Will the world's richest university really miss its income from foreign student enrolments?

The Trump administration’s move to bar Harvard University from enrolling international students and freeze $2.6 billion in federal funding has revealed how even the world’s richest university remains vulnerable. Despite a $53.2 billion endowment, Harvard is confronting limits in how much of that wealth can be used to absorb the fallout.

The Department of Homeland Security revoked Harvard’s certification under the Student and Exchange Visitor Program, halting new enrollments from abroad and forcing existing international students to transfer or risk losing legal status. The decision stems from allegations of campus unrest, antisemitism, and supposed links to foreign governments.

Nearly 6,800 foreign students are currently enrolled in the university. Harvard’s official website states that between 500 to 800 Indian students and scholars are enrolled at the university each year. At present, the number stands at 788.

Harvard has refused to comply with federal demands to turn over student records and protest footage, calling the government’s move unlawful. The school has initiated legal proceedings to challenge the revocation and associated funding blocks.

Though Harvard’s endowment surpasses the GDP of many countries, most of it is legally restricted. Donors typically earmark their gifts for specific uses, such as scholarships, faculty positions, or particular research projects. As a result, only about a quarter of endowment payouts are available for discretionary spending.

This means Harvard cannot simply tap into its endowment to offset the loss of federal grants or cover tuition shortfalls. The university also risks breaching donor agreements if it redirects funds without proper authority. Spending from the unrestricted portion may provide some short-term relief but could compromise future financial stability.

Federal research grants, especially from agencies like the National Institutes of Health and the National Science Foundation, are critical to Harvard’s research in fields such as medicine, climate science, and national security. These funds not only support research itself but also provide for the infrastructure and staffing necessary to run large-scale academic programs. The freeze disrupts dozens of ongoing initiatives, including projects on tuberculosis, ALS detection, and radiation therapy.

In the interim, Harvard has reallocated $250 million from internal funds to sustain critical research. However, the uncertainty around federal funding and restrictions on international students could weaken its long-term academic standing and global influence.

The ban also poses risks to the regional economy. International students at Harvard contribute to Massachusetts through housing, local businesses, and by working in hospitals, biotech, and research institutions. Their absence could impact sectors that rely on highly educated talent from abroad.