Tag: Pressures

  • With Grant Cuts, Trump Pressures UCLA to Make Deal

    With Grant Cuts, Trump Pressures UCLA to Make Deal

    The Trump administration announced last week it was freezing federal grants for another prestigious research university. But this time, it wasn’t a private institution.

    It was the University of California, Los Angeles, and if the UC system doesn’t make a deal with the federal government, campuses across one of the nation’s largest public higher education systems might incur the administration’s further punishment. State leaders condemned the funding freeze, and faculty at UCLA are urging university administrators to fight. But the university has said little about how it plans to respond to the administration.

    The Department of Justice has been investigating the University of California system for months—looking into alleged antisemitism, alleged use of race in admissions and “potential race- and sex-based discrimination in university employment practices.” The agency’s investigations into the broader UC system are still ongoing, but last week, the DOJ told system officials it had made a finding regarding one campus and demanded a quick response.

    “The Department has concluded that UCLA’s response to the protest encampment on its campus in the spring of 2024 was deliberately indifferent to a hostile environment for Jewish and Israeli students in violation of the Equal Protection Clause and Title VI,” the letter said. (Title VI of the Civil Rights Act of 1964 prohibits universities that receive federal funding from discriminating based on shared ancestry, including antisemitism.)

    The letter didn’t specifically say what the Trump administration wants UC to do now about its alleged failure to handle a pro-Palestine encampment that ended more than a year ago, and that UCLA itself dismantled a week after its creation. The DOJ didn’t provide Inside Higher Ed further information Monday, but U.S. attorney general Pam Bondi’s news release accompanying the DOJ letter suggests the Trump administration wants significant concessions.

    “Our investigation into the University of California system has found concerning evidence of systemic anti-Semitism at UCLA that demands severe accountability from the institution,” Bondi said. “This disgusting breach of civil rights against students will not stand: DOJ will force UCLA to pay a heavy price for putting Jewish Americans at risk and continue our ongoing investigations into other campuses in the UC system.”

    Just hours before the DOJ’s announcement, UCLA had announced that it was paying $6.45 million to settle a lawsuit from Jewish students over reported antisemitism associated with the encampment. But that wasn’t enough to assuage the federal government.

    The DOJ letter said the department “seeks to enter into a voluntary resolution agreement with the university to ensure that the hostile environment is eliminated and reasonable steps are taken to prevent its recurrence.” It asked the UC officials to contact a special counsel by today if they were “interested in resolving this matter along these lines,” providing an email address and a nonfunctional nine-digit phone number for them to contact. The agency is prepared to sue by Sept. 2 “unless there is reasonable certainty that we can reach an agreement.”

    That July 29 letter wasn’t the end of it. In the week between then and today’s deadline for UC to contact the DOJ, multiple federal agencies said they’re cutting off grants to UCLA. The total amount is unclear—other media have reported numbers exceeding $300 million.

    It’s reminiscent of what happened at Columbia and Harvard Universities. But unlike with those private institutions, the Trump administration hasn’t published an overarching demand letter for how it wants UCLA to change its ways, whether in admissions, student discipline or otherwise.

    A spokesperson for the Department of Health and Human Services, which includes the National Institutes of Health, responded to Inside Higher Ed’s requests for information on how much in NIH grant funding has been canceled and why with a two-line response attributed to an unnamed HHS official: “We will not fund institutions that promote antisemitism. We will use every tool we have to ensure institutions follow the law.”

    A National Science Foundation spokesperson wrote in an email that the NSF “informed the University of California, Los Angeles that the agency is suspending awards to UCLA because they are not in alignment with current NSF priorities and/or programmatic goals.” The spokesperson didn’t specify which priorities or which goals, and his email didn’t mention antisemitism.

    The Department of Energy went beyond allegations of antisemitism in its letter to UCLA, saying that “UCLA engages in racism, in the form of illegal affirmative action” and UCLA “endangers women by allowing men in women’s sports and private women-only spaces.”

    Mia McIver, executive director of the national American Association of University Professors, said what’s happening is the “Trump administration is extending its pattern of attacking higher education faculty, staff and students more broadly outward from the Ivy League universities into the public sector.” McIver, who taught at UCLA for a decade, said the administration intends to “exercise pervasive control over colleges and universities in every region of every different sort of institution.”

    “It is the federal government using levers of power that are completely unrelated to the underlying allegations,” McIver said. “Cutting off research for diabetes, cancer, heart disease will not improve the safety of Jewish faculty and students on campus and will not address antisemitism.”

    ‘Enough Is Enough’

    What does the UC system plan to do? A spokesperson deferred comment to UCLA, which also didn’t provide interviews Monday or answer written questions. The UC system spokesperson did forward a statement Friday from system president James B. Milliken, who started in his new job Aug. 1—just after the grant freezes. 

    Milliken called “the suspension this week of a large number of research grants and contracts” at UCLA “deeply troubling,” though “not unexpected.”

    “The research at UCLA and across UC more broadly saves lives, improves national security, helps feed the world, and drives the innovation economy in California and the nation,” he said. “It is central to who we are as a teaching and learning community. UC and campus leadership have been anticipating and preparing for the kind of federal action we saw this week, and that preparation helps support our decisions now.”

    He didn’t, however, say what the decisions would be.

    Also Friday, California governor Gavin Newsom, a potential 2028 presidential candidate and an ex officio member of the UC Board of Regents, released a statement calling it “a cruel manipulation to use Jewish students’ real concerns about antisemitism on campus as an excuse to cut millions of dollars in grants that were being used to make all Americans safer and healthier.”

    “This is the action of a president who doesn’t care about students, Californians, or Americans who don’t comply with his MAGA ways,” Newsom said.

    UCLA chancellor Julio Frenk said in a video on X Friday that “we share the goal of eradicating antisemitism. It has no place on our campus or in our society.” He said his wife is the daughter of a Holocaust survivor, and his paternal grandparents left Germany in the 1930s after being “driven out of their home by an intolerable climate of antisemitism and hate.”

    “These experiences inform my own commitment to combating bigotry in all its forms, but a sweeping penalty on lifesaving research doesn’t address any alleged discrimination,” Frenk said. He said, “We have contingency plans in place,” though he didn’t elaborate.

    In a petition, the UCLA Faculty Association’s Executive Board criticized UCLA administrators for their past “anticipatory obedience” to the federal government, which it said “has not prevented Trump administration attacks.”

    “UCLA’s anticipatory obedience has put itself in a place of weakness and we must instead choose to stand up,” the association wrote. “We do not have to bend to the Trump administration’s illegitimate and bad-faith demands. UCLA is a state university, with the financial backing and moral support of the fourth-largest economy in the world.”

    The association demanded that UC “demonstrate our strength as the world’s largest university system and reject the malicious demands of the Trump administration,” adding that “each university that falters legitimates the Trump administration’s attacks on all of our institutions.”

    It called for UC to fight the administration in court, to use unrestricted endowment funds to “help keep our university’s mission intact” and to work with Newsom and state lawmakers to get financial support. The petition ended with a call for university administrators to not “sacrifice our strengths and our community, deeply nurtured and protected for over 100 years, to a deeply callous and unfair federal administration that will only ask for more.”

    Meanwhile, Faculty for Justice in Palestine at UCLA said in a statement that “Israel continues to tighten its US-enabled siege of Gaza, where the calculated denial of humanitarian assistance is causing mass starvation amid ongoing aerial bombing. The theatrics of the Trump administration, echoed by UCLA, are part of a larger attempt to cover up this genocidal catastrophe in which all of us, and our university, are complicit.”

    McIver urged the UC system not to cut deals like Columbia and Brown Universities have.

    “There are always alternatives,” she said, “and every deal that is cut makes it harder for those who are downstream of the deal to continue resisting these attacks.”

    “The Trump administration is aiming to control colleges and universities at all levels in all states, and every settlement that is reached basically contributes to that goal,” she said. “And so there has to be a point at which everyone across the country stands up and says, ‘Enough is enough, we’re not going to tolerate this extortion, you can’t hold our campuses hostage and we’re not going to take it anymore.’”

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  • Financial Pressures Could Have Cascading Effects (opinion)

    Financial Pressures Could Have Cascading Effects (opinion)

    In April, Harvard University, despite its $53.2 billion endowment, announced plans for a $750 million bond issuance to bolster liquidity amid uncertainties over federal funding. Similarly, Brown University concluded its decade-long BrownTogether fundraising campaign, raising more than $4.4 billion, yet soon after secured a $300 million loan in the face of a structural budget deficit and the cancellation of federal grants. And in May, Columbia University announced layoffs of approximately 180 staff members after the federal government revoked $400 million in federal grants and contracts, citing the university’s handling of antisemitic harassment on campus.

    Together, these actions underscore that even the nation’s most selective and well-resourced universities are vulnerable to financial strain and are recalibrating rapidly in response to shifting economic and political forces. By contrast, less well-resourced, tuition-dependent institutions often confront the same headwinds, or their downstream effects, with fewer financial options and diminished capacity to respond.

    Liquidity and the Endowment Misconception

    A common misconception is that universities can freely tap into their endowments to address financial shortfalls. In reality, a significant portion of endowment assets are legally restricted by external donor agreements, regulatory frameworks and board policies. According to the NACUBO-Commonfund Study of Endowments, an average 71.1 percent of endowment funds are restricted by donor agreements alone. These funds are typically earmarked for specific purposes such as scholarships, endowed faculty positions or capital projects.

    Endowments are vital to institutional operations but are not unbounded. In fiscal year 2024, colleges and universities withdrew a total of $30 billion from their endowments, representing a 6.4 percent increase over the prior year, with nearly half of that spending (48.1 percent) dedicated to student financial aid. On average, endowments funded 15.3 percent of institutional operating budgets, underscoring their importance in day-to-day fiscal planning.

    At the same time, most institutions cap annual withdrawals at approximately 4.5 to 5 percent of a rolling three-year average to preserve long-term value. Exceeding these thresholds can jeopardize an endowment’s sustainability and may violate both donor restrictions and regulatory requirements. Consequently, when immediate cash needs surpass allowable draws, universities often turn to bond markets or bank loans, trading short-term liquidity for future debt obligations. According to a Forbes report, U.S. universities issued a record $11.6 billion in municipal bond debt in the first quarter of 2025 to safeguard operations amid federal funding cuts.

    Fiscal and Legal Acumen: A New Leadership Imperative

    In the current climate, effective university leadership requires not only academic vision but also robust financial and legal expertise. Leaders must navigate complex debt covenants, bond rating pressures and donor restrictions while transparently communicating difficult decisions to trustees, faculty, students and the public. These challenges, at least financially, arguably surpass those faced during the COVID-19 pandemic, when federal relief funds temporarily masked underlying vulnerabilities.

    Rising Insolvency Risk Beyond Public Campuses

    Recent announcements by private Research-1 universities suggest several well-known institutions—among them Duke and Northwestern Universities—could encounter significant fiscal strain if current federal research funding trends persist. While nonselective public research universities are often viewed as the most vulnerable to federal funding cuts, some prominent private institutions also face rising risk. High fixed costs, tuition and/or research dependency, and limited unrestricted endowment income create financial fragility as grants plateau.

    Enrollment Shocks: A Cascade in Waiting

    An often-overlooked but potentially destabilizing factor is the cascading effect on enrollment should elite institutions expand freshman classes and nonresearch focused graduate programs by aggressively tapping wait lists to compensate for financial shortfalls. While larger cohorts can spread overhead costs and generate additional tuition revenue, rapid expansion without strategic planning can strain housing, advising and support services, potentially degrading the student experience and affecting retention.

    For example, if the top 50 universities each increase enrollment by even 5 percent, thousands of well-qualified students may shift upward, siphoning tuition dollars from regional publics, tuition-dependent privates and community colleges. For institutions already operating on thin margins, this loss of yield could prove existential.

    This scenario recalls the 2008 financial crisis: a shock at the top reverberated across sectors. Here, if highly selective colleges “catch a cold,” more vulnerable campuses may suffer a deeper freeze.

    Equity and Access Under Pressure

    The most severe consequences are likely to impact lower-income students. Potential elimination of federal support programs like federal TRIO programs and Gaining Early Awareness and Readiness for Undergraduate Programs, coupled with the potential cascading effects outlined above, risk widening the affordability gap. To shore up budgets, financially stressed institutions may tighten aid packages and prioritize full-pay applicants. Simultaneously, regional institutions that disproportionately serve these populations face their own budget constraints, compounding threats to access and social mobility. Conversely, other financially stressed colleges may opt to elevate unfunded tuition discount rates to unsustainable levels in order to meet enrollment targets, an action we have witnessed during less stressful periods.

    Summer Melt: An Immediate Barometer

    The impending summer melt period—when students who have submitted deposits ultimately decide not to enroll—may serve as a real-time stress indicator. Historically, national melt rates hover around 10 to 20 percent, but even a two- to three-percentage-point uptick for small, tuition-driven colleges can force emergency cuts. If selective universities reach deeper into their wait lists this summer, downstream institutions could experience sudden enrollment gaps as fall semesters are about to begin.

    Toward Long-Term Resilience: Strategic Levers

    As the financial headwinds intensify, universities must couple urgency with discipline. Ensuring alignment among institutional leaders, preserving trust and activating institutional flexibility will be key. The following strategic levers offer a practical framework for leaders aiming to build resilience without losing sight of mission.

    1. Ensure board and leadership alignment: Any misalignment between governing boards and executive teams can slow decision-making and erode credibility. Clear alignment around scenario planning, liquidity thresholds and contingency triggers is paramount.
    2. Embrace shared governance: Genuine engagement with faculty, staff and students in fiscal deliberations can enhance adaptability and morale. Institutions that bypass shared governance risk midcareer talent attrition, as well as diminishing instructional quality and grant productivity.
    3. Rethink spending policies: Regular reassessment of endowment draw methodologies, debt covenants and liquidity lines is essential. Short-term borrowing can bridge operational gaps but should be paired with disciplined multiyear plans that include potential program realignment and other austerity measures.
    4. Diversify revenue streams: Institutions must increase nontraditional tuition income, such as from online certificates, executive education and micro-credentials. Commercializing research can generate revenue, however, safeguards are necessary to prevent a slide into “University Inc.” cynicism—the sense that institutions are prioritizing profit over scholarship.
    5. Strengthen financial transparency: Open dashboards tracking liquidity ratios, debt service coverage ratios and aid spending cultivate trust and temper rumor-driven resistance. Responsible transparency should extend to explaining why certain programs may face review in the name of institutional sustainability.

    The Faculty and Staff Dimension

    Financial pressures inevitably affect human capital. Institutions that announce austerity plans without clear road maps invite uncertainty and, ultimately, attrition among faculty and staff. Retention of human capital is crucial not only for educational quality but also for grant productivity and student success. Engaging employees in strategic trade-offs—such as phased retirement options, the cross-training of staff to handle multiple roles as part of new revenue initiatives or shared services efficiencies—can transform potential resistance into collaborative resilience. But these strategic trade-offs also impact human capital.

    What About Academic Mission?

    Some argue that larger entering classes could enhance diversity or increase institutional reach. Others worry that an aggressive growth mindset dilutes faculty engagement and student mentorship. Both perspectives merit consideration. Growth for growth’s sake, particularly when propelled by crisis rather than strategy, risks eroding the very qualities that make a campus distinctive.

    A Crucible Moment

    Higher education has weathered wars, recessions and a global pandemic, but today’s convergence of shrinking research support, demographic shifts and rising debt costs presents a challenge not witnessed in recent history. Liquidity stress is reaching even elite campuses.

    The lessons from recent bond issuances, emergency loans and layoffs are clear: Action must come before distress spreads further. Institutions that act now by aligning leadership, engaging stakeholders, adjusting spending, diversifying revenue and communicating clearly will emerge stronger and more mission‑focused.

    Those that delay risk letting early warning signs become full‑blown alarms.

    As summer melt data arrives and fiscal year budgets close, we will soon learn whether these echoes from the Ivies were just noise—or the first tremors of something more.

    Joseph E. Nyre served as president of Seton Hall University from 2019 to 2023 and of Iona University from 2011 to 2019. He is the founder and managing director of Veritas Solutions Advisors, a higher education and nonprofit consulting company.

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  • ED Pressures Accreditor to Act on Columbia

    ED Pressures Accreditor to Act on Columbia

    The Department of Education has publicly called on Columbia University’s accreditor, the Middle States Commission on Higher Education, to take action against the university’s alleged noncompliance with federal nondiscrimination laws.

    In a Wednesday news release, officials wrote that Columbia was found to have acted “with deliberate indifference towards the harassment of Jewish students, thereby violating Title VI of the Civil Rights Act of 1964.” Officials said, “Columbia failed to meaningfully protect Jewish students against severe and pervasive harassment on Columbia’s campus and consequently denied these students’ equal access to educational opportunities to which they are entitled under the law.” As a result of that finding, ED called on MSCHE to take action on the matter.

    Education Secretary Linda McMahon accused the university of failing to protect Jewish students on campus in the wake of Hamas’s Oct. 7 terrorist attacks against Israel, arguing that such a lapse “is not only immoral, but also unlawful.”

    McMahon added that accreditors are obligated to ensure members abide by their standards and called on MSCHE to inform the department of compliance actions taken against Columbia. ED indicated that MSCHE should require Columbia to develop a plan to ensure compliance.

    “We are aware of the press release issued today by the United States Department of Education (USDE) regarding Columbia University and can confirm that we received a letter regarding this matter this afternoon,” MSCHE president Heather Perfetti said in a statement. “This letter is part of the commitment reflected within the Executive Order to promptly provide to accreditors any noncompliance findings relating to member institutions issued after an investigation conducted by the Office of [sic] Civil Rights. Consistent with our Commission’s management of investigative findings, we will process these in accordance with our policies and procedures.”

    The call for MSCHE to take action on Columbia is the latest effort by the Trump administration to force further changes at an institution that has been in its crosshairs over how it handled a pro-Palestinian student encampment and related demonstrations in the aftermath of Oct. 7.

    Columbia has already yielded to the Trump administration’s call for sweeping changes, agreeing in March to revise disciplinary processes, hire campus police officers with the authority to make arrests and appoint a new senior vice provost to oversee academic programs focused on the Middle East, among other changes—despite concerns around academic freedom. However, university officials appear to have rejected the administration’s desire for a consent decree.

    The Trump administration has also frozen hundreds of millions of dollars in federal research funding, an effort that has continued even after university officials agreed to various demands.

    Columbia officials acknowledged the exchange between ED and MSCHE in a statement.

    “Columbia is aware of the concerns raised by the U.S. Department of Education’s Office for Civil Rights today to our accreditor, the Middle States Commission on Higher Education, and we have addressed those concerns directly with Middle States. Columbia is deeply committed to combatting antisemitism on our campus. We take this issue seriously and are continuing to work with the federal government to address it,” university officials wrote in a statement posted online.

    Wednesday’s news sparked confusion (and celebrations from some critics) online, as many social media users incorrectly interpreted the news to mean Columbia had lost accreditation. However, the federal government does not have the power to strip accreditation. Only accreditors can determine if universities are out of compliance, as experts have previously noted.

    (This article has been updated to add statements from MSCHE and Columbia.)

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