Federal policies tighten around Harvard University's financial situation under the Trump administration
The Trump administration has announced new restrictions on Harvard University, placing the oldest university in the US on "heightened cash monitoring" status due to financial concerns. This decision comes as part of a series of events triggered by the university's violations of Title VI of the Civil Rights Act, which prohibits discrimination on the grounds of race and ethnicity.
Under the new restrictions, Harvard is required to cover the initial disbursements of federal student aid as a precaution to ensure responsible spending of taxpayer funds. The Office of Federal Student Aid (FSA) is planning to require Harvard to post an irrevocable letter of credit for $36 million or provide alternative financial protection. This move is intended to provide additional security for federal student aid funds.
The FSA is also requiring Harvard to provide financial security beyond the initial disbursements of federal student aid. This means that the university must ensure it has sufficient funds to cover any potential future obligations related to federal student aid programs.
It's important to note that these restrictions do not apply to Cambridge specifically, but Harvard is mentioned in the same context. The new limitations on Harvard are due to the university's violation of civil rights issues, which has raised concerns about its financial position.
The US Department of Education has stated that students will continue to have access to federal funding. However, the restrictions limit Harvard's ability to access federal funds for student aid programs, which could potentially impact the university's financial aid offerings.
Harvard is compelled to spend its own funds for student aid programs before requesting funds from the education department under the new restrictions. This is part of a recent crackdown by the Trump administration aimed at ensuring the responsible use of federal funds.
The US Department of Justice imposed these restrictions on Harvard University in 2025, citing compliance and regulatory issues related to federal funding and grant management. The department's decision was a response to the university's violations of civil rights laws.
The Trump administration's actions against Harvard are part of a broader trend of increased scrutiny of universities' compliance with civil rights laws. It remains to be seen how these restrictions will impact Harvard's financial position and its ability to provide financial aid to students in the future.
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