Federal Aid Restrictions Imposed
The Trump administration escalated its dispute with Harvard University on Friday by placing the school under heightened financial scrutiny. The Education Department announced that Harvard must now use its own funds to distribute student loans and grants before being reimbursed with federal aid. The move, known as “heightened cash monitoring,” is typically applied to smaller or for-profit institutions, not elite universities with multibillion-dollar endowments.
Civil Rights Investigation Dispute
In addition to financial oversight, the administration gave Harvard a 20-day deadline to turn over detailed undergraduate admissions data. The request comes as part of a federal civil rights investigation into whether Harvard illegally considers race in its admissions process and whether it has adequately addressed antisemitism on campus. Officials said the school’s previous submissions of more than 500 pages were “deficient or wholly unresponsive.”
Financial Safeguards Demanded
The Department of Education is requiring Harvard to post an irrevocable $36 million letter of credit, representing 30 percent of its most recent federal student aid allocations. Education Secretary Linda McMahon said the demand reflects “growing concerns regarding the university’s financial position,” citing Harvard’s own bond market disclosures warning of risks tied to its ongoing conflict with federal authorities. She added that these measures are intended to “protect taxpayers” while Harvard remains eligible for federal aid.
Wider Conflict with the University
This action marks the latest escalation in a long-running standoff between the administration and Harvard, which has included attempts to challenge the school’s tax-exempt status, research funding, foreign student enrollment, and patent protections. Earlier this month, a federal judge ruled against the administration’s attempt to freeze $2 billion in Harvard research grants. Despite its $53 billion endowment, Harvard now faces new financial restrictions while the federal investigation continues.
