GOP calls to strip Harvard of billions in federal cash, tax breaks over ‘antisemitism shame’
The university benefits from hundreds of millions of dollars in direct federal payments — and even more in sweeping tax breaks which have helped make it the world’s richest academic institution.
Harvard, led by controversial president Claudine Gay, is being investigated by the federal Department of Education over whether it has breached the civil rights of Jewish students, which are protected under Title VI of the Civil Rights Act.
Elise Stefanik, the New York Republican whose questioning of Gay at the House Education and Workforce Committee last week left the college leader’s career in crisis, told The Post she wanted to “defund.”
“We must defund the rot in America’s higher education,” she said.
“It is unacceptable and un-American that any taxpayer dollars are going to universities propping up their promulgation of antisemitism by supporting professors, students and staff many who have openly called for the genocide of Jews.
“We will use every tool at our disposal to ensure that schools that protect and encourage antisemitism are cut off from any and all federal funds.”
And lawmaker Eli Crane (R-Az) told The Post he is introducing a bill to make Harvard and other colleges face real financial consequences if they are found to have fostered antisemitism on campus in the wake of the October 7 terrorist massacres of Israelis by Hamas.
“The American higher ed system is a racket, forcing taxpayers to first subsidize schools before roping them into paying student loans they didn’t choose to take on,” Crane said in a statement to The Post Wednesday on his bill, H.R. 6220.
“The schools make out like bandits, indoctrinating our youth with hate and delusion, all while taxpayers fund the whole thing. My bill starts to combat this scheme.”
Crane’s bill comes after Gay was allowed to stay as president by the Harvard Corporation, its ultimate governing body, despite disastrous testimony to Congress on antisemitism which included saying that calling for Jewish genocide was not automatically a breach of campus rules, for which she had to apologize.
Harvard is now facing mounting pressure on the huge amount of money it receives from the federal government.
That hit a record of $676 million this year in direct payments, and a $25 million payment from Covid rescue funds, the college reported in its fiscal year 2023 statement.
The college said that 64% of its research funding comes directly from federal departments, the biggest single tranche being allocated by the Department of Health and Human Services.
On top of that, an undisclosed amount of the $1.33 billion it received in tuition from students came through Pell grants and federal student loans.
But the biggest way Harvard, in common with other colleges, benefits from federal largesse is its tax-free status.
Donations to it are tax-deductible, an incentive for donors to lavish it with largesse.
That has allowed it to grow its endowment to just short of $51 billion. And it benefits further from tax breaks because its money managers trade shares, bonds and property without paying capital gains tax, corporation tax or taxes on interest payments and dividends.
In 2023, it brought in $186 million more than it spent — a figure on which a for-profit company would be taxed.
And last year it drew $2.46 billion from the endowment but paid just 1.4% tax on that, rather than the up to 37% an individual taxpayer would face.
The 1.4% tax was introduced in the face of fierce lobbying by Harvard in the Pres. Trump-era 2017 tax reforms, which imposed the levy on endowments belonging to colleges with at least 500 tuition-paying students and net assets of at least $500,000 per student.
Harvard, with 23,000 students, has $3 million in net assets per student thanks to its endowment, according to Richard Vedder, Distinguished Professor Emeritus of Economics at Ohio University and senior fellow at the Independent Institute, an economist who studies finance and higher education.
“These are not trivial amounts of money,” he told The Post.
“I’d like to sell my stocks and not pay any capital gains too! Harvard has all sorts of special privileges built into the tax code.”
Vedder has compared government subsidies and tax breaks at Ivy League universities and state schools, and concluded that students at Ivy League schools are more heavily subsidized than students at public institutions.
“Using endowments primarily to keep student fees low is very rare,” said Vedder in his testimony before the House Ways and Means Committee in 2015. “As a rule, endowments add to university income, rather than lower student costs.”
Calls for Harvard, and other members of the Ivy League, to be defunded have been growing since Oct. 7. and the tide of anti-Israel protests on their campuses, which have seen praise for Hamas.
In October Republican Sen. Senator Tim Scott (R-S.C.) introduced parallel legislation in the Senate to defund universities, including Harvard, that “fund or facilitate events that promote violent antisemitism.”
“Any university or college that peddles blatant antisemitism, especially after Hamas’ brutal attack on Israeli civilians, women and children, has no place moulding the minds of future generations, never mind receiving millions of taxpayer funds to do so,” said Scott said in a statement.
“No college or university should receive a single cent from the federal government to fund violent antisemitism.”
Florida governor and Republican president candidate Ron DeSantis — a Harvard Law School grad — joined the calls in an interview with WHO 1040.
“These are universities that will justify saying that it’s okay to talk about the genocide of Jews because of quote, free speech, but they don’t allow free speech on their universities,” he said.
“We’ve got to get smart about how we deal with these universities. We can’t keep funding universities that are creating this type of toxic environment and toxic ideology.”
Tech billionaire Elon Musk also joined the calls to defund the university, posting on X on Monday, “Defunding Harvard is the only thing that will work.”
He was replying to a post from C. Bradley Thompson, who posted, “@Harvard is gone. It cannot be saved. Harvard has a $50 billion endowment. It should never again receive a penny of taxpayer money. #defundHarvard.” Thompson is a political science professor at Clemson University.
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