US further tightens funding screws on Harvard in escalating showdown

The Trump administration imposed fresh restrictions on Friday on Harvard’s access to federal funds, opening a new front in its unprecedented crackdown on the prestigious US university.

The Department of Education announced in a statement that it has placed Harvard under “heightened cash monitoring (HCM) status”, saying there were “growing concerns regarding the university’s financial position”.

It cited the administration’s own accusations of civil rights violations at the university as creating uncertainty over future funding, as well as Harvard’s move to issue bonds and lay-off employees.

The status shift requires the university to use its own funds to pay out student financial aid packages that federal officials have promised, with the school later able to seek reimbursement from the government.

“Students will continue to have access to federal funding, but Harvard will be required to cover the initial disbursements as a guardrail to ensure Harvard is spending taxpayer funds responsibly,” the department wrote.

Additionally, federal officials are requiring Harvard to “post an irrevocable letter of credit for US$36 million” to “cover potential liabilities and ensure that Harvard meets its financial obligations to both students and the department”.