Trump vs. Harvard: Funding Ruling, $1B Demand, and Lawsuits

Trump versus Harvard is a running conflict that began in early 2025, when the Trump administration froze billions in research funding, tried to strip Harvard of its ability to enroll international students, threatened its tax-exempt status, and eventually demanded a $1 billion payment. Harvard refused the administration’s governance demands, sued, and has largely won in court so far. But the administration has responded with new lawsuits, an appeal, and additional investigations, and as of mid-2026 the dispute is unresolved.

What Triggered the Fight

On March 31, 2025, a federal antisemitism task force notified Harvard that more than $8.7 billion in federal funding was under review.¹²³

Harvard President Alan Garber refused on April 14. “No government — regardless of which party is in power — should dictate what private universities can teach, whom they can admit and hire, and which areas of study and inquiry they can pursue,” he wrote, calling the administration’s approach a “political ploy” rather than a genuine effort to combat antisemitism.⁴ Harvard’s lawyers told federal agencies that “neither Harvard nor any other private university can allow itself to be taken over by the federal government.”⁵ Harvard was the only Ivy League school to formally reject the demands outright.

What the Administration Did in Response

The Funding Freeze

Within hours of Harvard’s April 14 rejection, the task force froze $2.2 billion in multi-year research grants and $60 million in contracts.⁶ On May 5, Education Secretary Linda McMahon said Harvard would “cease to be a publicly funded institution” and ended all new grants.² Between May 8 and May 13, the NIH, USDA, Department of Energy, Department of Defense, NSF, and HUD sent termination letters for their grants and contracts.⁷ More than 900 awards worth over $600 million a year were terminated.⁸

International Students

Foreign students make up roughly 27 percent of Harvard’s enrollment and 40 percent of Harvard Medical School.⁹ On April 16, DHS Secretary Kristi Noem demanded records on every F-1 visa student and threatened to revoke Harvard’s certification under the Student and Exchange Visitor Program. On May 22, she ordered that certification canceled outright, meaning current international students would have to transfer or lose legal status.¹⁰ Harvard sued the next day, and U.S. District Judge Allison D. Burroughs blocked the revocation.

On June 4, Trump signed a proclamation suspending entry of new students on Harvard-sponsored F, M, or J visas and directing the Secretary of State to consider revoking visas for current students. The White House cited national security, alleged ties to foreign adversaries including over $150 million in funding from China, and antisemitism concerns.¹¹¹²¹³

Tax-Exempt Status and the Endowment Tax

Trump declared on social media that Harvard should lose its tax-exempt status, writing on May 2, “We are going to be taking away Harvard’s Tax Exempt Status. It’s what they deserve!”¹⁴ Harvard called the threat “highly illegal” and said there was “no legal basis” for it.¹⁵ Federal law bars a president from directing the IRS to investigate specific entities, and revocation of a university’s tax exemption is rare; the main precedent is the 1983 Bob Jones University case involving policies against interracial relationships.¹⁶

Congress delivered a firmer blow. In the tax-and-spending package Trump signed in July 2025, the excise tax on large university endowments moved from a flat 1.4 percent to a tiered structure reaching 8 percent for the wealthiest institutions. It applies to private universities with more than $500,000 per student in assets and more than 3,000 tuition-paying students. Harvard estimates the new rate will cost it about $300 million a year starting in fiscal 2027.¹⁷¹⁸

Patents and Debarment

In August 2025, Commerce Secretary Howard Lutnick opened a review of Harvard’s intellectual property under the Bayh-Dole Act of 1980, which lets the government exercise “march-in rights” over patents from federally funded research. Lutnick demanded a full patent list and compliance proof by September 5. Harvard, which owns over 5,800 patents, called the action “unprecedented” and “retaliatory.”¹⁹²⁰

On September 29, 2025, the HHS Office for Civil Rights referred Harvard for suspension and debarment based on a June 30 finding of “deliberate indifference” to discrimination against Jewish and Israeli students under Title VI. If the process runs against Harvard, the university could face a one-year suspension and possible permanent, government-wide exclusion from federal contracts and grants. Harvard was given 20 days to request a hearing before an HHS administrative law judge.²¹²²

What It Cost Harvard

The financial hit was severe. Harvard Medical School had roughly 350 grants terminated. The T.H. Chan School of Public Health lost more than 190 grants affecting over 130 scientists, received stop-work orders, and began winding down off-campus leases, including over $60 million in funding for a single tuberculosis research project.⁸

Harvard set up a $250 million research continuity fund from its own resources, froze hiring, paused staff raises, and delayed nonessential capital projects. Garber took a voluntary 25 percent pay cut, and dozens of faculty pledged 10 percent of their salaries.²³ Alumni giving broke records, topping the prior year by over $100 million. Even so, Harvard reported a $113 million operating deficit for fiscal 2025 on a $6.7 billion revenue base, its first deficit since the pandemic.⁸

The September 2025 Ruling That Restored Funding

On September 3, 2025, Judge Burroughs ordered the reversal of more than $2.6 billion in research grant terminations. She found that the administration’s actions were “illegal retaliation” for Harvard’s refusal to accept federal governance demands, and wrote that “a review of the administrative record makes it difficult to conclude anything other than that Defendants used antisemitism as a smokescreen for a targeted, ideologically-motivated assault on this country’s premier universities.”²⁴

The ruling held that the administration had violated Harvard’s First Amendment rights, failed to follow proper procedures, and acted “arbitrarily and capriciously.” Judge Burroughs pointed to public statements by Trump and other officials as evidence the actions were motivated by Harvard’s defiance rather than concern about antisemitism. The 900-plus terminated grants were reinstated. The White House said it would appeal.⁶

The Failed Deal and the $1 Billion Demand

Both sides briefly tried to negotiate. On September 30, 2025, Trump said publicly that a deal was “very close,” with Harvard paying “about $500 million” and running a “series of trade schools” focused on AI, engines, and other fields. Once the investment was made, he said, Harvard’s “sins are forgiven.”²⁵²⁶

The deal collapsed. By early February 2026, reporting indicated the administration had dropped a separate demand for a $200 million Treasury payment to reach a compromise. Trump then rejected Harvard’s proposed workforce training program, calling it a “convoluted job training concept” that was “wholly inadequate.” On February 2, 2026, he posted on Truth Social that he now wanted $1 billion in “damages” and described Harvard’s alleged conduct as a “Criminal, not Civil, event.”²⁷²⁸ He added that he wanted “nothing further to do, into the future, with Harvard University.”²⁹

The Pending Lawsuits

DOJ Antisemitism Suit

On March 20, 2026, the Justice Department sued Harvard in federal court in Massachusetts under Title VI of the Civil Rights Act of 1964. The 44-page complaint alleges “deliberate indifference” to harassment of Jewish and Israeli students after October 7, 2023, and failure to enforce campus rules against students who harassed or intimidated them. The DOJ wants a court to compel Title VI compliance, install an outside monitor, block Harvard from future federal funding, and claw back nearly $1 billion in grants already paid.³⁰³¹

A Harvard spokesperson called the suit “yet another pretextual and retaliatory action by the administration for refusing to turn over control of Harvard to the federal government.”³¹ The case landed with U.S. District Judge Richard G. Stearns, who in April 2026 rejected Harvard’s attempt to move it to Judge Burroughs.³² On May 18, 2026, Harvard filed a 49-page motion to dismiss, arguing the DOJ’s claims were “outdated and legally deficient” and that the complaint ignored reforms Harvard adopted after October 2023, including new protest rules, antisemitism training, and updated disciplinary procedures.³³

More than 120 Jewish faculty and staff at Harvard released an open letter condemning the DOJ suit as a “cynical misuse of antisemitism claims to justify an attack on academic freedom and free expression.” Led by government professor Steven Levitsky, the signatories called it an “authoritarian assault on institutions of higher education” and wrote, “Using accusations of antisemitism to attack academic freedom and free expression is reprehensible — and we want no part in it.”³⁴³⁵

Admissions Records Suit

On February 13, 2026, the DOJ filed a separate lawsuit to force Harvard to turn over five years of individual application files, including grades, test scores, essays, extracurricular activities, and race and ethnicity data, for undergraduate, medical, and law school admissions. The suit is part of a compliance review that began in April 2025 into whether Harvard is following the Supreme Court’s 2023 decision in Students for Fair Admissions v. Harvard, which barred race-conscious admissions.³⁶ On June 3, 2026, Harvard moved to dismiss, arguing the DOJ skipped mandatory Title VI enforcement procedures and that its data requests were “unnecessary and vastly overbroad.” Harvard also asked the judge to pause the case pending a separate suit by 17 states challenging the Department of Education’s similar data collection.³⁷

The Appeal on the Funding Freeze

The administration formally appealed Judge Burroughs’ September 2025 ruling on December 18, 2025, to the First Circuit. In its April 27, 2026, brief, the government shifted its main argument from civil rights to contract law, arguing that federal grants are essentially contracts agencies can terminate based on changing priorities. It also argued the district court lacked jurisdiction and that the case should be moved to the U.S. Court of Federal Claims, a venue that does not typically hear constitutional claims or issue injunctions. Harvard’s responsive brief is expected in July 2026.³⁸

Where This Fits in the Wider Campaign

Harvard is the highest-profile target, but not the only one. Columbia University settled in July 2025, agreeing to pay $200 million to the federal government, $21 million to resolve an EEOC investigation, adopt the IHRA definition of antisemitism, and commit to merit-based hiring and admissions. Columbia denied wrongdoing and said the deal preserved its academic autonomy; the American Association of University Professors called it a “blow to academic freedom.”³⁹ Brown reached a smaller deal involving $50 million toward state workforce development.⁴⁰

In October 2025, the administration offered 12 universities a “federal funding compact” that traded priority grant access for a long list of commitments: defining sex by reproductive function, capping international enrollment at 15 percent, freezing tuition for five years, ensuring ideological diversity in academic departments, and sharing student records with federal agencies. Most invited schools, including MIT, Penn, UVA, Dartmouth, Brown, and USC, rejected it, and none had publicly signed by the November 21, 2025, deadline.⁴¹ In February 2026, the Pentagon canceled service members’ graduate program attendance at schools including Princeton, Columbia, MIT, Brown, and Yale, and Defense Secretary Pete Hegseth ended professional military education and fellowship programs at Harvard specifically.⁴²

Where Things Stand in Mid-2026

The dispute is unresolved. Harvard has won the important early rulings: the September 2025 order restoring research funding, and injunctions keeping international students enrolled. The administration has responded with the DOJ antisemitism suit filed in March 2026, the admissions records suit filed in February 2026, and an active appeal at the First Circuit. Harvard has moved to dismiss both new suits.

Harvard’s endowment stood at $56.9 billion after an 11.9 percent return in fiscal 2025, but officials warn that federal funding losses, the new endowment tax, and potential tariffs could combine to cost the university up to $1 billion a year.⁸ Garber, who is expected to serve through the 2026–27 academic year before a successor is chosen, has held the same position throughout: Harvard will not accept federal control over its academic decisions.⁴³

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