Harvard and MIT won't be affected by Trump's funding freeze: Here is why

The Trump administration's proposed freeze on federal research funding has sent shockwaves through the higher education sector, particularly within research-intensive institutions. The plan, outlined by the Office of Management and Budget, would cut off billions of dollars in government grants, loans, and contracts to universities across the country. As institutions scramble to prepare for what could be a prolonged freeze, some of the wealthiest and most well-established universities, like Harvard and the Massachusetts Institute of Technology (MIT), are in a much stronger position than others to weather the storm.
Despite the potential disruption to research and administrative operations, Harvard and MIT are unlikely to be significantly impacted by the freeze. These universities, with their massive endowments and alternative revenue streams, are uniquely positioned to sustain their operations even if federal funding is temporarily halted. As reported by Forbes, these elite schools have the financial resilience to outlast the freeze, ensuring that their research programs, faculty salaries, and infrastructure remain intact.
Financial strength through endowments
Harvard and MIT are among the wealthiest universities in the world, boasting some of the largest endowments in higher education. Harvard, with an endowment valued at $53.2 billion as of fiscal year 2024, can easily absorb short-term funding gaps, even if federal funds are frozen for months or longer. In fact, federal research grants accounted for just 1.3% of its total revenue in 2023, according to Forbes.

MIT, with an endowment of $23.4 billion, is similarly equipped to ride out the freeze. Federal funding accounted for about 52% of MIT's operating revenues in fiscal 2023, yet the university can tap into its vast endowment to maintain its critical research functions. Even if the freeze extends into the next few years, MIT has the financial capacity to ensure that its faculty and research teams are unaffected.
The role of Federal funding in research
Federal grants have long played a crucial role in supporting research at universities, funding everything from lab equipment to PhD salaries. However, the funding freeze primarily impacts institutions that rely heavily on government money for their operating costs. At the same time, universities with substantial endowments—such as Harvard and MIT—can shift their focus to other revenue sources, such as private donations and investment income, to keep research projects running smoothly.
For schools like Harvard and MIT, federal grants typically represent a small fraction of their total revenue. For example, Harvard's $649 million in federal funding during fiscal year 2023 was just 11% of its total revenue. MIT's federal funding, amounting to $1.6 billion, accounted for only 7% of its $23.4 billion endowment. With billions in reserves and alternative funding mechanisms in place, these universities have ample resources to weather the freeze without significant disruption to their core operations.
How endowments cushion the blow
Endowment funds are a critical financial asset for top-tier universities, offering a financial cushion during periods of uncertainty. While the federal funding freeze may cause difficulties for institutions with smaller endowments, elite universities like Harvard and MIT have built substantial financial buffers over the years.
For example, Harvard's endowment, which grew by nearly $5 billion in 2024, is managed through investments in private equity, hedge funds, and other high-return assets. This has allowed Harvard to not only withstand federal funding disruptions but also to continue growing its financial base. Similarly, MIT's endowment strategy, which focuses on long-term investments, ensures that the university remains financially stable even in the face of external funding challenges.
A comparison of Federal funding at top universities
While Harvard and MIT are in a strong position to manage the freeze, other universities are not as fortunate. Federal funding may account for a significant portion of revenue at institutions with smaller endowments or those less reliant on alternative revenue streams. The data below shows how federal grants, appropriations, and contracts factor into the financial structures of some of the top recipients of federal funding in fiscal year 2023.

Sourece: Forbes
As seen above, Harvard and MIT are among the top recipients of federal funding in the US, but their endowment wealth puts them in a position to navigate funding freezes with ease. Schools like Johns Hopkins, which rely on federal grants for 40% of their revenue, could be more vulnerable in the short term. In contrast, universities with smaller endowments may face more severe disruptions as they rely more heavily on federal funds.
Legal challenges and future uncertainty
While Harvard and MIT remain largely insulated from the freeze, the broader higher education community is facing a period of uncertainty. The freeze on federal funding has not yet come into effect. A flurry of legal challenges, including suits from multiple state attorneys general and nonprofit organizations, has stalled the freeze. As of now, no federal agencies have implemented the freeze, and the matter is still under legal consideration.
A judge issued a temporary restraining order that has paused the freeze while the court evaluates the case. The final decision will determine whether the freeze will go forward and for how long. As quoted by Forbes, Rick Hess, senior fellow at the American Enterprise Institute, remarked, "The scope of the pause government-wide is unprecedented," underlining the uncertainty surrounding the freeze.
Even if the freeze ultimately takes effect, Forbes reports that Harvard and MIT are well-prepared to handle the disruption. The legal challenges and the ongoing political debate around funding may also shape the future of federal research grants, but the wealth of these institutions provides a level of financial security that smaller schools simply cannot match.