arvard University could suffer financial losses of up to $1 billion a year if President Donald Trump moves forward with proposed cuts to research funding, tax exemptions, and international student enrollment, according to a report in The Wall Street Journal.
The projected shortfall includes approximately $700 million in federal research funding, $240 million in endowment losses, and $110 million in tuition revenue from international students and graduate programs. Despite Harvard’s $53 billion endowment — the largest of any university — much of it is restricted, designated for specific uses such as scholarships, medical research, or locked in long-term investments, limiting its flexibility.
Federal Contracts at Risk
Tensions between the Trump administration and Harvard have escalated in recent months, particularly following campus protests over U.S. support for Israel’s military campaign in Gaza. The White House has accused the university of failing to protect Jewish students and violating civil rights laws, triggering an aggressive response.
On Tuesday, the U.S. General Services Administration (GSA) advised federal agencies to reevaluate their contracts with Harvard and consider alternative partners. Already, the administration has revoked over $2 billion in federal funding for higher education and research since April — a trend experts say could have devastating long-term consequences for the Ivy League institution.
Katharine Meyer, a fellow in education policy at the Brookings Institution, warned that even seemingly modest contract withdrawals could add up quickly. “This $100 million pullback may look small in isolation,” she said, “but cumulatively, it’s pushing Harvard toward a point where it simply can’t absorb the revenue losses from canceled grants and contracts.”
Kennedy School Layoffs, Asset Sell-Offs
The impact is already visible. Harvard’s Kennedy School of Government has begun laying off employees and downsizing certain departments. To bolster its finances, the university recently sold $1 billion in private equity assets — at a 7% discount.
Tax Policy and International Student Restrictions
Further compounding the crisis is Trump’s proposal to impose an 8% tax on university endowments, potentially costing Harvard hundreds of millions more each year. Additionally, with more than 7,000 international students who typically pay full tuition, restrictions on foreign student enrollment would strike another major blow to revenue.
The administration has already removed Harvard from the U.S. government’s electronic student immigration registry, effectively blocking it from enrolling new international students. Embassies have also reportedly been instructed to deny visa applications for students planning to attend Harvard.
White House Justifies Actions
White House Press Secretary Karoline Leavitt told reporters the administration believes Harvard violated U.S. civil rights laws. “Any institution that breaks federal law — including civil rights protections — should not receive taxpayer funding in the form of research grants or educational subsidies,” she said.
Despite its vast wealth, Harvard may soon be forced to make deeper cuts across programs, staffing, and student aid if the Trump administration’s actions continue. What began as a political standoff now threatens to become a financial crisis for one of the world’s most prestigious academic institutions.
