Trump now threatens Harvard's tax-exempt status amid escalating clash with US higher education

President Donald Trump has threatened to revoke Harvard University's tax-exempt status after the Ivy League school rejected a list of political and institutional demands from his administration. The threat follows the government's decision to cut $2.2 billion in federal funding previously earmarked for Harvard, intensifying an already fraught relationship between the White House and US higher education.
In a Truth Social post, Trump accused Harvard of acting as a political entity rather than a public-serving institution. “Perhaps Harvard should lose its Tax Exempt Status and be Taxed as a Political Entity if it keeps pushing political, ideological, and terrorist inspired/supporting ‘Sickness?'” he wrote. “Remember, Tax Exempt Status is totally contingent on acting in the PUBLIC INTEREST!” as quoted by the Independent.
Harvard defies government demands
The confrontation began after the Trump administration issued a list of directives aimed at reshaping university governance and limiting campus activism. These demands included ending diversity, equity, and inclusion programs, enhancing cooperation with the Department of Homeland Security, curbing student protests, and reducing faculty influence in administrative decision-making.
According to the Independent, Harvard's legal team rejected the directives in a formal response, arguing that the requests “go beyond the lawful authority of this or any administration.” The letter stated, “The university will not surrender its independence or relinquish its constitutional rights. Neither Harvard nor any other private university can allow itself to be taken over by the federal government.”
Loss of funding tied to political standoff
As a result of Harvard's refusal, the Trump administration revoked a portion of the approximately $9 billion in federal funding that the university relies on for research support. This funding represents Harvard's largest single source of research income and has played a central role in maintaining the school's academic leadership in fields such as science, technology, and medicine.
Harvard, the oldest and wealthiest university in the US, holds an endowment valued at $53 billion. Its tax-exempt status, granted under section 501(c)(3) of the Internal Revenue Code, allows the university to avoid federal income taxes, save on capital gains, and issue tax-free bonds. Bloomberg News estimated Harvard's tax benefits in 2023 amounted to at least $465 million.
Tax exemption under political scrutiny
The IRS governs which institutions maintain 501(c)(3) status, and according to the Independent, organizations risk losing this status if they participate in political campaign activity or engage in substantial lobbying. Trump's post frames Harvard's resistance as politically motivated and outside the bounds of its nonprofit mission.
The standoff has intensified a broader struggle between the Trump administration and US higher education institutions, many of which have expressed growing concern over federal overreach and threats to academic independence.