Trump government imposes financial-based limitations on Harvard
In a series of developments, two prestigious universities, Harvard University and the University of California, Los Angeles (UCLA), find themselves at the centre of controversies regarding federal funding and policy changes.
Harvard University, one of the oldest and most esteemed institutions in the United States, is currently facing a significant challenge. The Trump administration has placed Harvard on 'heightened cash monitoring' status, restricting its access to federal funds for student aid. This announcement was made in 2025, during President Donald Trump's second term. The exact institutional issuer is not specified, but the restrictions are part of measures taken by the Trump administration.
The Office of Civil Rights is also reviewing whether Harvard still considers race in its undergraduate admissions process, a practice deemed unlawful by the US Supreme Court in 2023. Additionally, the Department of Education has expressed concerns about Harvard's finances, citing its decision to issue bonds and conduct layoffs. To ensure its financial obligations are met, the Department of Education has sought a letter of credit for $36 million from Harvard.
Harvard has not responded to requests for comment regarding the current situation. However, the university has already faced financial challenges due to Trump's administration's campaign to leverage federal funding for change at universities.
Meanwhile, UCLA has also been affected by federal funding restrictions. In August, the government froze $600 million in funding for UCLA. The university has recently unveiled new protest rules, formalizing interim policies from September 2024. The new rules restrict unauthorized encampments, ban masks or face coverings for rule violators, and make outdoor spaces off-limits for unapproved demonstrations.
Policy violations at UCLA could lead to disciplinary action or arrest. The university is also facing a proposed $1 billion settlement for a federal probe into its activities. A judge this month ruled that the administration had unlawfully terminated more than $2 billion in research grants awarded to UCLA.
The University of California system, of which UCLA is a part, has called this period one of the gravest threats in its history. California Governor Gavin Newsom has labelled the proposed settlement an extortion attempt.
Interestingly, the Trump administration has settled federal investigations with Columbia University and Brown University, with both universities agreeing to pay millions to the government.
In a positive development, UCLA will allow pre-approved overnight events and designated areas for public expression without prior approval. This move towards greater freedom of expression is a step towards addressing concerns about campus politics and free speech.
These developments underscore the complex relationship between universities and the federal government, and the challenges faced by institutions in navigating these relationships during politically charged times.
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