Universities are paying the U.S. millions of dollars. Where will the money go?
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Ira Porter Staff writer
The Trump administration celebrated a series of multimillion-dollar settlements with U.S. universities this summer. The sums were unprecedented and more might come. Harvard, the oldest and wealthiest university in the United States, was reportedly in negotiations to restore billions in grant money before a judge ruled in the university鈥檚 favor. In return for the payments and other concessions, schools have had federal funding restored. In total, the settlements have amounted to $250 million so far, with the potential to reach into the billions.
Columbia University has the heftiest fine thus far, at $200 million over a three-year period related to antisemitism on campus that stemmed from protests over the Israel-Gaza war. The school a $21 million fund to compensate students and faculty at the school with direct payments for antisemitism that they experienced. This came after the Trump administration paused $400 million in grants for research, the agreement restored. Columbia also made other concessions, including shifting oversight of student discipline from the faculty senate to administrators.聽
鈥淐olumbia鈥檚 reforms are a roadmap for elite universities that wish to regain the confidence of the American public,鈥� U.S. Education Secretary Linda McMahon said in a .
Why We Wrote This
Columbia and Brown universities have already made deals with the Trump administration to settle claims brought by the government. Harvard, Cornell, and UCLA are in negotiations. Where will the money end up?
The Columbia agreement is one of many:
- Brown University a $50 million deal. The school will pay that money over a 10-year period to state workforce development organizations in Rhode Island, to make sure that the initiatives are in compliance with anti-discrimination laws. Brown saw $510 million in funding restored and all pending anti-discrimination investigations were closed by the Trump administration.
- Cornell University appeared to be a $100 million settlement with the government to have hundreds of millions in federal funds restored, but negotiations have reportedly . So far, details of where the money will be spent and what concessions the school will make have not been released.
- The University of California, Los Angeles was by the Trump administration in August related to allegations of antisemitism and civil rights violations. Negotiations are ongoing.
- Harvard University is reportedly nearing an agreement, but those talks . A federal judge on Sept. 3 that more than $2 billion in federal funding was taken from Harvard illegally. The government is appealing that decision. A group of Harvard professors has urged the university鈥檚 president, Alan Garber, not to cede any academic freedoms in a settlement.
So, where does the settlement money go?
The short answer, says Mark Harkins, a senior fellow at the Government Affairs Institute at Georgetown University, is that money that has not been earmarked for specific initiatives goes to the U.S. Treasury.
鈥淚t鈥檚 hard to say where anything will go because nothing is on paper,鈥� says Mr. Harkins. 鈥淏ut, if it truly is a fine, it will go to the U.S. Treasury, the same place that your tax dollars go.鈥�
In 2024, the Department of Education fined Liberty University $14 million for violating the Clery Act, which requires universities to report campus crime statistics, ensure sexual assault awareness and prevention, publish annual reports with this data, and issue timely warnings for crimes that pose a threat to students and the campus community. That money was paid to the Treasury.
Sometimes, settlement fines can be paid directly to victims, as Columbia is doing. In 2018, a settlement was upheld by a federal judge where Trump University paid $25 million to victims who were defrauded by the failed seminar program. A small portion of that fine was paid to the New York attorney general鈥檚 office to resolve its lawsuit.
Once the money is paid to the Treasury, it can be used to cover other deficits, Mr. Harkins says.
鈥淭here鈥檚 no judge overlooking this. This is basically being tried in the court of public opinion, and so, that gives you all this flexibility and leeway,鈥� Mr. Harkins says. 鈥淭his is the art of the deal, so to speak.鈥�
Why are schools agreeing to make payments?
Schools are cutting deals and paying fines because they think it鈥檚 the smart financial decision in the long run, says Jon Fansmith, the senior vice president for government relations and national engagement at the American Council on Education. is a nonprofit group that advocates policies that affect nearly 1,800 colleges and universities.
鈥淚t鈥檚 unfortunate, but the federal government has a tremendous ability to inflict harm,鈥� Mr. Fansmith says. He adds that schools fighting the government are left in an untenable position because the legal process is incredibly expensive. Schools have to pay legal fees and still risk losing federal funding.
Mr. Fansmith says that, ultimately, schools wind up, 鈥渃oming to terms to simply settle the matter and allow for their students, staff, and researchers to move on and do the work they should be doing.鈥�
Schools paying up now was the 鈥渟mart play,鈥� says Andrew Gillen, a research fellow at the Cato Institute鈥檚 center for educational freedom. Federal funding that was being held up was money that was already approved by the previous administration.
鈥淭his is all basically fighting over old money. But for the next 3 1/2 years, the people making decisions on who gets funded ... are going to be the people you鈥檙e suing. Even if you win the argument over the old money, you might be putting at risk the new money,鈥� he says.
Also, fighting the government is expensive. Harvard is an example. The university鈥檚 recent court victory to restore frozen research funding came after the school had already spent millions of dollars in legal fees to fight the Trump administration, which has vowed to appeal the case and has argued that Harvard is not eligible for future grants.
Harvard has been the only school so far to put up a fight in court. In the process, professors pledged millions in their collective salaries to support the school, and the university freed up $250 million to plug funding gaps.
Schools that decided to make payments saw funding restored, unlike Harvard, and in cases where they made concessions, like the University of Pennsylvania, they got funding back.
Why do penalties differ for each institution?
The Trump administration has not said why settlement amounts differ.
The figures are being created without clarity, Mr. Harkins says. But he suspects there is a logic to the varying amounts that schools are agreeing to pay.
鈥淭here鈥檚 probably a logic to it that鈥檚 internal to the Trump administration,鈥� he says. 鈥淲hen you look at tariffs, they are all over the map, but when somebody went back and said, 鈥極K, let鈥檚 understand why these tariffs are different rates, it turned out that it revolved around what our trade deficit was with that individual country.鈥�
Using that logic, Mr. Harkins suspects that settlements are being made based on the size of a school鈥檚 endowment. He emphasizes that because none of this is being handled in a court of law, it is at the executive branch鈥檚 discretion to promise not to investigate schools if they settle.
Mr. Gillen of the Cato Institute thinks it鈥檚 something different.
鈥淔rom what I鈥檝e seen,鈥� he says, 鈥渋t鈥檚 almost like the amounts are being determined by how vulnerable the school is to the withholding of future federal funding than it is any actual problem that they鈥檙e being punished for.鈥�
