What Harvard's Federal Funding Cuts Mean for the University

Yahoo

27-05-2025

The Eliot House dormitory on the Harvard University campus in Cambridge, Massachusetts, US, on Tuesday, May 27, 2025. Credit - Sophie Park—Bloomberg via Getty Images
Harvard University is poised to lose its remaining federal funding and ties to the federal government as its battle with the Trump Administration intensifies.
The U.S. General Services Administration (GSA) asked federal agencies in a Tuesday letter to reconsider all federal contracts with Harvard and instead 'seek alternative vendors' for future endeavors. The letter was first reported on by The New York Times.
'The Trump Administration is not backing down from its onslaught of attacks on the institution,' says Katharine Meyer, an education policy fellow at the Brookings Institution. 'No sort of path is too small for them to look into going after.'
The GSA and Harvard did not respond to TIME's requests for comment. The university has previously filed multiple lawsuits against the Administration over its actions.
Here's what to know about what the requested federal funding cuts, and what they mean for Harvard.
The Trump Administration has targeted a number of colleges and universities over their diversity, equity, and inclusion programs and pro-Palestinian demonstrations on their campuses, among other issues. Harvard, which has refused to comply with the Administration, has faced particular ire.
In April, federal officials sent a letter to Harvard demanding that it modify its hiring practices, implement 'viewpoint diversity' to include conservative ideology, and alter its student discipline regulations or risk federal financial support.
Harvard's defiance of the demands initially put $2.2 billion in multi-year federal grants at risk. Another $2.7 million in Department of Homeland Security grants and $1 billion in federal funding for health research are under threat as well.
The Trump Administration has also moved to attempt to revoke Harvard's tax-exempt status and the university's ability to enroll foreign-born students. A federal judge on Thursday will decide whether a preliminary injunction issued against the latter should be extended.
In its Tuesday letter, the Administration cited what it called 'discriminatory practices' related to Harvard's hiring and admissions process, the university's handling of antisemitism on campus, and a 'lack of commitment' to 'national values and priorities' in its request for agencies to cancel remaining contracts with the school.
'This $100 million dollar contract pullback is certainly the smallest effort that we've seen, but I think the cumulative impact is hurtling toward a point where eventually Harvard does not have infinite funds to be able to fill in where they've lost federal contracts and grants and any other sources of their revenue,' says Meyer.
Harvard's operating expenses reached $6.4 billion for fiscal year 2024, compared to the more than $3 billion in federal funding for the university at risk under the Trump Administration.
Federal sponsorship for research made up 11% of the university's total operating revenue for the 2024 fiscal year. Harvard warns on its website that without federal funding, cutting-edge research into conditions including cancer, heart disease, and diabetes 'will come to a halt midstream, and researchers will lack necessary resources to finish ongoing projects or to finance new ones.' Some Harvard labs, including one working on human organs-on-chips, which replicate the function of organs, have received stop-work orders following the Trump Administration's efforts to slash funding. Those researchers were using that technology to study how certain organs react to radiation therapy.
The Administration's move to bar Harvard from enrolling international students could hit another source of the university's funds beyond the money it receives through government grants and contracts. Harvard received more than a fifth of its funding in 2024 from education revenue, including tuition, housing, food income, and more. International students contribute a large portion of that revenue, with more than 6,700 enrolling at the school for the most recent school year. The standard cost of attendance for foreign-born students, many of which pay full price for tuition, is $101, 974.
Harvard has mounted legal challenges against the Administration's unprecedented actions. It filed a lawsuit on April 21, citing violations of the First Amendment and claiming federal officials did not abide by the proper procedural rules to slash grant funding. A second lawsuit followed last Friday after officials moved to bar the university from enrolling international students, and a federal judge temporarily blocked the Administration from doing so.
Harvard's substantial federal endowment, which distributed $2.4 billion in the fiscal year ending in June 2024, also puts it in a unique financial position to bite back against the Trump Administration's attacks.
But restrictions on how the endowment is used mean it can't be relied on as a simple replacement for lost federal funding. And as the lawsuits continue to play out in the courts, some experts warn that the federal government's actions are already changing the higher education landscape. The legal limbo surrounding student visas has led universities worldwide to attempt to entice Harvard international students to transfer to their higher education institutions. Some colleges and universities are also implementing policy changes to proactively avoid Trump's ire.
'[Universities] are certainly very worried that the courts will rule that the federal government has the ability to do these ad hoc rescissions of grants and contracts and institutions that don't have the financial means of Harvard are not going to be able to say no,' says Meyer. 'With the legal uncertainty, I think a lot of institutions are reviewing their policies and reviewing their practices and trying to kind of proactively rearrange what they're doing and try to position themselves to be in the federal government's good graces.'
Meyer believes that the Trump Administration will likely move to rescind Harvard's ability to award federal financial aid to students, dealing the school a further blow.
'When institutions lose the ability to award federal financial aid just largely because they're truly bad faith actors who are misleading students about their enrollment opportunity,' she says. 'To do so for Harvard because of ideological reasons would be completely unprecedented, but I expect that the Trump Administration is looking through every policy that exists to see if they might have grounds to do so.'
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