Universities in precarious position as Trump uses research funding as a wedge

The Hill

16-03-2025

The Trump administration is taking advantage of the entanglement of university finances and government funding, seeking to put schools on a short leash tied to their research capabilities.
Columbia has already lost $400 million in grants over what the government calls inaction on antisemitism. Harvard is implementing a hiring freeze due to financial 'uncertainties' in federal policy. And Johns Hopkins announced Thursday it is letting go of 2,000 workers due to federal aid cuts.
While Republicans cheer these moves and others question why these big universities receive so much financial support in the first place, experts say scientific research relies largely on federal dollars and a lack thereof could lead to schools having to make sweeping changes in funding strategy.
'It is a long-standing relationship. As the federal government is pulling back on investments in those areas, it's going to have severe consequences for institutions,' said Liz Clark, vice president of policy and research of the National Association of College and University Business Officers.
Most higher education institutions receive federal dollars in the form of student aid and Pell Grants, which President Trump has not yet threatened.
But it is a different story for research institutions, with hundreds of schools receiving federal funds for educational, medical, agricultural and other types of research programs. The National Center for Science and Engineering Statistics found in fiscal year 2021 colleges received around $49 billion in federal research and development funding.
All of those avenues are under attack as the Department of Government Efficiency (DOGE) has taken an axe to various federal agencies and programs.
At the Education Department, the Institute of Education Sciences saw hundreds of millions of dollars in research contracts canceled.
And, perhaps most dangerously for scientific research, the National Institutes of Health later declared it will only allow schools to cover 15 percent of administrative overhead from its grants, whereas before it was as high as 69 percent at Harvard University.
The moves became more targeted when the federal government announced $400 million would be taken away from Columbia after more than a year of Republicans criticizing the university for its handling of pro-Palestinian protests.
Then the University of Maine lost around $30 million from the United States Department of Agriculture after the state's governor got into a public spat with President Trump over transgender athlete policies.
While the focused actions against Maine and Columbia could face legal challenges, universities may have to deal with the possibility of either bowing down to demands from the administration or prioritizing which research can be done without federal backing.
The Trump administration on Friday laid out multiple changes Columbia would have to make to its policies in order for talks to begin on restoring funding, including changes to protest rules and disciplinary procedures and putting the Middle East, South Asian and African studies departments under 'academic receiverships' for at least five years.
'Half of this stuff you can't just do and the other half is insane,' Joseph Howley, a professor of classics at Columbia, told The Associated Press. 'If the federal government can show up and demand a university department be shut down or restructured, then we don't have universities in this country.'
Clark said 'there are questions as to what falls within current law,' but that when it comes to immediate budgetary concerns, 'institutions are going to be making priorities.'
'They're likely first considering what absolutely must continue, what they would like to continue and what they may not have the resources to continue,' she said.
Harvard enacted a hiring freeze that will stay in place until at least the end of the academic year and told leadership in different university schools to 'scrutinize discretionary and non-salary spending, reassess the scope and timing of capital renewal projects, and conduct a rigorous review of any new multi-year commitments.'
Johns Hopkins University said Thursday it is firing 2,000 workers over DOGE's vast cuts to U.S. Agency for International Development.
The cuts may have only begun: The Department of Education on Friday announced investigations into dozens of universities over what they call diversity, equity and inclusion practices. The agency said in its Dear Colleague letter schools that do not comply could lose funding.
Those outside the schools are questioning why, faced with such devastating cuts, they don't do more to tap into their endowments, which for elite colleges can run into billions of dollars. Harvard's, the largest in the nation, is more than $50 billion, larger than most states' annual budgets.
An endowment is a set of donations to universities that are invested by the institution to support its mission. The money is typically legally obligated to go to certain aspects of the university and cannot be moved around to other areas, often based on donor preferences or other guidelines.
'Endowments are made up of thousands of separate funds. They don't work like a savings account […] where you could go to the bank with your ATM card, your debit card, and take out money and spend it on whatever you want. They're a collection of funds that are designated for specific purposes, and they're legally binding purposes,' said Steven Bloom, assistant vice president of Government Relations at the American Council on Education.
Another potential challenge for the schools is the timing of the Trump cuts: Most colleges set their budget for a year in advance starting in the summer.
'Here we are in the middle of their fiscal year, and they're potentially losing billions of dollars,' Bloom said, adding that even 'institutions that are well resourced, like Harvard or [the Massachusetts Institute of Technology] and others, they don't have hundreds of millions of dollars lying around that they can use to make up for that shortfall.'