The Department of Education said it had placed Cambridge, Massachusetts-based Harvard on "heightened cash monitoring" status, a shift from the typical practice that will force it to use its own funds to disburse federal student aid before drawing down funds from the department.
Trump has cracked down on universities and threatened to cut federal funding over a range of issues like pro-Palestinian protests against US ally Israel's assault on Gaza, transgender policies, climate initiatives and diversity, equity and inclusion programs.
The Education Department is also seeking to have Harvard post a letter of credit for $US36 million to ensure its financial obligations are met. In a letter, it said recent events raised concerns about Harvard's finances, citing its decision to issue bonds and conduct layoffs amid its conflict with the White House.
The Education Department said Harvard was at risk of losing access to all federal student aid funding by not complying with requests for records from its Office of Civil Rights, which a separate letter warned may pursue an enforcement action.
That office has been reviewing whether Harvard still considers race in its undergraduate admissions process even after the US Supreme Court in 2023 ruled that affirmative action practices that schools relied on to boost enrolment of racial minorities were unlawful.
Harvard did not respond to requests for comment.
The government in July settled its federal investigations with Columbia University, which agreed to pay more than $US220 million to the government, and Brown University, which said it will pay $US50 million to support local workforce development. Both accepted certain government demands.
The Trump administration has been seeking a settlement with Harvard. Trump has said Harvard should pay "nothing less than $US500 million."
The government had separately proposed settling its probe into the University of California, Los Angeles through a $US1 billion payment from the university.Â
California Governor Gavin Newsom called that offer an extortion attempt. The government froze nearly $US600 million in funding for UCLA, the university said in August.
UCLA unveiled new protest rules on Friday that formalised interim policies put in place in September 2024. UCLA experienced large demonstrations last year and a violent attack by a pro-Israeli mob on a pro-Palestinian encampment.
The policies unveiled at UCLA include measures that restrict unauthorised encampments, ban masks or face coverings for those who violate rules and make outdoor spaces off-limits for demonstrations that are not pre-approved.
