Why Trump Is targeting Harvard’s funding and tax-exempt status

By Elnur Mirzazada
May 19, 2025 12:00 Updated 6h ago
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The conflict between the Trump administration and Harvard University has escalated dramatically in recent months, with the federal government freezing billions in funding and explicitly threatening to revoke the university's tax-exempt status.

This confrontation represents one of the most aggressive governmental interventions into higher education in recent memory, with potentially far-reaching consequences for academic freedom and university governance. The administration has deployed multiple federal agencies in this effort, from the Department of Education to the IRS, while Harvard has responded with legal action to protect its interests and autonomy.

The Administration's Stated Justifications
The Trump administration has presented several official justifications for its unprecedented actions against Harvard University. Central to these claims is the allegation that Harvard has failed to adequately address antisemitism on campus, particularly following pro-Palestinian protests related to the Israel-Hamas conflict. In April 2025, the Justice Department-led Task Force to Combat Anti-Semitism, created following a February executive order, became a key instrument in the administration's campaign against Harvard. The administration contends that Harvard has allowed antisemitism to flourish on campus while failing to meet its obligations under Title VI of the Civil Rights Act.

Beyond concerns about antisemitism, the administration has targeted Harvard's diversity, equity, and inclusion (DEI) programs, demanding their elimination. In a five-page letter sent to Harvard on April 11, Trump officials explicitly called on the university to eliminate its DEI programs and offices, including its Office of Civil Rights and Belongings. The administration has also scrutinized Harvard's admissions practices in light of the 2023 Supreme Court decision that mandated colleges cease considering race in admissions. In May 2025, the Justice Department began investigating whether Harvard's admissions procedures were being used to deceive the government under the False Claims Act.

Education Secretary Linda McMahon articulated the administration's position in a letter to Harvard, stating that "In every way, Harvard has failed to abide by its legal obligations, its ethical and fiduciary duties, its transparency responsibilities, and any semblance of academic rigor," adding that the university "has made a mockery of this country's higher education system".

The Specific Demands
The administration's demands to Harvard have been extensive and intrusive, according to multiple sources. They include:

  1. Reforming the university's student disciplinary system
  2. Investigating protesters involved in pro-Palestinian demonstrations
  3. Commissioning external audits of programs deemed antisemitic
  4. Eliminating diversity, equity, and inclusion programs
  5. Committing to "viewpoint diversity" in hiring and admissions practices through "structural and personnel changes"
  6. Curbing the power of faculty
  7. Reporting conduct violations by international students
     

Harvard University President Alan Garber rejected these demands on April 14, explaining that they infringed upon Harvard's academic freedom and other rights. "The University will not surrender its independence or relinquish its constitutional rights," Garber wrote.

The Administration's Escalating Actions
Following Harvard's refusal to comply with its demands, the Trump administration has taken increasingly severe actions against the university. These include:

Funding Freezes
The administration has already halted $2.2 billion in federal research grants and contracts to Harvard. On May 5, 2025, Education Secretary Linda McMahon announced that Harvard would not be eligible for any new federal research grants due to "consistent violations of its own legal duties". This move specifically targeted research grant funding while not impacting federal Pell Grants or student loan funding at that time.

Harvard quickly denounced these measures, with a spokesperson stating that the demands "would impose unprecedented and improper control" on the university and "would have chilling implications for higher education". The university's lawsuit, filed on April 21, argues that the government's actions will jeopardize "Harvard's academic autonomy and threaten essential, life-saving, and groundbreaking research conducted on its campus".

Tax-Exempt Status Threats
In addition to the funding freeze, President Trump has repeatedly threatened to revoke Harvard's tax-exempt status. On April 15, 2025, he first floated the idea on social media, writing: "Perhaps Harvard should lose its Tax Exempt Status and be Taxed as a Political Entity if it keeps pushing political, ideological, and terrorist inspired/supporting 'Sickness?' Remember, Tax Exempt Status is totally contingent on acting in the PUBLIC INTEREST!"

By early May, Trump's rhetoric had escalated to a direct claim that action was being taken. On May 2, he posted: "We are going to be taking away Harvard's Tax Exempt Status. It's what they deserve!". CNN reported that the Internal Revenue Service was indeed making plans to rescind Harvard's tax-exempt status, according to two sources familiar with the matter.

Harvard President Alan Garber responded forcefully, telling The Wall Street Journal that such an action would be "highly illegal" and "destructive" to the university. He added that the message it would send to the educational community "would be a very dire one, which suggests that political disagreements could be used as a basis to pose what might be an existential threat to so many educational institutions".

The Broader Campaign Against Elite Universities
The targeting of Harvard is part of a wider campaign against American universities, particularly elite institutions. The Trump administration has launched investigations or funding suspensions against more than 60 institutions, including Columbia, Cornell, Princeton, and the University of Pennsylvania. This campaign represents what many academic leaders view as an unprecedented governmental intervention into higher education.

On April 28, the civil rights offices of both the Department of Education and the Department of Health and Human Services announced investigations into Harvard University and the Harvard Law Review based on allegations of race-based discrimination in the journal's operations. These investigations are examining Harvard's relationship with the journal, including financial ties, oversight procedures, and selection policies.

Columbia University has already accepted demands from the Trump administration in an attempt to recover approximately $400 million in federal grants and contracts. As part of its concessions, Columbia agreed to new oversight for its Middle Eastern, South Asian, and African Studies Department, strengthened campus security, and introduced stricter protest and disciplinary policies.

Multiple Perspectives on the Conflict
The administration's actions have drawn varied responses from different stakeholders. Nearly 200 leaders in higher education issued a collective statement opposing "the unprecedented government overreach and political interference that currently threaten American higher education". This letter, coordinated by the American Association of Colleges and Universities, was endorsed by presidents and administrators from a range of institutions across the U.S.

Notably, even organizations focused on combating antisemitism have expressed concerns about the administration's approach. The Anti-Defamation League, a major organization that combats antisemitism, wrote in an open letter: "Antisemitism on college campuses is a genuine crisis that demands serious attention, but we are concerned about the extent and scope of the current approach taken by the Administration to Harvard". Jonathan Greenblatt, president and CEO of the ADL, added that "Denying federal funds (whether in part or in total) is an extremely serious and rightfully rare punishment that should be used only in the most severe situations with institutions incapable or unwilling to improve".

Former Harvard President Larry Summers, despite being critical of Harvard's handling of anti-Israel sentiment on campus, has also expressed concern about the administration's actions: "Universities are in need of a great deal of reform and it's come too slowly, but that's not a reason why the government can entirely suspend the law".

Political Context and Motivations
The conflict between the Trump administration and Harvard occurs against a backdrop of declining public confidence in higher education. According to a 2024 Gallup/Lumina Foundation poll cited by CBS News, the percentage of Americans with high confidence in higher education had declined by 21 points over less than a decade, with almost a third expressing no confidence at all.

Critics argue that the administration's targeting of Harvard and other elite universities is politically motivated rather than genuinely concerned with addressing antisemitism or improving education. The New York Times reported that the Trump administration's confrontation with Harvard is "part of a broader initiative by Mr. Trump to redefine the conventional boundaries of civil rights disputes and reshape what he perceives as the liberal bias of elite academic institutions".

The Task Force to Combat Anti-Semitism, which is spearheading many of these efforts, is led by former Fox News personality and civil rights lawyer Leo Terrell, in conjunction with top Trump official Stephen Miller and others. The task force's early actions against elite academic institutions "underscore the power and influence that Miller has amassed in Trump's second term – implementing an agenda years in the making that extends far beyond the issue of combating antisemitism".

Potential Implications and Consequences
If the administration succeeds in revoking Harvard's tax-exempt status, the consequences would be severe. Harvard would not only be liable for federal taxes but could also see a decline in donations, as contributions would no longer be tax-deductible for donors. A Harvard spokesperson warned that money for federal taxes would have to be taken away from other priorities and "would result in diminished financial aid for students, abandonment of critical medical research programs, and lost opportunities for innovation".

The implications extend beyond Harvard itself. As President Garber noted, this unprecedented action could create a precedent where "political disagreements could be used as a basis to pose what might be an existential threat to so many educational institutions". The dispute raises fundamental questions about academic freedom, government oversight of higher education, and the independence of universities in America.

Conclusion
The Trump administration's targeting of Harvard University's funding and tax-exempt status represents a dramatic escalation in tensions between the federal government and higher education institutions. While the administration's stated justifications center around antisemitism, diversity programs, and admissions policies, many observers see political motivations behind these unprecedented actions.

The outcome of this conflict will have significant implications not only for Harvard but for American higher education as a whole. It raises fundamental questions about academic freedom, university governance, and the appropriate relationship between the federal government and educational institutions. As Harvard continues its legal challenge and the administration maintains its pressure, the resolution may ultimately shape the landscape of American higher education for years to come.

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