Universities in Crisis as Federal Funds Vanish
A sweeping and aggressive move by President Donald Trump’s administration to withhold federal research funding from major U.S. universities is triggering deep financial trouble at some of the country’s most prestigious institutions. Universities like Harvard, Columbia, Princeton, and Johns Hopkins are now facing sharp budget cuts, mass layoffs, and threats to their core missions in science, medicine, and education.
The administration’s cuts are tied to accusations that universities have failed to adequately address antisemitism, have promoted diversity, equity, and inclusion (DEI) in ways the administration opposes, and have accepted foreign funding without proper oversight. In addition to removing grants and research contracts, the administration is also pushing for new taxes on university endowments, which would severely limit their financial flexibility.
“We’re going to have to really rethink higher education and how we’re funded,” said Ruth Johnston, vice president of the National Association of College and University Business Officers.
Harvard: Lawsuits, Layoffs, and a Stripped-Down Campus
Harvard University has found itself at the center of this standoff. The school has filed a lawsuit against the federal government to restore billions in lost grants, but even university leaders admit that funding may never return to previous levels.
“These federal actions have set in motion changes that will not be undone, at least not in the foreseeable future,” said Hopi Hoekstra, dean of Harvard’s Faculty of Arts and Sciences, during a faculty meeting.
To reduce costs, Harvard President Alan Garber has taken a 25 percent pay cut. Committees within the Faculty of Arts and Sciences are now reviewing staffing levels and academic programs, looking for ways to keep core research afloat despite the financial hit.
At Harvard’s T.H. Chan School of Public Health, which used to rely on federal grants for nearly half its budget, administrators have laid off employees, reduced the number of graduate student admissions, and eliminated everyday expenses such as catering at meetings, coffee in faculty lounges, and even some printers and desk phones. A spokeswoman for the school confirmed that it has lost nearly every direct federal grant it once received.
To help cover shortfalls, Garber pledged $250 million in transitional support from the university’s own funds. But he made clear this is a temporary solution as Harvard searches for alternate sources of research funding.
Columbia: Hundreds of Grants Canceled, Staff Laid Off
Columbia University is also struggling with the fallout. The loss of more than 300 multiyear federal research awards has forced the school to lay off 180 people. These jobs represented about 20 percent of the university’s staff who had been funded by the terminated grants.
In a letter to the Columbia community, acting President Claire Shipman wrote, “We are working on and planning for every eventuality, but the strain in the meantime, financially and on our research mission, is intense.”
The letter, also signed by Provost Angela V. Olinto and two other senior leaders, explained that the school is now “running lighter footprints of research infrastructure in some areas,” while trying to maintain continuity in others with the help of internal stabilization funds.
To cope with the cuts, Columbia has frozen most salary increases, offered voluntary retirement programs, and made deep reductions in its central administration. The administration admitted that “federal actions over the last several months and our perspective on the scale and scope of future funding challenges requires that we look across the University, not just to areas directly impacted by federally funded research.”
Princeton and Michigan State Prepare for More Pain
At Princeton University, school leaders have instructed departments to brace for 5 to 10 percent budget cuts over the next three years. According to Princeton Alumni Weekly, the university said it expects “very large, permanent cuts to federal research funding as well as substantial increases to the endowment tax.” Several dozen federal research grants have already been suspended.
Michigan State University has adopted a more cautious tone. President Kevin Guskiewicz told the community that the school would need to “adjust our financial path” in response to changes in federal policy. While he did not provide specific details, he confirmed that university finances would be reviewed for short-, medium-, and long-term cost savings.
The Impact on Students and Graduate Programs
While many undergraduates may not have noticed major changes yet, experts warn that deeper impacts are coming. Hiring freezes began in March after the administration announced new limits on research funding through the National Institutes of Health. Layoffs, which have already begun at some institutions, may expand further.
Graduate students are especially vulnerable. Many receive stipends and tuition coverage through federal research grants. With those grants disappearing, fewer students are being admitted. At Purdue University, senior Alyssa Johnson changed her career plans after facing unexpected difficulty getting into graduate school. “I kind of went through a little bit of a career crisis,” she said, explaining that the political climate and uncertainty about science funding pushed her in a new direction.
The Trump Administration’s Strategy
The Trump administration has made no secret of its intentions. At a Women’s History Month event in March, Trump said, “You see what we’re doing with the colleges, and they’re all bending and saying, ‘Sir, thank you very much, we appreciate it.’”
Secretary of Education Linda McMahon defended the funding freezes. In a statement about Columbia University, she said, “Institutions that receive federal funds have a responsibility to protect all students from discrimination. Columbia’s apparent failure to uphold their end of this basic agreement raises very serious questions about the institution’s fitness to continue doing business with the United States government.”
At the same time, critics say the administration is using intimidation rather than due process. Michael Pillera, a civil rights lawyer, said the administration is bypassing legal safeguards. “Much of the playbook is intimidation, more so than actual substantiated legal findings,” he said.
Why Endowments Can’t Fix Everything
Some observers have asked why wealthy universities like Harvard, with endowments worth tens of billions, don’t just use those funds to ride out the crisis. Former Harvard president Larry Summers argued they should try.
“They should make clear that their formidable financial endowments are not there to simply be envied or admired,” he wrote in the New York Times. “Part of their function is to be drawn down in the face of emergencies, and covering federal funding lapses surely counts as one.”
But others say it’s not that simple. Liz Clark of NACUBO explained that university endowments are not like savings accounts. “They are very different, and they are unique strategic finance tools,” she said. Many endowment funds are legally restricted to specific uses such as scholarships, scientific research, or long-term investments. Most are tied up in illiquid assets like real estate or private equity.
Clark added that while some universities may have reserve funds, most cannot freely tap their endowments to replace billions in lost federal revenue.
The Bigger Picture: A National Shift
According to an Associated Press analysis, nearly 100 colleges under investigation by the Trump administration received more than $33 billion in federal revenue in the 2022–2023 school year. In some elite research universities, federal funds accounted for up to 50 percent of total revenue.
At Johns Hopkins University, nearly 40 percent of funding came from the federal government. That included money for missile design, neuroscience, and immunology research. Now, the school has announced 2,200 layoffs and is warning of further disruptions.
Jonathan Friedman, who works with PEN America, said this campaign has put universities in a constant state of fear. “It feels like any day, any university could step out of line in some way and then have all of their funding pulled,” he said.
Robert Kelchen, a professor at the University of Tennessee, said that although Ivy League and blue-state schools are speaking out, red-state universities are also feeling pressure. “They’re just not saying it out loud,” he said.
What Happens Next
Legal battles are continuing. Harvard is suing the federal government. Columbia has complied with some administration demands, including banning masks during protests and hiring more campus police. Trump has suggested he might go further, including stripping Harvard of its tax-exempt status.
For now, universities are trying to delay the worst effects with hiring freezes, administrative cuts, and emergency funding. But the long-standing partnership between the federal government and higher education appears to be unraveling.
“We are in the early stages of a structural transformation,” said Erin Hennessy of TVP Communications. “And for many institutions, this is just the beginning.”
NP Editor: Somehow I’m not buying the “unique strategic tool” argument for not using endowments. And I don’t feel sorry for these clowns who have indoctrinated student with woke, racist BS. Go Trump!
