American universities are huge recipients of federal cash and benefits. Most private colleges are considered “non-profit,” meaning they do not return profits to individual investors but are governed by a board that reinvests profits back into the school. Universities that receive this tax-exempt status are supposed to operate in a way that serves the general public. This obligation hasn’t been kept for some time. Instead, too often, some of these colleges have imposed blatant discrimination and infringed on free speech rights while receiving taxpayer funding. President Donald Trump and his team are working to weed out corruption at these universities.
In 2023, the Supreme Court made a landmark decision that significantly restricted the use of race-based admissions in colleges. In Students for Fair Admissions v. President and Fellows of Harvard College, SCOTUS ruled that Harvard violated the Civil Rights Act of 1964 by using race, rather than merit, as a determining factor in the college admissions process. The decision seemed to fall on deaf ears as many top schools scrambled to “redefine” affirmative action programs to skirt the ruling. President Biden and his administration made no attempts to enforce the law.
This week, Defending Education published a report that nearly 400 colleges or universities still have DEI offices or DEI programming despite President Trump’s executive order demanding an end to such programs as a condition of federal funding. Some have merely rebranded to disguise their DEI practices. President Donald Trump is taking aggressive actions to drive that number down.
One of President Trump’s first acts was to issue an executive order to end diversity, equity, and inclusion programs within the federal government and to prohibit their funding. He directed the Attorney General and Secretary of Education to issue guidance to institutions of higher education that receive federal grants and loans or have endowments over $1 billion. In February, the Department of Education sent letters to all educational institutions informing them that DEI would no longer be tolerated. The letter stated:
The Department will no longer tolerate the overt and covert racial discrimination that has become widespread in this Nation’s educational institutions. The law is clear: treating students differently on the basis of race to achieve nebulous goals such as diversity, racial balancing, social justice, or equity is illegal under controlling Supreme Court precedent.
The letter also instructed schools to ensure that their policies aligned with this anti-discrimination requirement and stop efforts to circumvent the law by using third-party contractors or simply rebranding. The consequence of noncompliance is the revocation of federal funds.
Beginning last year, Columbia University allowed pro-Hamas protests to overtake their campus and occupy educational buildings. The leadership at Columbia did little to punish these protestors, leaving Jewish students feeling unsafe on campus. This effectively shut down instruction and put students in harm’s way. Once President Trump entered office, he cancelled $400 million in federal funding to the university. Columbia then caved to some of the President’s demands to get this money back, including hiring more campus police officers, requiring protestors with face masks to produce university identification, and appointing a new Vice President Provost who will oversee the Center for Palestine Studies. Columbia was one of 60 universities that the Trump administration put on notice for antisemitic activity.
While Harvard University was one of the schools the Trump administration called out for its antisemitism, it had a massive list of other problems as well. Government officials sent a letter outlining reforms needed to continue receiving federal funds, including changes to their policies on governance, hiring, admissions, whistleblowing reporting, transparency, and more. In response, Harvard has dug in their heels despite $2.2 billion of their federal funding being frozen and their tax-exempt status being threatened. It seems a couple of billion dollars to them is just a drop in the bucket.
Harvard has a $53 billion endowment, the largest of any university in the nation. Federal funding only accounts for 16% of their budget, including amounts issued as student loans. Columbia University is also wealthy, ranking 12th with a nearly $15 billion endowment. With these staggering amounts in donor support, it is questionable why they need the federal government to bankroll their accounts.
One proposal that Republicans have floated is raising taxes on university endowments. In 2017, the Tax Cuts and Jobs Act included a 1.4% tax on the income of endowment assets exceeding $500,000 per full-time student. In February, Representative Mike Lawler (R-NY) introduced the Endowment Accountability Act (H.R. 1128), which would raise the endowment tax to 10% and lower the asset threshold to $200,000 per student. Rep. Troy Nehls’ (R-TX) Endowment Tax Fairness Act (H.R. 446) would raise that percentage even higher to 21%. Putting any such proposal in the upcoming reconciliation package could help offset other costs, such as enhanced border security and deportation efforts.
The Trump administration’s direct actions will benefit students and our nation overall. Colleges have gotten away with pushing radical ideologies that run counter to independent and critical thought and operating in violation of civil rights laws, all while profiting off taxpayer-funded grants. They have become racist institutions rather than innovators of the American Dream. The Trump administration is attempting to right the wrongs of the last decade so that American universities can be places of virtue again.
