Why Harvard may pay $500 million to settle with the Trump administration and restore federal funding

Why Harvard may pay $500 million to settle with the Trump administration and restore federal funding

Harvard University and the Trump administration are nearing a $500 million settlement that would restore billions in federal research funding frozen during their months-long standoff. The payment, spread over several years, would be directed toward vocational and academic programs rather than paid directly to the government, meeting President Trump’s demand for a sum more than twice Columbia University’s recent $200 million agreement, the New York Times reported.

Under the proposed framework, Harvard would also commit to reinforcing its efforts against antisemitism on campus. In return, the administration would reinstate federal research grants, abandon plans to appoint a monitor, and end Justice Department and Commerce Department investigations into the university. The deal would also halt attempts to block thousands of international students from enrolling.

For Trump, the agreement would be a political win, demonstrating that his pressure forced concessions from one of the world’s wealthiest universities. For Harvard, it would protect its academic independence and safeguard a key revenue stream. The university, despite its $53 billion endowment, has warned that the freeze on funding could blow a $1 billion annual hole in its budget.

One unresolved issue is the administration’s push for detailed admissions data — including race, gender, GPAs, and test scores — in line with Trump’s recent executive order. Harvard has resisted, arguing the demand is invasive and risks undermining its admissions process in the wake of the Supreme Court’s affirmative action ruling.

The dispute erupted in the spring when Harvard rejected a sweeping list of federal demands, from political ideology surveys to curriculum audits. Hours later, the administration froze research funding. Harvard sued in April, framing the case as a defence of constitutional and academic freedoms. A federal judge has yet to rule, but both sides have sought an off-ramp to avoid prolonged damage.

On Harvard’s campus, some faculty and students fear any deal would signal capitulation. Negotiators have pushed for the settlement to be a formal legal agreement, making it harder for the administration to change terms later. The outcome could set the tone for other universities, with the administration already proposing a $1 billion settlement for UCLA and striking deals with Columbia and Brown that include cultural and political conditions.