Harvard faces financial crisis due to federal policy changes

In July 2025, Harvard University, located in the United States, notified its campus community of significant financial challenges stemming from multiple federal policies and funding cutbacks. University administrators, including President Alan M. Garber, distributed a letter detailing expected annual losses of up to $1 billion due to these changes. The financial struggles are linked to the termination of federal research grants, budget reductions within federal agencies, and increased taxes on the university's endowment income. As part of their response, Harvard will maintain a hiring freeze and implement cost-reduction measures across all schools and administrative units. Plans to release an updated budget for Fiscal Year 2026 aim to address these adverse financial implications. However, officials expressed uncertainty about whether the lost funding would be restored in the near future. They also highlighted ongoing tensions with the federal government regarding research funding and international student admissions, adding complexity to the institution's financial predicament. The dependence on federal funding has been reinforced by recent policy changes that directly affect higher education institutions, raising concerns about the future of research and teaching at Harvard.