Universities Get Schooled on Federal Funding

By Christian Schneider

Thursday, April 17, 2025

 

This week, President Donald Trump froze $2.2 billion in grants to Harvard University, angering members of the Elbow Patch Mafia around America. Critics quickly pounced, accusing the president of strong-arming private institutions and turning elite universities into political vassals. To be fair, they’re not entirely wrong — Trump’s move is a transactional attempt to bend higher education to his will. Yet it must be acknowledged that the impetus for the freezing of federal dollars for certain universities was a crisis for Jewish students, caused by the failure of college administrators to counter antisemitism and the harassment of Jews on campus.

 

The progressive ire over this move is rich with irony: administrators and faculty who have long championed a larger role for the federal government in American life are now experiencing the downside of that arrangement firsthand. When they were calling for more federal funding for public education, climate research, and social justice initiatives, they weren’t picturing a president like Trump holding the checkbook. They wanted the government to be a silent partner — one that funds without fussing.

 

But that’s not how this works. That’s never how it’s worked.

 

Of course, for all the dysfunction we’ve seen in Washington over the years, presidents have largely steered clear of micromanaging public and private universities. Even at the height of the culture wars, the general understanding was that universities — especially private ones — ought to be left to govern themselves.

 

But while the critics of Trump’s gambit are right to worry about presidential overreach, their indignation rings a bit hollow. The dirty little secret here is that conservatives have been warning about this exact scenario for decades. If you take billions of dollars from the federal government, you shouldn’t be surprised when the federal government wants something in return (as National Review’s editorial on this subject explained).

 

It’s a principle that is so basic that it ought to be posted in every college finance office. If you earn a paycheck, you answer to your boss. If you sign a contract, you abide by its terms. And if you’re a university — or a state or local government — and you accept money from Washington, you’d better be prepared for being told how to run your shop. The idea that elite colleges can gobble up taxpayer money while maintaining total autonomy has always been a fantasy. Except now it’s not Emma Stone but Roger Stone.

 

This is hardly a new phenomenon. The federal government has been leveraging its purse strings to enforce national policy for decades. One of the most famous examples came in the 1980s when the Reagan administration told states they would lose federal highway funds unless they raised the legal drinking age to 21. There was no national law mandating a drinking age. The feds simply said, “Nice roads you got there. Shame if we lost your Venmo username.”

 

And guess what? Every state fell in line.

 

The same dynamic plays out across the entire spectrum of government spending. Medicaid funding is tied to federal mandates about what services must be covered and how much a state must spend to get matching funds, which is why some GOP-led states refused to take part in Obamacare’s Medicaid expansion. Transportation money is handed out with strings dictating where and how it must be used, including mandates for design standards, environmental-impact assessments, and maintenance schedules.

 

Environmental grants require compliance with Washington’s regulations, regardless of whether or not they make sense for a given state. Even in education, states and school districts live and die by the metrics and mandates tied to federal dollars (how much must be spent on low-income students, etc.)

 

In contradiction to our federalist tradition, states are increasingly willing to become arms of the federal government in exchange for big checks. In fiscal year 2024, the federal budget sent $1.1 trillion (16.2 percent of all the money the feds spent) back to state and local governments. That number was actually down from 2021, when state and local governments received $1.5 trillion, an amount inflated by Covid-19 relief. But it’s also almost four times as much as state and local governments received in 1982 ($287.9 billion in 2024 dollars).

 

Arizona, for example, gets over 36 percent of its total revenues from the federal government. The state is in a position to be bullied either by Congress or a vindictive president intent on implementing his vision without the hassle of writing laws. (Start preparing the new signs: “Welcome to America, Arizona Campus.”)

 

And it’s not just government entities that find themselves in this position. Private businesses that do work with the federal government are subject to the same pressures. Defense contractors, law firms, and pharmaceutical companies are constantly calibrating their actions to avoid jeopardizing lucrative federal contracts. In fact, some of the most high-powered law firms in the country have recently gone out of their way to curry favor with the Trump administration — some even capitulating to political demands — because they don’t want to risk losing multimillion-dollar deals or drawing the ire of the administration.

 

They like getting paid more than they don’t like Trump.

 

So now it’s academia’s turn to learn this lesson. Trump’s move may be ham-fisted, and his motives may not be entirely pure, but the principle he’s exposing is one that was always there, hiding in plain sight: once you’re on the federal dole, you no longer have complete control over your own destiny.

 

Of course, the universities will argue that their work is too important, their mission too sacred, to be subject to the whims of a president — especially one as polarizing as Trump. But that argument falls apart the moment they cash the check.

 

So if Ivy League schools want to be fully independent, they can give back the billions they have taken from taxes paid by plumbers and nursery school teachers. If Columbia wants to preserve its academic integrity, it can say no to federal money and fund itself with tuition and private donations. But that’s not what’s happening. Columbia blinked. They saw what was coming and decided it wasn’t worth the fight, capitulating to Trump’s demands so as not to wave $400 million goodbye.

 

In doing so, they’ve proven the conservative point better than any Republican talking head ever could. The federal government isn’t some benevolent grant fairy handing out money with no expectations. And colleges that allowed antisemitism to sweep across campus should put their hands back in their own pockets.

 

So sure, go ahead and criticize Trump for playing hardball with Harvard. Worry about the precedent it sets — you’re right to do so. If Trump can use the threat of cutting funds to tell private schools what their policies should be on masks or plagiarism or student demonstrations, then a future Democratic president can come in and make a different set of demands. Today, it’s about DEI programs or China partnerships; tomorrow, it could be mandating segregated graduation ceremonies or requiring websites encouraging students to snitch on each other in the name of justice.

 

But recognize the responsibility of colleges to all their students. Prominent universities that take federal money have failed in some of their fundamental responsibilities, leading them to this moment.

 

In the end, the danger isn’t just Trump — it’s the structural imbalance that lets any president wield the power of the purse like a cudgel. Democrats have always been comfortable with attaching strings to funding. They’re upset now only because of who is pulling them.