Newsom Threatens Funding Over Trump University Compact

The Trump administration sent a 10-point “Compact for Academic Excellence in Higher Education” to nine universities, including USC, offering preferential federal grants, higher overhead payments and enforcement oversight in exchange for reforms such as ending race- and gender-conscious admissions, restoring standardized tests, freezing tuition hikes, capping international student enrollment, limiting use of endowments for political causes, and installing an external monitor. California Gov. Gavin Newsom warned that any California university that signs the compact would immediately lose billions in state funding, including Cal Grants (USC received $28.4 million in Cal Grants last year; statewide Cal Grant totals run into hundreds of millions for private institutions and billions for public systems). The White House describes the plan as voluntary and aimed at bolstering free speech and combating anti‑Semitic or anti‑American influences, while higher‑education leaders and groups such as the American Council on Education call it political coercion that intrudes on academic freedom and governance. Media and advocates are sharply divided, with some portraying the compact as restoring institutional neutrality and others calling it “thought policing” that could restrict protests and trans‑related policies. The dispute sets up a likely legal and political showdown over federal incentives versus state oversight as universities weigh the tradeoffs of accepting federal favors or risking state penalties.