U.S. Universities Facing Financial Strain

Higher education is being redefined in the United States as they are experiencing an unprecedented financial squeeze under the Trump administration. The list ranges from cutting federal research grants to restricting graduate student loans and international student visas, and several elite institutions are now being forced to reassess budgets and priorities. A new Forbes report highlights 25 graduate schools that are particularly facing the brunt of these policy changes. As these institutions heavily relied on federal support and international enrollment, they are finding themselves at the center of this storm, raising urgent questions about the future of advanced education and research in America.

Which Schools Are Affected?

• What is noticeable about the list is that it includes many of the nation’s most prestigious institutions, including six of the eight members of the Ivy League. The 25 elite U.S. graduate schools under severe financial pressure include Johns Hopkins, Duke, Harvard, Columbia, Northwestern, and the University of Chicago. MIT, Princeton, Yale, and Washington University in St. Louis, among others, now face sharply higher taxes on the earnings of their endowments.
• These are institutions with high proportions of graduate students, often large numbers of international graduate students, and heavy reliance on federal research funding and student loans.

What’s Causing the Financial Stress?

While the universities have not yet laid out their long-term restructuring plans, the immediate actions taken by them are

• Cuts/restrictions in grant funding: Federal research grants have been frozen or canceled in many instances, or their overhead (indirect costs) have been reduced or restricted.
• Changes in student loan policy (Grad PLUS, etc.): New caps or elimination of certain graduate loans affect student borrowing. This can reduce the number of students who can afford graduate education or shift funding burdens.
• Visa & international student policy changes: Restrictions or scrutiny on foreign students, plus visa delays or changes, reduce or threaten international enrollment—an important revenue stream for many of these institutions.

How Big Are the Stakes?

• For many of these schools, graduate students make up a large share of total enrollment—often above 50% or more in some cases.
• A large share of those grad students are international (foreign visas), which means funding and tuition flows can be volatile under policy shifts.
• These schools usually have high “financial grades” in Forbes’ metrics, meaning their finances were comparatively healthy before these policies. But the new changes are forcing “painful readjustment.”

Long-Term Consequences for Research & Innovation

Early-career researchers, PhD students, and postdocs may suffer contraction of available positions or funding. Some research areas (especially those heavily dependent on federal grants or “overhead” funding) may shrink.

To mitigate this situation, universities may shift to:

• Increasing internal funding for graduate stipends and research overheads
• Seeking private/philanthropic funding to replace lost government funds
• Possibly increasing tuition or fees to make up shortfalls (though that has its own problems)

While the Forbes article focuses on graduate schools, the ripple effects are very real for undergraduate students, too.

Impact on Undergraduate Students

1. Reduced Access to Research Opportunities
   • Many undergraduates gain early exposure to labs and research through graduate-led projects. If funding cuts shrink graduate enrollment or research budgets, undergrads may lose those opportunities.
2. Fewer Teaching Assistants (TAs)
   • Graduate students often serve as TAs, mentors, and tutors. With fewer grad students, undergraduates may face larger class sizes, less individualized support, and potentially lower-quality instruction in discussion sections and labs.
3. Potential Increase in Tuition and Fees
   • As schools try to offset financial losses, the cost of attendance is being raised disproportionately, cutting aid, thereby forcing undergraduates to shoulder higher costs. Even modest fee hikes can have significant effects, especially on middle- and lower-income students.
4. Program Cuts or Limited Course Offerings
   • Budget shortfalls may lead to reduced course diversity, fewer majors/minors, and less access to specialized classes—limiting the breadth of the undergraduate academic experience.
5. Decline in Campus Services
   • Graduate students also contribute to campus life (residence halls, student groups, cultural centers). With fewer grads, services and activities may contract, reducing overall student support networks.
6. Impact on Prestige and Career Opportunities
   • If a university scales back high-profile research or graduate programs, its overall academic reputation could suffer. For undergraduates, this may affect the value of their degree and their access to elite research internships or postgraduate opportunities.

Undergraduate students’ biggest attraction to studying in the U.S. has been the postgraduate opportunities available for international students, especially in STEM fields. In 2023–2024, a record 242,782 international students participated in Optional Practical Training (OPT), a program that allows them to gain practical work experience for one year after graduation—or up to three years for STEM majors. However, the Trump administration is expected to overhaul immigration policies in ways that could restrict or even eliminate OPT, dealing yet another blow to the global appeal of a U.S. degree.

The challenges in graduate studies cannot be viewed in isolation. The shifts are set to reshape higher education for both graduate and undergraduate students. As policymakers and institutions grapple with these changes, the choices made in the coming years will determine whether American higher education continues to attract the brightest minds from around the world—or risks losing its competitive edge.