What Loss of Federal Funding and Tax-Exempt Status Could Mean for Harvard

Historically, private, for-profit colleges have had a difficult time remaining financially stable.

For decades, Harvard University has remained atop many prestigious rankings, alongside seven other Ivy League schools, Stanford, MIT, and the most elite, expensive, private, nonprofit institutions across the nation.

If President Donald Trump succeeds in revoking its tax-exempt or federal grant eligibility status—which he’s threatened to do on multiple occasions in the past month—America’s oldest university, founded in 1636, could be on a much different list of schools ahead of its 400th birthday.

It could join the University of Phoenix, Hillsdale College, the University of Austin, and Bob Jones University.

Those institutions are among a few dozen post-secondary schools that, either currently or in the past, have operated without tax-exempt status or did not receive federal aid, according to their respective websites.

Unlike Harvard, most of those schools have operated either as a business or a conservative religious institution, and none are major research centers.

They also lack multi-billion-dollar endowments sponsored by wealthy alumni donors.

Still, each of those institutions has a unique identity.

The newest of them, the University of Austin in Texas, established in 2021, brands itself as an anti-woke institution with no political or religious affiliations.

It’s located in a small office, but plans to expand into a residential campus with continued help from wealthy donors.

This institution operates with a nonprofit, tax-exempt status, but it does not receive public funding, according to its website.

“If we were mimicking the traditional model of higher ed, then yes, starting a new university would cost billions. But we’re not doing that,” the website says.

“Building a university from the ground up affords us the opportunity to reexamine the legacy practices of universities and dramatically slash the cost of university administration, ensuring funds are directed as much as possible to academics.

“UATX is developing a new financial model that reverses higher ed’s bureaucratic bloat, improves student experience, and keeps fees to a minimum.”

Hillsdale College in Michigan, with an acceptance rate of 21 percent, is among the most competitive higher learning institutions that operate without government funding.

The school played a role in the abolitionist movement in the 1860s and educated hundreds of Union soldiers.

However, when forced to track student enrollment by race in the 1970s, school administrators resisted the federal mandate and have refused federal aid with strings attached ever since, according to the college’s website.

By Aaron Gifford

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