Just over half of the college’s operating budget is comprised of tuition money.
Amid nationwide financial uncertainty for higher education institutions, Lafayette College saw an increased endowment for the start of the current fiscal year, despite a small drop in revenue.
“I think that we do a really great job at managing our finances in a way that balances those competing factors and the risks that are out there,” said Vice President for Finance and Administration Audra Kahr.
The college’s endowment, as of July 1, stands at $1.2 billion, an 11% increase from the previous year, according to an October presentation by college administration. The projected revenue, meanwhile, sits at $203 million, a small dip from last year’s $204 million amount and partly the result of underenrollment for the Class of 2029.
The metrics are two of the college’s main financial wellness measurements that have — for now — endured a difficult higher education environment marked by federal funding threats, declining college enrollment statistics and a fluctuating economy.
Trump administration unlikely to harm Lafayette endowment
The college’s endowment, which constitutes 22.7% of its revenue, crested $1 billion for the fourth consecutive year.
“After some of the tariff provisions were rolled back, we realized that they weren’t going to be as dramatic and impact economic growth outlook in a meaningful way,” Krishna Memani, the college’s chief investment officer, said of President Donald Trump’s tariffs, which previously cast some doubt on the college’s endowment.
Memani noted that President Donald Trump’s “Big Beautiful Bill,” while hindering financial growth at many colleges with large endowments, may grow Lafayette’s because the college will not have to pay its newly introduced tax on endowments. Colleges with under 3,000 students are exempt from the tax.
“It’s a marginal benefit to us,” Memani said.
Kahr, who co-chairs the college budget planning committee and led an October Forward Together presentation on finances, said that the endowment “creates flexibility.”
“When you have an endowment that supports a significant portion of your operations, it releases pressures that you may have in dollars going to support operational needs,” she said. “We’re very fortunate that our endowment, the way it’s set up, has a lot of fluidity with it.”
Revenue and enrollment dip, fundraising and debt improve
The college’s revenue and expenditures decreased by $1 million in the current fiscal year, according to Kahr’s presentation. After the college reported $212.1 million in its 2023-24 fiscal year report, it decreased to $204 million and then $203 million in the following two years.
Kahr said that 51% of the college’s revenue this fiscal year is comprised of tuition, similar to the previous year’s fiscal year budget.
Part of that revenue dip may be attributed to a small decrease in Lafayette’s enrollment.
Lafayette enrolled 696 first-year students this fall — about 40 fewer than the college had budgeted for, according to Kahr. The college’s contingency plan set aside roughly $1 million to cushion that gap, but once the college’s discount rate was applied — the tuition it forgoes through financial aid — the shortfall pushed the budget into a deficit of up to $5 million earlier in the fall.
The deficit number can fluctuate, explained economics professor James DeVault, who serves on the college’s budget planning committee.
“Part of the problem with the budget is it’s constantly evolving,” he said. “So a $4 million deficit can become a $5 million deficit or a $1 million deficit as time changes.”
College President Nicole Hurd acknowledged that first-year enrollment numbers were “smaller than we wanted it to be.”
According to Director of Institutional Research Simon Tonev, the college currently has 2,675 enrolled students, its lowest number since the 2020-21 academic year.
Meanwhile, Kahr said the college’s debt decreased, from $310 million in 2023-24 fiscal year reports to $294 million in the last fiscal year. Of highest priority for the college is to put down a $18 million debt payment in 2028, one of multiple long-term payments slated to pay off the debt.
“We need to repay some of our debt so that we can reinvest in ourselves,” Kahr explained, citing capital projects and long-term planning in the college’s master plan.
The college’s donations, for the previous fiscal year, were reported at $30 million per Kahr’s presentation, though Sean Scanlon, the vice president of advancement, wrote in an email that the advancement division reported $3 million less in funds in its 2024-25 fiscal year report.
Scanlon wrote that the office measured thousands of donors in the last fiscal year, and did not identify the exact number of donors.
Federal cuts and local collegiate closures
The college holds 24 federal grants totaling around $6.3 million, according to the Office of the Provost. Other colleges, such as Ivy League institutions, have faced pressure on billions of dollars of funding from the Trump administration in 2025. The college has not reportedly lost any of its federal grants.
Some colleges in Pennsylvania have had to shut their doors entirely: Cabrini College and Clarks Summit University in Pennsylvania announced their closures in 2024, while Rosemont College announced it would merge with Villanova University in April.
Penn State University, citing major finance deficits, voted to close seven of its 20 commonwealth campuses, sparing its Lehigh Valley campus.
“It’s really hard to see that as somebody who’s been in higher education for a really long time — you don’t want to see that happen,” Kahr said of the closures. “But I believe that we do a really great job at managing our finances in a way that balances those competing factors and the risks that are out there.”
Memani clarified that any endowment value is subject to change.
“Investing is a risky business,” he said. “Something can happen tomorrow that can change that outlook dramatically.”