Harvard Placed Under Financial Monitoring As Trump Administration Slaps Funding Cuts

Last Updated:September 20, 2025, 18:01 IST

The Trump administration placed Harvard on heightened cash monitoring, requiring a $36 million letter of credit and threatening federal aid loss.

The Trump administration started cutting federal research grants from Harvard in April after the Ivy League school rebuffed a list of wide-ranging demands from the government in a federal investigation into campus antisemitism

The Trump administration, on Friday, imposed new restrictions on Harvard University, curtailing the Ivy League school’s access to federal student aid funds due to concerns over its “financial position,” Reuters reported.

The Department of Education said Harvard, based in Cambridge, Massachusetts, has been placed on “heightened cash monitoring” status. Under this measure, Harvard must use its own funds to disburse federal student aid before drawing down money from the department.

The Education Department also required Harvard to provide a $36 million letter of credit to guarantee it can meet its financial obligations. Officials pointed to the university’s decision to issue bonds and carry out layoffs amid ongoing disputes with the White House as causes for concern.

Trump has ramped up oversight of universities, threatening to withhold federal funding over issues such as pro-Palestinian protests, transgender policies, climate initiatives, and diversity, equity, and inclusion programs.

The Education Department warned that Harvard could lose access to all federal student aid if it fails to comply with record requests from its Office of Civil Rights. The office is examining whether Harvard still factors race into undergraduate admissions, following the US Supreme Court’s 2023 decision that ended affirmative action policies aimed at increasing enrollment of racial minority students.

The federal government settled investigations with Columbia University, earlier this year, which agreed to pay over $220 million, and Brown University, which will pay $50 million to support local workforce development. According to Reuters, Trump stated that any settlement with Harvard should be “nothing less than $500 million.”

The administration also proposed a $1 billion settlement with the University of California, Los Angeles (UCLA), a move that Governor Gavin Newsom called extortion. UCLA stated that the government had frozen nearly $600 million in funds.

UCLA unveiled new protest rules on Friday, formalising interim policies introduced in September 2024 after large demonstrations and a violent attack on a pro-Palestinian encampment. The policies restrict unauthorised encampments, ban masks for rule violations, and make certain outdoor spaces off-limits for demonstrations that are not pre-approved.

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