Roughly 24 hours after the Trump administration announced it would freeze more than $2 billion in federal grants and contracts, Harvard University’s research division began to assess the resulting fallout. The impact is already being acutely felt at Harvard’s School of Public Health, where professors are scrambling to salvage their research into treatments for tuberculosis and cancer. Harvard, the nation’s oldest and wealthiest university, has emerged as a new symbol of resistance to the Trump administration after refusing to concede to a series of policy changes demanded by the administration. Now, having placed itself in an uncertain position, Harvard must carefully consider its next steps.
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John Shaw, Harvard’s vice provost for research, emailed colleagues on Tuesday evening, urging them to notify the Office for Sponsored Programs of any funding disruptions they become aware of and to outline the actions they plan to take. According to an email reviewed by CNN, he wrote, “While it is inevitable that important research will suffer as a result of the funding freeze, we are asking for your assistance in determining the best approach to preserve essential work and support our researchers, while also utilizing institutional resources responsibly during this disruption.” “The intention is to stabilize the research environment while we gather information, coordinate decision-making, and prioritize the protection of what is most important.”
Professors within the Faculty of Arts and Sciences, which houses Harvard’s undergraduate and PhD programs, were informed via a separate email that a town hall meeting would be arranged in the coming days to address their questions. The funding freeze poses a threat to as much as $9 billion in federal funding for Harvard. Beyond the practical implications of losing these funds, the potential extent of this standoff remains unclear. One Harvard professor, who was not authorized to speak publicly, commented, “The degree to which the federal government’s influence permeates the university is sometimes obvious and sometimes less so.” “They are actively engaging in scenario planning to anticipate the potential consequences for each of the schools.” Several members of Harvard’s board of overseers directed CNN to the university’s press office. The university also declined CNN’s request to interview President Alan Garber. The funding concerns arise as the Department of Homeland Security issued a threat to Harvard on Wednesday, indicating it would revoke the university’s ability to enroll international students if it fails to comply with federal demands. Homeland Security Secretary Kristi Noem has given the university until April 30 to provide records regarding alleged “illegal and violent activities” of international students, or risk losing its certification under the Student and Exchange Visitor Program, which enables higher education institutions to issue eligibility certificates for nonimmigrant student visas.
Additional concerns expressed by the professor include the potential loss of the university’s tax-exempt status, which the IRS is reportedly planning to rescind, according to two sources familiar with the matter, as well as the possibility of the federal government ceasing to grant visas to foreign students, who constitute over a quarter of Harvard’s student body. “I am uncertain what the implications of losing that status would be,” stated Harvard economics professor Gregory Mankiw. “We do not have shareholders or distribute dividends, so I am unsure what they would be called.” “It is unclear how we would be taxed.” Non-profit organizations that benefit from tax exemption can lose this status if they violate various regulations, including those pertaining to political activity. Rescission would be an uncommon action for the IRS. Decades ago, the IRS revoked the tax-exempt status of a Christian university due to discriminatory practices. Sources indicate that a final decision regarding the rescission of Harvard’s tax exemption is expected soon. An attorney representing the university did not immediately respond to a request for comment. CNN has contacted the Treasury Department, which oversees the IRS, for comment. Harvard’s $53.2 billion endowment could also be a source of concern. Recent legislation introduced by Republican Representative Mike Lawler proposes raising the tax rate on endowment income from 1.4% to 10%. Late last year, The Harvard Crimson reported that Garber informed faculty that the potential tax hike was the “threat that keeps me up at night.” “If the tax is implemented, the university will be compelled to make cuts in some area,” Mankiw told CNN. “Our core functions are teaching and research. The question then becomes: would society benefit from less research or less teaching? The school will face a number of difficult decisions,” he said.
An Unprecedented Situation
This unprecedented situation could force Harvard into a protracted and costly legal battle with the Trump administration. “There is no existing playbook for navigating this,” said Stetson University law professor Peter Lake, who also serves as the director of the Center for Excellence in Higher Education Law and Policy, in an interview with CNN. Lake is an alumnus of Harvard College and Harvard Law School. A group of Harvard professors, through their chapter of the American Association of University Professors, preemptively filed a lawsuit last week in an attempt to prevent the administration from targeting university funding. The lawsuit alleges that the Trump administration violated the law by freezing funds without adhering to the protocol established under Title VI of the Civil Rights Act, which prohibits discrimination and aims to ensure that institutions receiving public funds comply with regulations. AAUP counsel did not provide a comment to CNN. The federal government has not responded to the lawsuit. Harvard could initiate its own federal lawsuit to challenge the administration’s actions in withholding funding, with potential legal arguments centered on First Amendment protections, claims of retaliation, or allegations that the government violated their civil rights under Title VI. If Harvard pursues litigation through the federal judicial system, it could lead to potential conflicts of interest due to judges’ connections to the university. Harvard Law School graduates constitute a significant portion of the federal judiciary, and they currently hold four seats on the US Supreme Court. The government could also pursue legal action against Harvard; a federal agency that provides funding to an institution can initiate fund termination proceedings or refer the matter to the Department of Justice for legal action if they believe Harvard is not in compliance. If the Justice Department becomes involved, it could file a lawsuit against Harvard seeking judicial intervention, which could grant the federal government greater leverage over Harvard through judicial oversight for an extended period. In this scenario, according to Lake, “If they chose to, they could literally go to court every week and say, ‘Look at what Harvard failed to do today.’” The university may be considering a shift away from its confrontational stance toward negotiating an agreement that would avert legal proceedings and reduce the tension that has escalated in the months since Trump’s term began. Harvard also possesses a degree of leverage, given its extensive global connections, Lake noted. “We have observed (Trump) employing this approach consistently – aggressive bargaining, utilizing what could be described as nuclear options, and employing very strong rhetoric. It is possible that the strategy is to respond in kind
