photo by: Chad Lawhorn/Journal-World photo

KU Endowment's offices on West Campus in Lawrence are pictured April 16, 2021.

The KU Endowment Association is restructuring potentially millions of dollars in scholarships to meet new Trump administration requirements related to diversity, equity and inclusion, the Journal-World has learned.

The restructuring — which the association has begun to communicate through letters to select donors — means, for example, that a scholarship fund established to provide financial assistance to female students in a particular major now will be required to accept applications from both male and female students, according to a donor letter the Journal-World obtained.

The letter goes on to say that KU also will be making adjustments to scholarships that make awards at least partially based on race, national origin, age or disability. If KU doesn’t make changes to such scholarships, Endowment leaders are worried that the university will face sanctions from the federal government, including some that could put in jeopardy the approximately $150 million that the university receives through the federal student aid programs.

“I’m sure you’ve seen headlines involving similar investigations and consequences at institutions such as Columbia University and others,” Daniel Martin, president of the KU Endowment Association, said in the letter.

photo by: Chad Lawhorn/Journal-World photo

Daniel Martin, president of KU Endowment, pictured at a campaign kickoff event for KU’s new $2.5 billion fundraising campaign on Thursday, Oct. 19, 2023 at the Jayhawk Welcome Center.

It is unclear whether the pending changes may impact some students who currently have been awarded the scholarships in question, and are expecting them to be renewed for the next school year. The letter does not address that issue. The Journal-World asked that question to the Endowment Association Thursday afternoon but has not received a response.

The prospect that university scholarships could dramatically change has been hanging in the air since the beginning of President Donald Trump’s second term in January. On his first day in office, Trump signed an executive order that placed new limitations on diversity, equity and inclusion programs at universities. On Feb. 14, the U.S. Department of Education issued a new “Dear Colleague” letter that heavily focused on the practice of using race considerations to award financial aid to students.

It is not clear how many KU scholarships use a student’s race as a deciding factor in awarding scholarships, but the Endowment Association letter makes clear that KU believes it must look not only at scholarships that use race as a factor but also ones that use other “protected classes” in civil rights law, with the letter specifically citing “race, national origin, sex, age, and disability.”

The letter said the number of scholarships impacted by the restructuring is significant.

“The number of scholarship funds affected represents approximately 13% of the annual scholarship funds provided by KU Endowment to the university,” Martin said in the letter. “As a result, the impact of inaction would be substantial, not only to the university’s compliance posture, but to student affordability and access, potentially influencing whether some students are able to attend KU at all.”

KU Endowment’s most recent financial statements show the organization provided about $53 million in student support to the university in fiscal year 2024. At 13%, that means up to nearly $7 million in scholarships could be impacted, although the number also could be less because the student support category likely includes expenditures other than scholarships.

The Endowment Association on Wednesday afternoon didn’t immediately respond to a request seeking clarification on that number, among other questions.

The Journal-World began asking endowment officials last week about any changes related to scholarships that were tied to DEI initiatives, but the association provided no response to the email inquiry. Subsequently, the Journal-World received a copy of a letter that endowment officials mailed to a donor earlier this month. The donor, who has remained anonymous, said they were upset with the Endowment Association’s decision to alter the terms of the scholarship the donor had created. The donor said they planned to fight the decision, but didn’t detail how.

The letter is unclear on whether donors can stop the Endowment Association from making changes to the terms of the scholarship programs.

“We will implement these modifications beginning May 1, to allow the university’s Financial Aid and Scholarships Office to incorporate the funds into student aid packages for the upcoming fall semester,” Martin said in the letter.

The letter goes on to provide the donor with contact information for an endowment executive, if the donor wants to discuss the matter in more detail.

Among the questions the Journal-World has asked but not received an answer to is whether the Endowment Association can unilaterally change the restrictions that were placed on the scholarship programs, or whether the association must first receive permission from the donor to do so.

Endowment and university leaders, both at KU and nationally, have recently highlighted the sanctity of donor restrictions that are placed on gifts made to university endowments. The issue has come to the forefront as questions have grown about whether universities should use their sizable endowment funds to make up for lost federal dollars. Many university leaders, including those at KU, have said that is not feasible because endowment associations can’t simply change the restrictions that donors have placed on their gifts.

The letter states that the Endowment Association had multiple attorneys review the multitude of scholarships managed by the association. The letter said the endowment leaders “deeply regret” having to notify scholarship funders of “the need to address your fund within this compliance framework.”

Various aspects of Trump’s executive orders related to higher education, diversity, equity and inclusion are being challenged in court. There also have been questions raised about whether the federal government would be violating the First Amendment if it prohibits organizers of privately funded scholarships from placing various restrictions on how they are awarded. In its letter, the Endowment Association said it is “committed to reassessing the adjustment and restoring the original preference language,” if future judicial rulings or legislative action allows it.