After Freezing Its Funding, Trump Now Threatens Harvard University With Loss of Tax-Exempt Status

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Harvard University is facing escalating pressure from the Trump administration after refusing to comply with federal demands on campus policy and governance. In response, the Department of Education froze nearly $2.3 billion in funding, and President Donald Trump is now threatening to revoke the school’s tax-exempt status. The conflict centers around Harvard’s decision to reject a detailed list of changes demanded by the administration, including a ban on face masks at protests, an end to diversity and equity programs, and a restructuring of hiring and admissions policies. The government also called for restrictions on international students deemed hostile to American values. The university refused to comply, calling the demands unconstitutional and a threat to academic freedom.

Trump took to his Truth Social account to accuse Harvard University of promoting political, ideological, and terrorist-inspired views. He then floated the idea of taxing the university like a political entity rather than treating it as an educational institution. The move mirrors prior actions against Columbia University, which accepted revised protest policies after the administration cut its funding earlier this year.

What Triggered the Clash With Harvard University

The administration’s demands came in a joint letter from the Departments of Education, Health and Human Services, and the General Services Administration. The letter accused Harvard of failing to meet the civil rights and academic standards required for federal funding. Among the proposed changes were ending affirmative action in hiring and admissions, closing all DEI offices, auditing viewpoint diversity among faculty and students, and implementing harsh penalties for protest-related rule violations.

Harvard University responded with a firm refusal. In a public letter, President Alan Garber said the university will not surrender its independence or relinquish its constitutional rights. Harvard also joined legal action with peer institutions to challenge what it called an unprecedented misuse of federal funding power.

The legal argument rests on First Amendment protections and Title VI of the Civil Rights Act. Harvard says the government cannot compel ideological conformity as a condition for funding. The American Association of University Professors filed a separate lawsuit, accusing the administration of undermining academic freedom through coercive threats.

What’s at Stake Beyond the $2.3 Billion Freeze

The Department of Education’s task force on anti-Semitism claims Harvard’s resistance justifies freezing its federal support. The move affects $2.2 billion in grants and $60 million in contracts. However, the broader impact could be far more significant. Federal agencies are also reviewing nearly $9 billion in long-term grants and contracts linked to Harvard and its affiliates.

Although Harvard University has the largest academic endowment in the United States, valued at $53.2 billion, over 70 percent of those funds are restricted by donor intent. Cuts to federal research money would directly affect programs in medicine, science, and technology. These cuts would threaten not just Harvard’s operations but broader research progress across the country.

The administration’s critics say these actions represent a dangerous politicization of education funding. While some conservative lawmakers applaud Trump’s moves, others, including academic leaders and civil rights advocates, warn that punishing universities for ideological noncompliance erodes foundational democratic principles.

Trump’s threat to remove Harvard’s tax-exempt status also faces legal hurdles. Universities qualify for tax exemptions under IRS rules by serving public education purposes. Stripping that status would require either proof of political misuse or legislative changes. Neither option is guaranteed in the current Congress.

Fellow Woke Institutions Support Harvard University’s Defiance

Support for Harvard’s defiance has come from other elite institutions. Princeton, Stanford, and MIT have all issued statements defending academic freedom and condemning government overreach. Former President Barack Obama and Senator Bernie Sanders both praised Harvard’s stance as an important defense of constitutional rights.

Whether this standoff ends in court or compromise remains unclear. But for now, Harvard University appears determined to resist federal pressure, even at the cost of billions in lost support. Its decision could shape how other universities respond as Trump’s second-term policies continue to reshape the relationship between government and education.

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