Should Harvard be forced to borrow money and have it's pockets drained.

It's kind of like having K repossess all the crap you stole.

Elite Universities in Trump’s Crosshairs Are Drumming Up Cash

Princeton, Harvard and Brown are among the schools issuing debt

By Heather Gillers, WSJ and

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Elite universities are raising cash due to concerns about President Trump’s policies.

Princeton is issuing $320 million in bonds, Northwestern secured $500 million, and Harvard raised $750 million.

The Trump administration has pulled, paused or placed under review more than $10 billion in funding as part of its push for sweeping changes to how universities operate.

Elite universities are raising cash as they deal with life in President Trump’s crosshairs.

Princeton University is issuing $320 million in bonds, while Northwestern secured $500 million and Harvard raised $750 million. Yale University, which has flown under Trump’s radar so far, is trying to sell billions in its private-equity holdings.

Many colleges haven’t turned to such measures since the 2008-09 financial crisis or the pandemic. “Most universities are not panicking but want to be prepared for the worst,” said Greg Dowling of investment consulting firm Fund Evaluation Group.

The Trump administration has pulled, paused or placed under review more than $10 billion in funding as part of its push for sweeping changes to how universities operate, which the schools argue amounts to massive overreach by the federal government into private institutions.

The administration has said its actions are an effort to protect Jewish students in the wake of pro-Palestinian protests last school year. The Trump administration has also targeted diversity, equity and inclusion, or DEI, efforts.

Last week, Trump threatened Harvard University’s tax-exempt status and its ability to enroll international students after the school rebuffed the administration’s demands for major cultural change. Harvard on Monday sued the Trump administration, saying it had violated the school’s constitutional rights by endangering its academic independence.

Schools are dealing with more uncertainty now than they did during previous market drawdowns or economic downturns, when they could expect the government to be supportive, said Matt Bank of Charlotte, N.C.-based outsourced investment office GEM.

“In some respects, it feels like the intention here is to create disorder,” he said.

University leaders and endowment chiefs also expect Congress to consider raising the tax on the richest endowments and expanding the number of schools affected. Competing proposals have been introduced in the House.

Some donors threatened to pull support from universities last year over mounting pro-Palestinian protests. But private gifts are just one way schools are funded. Former Northwestern President Morton Schapiro breaks down the complex financials of higher education. Photo illustration: WSJ

Princeton’s bond deal, which closed Tuesday, follows similar moves by Harvard, Northwestern University and Brown University. Princeton didn’t specify in its bond filings exactly how it plans to use the money but said the Defense Department, the Energy Department, NASA and other federal agencies have suspended “several dozen” research grants.

Like the other schools, Princeton is issuing taxable bonds, which carry higher interest rates than more typical tax-exempt university debt. But proceeds can be used to plug budget holes, if needed.

The New Jersey university said it was among 60 colleges and universities that received a March 10 letter from the Education Department saying it would take action against schools that failed to protect against antisemitism. The department also said any practices it views as “unlawful racial discrimination” could lead to additional funding losses, according to Princeton.

Students studying at Harvard’s Lamon Library at night.

Much of Harvard’s endowment of over $50 billion is locked up in long-term investments or restricted by donors for specific purposes. Photo: Sophie Park/Getty Images

Northwestern in its $500 million bond offering last month estimated that federal dollars accounted for more than three-quarters of its total research funding last year. The school said it is reviewing spending and cutting nonpersonnel budgets by 10%.

Universities are issuing bonds in a rocky market where they are likely to pay higher interest rates. Moody’s Ratings last month lowered its outlook for higher education bonds to negative.

Dowling, the investment consultant, said his firm’s public university clients have been reviewing their investment portfolios for ways to raise cash, even though they have largely escaped the Trump administration’s focus so far.

In addition to cash reserves, some universities have large endowments—Harvard’s was more than $50 billion as of June. But much of the endowment is locked up in long-term investments or is restricted by donors for specific purposes.

Yale University Old Campus courtyard with statue and students.

Yale has been marketing a slate of its private-equity investments. Photo: Joe Buglewicz/Bloomberg News

Some universities had already been trying to unload their private-equity holdings by selling stakes on the secondary market, as a dealmaking slump slows payouts to clients. The Trump administration’s actions have caused an uptick in schools’ interest in exploring such sales, according to agents involved in such deals. Universities typically expect to hold private equity for around a decade. Cashing out beforehand usually involves selling at a discount.

Yale has been looking to sell a $5.5 billion slate of private-equity investments for more than a year, said people familiar with the sales effort, largely to reshape its private-equity portfolio under new leadership. A firm marketing the slate has told potential bidders it is expected to sell in the range of 90 cents on the dollar.

The Yale portfolio for sale includes fund stakes from firms including CD&R and Golden Gate Capital, said people familiar with the offering.

A Yale University spokeswoman said the school is “committed to private equity investments as a major part of our investment program” and continues to make new such investments. The possibility of a sale was reported earlier by Secondaries Investor.

Write to Heather Gillers at heather.gillers@wsj.com and Juliet Chung at Juliet.Chung@wsj.com