Harvard posts deficit of over $110 million as funding feud with Trump continues to sting

Harvard has stated that it had an “extraordinarily challenging” fiscal year amid its ongoing feud with the Trump administration.

President Donald Trump withheld over $2 million in federal research funding after he accused Harvard of “repeatedly” failing to confront anti-Semitic harassment on its campuses, arguing that the university was violating federal civil rights law.

'Even by the standards of our centuries-long history, fiscal year 2025 was extraordinarily challenging, with political and economic disruption affecting many sectors, including higher education.'

Harvard responded to the funding freeze by suing the administration. While most of those awards have been reinstated, according to Harvard, President Donald Trump’s actions against the university appear to have made an impact.

“The reinstatements of those grants do not erase the disruption the terminations sparked, nor do they negate the uncertainty ahead. That means we can’t simply return to ‘business as usual,’” Harvard chief financial officer Ritu Kalra told Bloomberg.

A financial report released Thursday by the Ivy League school showed a $113 million deficit for fiscal year 2025, which ended on September 30. This marks Harvard’s first operating loss since 2020 and its largest deficit since 2011. In contrast, for fiscal year 2024, Harvard reported a $45 million gain.

Harvard’s financial difficulties prompted it to make “difficult but necessary choices,” according to Alan Garber, the university’s president. It reportedly implemented a hiring freeze, initiated layoffs, scaled back projects, and withheld salary increases from exempt employees.

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“Even by the standards of our centuries-long history, fiscal year 2025 was extraordinarily challenging, with political and economic disruption affecting many sectors, including higher education,” Garber wrote.

He also blamed President Donald Trump’s termination of federal research funding, noting that a federal judge found the move to be unlawful. The administration reportedly has plans to appeal the judge’s decision.

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“We closed [the fiscal year] confronting the abrupt termination of nearly all of Harvard’s federal research grants, facing potential constraints on the exchange of international scholars, and considering how we will absorb the enactment of a substantial increase to the federal tax on endowment income, scheduled to take effect in fiscal 2027,” the report read.

Despite its reported challenges, Harvard recorded the largest current-use gifts in its history, totaling $629 million — a 19% increase over the previous fiscal year. However, the university's endowment gifts, which are more restricted in their use, have declined over the last two years. In fiscal year 2023, Harvard collected $561 million in endowment gifts, while the amounts dropped to $368 million in 2024 and $364 million in 2025.

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