Harvard rejects Donald Trump’s demands — but can the university survive the funding freeze? Explained

Harvard University is at the center of an intensifying political showdown after rejecting sweeping demands from the Trump administration. The government previously threatened to freeze up to $9 billion in federal research grants and contracts — a move that could seriously disrupt the university’s operations. The Trump administration has cut $2.2 billion already. The big question is: Will this funding freeze actually hurt Harvard?

The Trump administration wants Harvard to overhaul its governance, eliminate diversity, equity and inclusion (DEI) programs, change admissions and hiring practices, and reduce the influence of certain ideological groups on campus.

Federal funding matters — A lot

While Harvard has a colossal $53 billion endowment, it still depends significantly on federal funding. In fiscal 2024 alone, the university received about $715 million from federally sponsored research — roughly 11% of its annual budget.

Some parts of the university are far more vulnerable:

Harvard School of Public Health gets 59% of its revenue from sponsored research.

Engineering School: 37%

Medical School: 35%

With such deep reliance, even partial cuts could seriously impact staffing, student fellowships, and ongoing research projects.

Can Harvard just dip into its $53 billion endowment?

Not easily. While Harvard is America’s wealthiest university, roughly 70% of the endowment is legally restricted — earmarked for specific programs or departments. It can’t simply be used to plug budget holes.

Harvard has already announced plans to borrow $750 million as a contingency — a clear sign that even a wealthy institution could feel the pressure if federal funding dries up.

Ripple effects

The freeze won’t just hit Harvard. It could also impact the local economy, including the Longwood Medical Area, home to Harvard’s top-tier hospitals and research centers that rely on federal funding for medical innovation and clinical studies.

Legal and political uncertainty looms

Harvard’s stance — defending academic freedom and rejecting what it views as unconstitutional government overreach — could trigger a prolonged legal battle. The university argues that most of the Trump administration’s demands go beyond combating antisemitism and instead aim to reshape higher education ideologically.

The case could set a national precedent on how far the federal government can go in dictating university policies in exchange for funding.

So, will it hurt Harvard?

In the short term? Possibly — especially for research-heavy departments and public health efforts.

In the long run? That depends on the courts, the next administration, and how far the government is willing to go.

How did Harvard respond to Trump admin demands?

President Alan Garber flatly rejected the demands, saying they cross red lines by threatening Harvard’s academic freedom and institutional autonomy. “Harvard will not surrender its independence or constitutional rights,” Garber declared, warning that the government’s actions threaten not only the university but public health and national innovation.

Why pressure on elite colleges now?

Trump’s administration has ramped up pressure on elite colleges over how they handle antisemitism, especially after campus unrest following the October 7, 2023 Hamas attack on Israel and Israel’s subsequent military response in Gaza. The White House argues top schools failed to protect Jewish students and that DEI programs have contributed to an anti-Israel atmosphere.

Is this just about antisemitism?

Not entirely. Harvard argues that while some demands address antisemitism, most amount to unconstitutional government control over campus life — from curriculum to personnel decisions. In its response, backed by two major law firms, Harvard says this is a broader attempt to reshape higher education through executive power.

What are the political and legal implications?

This confrontation is quickly becoming a symbol of resistance to Trump’s aggressive use of federal power. Former President Barack Obama praised Harvard’s stand, calling it “an example” of protecting academic freedom. But critics warn the university is taking a major risk.

Trump escalates attack on Harvard, suggests revoking tax-exempt status

President Donald Trump intensified his criticism of Harvard University on Tuesday (April 15), suggesting that the Ivy League institution should be stripped of its tax-exempt status.

Posting on Truth Social, Trump wrote: “Perhaps Harvard should lose its Tax Exempt Status and be Taxed as a Political Entity if it keeps pushing political, ideological, and terrorist inspired/supporting ‘Sickness?’ Remember, Tax Exempt Status is totally contingent on acting in the PUBLIC INTEREST!”

What comes next?

For now, Trump’s administration appears determined to cut off funding unless Harvard agrees to the changes. The case may head toward protracted legal battles, and it could set a precedent for how much control the federal government can exert over private educational institutions.

Harvard’s defiance is about more than just funding — it’s a test of academic freedom, political power, and the future of higher education governance in the US.

But one thing is clear: Harvard’s resistance is a gamble — not just for its own future, but for the independence of US higher education as a whole.

(With Bloomberg inputs)