"Harvard has the money, yes, but it is adding a headache. It's adding staff. It's interfering with students' ability to access federal financial aid ... The government's making it harder for Harvard to support low-income students, which speaks to exactly what the administration's goals are here-they're not to help students, they're not to improve education, they're not even to address what they see as concerns at Harvard-they're just to attack Harvard."
"Institutions placed on heightened cash monitoring are asked to put up a letter of credit that serves as collateral for the Education Department if the institution closes, or to award federal financial aid from their own coffers before being reimbursed by the department, explained Robert Kelchen, head of the Department of Educational Leadership and Policy Studies at the University of Tennessee at Knoxville. Harvard has been asked to do both."
"Students will continue to have access to federal funding, but Harvard will be required to cover the initial disbursements as a guardrail to ensure Harvard is spending taxpayer funds responsibly," officials wrote."
The Education Department placed Harvard on heightened cash monitoring, imposing stricter federal oversight and financial safeguards. Harvard must provide an irrevocable $36 million letter of credit or other acceptable financial protection and is required to cover initial federal student aid disbursements before reimbursement. The designation typically targets institutions with severe financial instability, yet Harvard holds a $53 billion endowment and is not financially distressed. The federal government previously froze $2.7 billion in federal grants after Harvard declined sweeping department demands. Critics say the designation adds administrative burdens, requires added staff, and impedes low-income students' access to federal aid.
Read at Inside Higher Ed | Higher Education News, Events and Jobs
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