By Sara Randazzo

A financial reckoning has started at universities from the Ivy League to state schools as President Trump's funding cuts hit home.

Spending pullbacks such as hiring freezes, research pauses, broad budget cuts and in some cases layoffs have begun at universities including Harvard, Columbia, Princeton and Michigan State. The cutbacks extend across school budgets, beyond areas directly affected by research funds that Trump has canceled.

"We're going to have to really rethink higher education and how we're funded," said Ruth Johnston, vice president of consulting at the National Association of College and University Business Officers.

The Trump administration is imperiling universities' traditional funding on several fronts in his campaign to remake higher education. He has yanked or threatened to pull billions of federal research dollars, citing concern about antisemitism and DEI. He has signed an executive order cracking down on foreign funding. And Republicans in Congress have weighed raising taxes on endowment funds.

At Harvard, which is locked in a high-stakes battle with the administration, changes are hitting from the top down.

Harvard President Alan Garber will take a 25% pay cut, a spokesman said this week. New committees of the faculty of arts and sciences, which encompasses the undergraduate programs, are analyzing current staffing and looking for ways to keep research going.

"To preserve our mission, we must act now," Hopi Hoekstra, the dean of Harvard's faculty of arts and sciences, said at a recent faculty meeting.

Hoekstra acknowledged at the meeting that even if Harvard wins a lawsuit it has filed against the federal government seeking to restore billions in federal funds, the current level of funding is unlikely to return. "These federal actions have set in motion changes that will not be undone, at least not in the foreseeable future," Hoekstra said.

Harvard's school of public health, which relies on federal grants for almost half its budget, has conducted layoffs and reduced graduate-student admissions. It has pinched pennies on everyday spending, cutting coffee in the faculty lounge as well as catering at meetings, and removing some printers and desk phones. A spokeswoman for the T.H. Chan School of Public Health said it has lost nearly every direct federal grant it receives.

Garber said Wednesday the university would contribute an additional $250 million to backfill some of the lost research funds "for a transitional period as we continue to work with our researchers to identify alternative funding sources."

Institutions will do what they can "to protect the academic core as long as possible," said Erin Hennessy, an executive vice president at TVP Communications, a higher-education communications firm. That means going after easier cuts first, she said, such as not filling vacant positions, deferring building projects and consolidating departments, before touching the faculty.

So far, the undergraduate experience hasn't changed at most universities, but cuts in the coming months could have a significant impact by fall. Many universities implemented hiring freezes in March, after the Trump administration announced caps to research costs funded by the National Institutes of Health. Actions such as layoffs haven't yet become widespread.

Columbia leaders said this month that the loss of more than 300 multiyear federal research awards -- part of a protracted back-and-forth with the Trump administration over antisemitism concerns -- has led to a burden on its finances. The university laid off 180 people working under now-terminated grants, about 20% of those funded in some way by the grants. Some research is scaling back or winding down, and researchers can apply to tap internal "stabilization" funds to keep projects moving short term.

Most Columbia employees won't get pay raises, and the university will offer a voluntary retirement program.

"We are working on and planning for every eventuality, but the strain in the meantime, financially and on our research mission, is intense," Claire Shipman, Columbia's acting president, and three other university leaders wrote in a May letter.

Shipman acknowledged that the scale of the funding change means leaders will have to look across the university, not just at areas directly affected by federally funded research.

The elite universities feeling much of the financial pain from Trump's actions are ones that have been resistant to financial pressure that many others have faced in recent years, said Robert Kelchen, a professor of education at the University of Tennessee, Knoxville.

Longstanding concern over a shrinking pool of college applicants has affected much of higher education beyond about 200 or so research universities, Kelchen said. Now, those are the ones being hit the hardest.

Kelchen said so far, those universities sounding the alarm about financial headwinds have been in Democratic-controlled states and the Ivy League, "where being transparent is a good political move." Schools in red states are facing the same problems, he said, but aren't being vocal about it.

Michigan State President Kevin Guskiewicz told the university community recently that "we must adjust our financial path" in light of the changing federal policies. Without laying out specific cuts, he said the university's finances would be analyzed for short-, medium- and long-term savings.

Princeton leadership on Monday told departments to prepare for 5% to 10% budget cuts over the next three years in anticipation of "very large, permanent cuts to federal research funding as well as substantial increases to the endowment tax," according to Princeton Alumni Weekly.

The New Jersey school said in April that several dozen of its federal research grants had been suspended.

Write to Sara Randazzo at sara.randazzo@wsj.com

(END) Dow Jones Newswires

May 16, 2025 09:00 ET (13:00 GMT)

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