What’s Going On With Harvard’s Grant Funding?
Harvard has made news headlines recently, as it has come into an escalating conflict with the federal government. This has caused concern among parents and students, both those who are planning on attending Harvard in the fall, and those who are starting to consider their college applications. In this article, we’re going to explore what’s happening, and how it might impact you. We’re going to look at what the administration is asking of Harvard, the consequences Harvard has suffered so far, where things may go next, and how all of this will impact you. Let’s get started!
Why is Harvard in the News?
On April 11th, the current administration sent this letter to Harvard University with a list of concerns and demands. We recommend reading this in full, but to sum up, they are stating that they have concerns with both antisemitism on Harvard’s campus, and whether or not Harvard is following the precepts of the civil rights act.
Their proposed remedies to this include a massive restructuring of Harvard’s administrative structure, federal oversight of hiring, admissions, and teaching, and vastly reshaping how Harvard works as an institution. Unsurprisingly, Harvard was unenthused about this prospect. All universities, and indeed organizations generally, prize their independence, and it is unsurprising that Harvard is resisting this particular government policy.
After this refusal, the government cut grant funding to Harvard steeply, both for current commitments, and for long term grants. These grants were made to support various research initiatives at Harvard; as with all university research, the government foots much of the bill because it sees this as an investment. Studies to ameliorate various diseases, research into new technology, and methods to improve public health are all considered good things by the government.
Harvard then doubled down, stating its intention not to give in, and has begun drafting lawsuits against these moves by the government. In response to this, there have been statements from the administration calling Harvard’s status as a nonprofit into question. This would be a significant escalation, and many other universities have issued statements of support for Harvard, or joined in on its lawsuit against the government. The threat of loss of funding is very real to these schools, and they see no option but to fight against it.
In part, this is because of the situation with Columbia. As we covered previously, the federal government cut funding for their research grants if the school did not address concerns about antisemitism on campus. Columbia agreed, and made major changes. After this happened, the federal government froze even more research funding; $250 million on top of the $400 million already frozen. This alarmed other universities, and raised the question as to whether or not negotiating with the administration is ever a viable option.
Why Does Nonprofit Status Matter to Universities?
All top research universities are non-profit institutions. They don’t exist to create money, but to generate knowledge. They do often have a fair bit of money, but this is concentrated at the top end; most schools have far smaller endowments than Harvard. There are for-profit colleges of course, but these are generally not worth the time or money to attend. A school should focus its energy on education and research, and not see students as a source of income.
Nonprofit status gives universities certain privileges, the most prominent being tax exemption. This is important, because many universities are major land-owners, and this status lets them avoid the property taxes they would otherwise be saddled with. This is a trade off for the government to be sure, but one they have been happy making thus far. They lose out on the income from taxing universities, but gain a major benefit from the innovations those universities create. The relationship is symbiotic, with both benefiting.
Losing this, coupled with a loss of government grant funding, will greatly increase the costs universities face, while simultaneously slashing their incomes. Even Harvard with its billions will be unable to cope with this long term; yes they have a $50 billion endowment, but they spend over $6 billion each year to operate, so that pool can be drained quite quickly.
What Happens to Harvard Next?
The one thing we can say for certain is that there will be significant legal action forthcoming. Harvard is claiming that most every portion of the government’s order and actions has been unconstitutional, and they are being joined by most of the top universities in the US in this claim.
This will be an interesting lawsuit, not least because the universities whose graduates now fill the Supreme Court can afford some truly spectacular attorneys, and they have the alumni network and connections to make their positions known broadly. It is likely the government will take further action to bring these universities in line with their desires, but in the end, it will all fall to what the courts determine is allowable.
In the near term, we don’t anticipate any significant changes on the ground at Harvard, at least for most students. There may be increases in tuition, but unless the government takes drastic action, business should continue as normal. The most likely scenario is that courts put a stay on these executive actions until the cases are decided, which would likely be a few years out; the legal system is not known for its breakneck speed.
This holds true for any further actions the government takes as well; we anticipate they will threaten or enact further restrictions on Harvard; cutting more funding, attempting additional regulations, coming after their nonprofit status or accreditation; but each of these will be challenged in court, and will need to be deliberated over and decided on.
If you are considering applying to Harvard, then you should still do so, because the biggest takeaway from this is that Harvard is not unique. (Well they are, but also aren’t, let us clarify). Harvard is a great school, but they aren’t alone in being targeted by the government here; they are merely the first to get targeted to this extent, and to fight back this much. The same measures being brought against Harvard can be brought against any other university in turn.
Thus you should not be discouraged from applying to Harvard specifically because of this, because it is likely that every top university will be facing similar tribulations in its own time. How that plays out in the future depends in large part how things go for Harvard over the next few months.
Final Thoughts
We are living in interesting times, and that makes the college admissions process more exciting than ever. Of course, this is more excitement than most students or parents want, especially on top of all of the stresses already associated with the admissions process.
We hope that this article has given you a solid understanding of what’s going on between Harvard and the federal government, and how these machinations may impact your own college journey. We don’t know what’s going to happen next, but we will keep you updated, every step of the way.
When dealing with a constantly shifting situation, an expert guide can make all of the difference, be that in wilderness exploration or the wonders of college admissions. If you would like a guide for your own educational journey, Ivy Scholars can help. Schedule a free consultation today to learn how we can make your life less stressful. We have a long experience helping students find a spot in the college of their dreams, and are always happy to hear from you.
