The Danforth Foundation will end a 28-year-old fellowship program that provides funding for graduate students who want to become college teachers.

Jene L. Schwilck, president of the foundation, said yesterday during the past 21 years the organization "overspent its income," requiring a cutback in funding of current programs.

As a result, this April the foundation will select the last group of 100 students to receive fellowship grants, and the program will end in 1986, when they complete their studies.

In Mourning

"It's a sobering situation to see one of the major sources of funding dry up," Margot N. Gill, director of fellowships, said yesterday. "People at universities are saddened by what seems to be a necessary financial step," she added.

For the past several years the foundation awarded fellowships to undergraduates in their senior years and to graduate students who started a doctoral program, Gill said.

The termination of the program will have "a definite effect on students, especially those in the humanities," Gill said.

The fellowship program is also a source of funds for women who want to continue their graduate educations after several years, she said. "To watch those people lose this funding is a very sad picture," Gill added.

Since the program began in 1951, the foundation has awarded fellowships to 3600 students, Schwilck said.

The fellowships cover tuitions, living expenses and other incidental costs of a four-year doctoral program for students who want to teach in colleges and universities he added.

What a Bear

Schwilck said in the past seven years the foundation's capital has declined from about $220 million to $70 million, mainly because of a reduction in the value of its stock holdings. In the same period the foundation's operating budget has declined from $12 million to $4 million, he added.

"The trustees deliberately overspent because we had a number of good projects," Schwilck said.

Slashing

In the last two years, however, the foundation has reduced its expenditures in part by cutting the number of graduate fellows from a high of about 200 to 100 in recent years, he added.