When administrators at Boyce College start building a budget each year, they take a look at money flowing in from annual giving, auxiliary services, denominational support, and the endowment. Then they see how much more they need, and use that number to figure out tuition.
Not included in the calculations? Any federal funding.
Boyce, a conservative Christian college in Louisville, Ky., is among a small subset of higher-education institutions that take no federal funds. There are no grants from the National Institutes of Health, no Pell Grants, no Covid-relief funds, no federally backed student loans. There’s also no federal oversight.
The Trump administration’s freeze on large swaths of federal funding to colleges like Harvard and Columbia Universities has prompted higher education to ponder a world where those dollars can’t be counted on. But presidents of colleges that swear off such funding already live in that world: They don’t have to worry about any administration — Republican or Democratic — pulling the rug out from under them. They also know that making the switch from taking federal funds to not taking any would be nearly impossible — not only because of the lost revenue, but because it would require a complete rethinking of how to operate.
While very few if any colleges seem likely to stop accepting federal funds — so far the Trump administration hasn’t threatened a campus’s federal financial aid, the largest part of government money — the experiences of campuses that have provide a glimpse of a starkly different financial model. “We understand that I have to raise more money, and we have to be leaner in the budget than we would be, if we were able to prime the pump with federal funding,” R. Albert Mohler Jr., Boyce’s president, said in an interview. Like most of its counterparts, Boyce’s refusal of federal funding stems from its conservative Christian belief system; campuses that don’t take the money don’t have to comply with federal nondiscrimination laws like Title IX.
“The moment you participate in those federal programs and you receive those federal dollars, you open yourself to federal scrutiny, which, by the way, is what the taxpayers would, and should, expect,” Mohler said. “We serve a very conservative Christian denomination, and I think it would be malpractice for me to open this institution to federal intrusion on those issues.”
Jennifer Jensen understands how important it is to have a pot of money for getting a college off the ground. She’s the president of Mount Liberty College, in Utah, which enrolled its first students in 2019. ”We knew we wouldn’t accept government funding because we just are opposed to all the strings that are attached,” Jensen said. “And we’re actually unaccredited for those same reasons, because there’s too many strings.”
Without federal funds, the college turned to foundations and donors to get the money needed to launch. “Ours has been sort of bootstrapped all the way from the beginning,” she said. Reliant on tuition, with a small number of students — less than 100 total — they utilize adjunct faculty. “It keeps us very small and very student-centered. We don’t have a ton of administration or any of that sort of thing.”
The school offers scholarships, which can typically bring tuition down from about $15,000 per year to between $4,000 and $5,000. “So it’s really a doable amount. If they work, you know, really hard over the summer and then maybe part time during school they should be able to come up with that amount of money. But that means for every student who gets a scholarship, it’s a $10,000 donation that we need. It really adds up fast.”
That’s also true at more established schools. Grove City College has been around since the 1870s. In the late 1970s, it was one of the first colleges to opt out of federal funding in a dispute over Title IX compliance. It was the plaintiff in a landmark U.S. Supreme Court case, Grove City College v. Bell, in which the court ruled 6-3 that students’ acceptance of federal educational grants subjected the college to regulatory requirements from the federal government.
But the ruling applied just to specific programs that received the money. Four years after that ruling, in 1988, Congress broadened Title IX, subjecting all parts of any educational institution that got federal funding to Title IX requirements and other federal oversight. Grove City withdrew from the Pell Grant program starting in the 1988-89 school year, and in 1996 it withdrew from the federal Stafford Loan program, instead starting a special loan program with PNC Bank.
It now has an endowment topping $270 million following a recent $70-million gift from a donor. Grove City currently gives out more than $12 million annually in scholarships, the majority of which are need-based. The college doesn’t offer any tuition discounts. It uses the College Board’s CSS Profile tool for awarding aid.
Having a healthy endowment helps significantly, said Grove City President Paul J. McNulty, who is retiring from the school after more than a decade at the helm. “Surprisingly, I don’t spend more time fund raising” than other private school presidents, even those who get federal funding, he said. “When the school is succeeding, donors want to be a part of that. I spend most of my time trying to advance initiatives that will help our students.”
The fund raising McNulty does do is helped by the college’s decision to forgo federal funding, he said. “It has been a positive experience for us. It gives our supporters a cause, a focus for their giving.”
For example, during the pandemic, Grove City could have gotten about $7 million in federal relief funds, but didn’t take them. Instead, the college committed to not laying off any employees and received a $4-million unrestricted gift to tide them over during that time, McNulty said.
If a college flipped to not accepting federal funds to get away from government control — no matter if the presiding administration was liberal or conservative — they would see a fund-raising boom, McNulty believes. “I think they would see a financial uplift from their supporters rallying around them,” he said.
But that financial uplift comes with limitations. “We’re missing an awful lot of dollars that would otherwise flow into the institution’s budget, and that means we’re losing students who would basically build their college experience on the expectation of federal funding through loans and grants,” Mohler said. “It’s, of course, a limiting factor.”
The impact is felt in both what is offered at the colleges and what isn’t. Boyce keeps its administrative and athletics operations slim, Mohler said, offering only women’s volleyball, men’s and women’s cross country, men’s soccer, and men’s basketball. That is a different structure than many small private colleges, which try to build up athletic programs to generate tuition by bringing in students with partial scholarships.
Federal money is the key driver in funding research. Not taking it limits research capabilities, which in turn limits graduate-program possibilities. Research also brings in money from indirect-cost allocations that can cover administrative or building fees, and can bring staffing that doesn’t necessarily go away when a grant does, Mohler said. When federal grants end, colleges are often left to pick up the slack for the programs they helped create.
“We just don’t play that game,” Mohler said. “And I’m really not speaking ad hominem here. I have sympathy for those who are presidents of other institutions. I have friends who are presidents of other institutions that follow that model. But I just say, my life is a lot less complicated.”
Boyce does get about $9 million a year from the Southern Baptist Convention, which makes up less than 20 percent of its budget, Mohler said.
Mohler said the current political moment illustrates the counterintuitive benefits of turning down federal funds. “Look, there are undoubtedly people who would look at our situation and say, ‘You’re idiots because you’ve been giving up multiple millions of dollars cumulatively in terms of budget support,’” he said. “But I look at that and say, ‘That’s just too expensive.’ How so? Because it brings all of the complications of receiving government funding.”
“The fact is, most institutions are absolutely now dependent on that federal funding,” he added. “They have no imagination of what to do if they were no longer able to receive those funds.”
