Harvard’s Battle With Trump Admin May Break It

Harvard could end up with a billion-dollar-sized hole in its annual budget if it fails to reach an agreement with the Trump administration and earn back its federal funding, according to The Wall Street Journal.

The university’s annual operating budget was $6.4 billion in fiscal year 2024, and with the Trump administration cutting more than $2 billion from the Ivy League institution over its failure to reach an agreement to tackle antisemitism on campus, Harvard may find itself unable to sustain itself long term, according to a WSJ analysis.

“Harvard is peering over the precipice,” Ted Mitchell, president of the American Council on 🎓Education, told the WSJ.

The university has so far taken out a $750 million loan from Wall Street and has begun reallocating its own funds to make up for the loss so it can continue funding its essential functions. Despite claiming to be cash-strapped, the university has somehow found a way to relieve all students from families making less than $200,000 per year of all tuition costs.

More than half of Harvard’s finances go towards paying its staff, according to its 2024 financial records. In the 2021-2022 academic year, the school had 10,120 administrative and support staff and only 7,483 full-time undergraduate students, making the ratio 1,352 administrators per every 1,000 students, according to an analysis conducted by The College Fix.

Harvard didn’t immediately respond to a request for comment.

“They’ve got enough money to keep going for a while, but eventually they’re going to have to make substantial cuts,” Robert Kelchen, a professor at the University of Tennessee, Knoxville who studies 🎓Education finance, told the WSJ. “You would change the future of the institution.”

Harvard told the Trump administration in April it “will not surrender” its academic freedom and free speech rights to appease the administration’s demands, which included revamping and properly enforcing its policies regarding protests and punishments and better vetting of foreign students for anti-American views. Since then, the administration has taken a hammer to the school, cutting funds and contracts and attempting to revoke Harvard’s ability to host foreign students, though the latter measure has been blocked by a federal court.

Harvard attempted to negotiate with the Trump administration the following month, saying it could address issues like antisemitism without federal oversight. However, this move only earned it an additional revocation of $450 million in federal grants.

Despite its $53 billion endowment, the university will likely find it difficult to liquidate the funds needed to make up for its shortfall due to donor restrictions, WSJ said. The burden on Harvard will only be worsened if Congress succeeds at increasing the university endowment tax rate from 1.4% to up to 8% and if the Internal Revenue Service (IRS) revokes the school’s tax-exempt status as President Donald Trump requested.

Anti-Israel demonstrations at Harvard consisted of disrupting classes, occupying a campus building and setting up a multi-day encampment. A September congressional investigation found “Harvard failed” to punish a majority of those involved in the protests, and a more recent investigation conducted by the university itself revealed that more than a quarter of Jewish students felt “physically unsafe” on campus and “Almost 60% of Jewish students reported experiencing ‘discrimination, stereotyping, or negative bias.’”

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