After weeks of saying he’s willing to work with the Trump administration to combat antisemitism, Harvard University President Alan Garber emerged Monday as the highest-profile challenger to the government’s effort to force change at elite U.S. colleges.

The retribution was swift.

A government task force on antisemitism said late Monday that it plans to freeze $2.2 billion of multiyear grants after Harvard’s decision to reject new demands from the administration. In a statement earlier in the day, Garber had argued that the expanded requests crossed red lines regarding academic freedom and interference in higher education.

“It makes clear that the intention is not to work with us to address antisemitism in a cooperative and constructive manner,” Garber wrote on Harvard’s website. “Although some of the demands outlined by the government are aimed at combating antisemitism, the majority represent direct governmental regulation of the ‘intellectual conditions’ at Harvard.”

Harvard’s rebuke — backed by two law firms in a letter to U.S. agencies — won plaudits from Democratic lawmakers, including former president Barack Obama, alumni and academics who have been eager to see resistance to President Donald Trump’s use of threats and executive orders to reshape institutions.

But Trump escalated the dispute with Harvard on Tuesday, threatening the university’s tax-exempt status.

“Perhaps Harvard should lose its Tax Exempt Status and be Taxed as a Political Entity if it keeps pushing political, ideological, and terrorist inspired/supporting “Sickness?” Trump posted on Truth Social. “Remember, Tax Exempt Status is totally contingent on acting in the PUBLIC INTEREST!”

Follow the The Big Take daily podcast on Apple, Spotify or anywhere you listen.

Along with targeting law firms and cities, the Trump administration has sought sweeping changes to universities, claiming that top schools aren’t doing enough to fight antisemitism on campus. The White House has criticized schools’ response to disruptions around pro-Palestinian student protests after the Oct. 7, 2023, attack by Hamas on Israel and the Jewish state’s retaliatory response in Gaza.

Already, the government ha0s canceled $400 million in funding to Columbia University, paused funds to Northwestern and Cornell and suspended money for Princeton. U.S. agencies have previously said they are reviewing about $9 billion of Harvard’s grants and contracts. That’s sparked concerns among faculty, students, lawmakers and alumni that the administration’s actions are suppressing free speech and harming scientific endeavor.

‘A gamble’

As the richest U.S. university, with a $53 billion endowment, Harvard has more financial power than others to weather a potential legal and political fight. Yet the administration’s response Monday — saying Harvard’s pushback “reinforces a troubling entitlement mindset” — indicates that it’s willing to strip key funds for research, medicine and public health at the Massachusetts school.

“Harvard’s decision to fight the government, one of the few entities that’s bigger than Harvard, is a gamble,” said Adam Kissel, a visiting fellow at the Heritage Foundation and former deputy assistant secretary at the U.S. Department of Education. The government likely “will begin taking action to issue findings and final determinations that will inevitably bring Harvard back to the table.”

A Harvard spokesman referred to Garber’s earlier statements when asked about the funding freeze: “For the government to retreat from these partnerships now risks not only the health and well-being of millions of individuals, but also the economic security and vitality of our nation.”

Harvard posted the administration’s letter from late Friday that detailed the new demands tied to federal funding. They included reforming the university’s governance; ending diversity, equity and inclusion programs; changes to its admissions and hiring; and curbing the “power” of certain students, faculty and administrators because of their ideological views. In his response, Garber declared that Harvard wouldn’t “surrender its independence or constitutional rights.”

The statement drew support from former Harvard President Larry Summers, who said he hoped other universities would adopt a similar stance to defend academic freedom. Massachusetts Representative Seth Moulton, a Democrat and Harvard alumnus, praised the school’s leaders “for finding the courage to stand against modern-day tyrants,” while Democratic Governor Maura Healey, also a graduate, said she was grateful to Garber and Harvard for standing up for educational freedom.

“We all agree that antisemitism has no place in America and that it should be fought in the workplace, classrooms and everywhere,” she said in a statement. “Complying with the Trump administration’s dangerous demands would have made us all less safe and less free.”

Obama, a Harvard Law alumnus, said the university’s move “set an example” in rejecting what he called “an unlawful and ham-handed attempt to stifle academic freedom.”

“Let’s hope other institutions follow suit,” he added.

Columbia, which has sparked criticism over its response to some of Trump’s demands, released its own statement late Monday.

“We would reject any agreement in which the government dictates what we teach, research, or who we hire,” Acting President Claire Shipman said in a message posted on the school’s website. “Though we seek to continue constructive dialog with the government, we would reject any agreement that would require us to relinquish our independence and autonomy as an educational institution.”

Princeton President Chris Eisgruber said his university “stands with Harvard.”

But the Trump administration continues to hold significant leverage over the institutions. Elise Stefanik, a Republican lawmaker from upstate New York, said it’s time to “totally cut off U.S. taxpayer funding to this institution that has failed to live up to its founding motto Veritas.” Stefanik, a Harvard alum, has been a leading critic of the university, its leadership and Penny Pritzker, senior fellow of the Harvard Corp., which oversees the university.

Funding freezes also risk hitting both the school and the local economy, including Harvard’s renowned hospital system. The school’s most recent financial report shows that 11% of its $6.5 billion in annual operating revenue comes from federally sponsored research funding.

The school of public health is the most reliant on “sponsored support,” at 59% of its operating revenue, followed by the school of engineering at 37% and the medical school at 35%. The report doesn’t break down federal support versus other money for the schools. Federal funding made up approximately 68% of total sponsored revenue in fiscal 2024.

While Harvard’s $53 billion endowment is more than three times the size of Columbia’s, the university can’t spend it like a bank account. About 70% of the annual distribution is restricted by donor terms to specific programs, departments, or purposes, according to the school. It distributed $2.4 billion in fiscal 2024.

Most universities don’t have enough cash and cash liquidity to go indefinitely without such a large portion of their expected budget, said Matthew Wynter, an assistant professor of finance at Stony Brook University in New York. While there’s potential that donations will increase in the wake of Harvard’s resistant stance, the university still has to repair relations with some of its biggest financial supporters after its initial approach to combating antisemitism on campus created significant rifts.

What’s more, turmoil in the U.S. stock market and concern about a potential recession may also lead some alumni to hold back.

“Even for a school like Harvard that has an enormous endowment, in this financial market, it’s very difficult to raise money because of a lot of their alumni gifts are going to be financial assets, which are also performing poorly right now,” Wynter said.

Harvard last week sold $750 million of bonds amid the threats to its federal funding. “As part of ongoing contingency planning for a range of financial circumstances, Harvard is evaluating resources needed to advance its academic and research priorities,” the school said.

The university is working with law firms Quinn Emanuel Urquhart & Sullivan and King & Spalding in response to the administration. From a legal perspective, the government’s demands on issues such as requiring diversity on ideological view points were “clearly overly aggressive,” said Vikram Amar, a professor at the University of California Davis School of Law and the former dean of the University of Illinois College of Law.

“I am not surprised Harvard couldn’t and didn’t accept all that was being asked of it,” he said.

-----------

—With assistance from Brendan Case.

©2025 Bloomberg L.P. Visit bloomberg.com. Distributed by Tribune Content Agency, LLC.