Harvard University might be facing financial challenges as President Donald Trump moves to cut billions in federal funding. The University’s endowment is in advanced talks to sell private equity fund interests totalling about $1 billion, a person familiar with the matter said on Thursday.
Earlier this month, the Trump administration froze over $2.2 billion in federal funding to Harvard University, citing its handling of antisemitism on campus and its refusal to dismantle diversity, equity, and inclusion (DEI) programs.
The administration also questioned Harvard’s tax-exempt status. Although a judge blocked the full freeze, many grants remain suspended, disrupting research and educational programs. In 2024, Harvard received $686 million in federal funds, a significant portion of its research and financial aid budget.
READ: Trump administration investigates Harvard University over alleged antisemitism (April 1, 2025)
In response, Harvard filed a lawsuit against the federal government, arguing that the funding cuts are politically motivated and violate academic freedom. The university has stated its commitment to addressing antisemitism while maintaining support for DEI initiatives. This conflict has sparked a broader national debate over the role of federal oversight in higher education, academic independence, and how institutions balance inclusive policies with political and legal pressures from the federal government.
However, it seems that the equity sale has been planned since last year and is not related to Trump’s latest federal funding cuts against Harvard, according to Bloomberg.
What is federal funding for American universities?
Federal funding for universities in the United States supports research, student aid, and institutional programs. Major sources include the National Institutes of Health(NIH), National Science Foundation, and Department of Education (DoE). These funds help finance scientific research, provide Pell Grants and student loans, and support infrastructure or special academic initiatives.
In many institutions, especially research universities, federal funding accounts for a significant portion of their budgets. It enables innovation, attracts top faculty, and expands access to education. Loss of such funding can disrupt research projects, reduce student aid, and impact university operations, making it a vital component of higher education in the U.S.
According to Bloomberg News, which first reported about the development, Harvard Management Company, which oversees the largest endowment in U.S. higher education, is being advised by Jefferies Financial Group to sell the portfolio to private equity firm Lexington Partners.