Scholarships: Reports on Perpetual and Transferable Scholarships and on Scholarship Bonds, Office of the University Attorney, 1971, 1973

To raise money with which to establish and fund their educational enterprise, Northwestern University’s founders and early trustees authorized in 1853 the sale of scholarship bonds, payable in installments for a total price of $100 each. Religious ministers and the orphaned children of ministers received a discounted price of $50 for the purchase of their bonds. Purchased bonds could be redeemed either for perpetual or transferable scholarships. Such scholarships could be used to send a student to Northwestern University without subsequent payment of tuition. After issuing 1161 bonds, Northwestern discontinued the further sale of bonds in 1867. 135 transferable scholarships and 206 perpetual scholarships were issued during the duration of sale and subsequent purchasers’ payments.

Key characteristics of the scholarships were as follows:

Transferable scholarships could be used one student at a time. Those could be sold, given, or passed along by instrument of will or by operation of law. Only the owner, owner’s son, or owner’s grandson were eligible to use the scholarship. The scholarship could be used until its owner or combined owners received a set time period’s worth of tuition, up to a maximum of ten years.

Perpetual scholarships could be used one student at a time. During the lifetime of the purchaser, the purchaser, the purchaser’s son and grandson could use the scholarship in the order designated by the purchaser. The scholarship could be transferred by will. The legatee of the purchaser, and the legatee’s legatees could use the scholarship until the chain of wills was broken. Should the purchaser die without bequeathing the scholarship to a specific individual, that purchaser’s sons were eligible to make use of the scholarship.

Northwestern University, at the time of its establishment and during the period in which it sold scholarship bonds, was a single-sex, all-male institution. The University became coeducational in 1869. In 1870 Northwestern’s Board of Trustees officially altered the terms of the scholarships to make those applicable to women as well as to men.