“Investment is not an entitlement,” the administration wrote in an April 11 letter, accusing Harvard of having “failed to live up to both the intellectual and civil rights conditions that justify federal investment.” It laid out ten conditions for continued funding — demands Harvard swiftly rejected.

Harvard’s president,  Alan Garber, responded with defiance, arguing the administration’s intentions were not to collaboratively combat antisemitism but to impose unconstitutional ideological oversight. “Although some of the demands outlined by the government are aimed at combating antisemitism, the majority represent direct governmental regulation of the ‘intellectual conditions’ at Harvard,” he wrote. “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.”

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Harvard’s lawyers, William Burck and Robert Hur — both with conservative credentials — argued that the administration’s list violated the First Amendment. They concluded: “Harvard is not prepared to agree to demands that go beyond the lawful authority of this or any administration.”

Within hours of Harvard’s reply, the administration retaliated, freezing $2.2 billion in federal grants and a $60 million contract.

But the Ivy League school is prepared to take the hit.

Harvard’s financial power lies in its massive endowment, valued at approximately $53.2 billion as of 2024. To put that into perspective, it exceeds the GDP of at least 100 countries, including Iceland, Tunisia and Bahrain. Managed by the Harvard Management Company, it functions like a global investment firm with stakes across hedge funds, private equity, real estate and public markets.

Each year, the university draws about 4.5% to 5% from the endowment — roughly $2.2–$2.5 billion — which covers 35–40% of its operating budget. A significant portion of the endowment is restricted to specific uses, but its scale gives Harvard unusual freedom to weather political storms.

While the freeze won’t bankrupt Harvard, it does strike at key areas. Federal research grants in medicine, public health, and science are now at risk, as are student aid programmes supported by federal funds. Innovation labs and collaborative research efforts with agencies like the NIH and Department of Energy could be stalled. There’s also concern that faculty may hesitate to apply for federal grants, or that top researchers may start looking elsewhere.

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The White House’s pressure campaign isn’t limited to Harvard. Other elite universities, especially those with prominent pro-Palestinian protests, are now being scrutinised. Critics argue that antisemitism is being used as a political cudgel to dismantle liberal-leaning institutions and reshape academic spaces in line with conservative values.

At Columbia University, the administration threatened $9 billion in cuts. Harvard may be the richest, but it’s not the only target.

Moreover, despite its wealth, Harvard remains expensive. Tuition stands at $56,550, but with housing, meals, and other expenses, the total cost exceeds $80,000 per year. Harvard argues its wealth ensures access: 55% of undergraduates receive need-based aid, families earning under $85,000 pay nothing, and the average aid package is around $60,000.

In 2024, the university admitted just 3.59% of 54,000 applicants for the Class of 2028 and currently enrolls about 24,500 students across all programmes.

Now, by calling the administration’s bluff, Harvard has raised the stakes for how far federal authorities can push universities under the guise of civil rights or ideological balance.