After Harvard rejects US demands, Trump adds new threat: All you need to know

US President Donald Trump threatened to strip Harvard University of its tax-exempt status , intensifying an ongoing battle between the White House and the nation’s oldest and wealthiest university.

The move came after Harvard rejected a list of policy changes demanded by the Trump administration, including shifts in hiring, admissions, and curriculum.

Just a day earlier, the administration froze over $2 billion in federal funding to the university. According to a person familiar with the president’s thinking, Trump was angered by media coverage of Harvard’s defiance and decided to escalate the pressure campaign, reported NYT.

Trump took to Truth Social and posted, "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?' … Tax Exempt Status is totally contingent on acting in the PUBLIC INTEREST!"

Tax-exempt status under fire

While White House officials noted that the IRS will decide independently on tax-exempt matters, Trump has privately indicated he’s committed to taking on Harvard. Losing its nonprofit status could cost the university billions of dollars over time.

Lawrence Summers, former Treasury secretary and Harvard president, responded sharply, "Selective persecution of your political adversaries through the tax system is the stuff of dictatorship… This is unconscionable and wrong."

IRS boundaries and legal reality

Federal law prevents the president from directly ordering IRS investigations. The agency declined to comment, but experts cast doubt on any serious threat to Harvard’s status.

Former IRS commissioner John Koskinen said, “The chances of getting the IRS to actually revoke the 501(c)(3) status of a major university are almost nonexistent… The problem is you're causing people to spend a lot of time and money responding and defending their actions.”

Still, the mere prospect of litigation could be an intimidating burden, he noted.

Billions at stake despite Harvard's wealth

Though Trump’s 2017 tax bill already imposed a levy on large university endowments, Harvard’s broader tax-exempt status allows it to avoid major tax liabilities and attract massive charitable donations.

Harvard’s $50 billion endowment is bolstered by tax-deductible gifts, often from wealthy donors like John Paulson and Ken Griffin.

Summers warned that if Harvard’s tax status were revoked—however unlikely—“It would devastate progress in medical and scientific research, opportunity for the next generation of Americans, and an important magnet for the United States in the world.”

Antisemitism allegations and political context

Trump officials have accused elite universities of fostering antisemitism and suppressing speech. White House press secretary Karoline Leavitt said, “Why are the American taxpayers subsidizing a university that has billions of dollars in the bank already? … And we certainly should not be funding a place where such grave antisemitism exists.”

Harvard stands its ground

The funding freeze followed Harvard’s refusal last week to comply with administration demands for policy changes and regular progress reports. University president Alan Garber said in a statement:

“No government—regardless of which party is in power—should dictate what private universities can teach, whom they can admit and hire, and which areas of study and inquiry they can pursue.”

Harvard receives about $9 billion in federal support, with most routed through affiliated hospitals and the remainder funding research in areas like cancer, space exploration, and Alzheimer’s.

While the school is financially fortified, other institutions have opted to comply with Trump’s conditions—Columbia University reportedly settled with the administration after facing similar pressure.