Universities Face Full Funding Freezes Amid Trump Administration Demands

As detailed in our prior client alerts here, on January 27, 2025, the Office of Management and Budget (OMB) issued a memorandum to the heads of all executive departments and agencies, ordering a freeze of federal grants.

On February 3, 2025, the US Department of Education's Office for Civil Rights (OCR) announced that its Task Force to Combat Anti-Semitism (Task Force) will visit 10 institutions of higher education (IHEs) that the Task Force determined "have experienced antisemitic incidents since October 2023."¹ On March 10, 2025, OCR sent letters to 60 IHEs, warning them of impending investigations "for Title VI violations relating to antisemitic harassment and discrimination."² In the letter, OCR warned that the administration may freeze federal funding for IHEs that fail to comply with their obligations under Title VI. In March 2025, the administration began implementing freezes of federal funding at specific universities:

• On March 7, 2025, the administration froze $400 million in federal funding to Columbia University;
• On March 19, 2025, the administration froze $175 million in federal funding to the University of Pennsylvania;
• On April 1, 2025, the administration froze $210 million in federal funding to Princeton University;
• On April 3, 2025, the administration froze $510 million in federal funding to Brown University;
• On April 8, 2025, the administration froze over $1 billion in federal funding to Cornell University and $790 million in federal funding to Northwestern University; and
• On April 14, 2025, the administration froze over $2.2 billion in federal funding to Harvard University.

In this alert, we provide background on several of these funding freezes and recommendations for IHEs as they navigate uncertainty and risks surrounding these freezes. 

Harvard University

On March 31, 2025, the administration announced it was reviewing $9 billion in federal contracts and grants to Harvard University. This announcement prompted a lawsuit by the American Association of University Professors (AAUP) and its Harvard Chapter. The complaint, filed on April 11, 2025 in the District of Massachusetts, argued that the review of Harvard's funding violated the Administrative Procedure Act by failing to follow the legal procedures for escalating a Title VI investigation to a threat to terminate federal funding. The plaintiffs also filed a motion for a temporary restraining order, seeking a preemptive halt to any funding freeze.³

On April 11, 2025,⁴ the administration sent Harvard a letter outlining a proposed series of programmatic changes to Harvard's academic operations which, if accepted by Harvard, would "constitute an agreement in principle, which the parties will work in good faith to translate into a more thorough, binding settlement agreement." The reforms identified fell into several categories, including:

• "Governance and leadership reforms," including "reducing the power held by faculty (whether tenured or untenured) and administrators more committed to activism than scholarship";
• "Merit-based hiring reform" and "admission reform," including adopting hiring and admissions policies that cease all preferences based on race, color, religion, sex, or national origin;
• "International Admissions Reform," including federal reporting requirements for any foreign student found to have committed a conduct violation;
• "Viewpoint diversity in admission and hiring," including commissioning an external auditor to assess every department’s viewpoint diversity and report to the federal government;
• "Reforming programs with egregious records of antisemitism or other bias," including commissioning an external auditor to assess every department’s biases and report to the federal government;
• "Discontinuation of DEI," including mandating the university shutter all DEI programs, offices, committees, positions, and initiatives;
• "Student discipline reform and accountability," including reforming student discipline policies for disruptive behavior such as sit-ins and encampments;
• "Whistleblower reporting and protection," including establishing a process for reporting to the federal government; and
• "Transparency and monitoring," including mandating the university submit a regular report to the government documenting compliance with the above mandates.

In response, on April 14, 2025, Harvard University President Alan M. Garber addressed a letter to the Harvard community committing that "the University will not surrender its independence or relinquish its constitutional rights" by complying with the administration’s proposed changes.⁵ This was followed by a letter sent by Harvard's outside counsel to the Commissioner of the Federal Acquisition Service at the General Services Administration, the Acting General Counsel of the US Department of Health and Human Services, and the Acting General Counsel of the Department of Education, in which Harvard affirmed its commitment "to fighting antisemitism and other forms of bigotry in its community," outlined the steps it has taken to do so, and contended that the government's letter stating its positions "disregards Harvard's efforts and instead presents demands that, in contravention of the First Amendment, invade university freedoms long recognized by the Supreme Court." The letter stated: "The university will not surrender its independence or relinquish its constitutional rights. Neither Harvard nor any other private university can allow itself to be taken over by the federal government. Accordingly, Harvard will not accept the government's terms as an agreement in principle."

Shortly after Harvard sent this letter on April 14, 2025, the administration announced a freeze of more than $2.2 billion in grants and contracts for Harvard. On April 16, 2025, news outlets reported that the administration will be taking steps to revoke Harvard’s tax-exempt status.⁶ As of the date of publication of this alert, there has been no public, official action taken regarding Harvard’s tax-exempt status. 

On April 21, 2025, Harvard filed suit in federal court in Massachusetts, accusing the administration of broad efforts "to punish Harvard for protecting its constitutional rights." The complaint states that the freeze "and the looming threat of additional funding cuts will chill Harvard's exercise of its First Amendment rights. Harvard will be unable to make decisions regarding its faculty hiring, academic programs, student admissions, and other core academic matters without fear that those decisions will run afoul of government censors' views on acceptable levels of ideological or viewpoint diversity on campus." Additionally, the complaint cites how this freeze will create a ripple effect beyond Harvard's campus, impacting critical research initiatives, stifling job creation, hindering scientific and medical developments, and also impacting "the economic security and vitality of our nation." The complaint asks the court to halt and declare unlawful the $2.2 billion freeze, as well as any freezes made in connection with the "unconstitutional conditions" in the administration's April 3 and April 11 letters outlining demands to Harvard.

Columbia University

On March 3, 2025, the Task Force notified Columbia University that it would review the university's federal contracts and grants as part of its ongoing investigations into the 60 named schools. On March 7, 2025, the administration announced it would pull $400 million in federal funding from Columbia University. On March 13, 2025, the administration sent a letter to the university outlining next steps that the administration "regards as a precondition for formal negotiations" regarding the restoration of federal funding.

On March 21, 2025, Columbia released a statement regarding changes it plans to implement,⁷ including, among others:

• Expanding oversight of student groups, including "rigorous and effective disciplinary actions for violations of University Rules," making "improvement to our disciplinary processes," and clarifying "time, place, and manner restrictions" regarding speech and protest activities.
• Expanding faculty searches "to ensure intellectual diversity across our course offerings and scholarship."
• Appointing a new Senior Vice Provost to "conduct a thorough review of the portfolio of programs in regional areas across the University, starting immediately with the Middle East." At this time, there are no public details on the timeline or extent of this review, which some commentators have called an academic receivership.
• Implementing university-wide Title VI training.

As of the date of publication of this alert, the administration has not yet announced its intention to reinstate the $400 million in federal funding to Columbia.

Northwestern University

On March 27, 2025, the House Education Committee sent a letter to Northwestern informing it that its federal funding was under “intense scrutiny.” The letter requested a response from the university containing, among other items, policies and budget information related to the university’s law school clinics. On March 31, 2025, Northwestern published a progress report highlighting its commitment to antisemitism.

On April 8, 2025, news outlets announced that the administration froze $790 million in federal funding for Northwestern.8 Representatives of Northwestern informed the community on April 17, 2025 that the university has not yet received official notice or confirmation of the freeze, but did receive stop-work orders on roughly 100 federal grants, which fund scientific research for various projects in robotics, nanotechnology, foreign military training, and Parkinson's disease.

After consultation and approval from the Board of Trustees, Northwestern has committed to self-fund research projects subject to the stop-work orders and any potential freeze, through the period of uncertainty regarding federal funding. Northwestern also announced a new webpage highlighting the importance of affected research projects, and committed that, "enabling this vital research to continue is among our most important priorities, and supporting our researchers in this moment is a responsibility we take seriously." 

University of Pennsylvania

On February 5, 2025, President Trump signed an executive order barring transgender women from participating in women's sports. The next day, the Department of Education launched an investigation into the University of Pennsylvania. On March 19, the administration announced, via a clip posted on X, that it was freezing $175 million of federal funding to the University of Pennsylvania due to the school’s policies on transgender athletes. These frozen funds include research grants directed at preventing hospital-acquired infections, drug screening against deadly viruses, and protections against chemical warfare.⁹

The University of Pennsylvania is not on the list of 60 schools that OCR is investigating for antisemitism.

Princeton University

On April 1, 2025, the administration froze $210 million in federal funding for Princeton University as part of its ongoing investigation into antisemitism. The university was contacted by several agencies, including the Department of Energy, NASA, and the Department of Defense. According to news reports, Princeton has not received a list of conditions to regain the funding. The administration has indicated that the funds will remain frozen while it investigates antisemitism on the campus.10

Cornell University

Cornell is among the 60 schools under investigation for antisemitism by OCR.  On April 8, 2025, news outlets reported that the administration froze more than $1 billion in federal funding for Cornell.

The same day, Cornell published a statement that it had not received notification of the freeze on $1 billion in grants, but that it did receive "more than 75 stop work orders from the Department of Defense." The frozen grant funds to Cornell University include those directed towards research into new materials for jet engines, propulsion systems, large-scale information networks, robotics, superconductors, and space and satellite communications, as well as cancer research.¹¹ As of April 18, the university "still has not gotten formal notification of the funding freeze."¹²

Litigation

As of the date of publication of this alert, Harvard University is the only IHE that has initiated a lawsuit challenging the funding freezes. This suit is accompanied by separate litigation by the national AAUP and its Harvard chapter filed on April 11, 2025. As noted in prior alerts, there are multiple pending lawsuits challenging freezes on federal grants to IHEs from government agencies, including NIH and NSF. We expect to see additional litigation over the funding freezes in the coming weeks. 

Recommendations

We recommend that IHEs monitor these developments closely and determine what steps would be needed to respond to investigations or inquiries from OCR or the administration. We anticipate that the administration will continue to investigate IHEs and review federal funding and research grants, particularly those considered "elite," such as Ivy League institutions. We recommend that universities, including those not identified for investigation by OCR, prepare for a review or reduction of their federal funding. Steptoe will be closely monitoring these developments and providing ongoing updates.

We are available to help with your institution's risk assessment and to provide compliance advice as you navigate this complex and rapidly changing landscape. For relevant updates, please refer to Steptoe's Education Publications.

¹ https://www.justice.gov/opa/pr/justice-department-announces-formation-task-force-combat-anti-semitism

² US freezes funding for Cornell, Northwestern University in latest crackdown | Reuters, U.S. Department of Education’s Office for Civil Rights Sends Letters to 60 Universities Under Investigation for Antisemitic Discrimination and Harassment | U.S. Department of Education.

³ https://www.thecrimson.com/article/2025/4/16/AAUP-files-for-preliminary-injunction/

⁴ Read the Trump Administration’s Letter to Harvard - The New York Times.

⁵ The Promise of American Higher Education - Harvard University President

⁶ Trump Threatens Harvard’s Tax Status After Freezing Funds - The New York Times. 

⁷ https://www.nytimes.com/2025/03/21/nyregion/columbia-response-trump-demands.html  

⁸ https://dailynorthwestern.com/2025/04/08/top-stories/federal-government-freezes-790-million-in-funding-for-northwestern/

⁹ https://president.upenn.edu/announcements/update-penn-community-federal-funding

¹⁰ https://www.cnn.com/2025/04/01/us/princeton-research-grants-suspended-trump/index.html

¹¹ Id.

¹² https://www.cornellsun.com/article/2025/04/the-university-still-has-not-gotten-formal-notification-of-the-funding-freeze-kotlikoff-tells-student-assembly