The Trump administration is pressuring at least 60 U.S. colleges and universities, including Harvard, to change their policies or risk losing billions of dollars in federal funding. Harvard, which stands to lose over $2.2 billion, is accused of violating students' civil rights by permitting antisemitic speech, though the government has not provided specific evidence. Harvard has the nation's largest educational endowment, worth over $53 billion in 2024, which could potentially buffer the university from financial strain. Endowments are not simple financial reserves but are collections of smaller funds, many with donor-imposed restrictions. Universities must respect these limits, which can be tied to specific scholarships, professorships, or building projects. However, the governing boards of universities decide the annual spending from their endowments. Despite the misconception that endowments are easily accessible, they are complex and governed by state and federal laws. For instance, the Uniform Prudent Management of Institutional Funds Act (UPMIFA), enacted in 2006 and applicable in all states except Pennsylvania, allows for prudent spending from endowment funds, considering factors like the institution's charitable purposes, economic conditions, and other available resources. Spending more than 7% annually in states with this cap is presumed imprudent, but circumstances can override this presumption. Harvard's endowment is composed of about 14,000 separate funds, with 80% restricted for specific uses, but the remaining 20% offers more flexibility. Other top universities with large endowments, such as Yale, Princeton, and Columbia, are also under investigation. The reluctance to spend endowment funds often stems from a desire to preserve long-term financial stability and enhance institutional prestige. Harvard, for example, is considering issuing $750 million in bonds to meet its financial needs without depleting its endowment. The Trump administration's policies could continue to impact financial markets, potentially reducing endowment values. In response to these threats, Harvard has begun to push back, asserting that the demands violate constitutional free speech rights and encroach on academic freedom. Notably, the administration is exploring the possibility of revoking Harvard's tax-exempt status, which would be unprecedented. Despite the pressure, Harvard's donors have responded with increased contributions, signaling support for the university's stance. Industry insiders and legal scholars suggest that the current financial pressures could justify increased endowment spending, as allowed under UPMIFA. Such a move could help mitigate the financial impact of the administration's actions, though it is not a complete solution. The ability to loosen restrictions on older, smaller endowment funds and to seek donor or court approval for using restricted funds also provides universities with additional flexibility in times of crisis. This situation highlights the complex interplay between higher education funding, legal constraints, and political pressures, and underscores the need for universities to navigate these challenges carefully while preserving their core missions and values.