Newsom Warns Universities Lose State Funding Over Compact

California Gov. Gavin Newsom warned any state university that signs President Trump’s “Compact for Academic Excellence in Higher Education” will “instantly” lose state funding—including Cal Grants—calling the proposal a “hostile takeover” that would force schools to “sell out” students and surrender academic freedom. The White House sent the compact to nine institutions — USC, MIT, Brown, Dartmouth, UPenn, Vanderbilt, the University of Texas system, Arizona and UVA — offering priority access to federal grants and other benefits in exchange for policy changes. The compact’s conditions include caps on international undergraduate enrollment, bans on considering race, sex or gender in hiring and admissions, reinstating SAT/ACT requirements, freezing tuition, strict definitions of gender, and measures to curb alleged ideological bias. Newsom’s ultimatum places California campuses — particularly USC, which has a large share of international students and substantial federal funding — between federal incentives and the risk of losing crucial state support. The University of Texas system has publicly welcomed the recognition, underscoring divided responses as the dispute escalates into a broader legal and political fight over federal conditioning of university policy.