The Trump administration is making it harder for colleges and universities to budget for the upcoming year.
Hundreds of universities and colleges across the country are perpetually under financial strain. Now, they’re seeing research grants cut, health care funding at risk and a hard-line immigration agenda threaten revenue from tuition.
“If the international pipeline gets cut off, as well as federal funding for grants, I think you will see schools that are already on the brink closing or merging that you never would have thought would be in trouble,” a chief financial officer for a midsize college in a red state, who was not authorized to speak on behalf of their employer, told NOTUS.
Many universities count on tuition dollars from international students who, in many cases, pay the full sticker price to attend college and do not receive financial aid. The Trump administration has already revoked (and in some cases, reinstated) visas for hundreds of international students. That, and the threat of travel bans, could dissuade international students from studying in the U.S.
The administration’s high-profile fights with Harvard and Columbia universities have offered a window into its discontent with the state of higher education. President Donald Trump signed an executive order on April 23 emboldening the education secretary to enforce foreign funding disclosure requirements for higher education institutions.
Both Harvard University and the University of California, Berkeley, are under scrutiny by the Department of Education over suspected violations of Section 117 of the Higher Education Act of 1965.
But it’s not just Ivy League schools and major research institutions that are navigating these changes.
“All these other schools that are on the brink are struggling now, are fearful that could happen to them,” the red-state college financial officer said. “So, the way that things are going is that it looks like you’re just picking a fight with the elite schools, but when you talk about cutting off international enrollment, that hits tons of schools, and so now they’re in contingency planning, trying to figure out what’s going to happen.”
The red-state college, for example, has been more conservative in how it’s funded scholarships as a result of uncertainty about funding and revenue. Experts and financial officers also worry that the general financial climate could contribute to a drop in philanthropic giving.
“Right now is a time where they are really lacking any clarity on where their resources are coming from and how many resources they’ll have, and that makes it nigh on impossible to plan for the upcoming academic year without a sense of what kind of budget you can work with,” said Katharine Meyer, an education policy fellow at the Brookings Institution.
A blue-state university CFO said that they’re budgeting more conservatively as well. Though commitments from students are up compared to last year, when issues with the Free Application for Federal Student Aid, or FAFSA, dissuaded a lot of students from attending, they’re not quite where they were two years ago, when the institution was just beginning to recover from the drop in enrollment due to the COVID-19 pandemic.
“It’s like this, 1-2-3, punch, like,” they said, referring to COVID, the FAFSA debacle and federal policy-related uncertainties. “Can we just have one year where it’s a normal one?”
In addition to potential variability in the amount of federal support schools receive, lack of clarity on the financial aid landscape could dissuade students from attending postsecondary institutions. The Trump administration has maintained that federal Pell grants, which make up the bulk of federal funding to universities and students, will continue to flow.
“I think the students are really caught, and their families, because it’s hard to understand anyway, but with these major changes, I think people are going to be that much more confused. And when people get confused, sometimes they don’t even apply to go to school,” said Ruth Johnston, vice president of consulting for the National Association of College and University Business Officers.
The Trump administration hasn’t hesitated to cut grants through both DOGE and in retaliation against diversity, equity and inclusion programs.
The blue-state institution had one grant reduced and is appealing to have one grant termination reversed but otherwise hasn’t been affected by grant funding loss. It is bracing for a Trump administration change, that is currently being litigated, where indirect research cost reimbursements would be capped.
“The business officers know how to run their business and to anticipate changes,” Johnston said. “So what’s going to happen? Some will have enough money set in a reserve or through this one time, kind of claw back so that they can survive for a while. Maybe one to three to five years, potentially, depending on what their endowment or their reserves are like. But you know, other universities, we’re going to start seeing more mergers and acquisitions. There’s no question about it, and closures.”
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Violet Jira is a NOTUS reporter and an Allbritton Journalism Institute fellow.