What Power Does the Government Have Over Higher Education?

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Peter Savage, an immunologist at the University of Chicago, keeps hundreds of mice for experiments to help develop cancer therapies. At the end of January 2025, with federal money in doubt, he still planned to keep feeding them. “If there’s a significant stoppage or delay in funding, we’d basically have to euthanize a lot of our mice and contract our colony to the smallest amount possible,” he told NPR.

That is what federal power over a university looks like from inside the building. Not an order about what to teach. A payment that does not arrive.

Washington can stop the money, but only through funds it agreed to send and statutes that say how to stop sending them, and the 2025 fight is over skipped procedure, not over whether conditions may exist. Which money is stopping matters enormously to you.

Your Pell grant and the lab down the hall are different money

Two federal streams reach a campus, under separate rulebooks. In academic year 2023 to 2024, over 8.5 million students and families received over $122 billion in aid under Title IV of the Higher Education Act. Federally funded research and development at universities surpassed $64 billion in fiscal 2024, the largest source being the Department of Health and Human Services (HHS), which includes the National Institutes of Health (NIH), at $35.5 billion.

They share no on-off switch. Student aid eligibility comes from the Higher Education Act’s own definition of an institution and its own certification process, not from the authority that awards or cancels a research grant.

So when a university loses billions, ask which stream. Harvard’s annual report put sponsored research at 15 percent of revenue in fiscal 2025 and recorded $629 million in federal sponsored revenue, an 8 percent decrease, after the suspension and termination of federal grants that spring. A deep wound to research, and not the end of anybody’s financial aid.

What your college signed to touch student aid

Every school in the aid programs signs a program participation agreement, which by statute conditions its initial and continuing eligibility on a list of requirements. To qualify at all it must be legally authorized, public or nonprofit, and accredited by a nationally recognized accrediting agency the Secretary of Education has recognized.

Accreditation is the turnstile. Hold on to that.

Break the rules and the Secretary may limit or terminate a school’s participation for violating any statutory provision of or applicable to Title IV. That action follows a hearing before a hearing official. The hearing comes first, not after.

The civil rights law that arrives with the check

Title VI of the Civil Rights Act is one sentence: “No person in the United States shall, on the ground of race, color, or national origin, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any program or activity receiving Federal financial assistance.”

Congress later defined “program or activity” to mean all of the operations of the listed entities, and that list expressly includes a whole college or university. Money in the chemistry building covers the admissions office. The whole institution counts.

Grove City College took no direct federal money. Its students received Basic Educational Opportunity Grants, and the Department concluded this made the college itself a “recipient” of “Federal financial assistance.” When it refused to sign a Title IX assurance of compliance, the Department ordered assistance terminated until it signed.

A college can be reached through its students’ aid without ever cashing a federal check. In February 2025 the Department told colleges that federal law bars using race in hiring, financial aid, scholarships, discipline, housing and “all other aspects of student, academic, and campus life.”

Congress wrote a hearing into the shut-off switch

Title VI does authorize a cutoff, and it says how. Termination requires an express finding on the record, after opportunity for hearing, and must be limited to the particular recipient and program in which the failure to comply was found.

The regulation adds two steps: voluntary compliance must be tried and fail, and the agency must file a written report with the House and Senate committees 30 days before funds stop.

That machine is slow, and almost never run to the end. The Congressional Research Service (CRS) searched proceedings at the Education Department’s Office for Civil Rights and found no Title VI termination orders in the last 25 years.

Essentially unused for a generation.

March 13, and the letters that followed

In early March 2025 the federal government cancelled $400 million in research grants and contracts to Columbia, asserting it had not done enough to combat antisemitism on campus. On March 13, officials from the Education Department, HHS and the General Services Administration demanded that Columbia put its Middle Eastern, South Asian, and African Studies Department under “academic receivership for a minimum of five years.”

Interim president Katrina Armstrong pledged tighter rules on student protests and closer oversight of the Middle Eastern studies programs. The commitments sparked backlash on multiple fronts, with some critics saying they did not go far enough. Fifteen days after the letter, Armstrong stepped down; trustee co-chair Claire Shipman was named acting president.

Harvard took the other road. Its complaint says the government froze $2.2 billion in multi-year grants and $60 million in multi-year contracts. President Alan Garber refused in writing: “Neither Harvard nor any other private university can allow itself to be taken over by the federal government.”

What Judge Burroughs actually held

Judge Allison Burroughs vacated and set aside the freeze orders as arbitrary and capricious under the Administrative Procedure Act (APA), and vacated the freezes and the termination letters as First Amendment violations. She also closed the shortcut: the grants had been cancelled under a general spending regulation, not under Title VI, and using it that way “would result in the regulation wholly nullifying an explicit statutory scheme.”

At a hearing that July she had pressed a Justice Department attorney on the claim that the government may halt funding at any time under contractual terms. “If you can make decisions for reasons oriented around free speech, the consequences of that are staggering to me,” Burroughs said.

In a second case, over the research grants, the district court found an official had given a grants management officer lists of grants to terminate. It held that the Department’s “agenda of blacklisting certain topics” had “absolutely nothing to do with the promotion of science or research.”

Joan Brugge runs a breast cancer lab at Harvard. She used to employ 18 researchers in it. Amid the disruption she lost a third of her staff and the breast cancer research slowed way, way down.

A grant is not an abstraction. It is a payroll.

Winning is not the same as being paid

The people behind the caption were researchers. Judge Young entered judgment for Brittany Charlton, Katie Edwards, Peter Lurie and Nicole Maphis, among others, for the reasons he had stated on the record.

Staying a district court order in a related dispute, the Supreme Court pointed to Department of Education v. California: suits based on “any express or implied contract with the United States” belong not in district court under the APA but in the Court of Federal Claims under the Tucker Act.

Venue decides the remedy. CRS explains that the APA’s waiver of sovereign immunity does not extend to “orders to enforce a contractual obligation to pay money.” In district court a university can get the grant back; in the Court of Federal Claims, damages later, if it wins.

For a lab with mice to feed, those are not the same outcome.

If the money stops, this is what happens to you

An April 2025 executive order tells the Secretary to resume recognizing new accreditors “to increase competition and accountability,” and to make them require program-level student outcome data. Pressure on the gatekeeper is pressure on the gate.

Losing accreditation is the fastest route to losing aid: a school may not be considered eligible for 24 months after accreditation is withdrawn, revoked or otherwise terminated for cause.

The Education Department cut ITT Technical Institute off from federal aid for new students, who no longer qualified for federal loans or Pell Grants; unable to sell its campuses, the chain closed with about 35,000 students enrolled. Credits are where it hurts. One former ITT student, McNeil, had to work through his coursework class by class with Marvin Loiseau, an admissions director at Ben Franklin, who described “sitting down with each individual student, one-by-one.”

Loans have a rule. If you accept a teach-out at another school, approved by your accrediting agency and any state authorizer, and do not complete it, the Secretary discharges the loan one year after your last date of attendance.

What Congress forbade, and how much a string can hold

The General Education Provisions Act says no provision of any applicable program may be construed to authorize a federal officer to “exercise any direction, supervision, or control over the curriculum, program of instruction, administration, or personnel” of an educational institution. That floor predates this fight.

Conditions themselves are lawful, within a line the Supreme Court has drawn between those that “define the limits of the government spending program” and those that “seek to leverage funding to regulate speech outside the contours of the program itself.”

That line sits higher than universities would like. Law schools challenged the Solomon Amendment, which made them choose between enforcing their nondiscrimination policy against military recruiters and keeping federal funds. They lost: Congress could have required equal access for recruiters directly without violating the schools’ freedoms of speech and association.

What Columbia, Brown and Penn agreed to

Three settlements, three prices.

Whether a standing monitor holding admissions data is enforcement or supervision is exactly where the two sides part.

The colleges that said no

In the fall of 1975 Hillsdale College’s trustees decided Title IX was such a serious assault on the school’s freedom that they could not accept it, and told the federal government so. Hillsdale stopped enrolling students with federal grants and loans, offering privately funded aid instead. In the first year that cost about $250,000; today, the college says, nearly $600,000.

Its own account is the strongest form of the defunding argument: under the definition it fought, “a school which merely accepted students who had federal grants or loans was to be classified as a recipient institution, forcing it to accept the same control as directly subsidized schools.” If leverage travels with the money, the clean escape is to stop taking it.

Universities were offered a compact promising preferential funding treatment: publish objective admissions criteria, require a standardized test of every undergraduate applicant, define male and female “according to reproductive function and biological processes.” MIT’s president, Sally Kornbluth, declined: “the people of MIT gladly compete with the very best, without preferences.”

Not every leader could refuse. Jim Ryan resigned as president of the University of Virginia, writing that he was inclined to fight, “But I cannot make a unilateral decision to fight the federal government in order to save my own job.”

Visas, endowments and the tax exemption

Two levers sit outside the education budget. Certification to enroll international students rests on recordkeeping and reporting duties, and the Student and Exchange Visitor Program serves a Withdrawal on Notice if a school fails to comply. After Harvard’s certification was revoked in 2025, its court filing described students and faculty expressing “profound fear, concern, and confusion.”

The other is tax. The 2025 reconciliation law replaced the flat endowment excise tax with three tiers, 1.4, 4 and 8 percent, rising with the endowment per student. Bob Jones University once lost its tax exemption over its ban on interracial dating among students.

Where the disagreement really lies

Almost nobody argues that a university breaking civil rights law must keep its funding. The American Council on Education (ACE) framed the objection as procedural: federal law “outlines specific procedures for investigating complaints and imposing sanctions,” and cutting funding unilaterally “bypasses this process entirely.” The American Association of University Professors goes further, calling the agreements a means of “undermining academic freedom and institutional autonomy, and unmooring the Civil Rights Act from its foundational commitments.”

The government’s framing is wider than any statute. A January 2025 executive order directs every agency head to identify all civil and criminal authorities in its jurisdiction that might be used to curb or combat antisemitism, and to inventory pending complaints involving colleges. On that account Washington is a customer as much as a patron, entitled to set the terms of its own grants, and a school under investigation has no claim to be paid while the case grinds on.

That position is not a novelty, and the Supreme Court has stated it about colleges directly. Ruling against Grove City College, the Court said Congress is free to attach reasonable and unambiguous conditions to federal financial assistance that educational institutions are not obligated to accept. The broader rule is older still: incident to the spending power, Congress may attach conditions on the receipt of federal funds.

The money was never unconditional. The argument is about which conditions, and who gets to impose them.

What that lever is for shows up when it fails. Corinthian Colleges shut its remaining 28 ground campuses, displacing about 16,000 students, less than two weeks after a $30 million Education Department fine for misrepresentation. They had to apply for a federal discharge and still owed their private loans.

Ann Bowers, who went to one of them, said the degrees were worthless in the job market because the school had committed fraud, and that borrowers went on strike rather than pay.

Nobody in that story was arguing about academic freedom.

Two camps think the argument is aimed at the wrong target. The Heritage Foundation would shrink the subsidy rather than police the discretion: end Parent PLUS loans, decouple federal financing from accreditation, cap indirect cost payments. New America wants the lever pointed at results, with a floor requiring that a program’s graduates “earn more than they would have with only their high school degree and earn enough to reasonably pay down their student loan debt.”

The question is now on appeal. ACE and 26 other higher education associations filed an amicus brief on July 22. Until the First Circuit rules in Harvard v. Department of Health and Human Services, whether Washington must hold a hearing before stopping your university’s money depends on which courtroom you stand in.