I'll admit I'm not privy to US educational system etc, but isn't Harvard a private university ? Why would they be receiving significant federal funds in the first place ?
We subsidize everything here. If you're important enough that the government might want to influence your behavior it has very little legal authority to demand things. Instead, we encourage behavior with tax breaks, contracts, and grants. Then we add stipulations to said breaks/funding, threatening to revoke them should the business/org in question not comply.
It's kinda like passing laws that require certain behaviors from businesses and such, except also taxpayers get their money funneled into private orgs for the privilege.
"Federal student loans allow [private universities] to raise fees much higher than they otherwise would be able to charge, as do tuition tax credits and Pell Grants. The tax-deductible treatment of private donations helps fund new buildings. … State and local government exemption of facilities from property and sometimes sales taxes provide further assistance. The federal government hands out research grants, with generous (probably overly generous) provision for overhead expenses. Endowments are also advantaged enormously by tax privileges."
Research grants. That said, Harvard has the largest university endowment in the world, they'd be just fine operating at their current size off their endowment proceeds effectively forever.
To put that into perspective of what it means, conservatively they can spend $2.14B every year and never touch the principle of their $53.6B[1] endowment following the "4% rule".
They already fund a fraction (1/3, I think) of their annual operating budget (>$6B) doing something similar to that. Ah, the article you linked says more or less that.
IIUC, The controversy was that some folks wanted to draw down the principal to do capital improvements (new buildings, etc) and other folks wanted to be as conservative as possible (potentially not even using the interest for operations).
Yeah, I'm not sure what Trump could really do here. Harvard gets < 1B in federal funds every year, mainly for research. Harvard also has a ~50B endowment. Short of sending in the military or confiscating Harvard's private funds, it seems like Harvard can wait him out.
With that said, the current administration appears to have a war on education in general so who knows what ideas they could cook up.
> Furthermore, I will direct the Department of Justice to pursue federal civil rights cases against schools that continue to engage in racial discrimination. And schools that persist in explicit unlawful discrimination under the guise of equity will not only have their endowment taxed, but through budget reconciliation, I will advance a measure to have them fined up to the entire amount of their endowment.
