Trump demands nine-figure payments from elite universities, stirring debate over federal leverage

The Trump administration has escalated pressure on elite American universities, demanding multimillion-dollar settlements in exchange for continued federal funding. Schools including Columbia University, Harvard University, and UCLA have faced financial stipulations ranging from $200 million to $1 billion, sparking criticism that the White House is using its funding leverage to impose political priorities.

Columbia’s $200 million settlement

In May, Cabinet officials and West Wing aides brought President Donald Trump a potential settlement with Columbia University. Instead of approving the agreement, Trump reportedly insisted the university pay $200 million, a jump from the original zero-dollar proposal, according to The New York Times. The sudden demand surprised university officials, who had already spent weeks aligning policy changes to meet the administration’s directives on addressing antisemitism on campus.Columbia ultimately agreed to the payment to maintain access to $1.3 billion in annual federal grant funding. “The settlements serve as an accountability measure, and the Trump administration commends the universities for collaborating to restore the greatness of these once-revered institutions and uphold students’ rights on campus,” White House spokesperson Harrison Fields said in a statement, according to The New York Times.

A broader pattern of financial leverage

Since the start of Trump’s second term, his administration has targeted elite schools with specific goals: Rooting out antisemitism, promoting a traditional definition of gender in campus activities and athletics, and countering perceived liberal bias. Federal agencies have employed civil rights investigations, frozen research funding, and threatened international student enrollments to press universities into compliance.Privately, however, Trump has signaled a financial dimension to these negotiations. Harvard University, for instance, is reportedly nearing a $500 million settlement with the White House, reflecting the administration’s assessment that legal challenges elevate the stakes. “Every time they fight, they lose another $250 million,” Trump reportedly said of Harvard in May, emphasizing that opposition to the administration could increase financial penalties, according to The New York Times.

UCLA’s unprecedented demand

The White House has also targeted UCLA, requesting $1 billion to the federal government and an additional $172 million for a claims fund addressing civil rights violations. The university’s total endowment, approximately $10 billion as of last summer, is smaller than Columbia’s or Harvard’s, suggesting that factors beyond wealth — possibly compliance history and legal resistance — also influence settlement demands.James B. Milliken, University of California president, criticized the settlement proposal: “A payment of this scale would completely devastate our country's greatest public university system as well as inflict great harm on our students and all Californians”, according to The New York Times.

Political backlash and legal pushback

The administration’s demands have drawn sharp responses from state officials. California Governor Gavin Newsom called the request “a billion-dollar political shakedown from the pay-to-play president” and indicated he would pursue legal action. White House Press Secretary Karoline Leavitt, however, dismissed the threat, stating, “Bring it on, Gavin”, according to The New York Times.

Implications for higher education

For universities, the stakes are clear: Compliance with the administration’s demands is tied directly to federal research funding and student opportunities. Critics liken the approach to extortion, while the White House frames it as an investment in vocational and workforce development. Internal deliberations at Columbia suggest that institutions weigh not only the financial cost but also the symbolic and operational impact of channeling funds to trade schools versus the Treasury, according to The New York Times.As Harvard and UCLA negotiations continue, the Trump administration’s strategy illustrates a broader trend in American higher education: Federal leverage increasingly intersects with political priorities, leaving universities navigating a high-stakes landscape where autonomy, funding, and policy compliance collide.TOI Education is on WhatsApp now. Follow us here.