According to reports, Cornell University and Northwestern University are currently close to reaching an agreement with the White House to obtain U.S. federal funding. Brown University, Columbia University and the University of Pennsylvania have previously reached settlements with the administration over the past month. However, UCLA and Duke University have recently joined Harvard, Princeton and other schools in losing U.S. federal funding.
Under huge financial pressure, more and more American universities are being forced to give up confrontation and instead seek compromise with the White House.
On August 4, it was reported that Cornell University and Northwestern University are currently close to reaching an agreement with the White House. Brown University, Columbia University and the University of Pennsylvania have previously reached settlements with the administration over the past month.
However, at the same time, reports indicate that the University of California, Los Angeles (UCLA) and Duke University have recently joined the ranks of Harvard University, Princeton University and other schools in losing U.S. federal funding, which is the financial lifeline for large research schools to maintain operations.
This unprecedented pressure campaign is shaking up the world of American higher education, affecting faculty, staff, student and alumni groups, and clouding the future of the medical and scientific research conducted at these institutions. As the Trump administration's leverage continues to increase, universities' increasingly tight budgets are forcing them to move faster to the bargaining table.
Chain Reactions and Financial Distress
A domino effect is unfolding, with one university's compromise appearing to be triggering another to follow suit.
Brendan Cantwell, a professor at Michigan State University who focuses on the political economy of higher education, said:
It looks like they both want to make a deal now, as if the dam has burst. I wouldn't be surprised at all if we see a flurry of settlements next.
Compromised American colleges and universities are experiencing varying degrees of financial stress:
Northwestern University announced it will cut more than 400 jobs to save 5% on labor costs after $790 million in research funding was suspended due to potential civil rights issues. The school called the past few months one of the most difficult periods in its 174-year history.
Cornell University’s leadership warned in June that the school was considering “dramatic austerity measures” as hundreds of millions of dollars in federal research contracts were terminated or frozen.
Brown University was forced to take out a $500 million loan shortly before reaching the settlement. The school ultimately agreed to pay its state $50 million over the next 10 years for workforce development in exchange for reimbursement of at least $50 million in unpaid U.S. federal grants.
This compromise can have long-term negative consequences. Lynn Pasquerella, president of the Association of American Colleges and Universities, worries that even if schools reach a deal, federal funds could continue to be weaponized by the Trump administration. She said:
The concern is that the more concessions we make by reaching these deals, the more the Government will be able to continue down this path.
“Federal Contractor” Dependence and Harvard’s Resistance
The Trump administration’s actions have exposed the deep dependence of America’s top research universities on government funding. Professor Cantwell likened these institutions to "major federal contractors", saying:
Imagine if the government said to Booz Allen or Raytheon, 'All your federal funds are going to be frozen for nine months,' you can imagine how those companies would react.
Harvard University has been hit harder financially than any other school by the storm, with billions of dollars in multi-year research grants and contracts frozen. The school estimates that the administration's move, along with provisions in the new bill that would increase taxes on endowment income, will cost it about $1 billion a year. Harvard Kennedy School has already made layoffs.
However, Harvard does not appear ready to compromise immediately. According to a report by the Harvard Crimson on Monday, Harvard University President Alan M. Garber has informed faculty and staff that a settlement with the administration is not imminent and that the school is considering legal options to resolve the dispute. Garber acknowledged in a letter to the entire school:
The unprecedented challenges we face have resulted in disruptive change, painful redundancies and continued uncertainty about the future.
Larry Ladd, a former budget director at Harvard University and now an adviser to the Association of Boards of Trustees of Colleges and Universities, said he could not criticize any university that struck a deal with the Trump administration, given the stakes involved. He explained:
Schools may be under pressure to support research endeavors by dipping into endowments and tuition revenue, which are typically used to support students. They don't want to do that because they want to continue supporting students. This pressure is real.