$1,000,000,000: This Is How Much Harvard Will Lose If Trump Okays Fund Cuts
Harvard University may lose up to $1 billion annually if US President Donald Trump goes ahead with his plans to cut research funding, tax policy and student enrollment, according to a new report in a leading American daily.
An analysis of the worst-case scenario losses shows that America's oldest institution may have a budget deficit of over a billion dollars annually, should the impasse in the Harvard-Trump tussle prevail.
According to The Wall Street Journal, a loss of $240 million in Endowment Fund, $700 million in research funding and $110 million in college, graduate school revenue puts the total number at over a million.
Even though Harvard has a massive $53 billion endowment, which is still wealthier and more powerful than its peers, the university doesn't have much flexibility with that money.
Much of the endowment is designed for specific purposes, such as some funds are allocated only for medical research, others for scholarships and some are locked in long-term investments.
In addition to this, Harvard is a tax-exempt university. But with Trump's intention to take away the tax-exempt status and impose an 8 per cent tax on endowment, it could lose hundreds of millions of dollars a year.
The US General Services Administration (GSA) on Tuesday asked all federal agencies to rethink their contracts with Harvard University and instead look for alternative businesses/companies for future endeavours.
Harvard University has a higher percentage of international students, more than 7,000, who pay full tuition fees. With the Trump administration threatening to block the university from enrolling these students, it could reduce tuition fees.
Since April, the US administration has taken away over $2 billion in research and education funding. With cuts to this, Harvard University might have to slash programs or departments, lay off professors or researchers, and reduce student scholarships.
One of its major schools, the Kennedy School of Government, has started laying off employees and cutting down some of its departments or programs. The university has also started selling investments at a loss. They sold $1 billion worth of private equity investments at a 7 per cent discount.
Katharine Meyer, an education policy fellow at the Brookings Institution, said that losing $100 million contract may seem small by itself, but if this keeps happening, the university won't be able to cover all the lost money from federal contracts, grants, and other income sources.
She said, "This $100 million dollar contract pullback is certainly the smallest effort that we've seen, but I think the cumulative impact is hurtling toward a point where eventually Harvard does not have infinite funds to be able to fill in where they've lost federal contracts and grants and any other sources of their revenue."
Over the last few months, the Trump administration has been at loggerheads with Harvard, particularly after anti-Israel protests over Benjamin Netanyahu's brutal war on Gaza and American support for what demonstrators called a genocide of Palestinians.
The administration has also accused to varsity of giving safe space to people with antisemitic views.
Karoline Leavitt, the White House Press Secretary, told reporters that Harvard had broken US civil rights laws. She said that if any organisation breaks federal law, like these civil rights laws, they should not be given federal funding, such as grants for research or education.
The Trump administration has also removed Harvard University from its electronic student immigration registry. This is used to track international students studying in the US, so if a university is removed, then international students can't legally study there.
The US has asked embassies to reject student visa applications of those looking to study at Harvard.
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