Trump threatens to revoke Harvard’s tax-exempt status in elite universities clash

Harvard defies Trump’s demand for federal oversight as funding freezes and tax threats escalate.

A person holds a sign about President Trump from their car in Harvard Square, Cambridge, Massachusetts, on April 15, 2025. Photo by Erica Denhoff/Getty Images

By Anna Fadiah and Hayu Andini

President Donald Trump has launched a new offensive in his escalating campaign against elite American institutions. This week, the president delivered a sharp ultimatum: Trump threatens to revoke Harvard’s tax-exempt status if the university continues to resist sweeping federal oversight. The declaration marks the most aggressive move yet in the administration’s wider war on higher education, a campaign critics say is politically motivated and designed to suppress academic independence.

The threat followed Monday’s freeze on $2.2 billion in federal research funding for the university, sending shockwaves through the Cambridge campus and beyond. In his social media statement, Trump claimed Harvard should be taxed “as a political entity” unless it submits to his demands, which include federal involvement in admissions decisions and faculty oversight.

Harvard President Alan Garber pushed back forcefully. “We will not negotiate over our independence or our constitutional rights,” he said, setting the tone for what is shaping up to be a defining showdown over academic freedom in the United States.

Trump zeroes in on elite academia

The president’s focus on elite institutions has intensified since his return to the political spotlight. While dozens of schools have faced pressure under his administration’s push to limit diversity programs and crack down on alleged anti-Semitism, Harvard now finds itself in the crosshairs of an administration determined to exert control over what it sees as hostile ideological territory.

In recent months, several other prestigious institutions, including Columbia University and Stanford, have altered policies or accepted government oversight in response to Trump’s threats of cutting funding. But Harvard has drawn a clear line.

The threat to revoke Harvard’s tax-exempt status could carry immense financial consequences. As the wealthiest university in the world—with an endowment of over $50 billion—Harvard enjoys massive benefits from its nonprofit status. Losing that designation would expose the university to federal taxation and potentially state-level consequences, disrupting its financial model and threatening thousands of jobs and research programs.

Fallout from the funding freeze

The immediate effects of the funding freeze are already visible. One Harvard faculty member was reportedly forced to shut down tuberculosis research this week due to a lack of resources. Departments across the university are bracing for further fallout.

Despite the upheaval, student sentiment remains strong. “I love it. I think it’s amazing,” said Darious Hanson, a Harvard undergraduate. “It shows that you’re not going to bow down, you’re not going to let free speech be taken.”

The funding halt has also affected collaborations between Harvard and federal agencies, including the National Institutes of Health and the Department of Energy. These programs often serve as the backbone of breakthrough research in public health, climate science, and technology—areas of national interest that could now face stagnation.

A political crusade framed as policy

White House Press Secretary Karoline Leavitt said the administration’s actions were a direct response to what it views as “unchecked anti-Semitism” on campus. The trigger, officials say, was a wave of protests against Israel’s war in Gaza that spread across Ivy League campuses late last year.

“Trump wants to see Harvard apologize. And Harvard should apologize,” Leavitt said during Tuesday’s briefing.

While Columbia University complied with the administration’s demand to allow oversight of its Middle Eastern studies program after being threatened with a $400 million funding cut, Harvard has refused similar terms. Garber’s resistance is being hailed by opponents of Trump’s policies as an essential act of academic courage.

Former President Barack Obama weighed in on X (formerly Twitter), saying, “Harvard has set an example for other higher-ed institutions—rejecting an unlawful and ham-handed attempt to stifle academic freedom. Let’s hope other institutions follow suit.”

Harvard stands alone in the storm

By refusing to cooperate, Harvard has become a symbol of institutional resistance to what critics see as an authoritarian push by Trump and his allies. The former president’s advisors, including Stephen Miller, have painted universities as anti-conservative strongholds that need to be brought under federal control.

Trump’s proposals for “viewpoint diversity” in faculty hiring and student admissions are being criticized as backdoor efforts to politicize campus governance and suppress critical thinking. His plan also seeks to install government monitors in key academic departments to investigate potential bias, particularly regarding Israel and the Middle East.

Harvard, which has produced eight U.S. presidents and 162 Nobel laureates, is now at the forefront of a battle that could reshape how American universities operate. Losing tax-exempt status would not only hurt Harvard’s finances—it could set a precedent for targeting other institutions unwilling to align with the federal government’s ideological directives.

A wider war on American institutions

Trump’s pressure campaign is not limited to universities. In a move that stunned the legal community, his administration has also begun targeting major law firms, demanding they donate hundreds of millions of dollars in free legal services to causes favored by the White House. The pressure is part of a larger strategy to reshape America’s professional class in line with Trump’s populist agenda.

The White House has justified its actions as necessary to combat what it calls a “liberal elite stranglehold” on education, law, and media. But critics argue the real goal is to silence dissent and suppress values of inclusion, diversity, and academic rigor.

Dozens of universities are now battling the Trump administration in federal court over deep funding cuts and politically motivated oversight efforts. These lawsuits have slowed but not stopped the campaign, and legal experts warn that the fight could reach the Supreme Court.

A test of academic freedom and political power

The clash between Trump and Harvard is about more than tax policy or funding. It’s a battle over the soul of American higher education. As Trump pushes for obedience from institutions that have traditionally operated independently, Harvard’s refusal marks a pivotal moment.

Garber’s statement that Harvard “cannot allow itself to be taken over by the federal government” may well become a rallying cry for defenders of academic freedom. It also signals that this fight is far from over.

Whether other universities will follow Harvard’s lead remains to be seen. For now, Trump’s threat to revoke Harvard’s tax-exempt status has drawn a line that could redefine the relationship between American universities and the government for years to come.

As the political temperature continues to rise, the implications of this conflict—on research, free expression, and the future of public education—will extend far beyond Cambridge.