The Administrative Procedures Act and Academic Freedom: The New Trump Attack On Harvard

On September 3, 2025, just a few weeks after a Massachusetts district judge ordered the unfreezing of over $2 billion in federal funding to Harvard, the Trump administration announced it was reclassifying the university under a “heightened cash monitoring” status. Pursuant to that reclassification, the federal government demanded that the university a) disburse financial aid to eligible students before, rather than after, receiving the funding for that aid from the Department of Education (ED) and b) provide an irrevocable letter of credit (LOC) worth over $36 million to establish itself as a “financially responsible institution”[1]. Separately, the administration threatened further funding cuts lest Harvard release its undergraduate admissions data[2].The sustained withholding of federal funds from the university represents an unprecedented attack on higher education in the United States has been widely argued since the policy’s very adoption. Equally important, especially in the wake of the administration’s disregard of the high-profile Massachusetts district court ruling, is the place that such funding freezes occupy in American law. On these most recent federal actions, precedent provides a clear guide: the Department of Education is engaging in arbitrary and capricious agency action under the Administrative Procedures Act (APA) and infringing on the First Amendment’s protection of academic freedom.

Longstanding Supreme Court interpretation of the APA cuts sharply against the ED’s reclassification announcement. Under Motor Vehicles Manufacturers Ass’n v. State Farm Mutual Automobile Insurance Co. (1983), agencies must articulate a “rational connection between facts and judgment required to pass muster under the ‘arbitrary and capricious’ standard”; to pass that test, an agency can not have, among other factors, “offered an explanation for its decision that runs counter to the evidence before the agency, or is so implausible that it could not be ascribed to a difference in view or the product of agency expertise”[3]. Indeed, in past instances where the ED placed universities on heightened cash monitoring, the facts before it satisfied the criteria set out for that classification; that is, “accreditation issues, late or missing annual financial statements, and/or audits, outstanding liabilities, denial of re-certifications, concern around the school’s administrative capabilities, concern around a school’s financial responsibility, and possibly severe findings uncovered during a program review”[4]. When Hampshire College and Drew College, for instance, were placed on heightened cash monitoring status, their financial responsibility composite scores were 0.6, well below the healthy minimum of 1.5[5]. Notably, by congressional statute, the metric “reflects the overall relative financial health of institutions on a scale from negative 1.0 to positive 3.0” [6].

However, Harvard’s reclassification falls well short of the Supreme Court’s demands of agency explanation. Unlike the aforementioned financially troubled schools, Harvard’s most recently available financial responsibility composite score was 2.8, significantly above the 1.5 threshold for financial responsibility under ED standards[7]. The ED’s letter informing Harvard of its new status does cite two separate financial concerns: its issuance of $750 million in bonds and hiring and salary freezes, both instituted in spring 2025[8]. Nonetheless, these one-off financial decisions—which were, by all accounts, motivated by the illegal funding freezes applied by the administration itself earlier this year—cannot overshadow the positive assessment of Harvard’s overall financial health. Nor are the administration’s articulated concerns about Harvard’s ability to cover immediate costs substantiated by “the relevant data,” as State Farm demands: the university’s primary reserve ratio showed that it could operate for 7.6 years off its reserve funds alone; Hampshire and Drew, on the other hand, produced ratios of 0.6 and -1.06 at the time of their reclassifications, respectively[9]. Harvard’s reclassification, then, is precisely the sort of unsubstantiated agency reasoning State Farm condemns, and is thus unconstitutional.

This, however, is not the end of the shaky legal ground the administration stands on: its second imposition, that Harvard provide an irrevocable letter of credit, lest it remain under the heightened monitoring indefinitely, collides with long-recognized First Amendment academic freedom protections. On this issue, the letter provides political reasoning to complement its financial assertions: “the U.S. Department of Health and Human Services has issued a finding that Harvard is in violation of Title VI of the Civil Rights Act of 1964, which prohibits discrimination based on race, color, and national origin”[10]. Presumably, to avoid the LOC requirement, Harvard must act on the “productive discussions with Harvard to reach resolution on the corrective action Harvard can take” offered by Health and Human Services (HHS) in the June letter to which the ED refers[11]. Though, setting aside Harvard’s objections to HHS’ findings, which include “twisting facts” and “misapplying antidiscrimination law,” it is difficult to see these suggested corrective actions as anything but attempts to regulate on-campus discourse by proxy through university administration[12]. Most tellingly, the corrections are indistinguishable from an earlier set of federal demands most pertinently including “end[ing] support and recognition of those student groups or clubs that engaged in anti-Semitic activity since October 7th, 2023… and disciplin[ing] and render[ing] ineligible the officers and active members of those student organizations” against which the Massachusetts district court granted a preliminary injunction in a separate decision in June[13].

It follows, thus, that on the same grounds that the court cited in this injunction, the functional conditioning of financial non-penalization on campus speech restrictions is unconstitutional under NRA v. Vullo (2024), where the Supreme Court held that “the First Amendment prohibits government officials from relying on the threat of invoking legal sanctions and other means of coercion to achieve the suppression of disfavored speech” (internal citations and punctuation omitted)[14]. Moreover, because political speech and protest—which, rather than illegal or even racist or otherwise hateful activity, constituted the vast majority of student organization activity after October 7—are so paramount to the “exposure to new ideas, new ways of understanding, and new ways of knowing” at the center of an undergraduate education, the would-be restrictions fall, not just under general First Amendment protections for “disfavored speech,” but also a “special concern” for academic freedom recognized explicitly by the Supreme Court in Keyishian v. Board of Regents (1967)[15]. That special concern, as Justice Brennan wrote, is not just a caution against government overreach, but a good in and of itself: “[t]he Nation’s future depends upon leaders trained through wide exposure to that robust exchange of ideas which discovers truth out of a multitude of tongues, rather than through any kind of authoritative selection” (internal citations and punctuation omitted)[16]. There is no way to square the ED’s demands with that good; accordingly, Harvard is also protected by academic freedom law on the LOC issue.

It is true that, under some circumstances, the government can constitutionally impose conditions on the receipt of federal dollars by private institutions. Such power, however, is not unlimited. As the Court held in Perry v. Sindermann (1972), “even though a person has no ‘right’ to a valuable governmental benefit, and even though the government may deny him the benefit for any number of reasons… [i]t may not deny a benefit to a person on a basis that infringes his constitutionally protected interest, especially his interest in freedom of speech”[17]. In other words: the ED cannot withhold funding because Harvard allows free speech on its campus.

So, what can be done? Harvard’s legal case is manifestly strong, and the administration, in following its failure in front of a district court with a new slew of restrictions and threats against the university, has shown no intention of backing down from its attacks thereupon. In this light, rather than negotiating a more limited settlement with the administration directly, it is pivotal that the university pursues its full rights in court. While it could come at a heavy short-term cost, principled legal resistance will ensure Harvard’s independence and previously productive relationship with the government. Such support could result in avoidance of the reputational and academic pitfalls that an institution like Columbia University, acquiesced to Trump’s demands outside of the courtroom, has faced; for an institution which boasts the motto Veritas, nothing could be more important.

References

[1] Shaffer, Rhonda. Rhonda Shaffer to Alan M. Garber, September 19, 2025. In Thomson Reuters. https://fingfx.thomsonreuters.com/gfx/legaldocs/egvbqgabgpq/09192025harvard1.pdf.

[2] U.S. Department of Education. “U.S. Department of Education Issues Denial of Access Letter to Harvard University for Its Continued Failure to Provide Admissions Data.” Press release.September 19, 2025. https://www.ed.gov/about/news/press-release/us-department-of-education-issues-denial-of-access-letter-harvard-university-its-continued-failure-provide-admissions-data.

[3] Motor Vehicles Manufacturers Ass’n v. State Farm Mutual Automobile Insurance Co., 463 U.S. 29 (1983).

[4] Federal Student Aid. “Heightened Cash Monitoring.” Department of Education. https://studentaid.gov/data-center/school/hcm.

[5] Whitford, Emma. “Education Dept. Subjects Harvard to More Financial Oversight.” Inside Higher Ed. September 19, 2025. https://www.insidehighered.com/news/government/student-aid-policy/2025/09/19/education-dept-subjects-harvard-more-financial.

[6] Federal Student Aid. “Financial Responsibility Composite Scores.” Department of Education. https://studentaid.gov/data-center/school/composite-scores.

[7] Ibid.

[8] Ibid.; Rosenberg, John S. “Reinforcing Harvard’s Finances.” Harvard Magazine. April 14, 2025. https://www.harvardmagazine.com/2025/04/harvard-finances-bond-market; Rong, Vivian W. “Harvard’s Hiring Freeze Continues.” Harvard Magazine. July 14, 2025. https://www.harvardmagazine.com/2025/07/harvard-hiring-freeze-update.

[9] Ibid.; Ibid.

[10] Ibid.

[11] U.S. Department of Health and Human Services. “HHS’ Civil Rights Office Finds Harvard University in Violation of Federal Civil Rights Law.” Press release. June 30, 2025. https://www.hhs.gov/press-room/hhs-finds-harvard-in-violation.html.

[12] Patel, Dhruv T., and Saketh Sundar. “Harvard Says Trump Administration Botched Its Antisemitism Findings.” The Harvard Crimson. October 1, 2025. https://www.thecrimson.com/article/2025/10/1/harvard-responds-to-hhs/.

[13] Gruenbaum, Josh, Sean R. Keveny, and Thomas E. Wheeler. Josh Gruenbaum, Sean R. Keveny, and Thomas E. Wheeler to Alan M. Garber and Penny Pritzker, April 11, 2025. In The Harvard Crimson, https://www.thecrimson.com/article/2025/4/15/agencies-demands-to-harvard/; President and Fellows of Harvard College v. United States Department of Homeland Security, No. 1:25-cv-11472-ADB (D. Mass. June 23, 2025) (Mem. & Order Granting Prelim. Inj.).

[14] National Rifle Association of America v. Vullo, 602 U.S. 175 (2024).

[15] Betts, Anna. “The showdown between Harvard and the White House – day by day.” The Guardian. April 19, 2025. https://www.theguardian.com/education/2025/apr/19/harvard-trump-administration-timeline; Harvard College. “Mission, Vision, & History.” https://college.harvard.edu/about/mission-vision-history. Keyishian v. Board of Regents, 385 U.S. 589 (1967).

[16] Ibid. [17] Perry v. Sindermann, 408 U.S. 593 (1972).

[17] U.S. Department of Education. “U.S. Department of Education Issues Denial of Access Letter to Harvard University for Its Continued Failure to Provide Admissions Data.” Press release. September 19, 2025. https://www.ed.gov/about/news/press-release/us-department-of-education-issues-denial-of-access-letter-harvard-university-its-continued-failure-provide-admissions-data.