Harvard University could face a budget shortfall of about a billion dollars a year if President Trump follows through on all of his plans and threats spanning research funding, tax policy and student enrollment, according to an analysis by The Wall Street Journal. That explains why Harvard has taken steps toward negotiating with the administration after months of defiance. The Journal`s estimate, based on publicly available data, is for a worst-case scenario in which Harvard loses all federal research funding, federal student aid and its ability to enrol international students, and Congress hikes its annual endowment tax to 8pc. A sustained shortfall of that magnitude would severely strain Harvard`s ability to manage its $6.4bn annual operating budget. Though Harvard has a $53bn endowment, more than 80pc of the money is subject to donor restrictions, meaning it can`t be touched to patch budget gaps.

(Adapted from `Harvard is Staring At A Billion-Dollar Budget Shortfall From Clash With Trump,` by Heather Gillers and Juliet Chung, published on July 2, 2025, by the Wall Street Journal)