The Trump administration on Friday rolled out new restrictions on Harvard University’s access to federal funds, escalating its ongoing clash with the elite U.S. institution.
In a statement, the Department of Education said Harvard has been placed on “heightened cash monitoring (HCM) status” over “growing concerns regarding the university’s financial position.”
Officials pointed to the administration’s civil rights allegations against Harvard, uncertainty over future aid, the school’s recent bond issuance, and staff layoffs as reasons for the move.
Under the new arrangement, Harvard must use its own money to distribute student financial aid that the federal government has approved, and then seek reimbursement.
“Students will continue to have access to federal funding, but Harvard will be required to cover the initial disbursements as a guardrail to ensure Harvard is spending taxpayer funds responsibly,” the department said.
In addition, Harvard has been ordered to provide an irrevocable $36 million letter of credit to cover possible liabilities and guarantee it meets financial obligations to both students and the department.
The measure is the latest step in the Trump administration’s intensifying battle with universities, following a recent court victory for the Cambridge, Massachusetts-based school.
Trump officials accuse Harvard and other colleges of advancing “woke” ideologies while neglecting to adequately protect Jewish students during pro-Palestinian demonstrations.
Harvard rejects these allegations, arguing that federal authorities are attempting to interfere with its admissions, hiring practices, and academic programs.
Earlier in September, a Boston judge directed the administration to lift its freeze on about $2.6 billion in federal funding for Harvard, ruling that the Department of Education had “used antisemitism as a smokescreen for a targeted, ideologically motivated assault on this country’s premier universities.”
Harvard has not publicly addressed the latest restrictions but announced Friday that it has begun recovering some of the previously frozen funds, including $46 million in research grants from the U.S. Department of Health and Human Services.