Already, and this is the Daily This is the Daily OS. Oh, now it makes sense.
Good morning, and welcome to the Daily OS. It's Thursday, the seventeenth of April. I'm Zara Seidler.
I'm Sam Kazlowski.
Harvard University is facing a major financial blow after the Trump administration froze two point two billion dollars in federal funding this week. The prestigious institution has refused to comply with a series of government demands relating to both diversity policies and anti semitism. Today, we're unpacking what's happened in this unprecedented standoff between one of America's most elite universities and the White House.
Zara, this is a pretty significant development in President Trump's relationship with universities, American universities, which is some of the most famous in the world. Can you break down exactly what's happened here though with Harvard?
So earlier this week, the Trump administration announced that it was freezing around two point two billion US dollars, So that's around three point five billion Australian dollars in grants to Harvard Universities. Now, that came in response to Harvard refusing to comply with a list of demands that came
from the government. Now, as you said, there is some context here between the relationship of the Trump administration and specifically higher education in the United States, and more specifically, over the last several weeks, we've really seen the Trump administration putting this increased pressure on universities, specifically focusing around two main issues. Now, those issues are anti semitism on campuses and DEI, which we know stands for diversity, equity
and inclusion when it comes to hiring and admission practices. Now, the government has been warning universities that if they don't comply with their demands on these issues, they could stand to lose billions in federal funding.
Okay, so before we get into the specific demands, can you give us a bit of background on Harvard's relationship with government funding. Yes.
So, I'm sure many of our listeners are familiar with Harvard. It's one of, if not the world's, most prestigious universities.
It's a Lacrosse did not go there.
Mike Ross from since did not attend, but many other famous people have attended. Its alumni and faculty have earned more than one hundred and sixty Nobel Prizes, with the most recent one being awarded just this year. And I think that that paints a very clear picture about the caliber of participants at this college. And when it comes to finances, like many other colleges, Harvard has an endowment, So that's basically a fund of donated money that has
been incoming into the college. Now, Harvard's endowment stands at around fifty billion dollars, whoa heaps of money. However, the university does still rely quite heavily on federal funding for research in particular. In fact, in twenty twenty four, the US government supplied about sixty eight percent of Harvard's outside research funding. So the freeze that we've been talking about represents quite a significant portion of federal research grants and contracts for Harvard.
So how did we get here? I mean, this is a really major escalation. There is so much going on in the Trump administration at the moment, it's interesting that we got to this point. What led to this standoff?
Look, the short answer here is that this has been brewing for a long time.
It hasn't come out of nowhere.
Both during the campaign and then once Donald Trump was inaugurated, he made very clear that he had colleges, especially Ivy League colleges, which are kind of the upper echelon of US colleges, He had them in his sites, and he has stood firm on that. He believes that they need to be doing more on anti semitism, and he believes that there is too much of a focus on DEI, so those diversity and inclusion programs at these colleges, and so over the past couple of months, he's basically been
implementing this crackdown on those colleges. When it comes to Harvard in particular, though, this started on March thirty first, when the White House announced that it was conducting a review of Harvard's federal contracts and grants, specifically with the
aim to combat anti semitism. Then last Friday, the administration sent a letter to Harvard's president, doctor Alan Garba, stating that the university had quote failed to live up to both the intellectual and civil rights conditions that justify federal investment.
I's strongly worded.
Very I mean, if there's one thing about this story, it's that nothing has been lightly worded on either side here. Basically, though that letter that I was just talking about that was sent last Friday, detailed a list of demands from the Trump administration to Harvard that the college would need to meet in order to maintain its federal funding.
And what type When you said demands, what type of thing are you talking about here? You're talking about like course curriculums and all of that question.
I mean, it is quite unfamiliar to an Australian audience, and it is fairly unprecedented until now to have a sort of list of demands sent to a private institution. The demands are themselves pretty extensive, so I guess I'll just go through a high level run through of what they are. So, the government wants Harvard to hire independent auditors to ensure that its departments have what they call diverse viewpoints, though we don't actually get any elaboration in
the letter about what that means. Other demands include the government wanting oversight of Harvard's hiring, promotions, and admissions processes. They've also demanded that Harvard reject applicants from non US citizens who are deemed to be hostile to American values.
That's a direct quote there, but again that term isn't actually defined On top of that, the government wants Harvard to report any international student accused of breaking university rules directly to the federal government, so rather than working through an internal process, that that process be expedited and sent straight to the government. The administration also calls for a ban on face masks and an end to funding quote any student group or club that endorses or promotes criminal activity,
illegal violence, or illegal harassment. Now that's kind of the clearest link made to the pro Palestinian protests that we saw on college campuses, the encampments that we saw last year. But then the Trump administration also requests that Harvard reforms programs with egregious records of anti Semitism or other bias.
And by programs them in courses right.
Yes, and departments.
So a similar request was made of Columbia, and they basically had to move the management of the Middle East department at that college under different management. And so they are looking for Harvard here to commission an external party, and that external party needs to be a pro by the government themselves to audit those programs and departments that they say most fuel antisemitic harassment.
So this is clearly not business as usual. No, in terms of the standard relationship between a government and a US university. How has Harvard now responded to these demands.
Well, Harvard has pretty firmly rejected those demands.
Which puts funding on the line right well exactly.
I mean, that's why we're talking about it today. So doctor Alan Garba, who I mentioned was the president, he came out with a very strongly worded statement where he said, no government, regardless of which party is in power, should dictate what private universities can teach, whom they can admit and hire, and which areas of study and inquiry they
can pursue. We were then shown a letter from Harvard lawyers who argued that the demands by the Trump administration violate Harvard's right to free speech and that they also exceed the government's authority. I was reading through that letter and I'll just pull out a few of the key quotes.
The lawyers claim that Harvard is committed to fighting anti Semitism and other forms of bigotry, and that anti Semitism and discrimination of any kind not only are a borrant and antithetical to Harvard's values, but also threaten its academic mission. But ultimately then the letter by those lawyers concludes that Harvard is not prepared to agree to the demands that go beyond the lawful authority of this or any administration.
And so we have there a refusal by Harvard to respond to the demands or to make the change that the Trump administration want. And therefore we fast forward, and the White House has now announced the immediate freezing of more than a quarter of Harvard's federal research grants and contracts.
And just to zoom out for one sec this is now becoming a common theme of the legal opposition to the Trump administration in this second term, of trying to examine what is and is outside of the scope of presidential power. I mean, there's a group of small businesses in the Marriaka taking the administrations to court this week over tariff, saying it is exceeding the powers usually given to a president. So it's interesting that this isn't just in this area,
it's across a lot of different areas. So the administration comes out and freezes a quarter of Harvard's federal research grants. What's been the response to Harvard taking that stand.
Look, it's been fairly mixed, and I don't think that that would surprise anyone. On the one hand, there are current and former students who are backing Harvard's moves, suggesting that this is upholding the integrity of the institution. One of those former students you might be familiar with is one Barack Obama.
I've heard of him.
He's, you know, a familiar name.
He attended Harvard, and he took to social media to praise the decision. He said, it's set an example for other higher ed institutions to reject an unlawful and handhanded attempt to stifle academic freedom while taking concrete steps to make sure all students at Harvard can bear fit from an environment of intellectual inquiry, rigorous debate, and mutual respect.
And that precedent point is really important here, because, as we've briefly inferred, Harvard is not the only school that is experiencing this sort of like negotiation with the Trump administration. I mentioned earlier that Columbia is another such school that
Donald Trump has in his sights. They are currently in negotiations with the Trump administration, and what we understand is that they have agreed to a number of the demands made by the administration, but here we have Harvard, at least to the public, being the first school to actively reject the demands made. And so what precedent this sets for other schools across the country who are also looking at having their funding frozen. It is really interesting.
Is there more that President Trump can continue to kind of threaten threaten Harvard with? Yeah?
I mean, it's a good question, because Donald Trump is certainly doubling down. He is now talking about whether or not Harvard should lose its tax exempt status, and he is suggesting that perhaps Harvard needs to be taxed as a political entity. He says, and I'm quoting here if it keeps pushing political ideological and terrorist inspired supporting sickness.
And so, just to be clear that if the tax exemption status of Harvard were to change, which would be highly significant, we could again see Harvard losing billions and billions of dollars under this move. But there hasn't been any confirmation from the administration beyond that truth social post that the Trump administration is actually thinking about doing this.
Right now, perhaps I'll just break that down a little bit more so, at the moment, Harvard would be taxed zero dollars for any of its income because it's classified as an education institution, and that's essentially a saving it makes because it doesn't pay money to the tax office. A political entity would be taxed a higher amount than zero.
And Trump is basically saying that, you know, you could wake up tomorrow morning, Harvard, and you could have a tax bill that could potentially be in the hundreds of millions.
Yeah.
Okay, so that's a pretty serious next step. Where do you see this all going, what happens next? And could Harvard actually even appeal decisions against it?
Yeah?
Well, again, I think it does need to be restated that this is a fairly unprecedented situation, both for Harvard and for the administration. There's not really anything that either of them can point to in terms of next steps that are clearly set out. So one option is that, yes, Harvard could challenge this in court. They could argue that there has been government overreach and that the demands violate
principles of academic freedom. Another alternative is that they could go back to the negotiating table exactly, and that they could settle on a compromise with the administration, though at this point that does seem less likely. But you know, we have no idea what's happening behind closed doors. But in the meantime, the existential threat that Harvard has to deal with is that it now has this huge funding gap that has almost entirely emerged overnight.
And so I was reading that there have.
Been a number of stop work orders made to certain faculties undergoing research, that their research grants have just been taken and therefore they cannot continue to invest in that research.
So don't come to work today because we don't have the money to pay you right now.
Correct, And so I suspect we'll see a bit more of that over the coming weeks and months. But this story is still developing, and whether or not either party negotiates compromises, we really don't know at this point.
It's a really interesting stories, Szara, that, as we've said a couple of times now, doesn't have a historical example for us to go and look at and examine what could happen next. So we're going to have to keep a really close eye on this one. And thank you for listening to this episode of The Daily Oz. We'll be back in the afternoon with our afternoon headlines. If you enjoyed this episode, Flick it to a friend means
the world to us. We'll speak to you later. My name is Lily Maddon and I'm a proud Arunda Bunjelung Kalkadoon woman from Gadighl country. The Daily oz acknowledges that this podcast is recorded on the lands of the Gadighl people and pays respect to all Aboriginal and torrest Rate island and nations. We pay our respects to the first peoples of these countries, both past and present.