Report: Harvard Could Face Billion-Dollar Budget Shortfall from Battle with Trump Administration
Harvard University could face a billion dollar budget shortfall if it loses its battle against the Trump administration, which has sought to make an example out of the school over concerns about antisemitism and DEI policies.
The Wall Street Journalpublished a report on Wednesday containing an analysis of all the ways Harvard University, America’s richest and oldest institution of higher education, could lose out on a about a billion dollars a year “if President Trump follows through on all of his plans and threats spanning research funding, tax policy, and student enrollment.”
“A sustained shortfall of that magnitude would severely strain Harvard’s ability to manage its $6.4 billion annual operating budget. Though Harvard has a $53 billion endowment, more than 80 percent of the money is subject to donor restrictions, meaning it can’t be touched to patch budget gaps without inviting lawsuits,” according to the report.
The Journal estimated a $240 million loss from Harvard’s $2.4 billion endowment income if Congress is successful in increasing the tax on annual investment income to 8 percent from the current tax rate of 1.4 percent.
The Journal then estimated a $110 million loss from the $800 million in college and graduate school revenue. That figure includes an estimated $90 million in potential loss in international student tuition, as well as a roughly $20 million loss in federal financial aid that is potentially at risk. In May, the Trump administration prohibited Harvard from enrolling students on foreign visas, saying that move was an effort to hold the school “accountable for fostering violence, antisemitism, and coordinating with the Chinese Communist Party on its campus.” Harvard sued in response, and a federal judge paused the order.
Finally, The Journal factored in $700 million the Trump administration slashed in federal research funding.
“That grim math helps explain why Harvard has taken steps toward negotiating with the administration after months of defiance,” The Journal noted.
With the administration continuing to apply pressure — on Monday, it notified Harvard that it has allegedly violated civil-rights law over its treatment of Jewish and Israeli students, risking more federal funding — Harvard has said it is working to increase viewpoint diversity and “intellectual openness,” according to the report. The school and Trump administration were engaging in talks as recently as mid-June, the report notes.
“Harvard has made significant strides to combat bigotry, hate, and bias. We are not alone in confronting this challenge and recognize that this work is ongoing,” the university said in a statement.
A senior White House official told the publication the school will receive no money “until it ends its discriminatory and deeply embarrassing practices. The private sector is welcome to step in and support Harvard.”
The Trump administration’s financial crackdown on the school has already “led Harvard to cut back” including freezing new hires, laying off staff at Harvard’s Kennedy School of Government, and shrinking department budgets, according to the report.
Ted Mitchell, president of the American Council on Education, a trade group for higher education, told the publication the school is “peering over the precipice,” and added that “Harvard and American education will suffer a severe, perhaps irreparable blow” if the school’s lawsuits against the Trump administration are unsuccessful.
Katherine Hamilton is a political reporter for Breitbart News. You can follow her on X @thekat_hamilton.
