In the initial weeks of the Trump administration's efforts to reduce funding that colleges and universities depend on, various grants and contracts have been slashed, resulting in layoffs for some researchers. Recently, these funding cuts have impacted students directly.
At the University of Pennsylvania, administrators have requested that departments in the School of Arts & Sciences reduce the number of incoming Ph.D. students. This has led to some departments rescinding informal offers, as noted by Wendy Roth, a sociology professor. Roth, who chairs graduate education, reported that the department faced the difficult task of "unaccepting" certain students, which elicited strong emotional responses, including tears from at least one rejected student.
The Trump administration's actions pose a significant threat to the financial stability of university-based research, particularly through substantial cuts to overhead reimbursements from the National Institutes of Health (N.I.H.). Although some of these cuts have faced legal challenges, universities remain on edge. For instance, the University of Pennsylvania is anticipating a potential loss of $250 million in N.I.H. funding alone.
Administration officials have framed the budget cuts as necessary measures to eliminate wasteful government spending. Katie Miller, associated with efforts to reduce federal expenditures, characterized the cuts as a means to dismantle what she termed "liberal D.E.I. deans’ slush fund."
In response to growing uncertainties, several educational institutions are proactively implementing budget cuts. North Carolina State University, for example, announced a hiring freeze, while Stanford University cited "very significant risks" in its decision to halt staff hiring. The University of Louisville also imposed an immediate hiring pause, pointing to anticipated funding losses of $20 to $23 million from the N.I.H.
The reductions are increasingly affecting graduate education, which is heavily reliant on research grants. The graduate program in biological sciences at the University of California, San Diego, typically admits 25 new students each year but will reduce that number to 17 for the upcoming year. Professor Kimberly Cooper expressed concern that these cuts could disrupt the academic landscape and hinder the educational mission of universities.
At the University of Pennsylvania, nearly all of the school’s 32 programs have faced similar budget cuts. For example, the history department was instructed to limit Ph.D. admissions to just seven students, down from the customary 17, while the English department's intake was reduced from 9-12 students to a maximum of six.
A letter from professors representing 22 departments at Penn cautioned that such decisions may inflict lasting damage on the university's reputation. When asked for comments, the university referred to a statement from interim president J. Larry Jameson, who emphasized that these actions pose "an existential threat" to both the university and higher education in America.
As the Trump administration continues to prioritize measures against antisemitism and diversity initiatives within schools, funding for scholarships and other undergraduate programs may also be at risk, pending legal developments.
According to David Kazanjian, the graduate chair of comparative literature at Penn, reductions in graduate student numbers will lead to fewer opportunities for undergraduates, potentially resulting in larger class sizes.
These cost-cutting initiatives are affecting a broad array of educational institutions, ranging from Ivy League schools to public universities. The decision to limit overhead reimbursements for N.I.H. grants to 15 percent could severely impact financial support that schools traditionally rely on for operating costs. For example, Columbia University, which receives approximately $1.3 billion annually in N.I.H. funding, faces potential losses of up to $200 million due to this policy change.
A graduate-student union at Columbia reported proposed cuts that could eliminate up to 65 percent of incoming Ph.D. students in the School of Arts & Sciences. Although pushback led to a revision of these proposals, firm numbers have yet to be disclosed.
Columbia's graduate workers emphasized that funding cuts were unnecessary, given the university's substantial endowment, which grew from $13.6 billion in 2023 to $14.9 billion in 2024. In contrast, Yale University has announced plans to temporarily support its scholars with funds from its endowment.
This week, the Education Department indicated it would review all federal contracts and grants associated with Columbia, claiming the institution had not taken adequate steps to combat antisemitism on campus. The review identified over $51 million in contracts that could potentially face stop-work orders.
In light of these developments, schools with substantial endowments may also face increased taxation. Traditionally exempt from taxes due to their nonprofit status, large private university endowments were subjected to a 1.4 percent excise tax on investment income during the Trump administration's first term. Current discussions could see this tax raised to between 14 percent and 21 percent.
The impending N.I.H. cuts and increased endowment taxation follow significant budget reductions already felt at public land-grant universities. One of the first programs targeted by the Trump administration was a U.S. Agency for International Development initiative known as "Feed the Future," which funded numerous agricultural laboratories across the country, many of which are now closing.
At U.C. San Diego, Professor Cooper warned that the implications of these funding reductions extend beyond academic institutions, potentially impacting the future biomedical workforce and various sectors of the economy. “The bigger issue in all this is that, this is our future biomedical work force,” she stated.