In a dramatic turn for American higher education, President Donald Trump announced this week that his administration is on the verge of striking a deal with Harvard University after months of escalating tensions, investigations, and funding freezes. The proposed agreement would see Harvard pay $500 million to establish a network of trade schools, a move Trump has described as a major investment in the country’s workforce and a potential turning point in the long-running standoff between the White House and the nation’s most prestigious university. The talks, which have drawn national attention, were reportedly facilitated by Stephen Schwarzman, the billionaire CEO of Blackstone and prominent Yale alumnus, according to The New York Times.
Trump’s campaign against Harvard began in earnest earlier this year, when the administration threatened and then implemented more than $2.6 billion in cuts to Harvard’s federal research funding. The White House also sought to block the university’s ability to enroll foreign students, citing concerns over campus culture and, most pointedly, Harvard’s handling of antisemitism allegations following the 2024 Israel-Hamas war protests. As The Dispatch reported, federal officials accused Harvard of allowing “an impermissible, multiweek encampment” that left Jewish and Israeli students feeling unsafe and disrupted academic life.
Harvard President Alan Garber has publicly acknowledged the presence of antisemitism and anti-Muslim bias on campus, but emphasized that the university has taken significant steps to address prejudice. “We have made efforts to combat all forms of discrimination,” Garber stated earlier this year, underlining the administration’s commitment to creating a safer environment for all students.
The White House’s pressure campaign against Harvard was part of a broader crackdown on elite universities, with the Trump administration vowing to eliminate what it called “wokeness” from higher education. Trump made it clear that schools resisting his agenda would face consequences, and Harvard’s open defiance in April 2025—when it became the first university to sue the administration over its sweeping demands—set the stage for a high-profile legal and political showdown.
Negotiations toward a resolution have been underway for months, but the process accelerated in recent days thanks in part to the behind-the-scenes involvement of Stephen Schwarzman. According to The New York Times, Schwarzman spoke with Trump over the weekend and again on October 1, 2025, using his considerable influence and ties to both the administration and the academic world to help broker a compromise. Schwarzman, who graduated from Yale in 1969 and earned his MBA from Harvard Business School in 1972, has long played a prominent role in American philanthropy and policy circles. He previously chaired Trump’s Strategic and Policy Forum at the start of Trump’s first term and endorsed him in both the 2020 and 2024 elections.
Schwarzman’s involvement in the Harvard talks is notable not just for his personal connections, but also for the broader context of his philanthropic activities. He donated $150 million to Yale in 2015, the second-largest gift in the university’s history, and has made major contributions to Harvard Business School, MIT, Oxford, and Tsinghua University in Beijing. The Yale Daily News noted that his donations have sometimes sparked controversy, but his influence in the world of higher education is undeniable.
When asked about Schwarzman’s role in the negotiations, Yale spokesperson Tina Posterli declined to comment on the activities of other universities but confirmed that Schwarzman remains an “active alumnus” and regular visitor to Yale. Blackstone, for its part, declined to provide comment on Schwarzman’s behalf.
Meanwhile, Yale has managed to avoid the brunt of the Trump administration’s crackdown. Unlike Harvard and several other Ivy League institutions, Yale has not faced direct threats to its federal funding. In fact, the university has ramped up its lobbying efforts in Washington, spending $320,000 in the second quarter of 2025—nearly double what it spent in the same period the previous year, according to The New York Times. Yale and 23 other universities also filed a joint legal brief in June supporting Harvard’s case against the government, a rare show of solidarity among elite schools facing mounting political pressure.
The legal battle took a decisive turn in early September, when a federal judge in Boston ruled in favor of Harvard and ordered the Trump administration to unfreeze the university’s research funding. The judge found that the funding cuts amounted to illegal retaliation for Harvard’s refusal to comply with the White House’s demands, noting that the university’s federally supported research had little connection to the discrimination allegations. Despite the ruling, the administration vowed to appeal and soon initiated new efforts to cut off Harvard’s future access to federal funding.
Throughout the standoff, Trump has repeatedly signaled that a deal was imminent, only for negotiations to drag on without resolution. But on October 1, he told reporters at the White House, “We’re in the process of getting very close. Linda’s finishing up the final details, and they’d be paying about $500 million,” referencing Secretary of Education Linda McMahon. Trump described the agreement as a win-win: Harvard’s payment would fund a “giant trade school, a series of trade schools that would be run by Harvard,” teaching skills such as artificial intelligence and other in-demand fields. “They’re going to be teaching people how to do AI and lots of other things,” Trump said.
For Harvard, a deal would likely mean an end to the punishing sanctions and a restoration of its federal research funding and ability to enroll international students. For Trump, it would represent a headline victory in his campaign to reshape higher education and promote vocational training—one that could have ripple effects across the academic landscape. The administration has already reached similar settlements with Columbia and Brown universities, resolving civil rights investigations and restoring their federal funding.
Yet, not everyone within Harvard’s ranks is eager to embrace the deal. Some faculty members have warned that agreeing to the White House’s terms would set a dangerous precedent and undermine the independence of American universities. The debate reflects broader anxieties about academic freedom, government overreach, and the future of higher education in an era of intense political polarization.
As the final details are hammered out, the eyes of the academic world remain fixed on Cambridge, waiting to see whether this unprecedented standoff will end in compromise or further conflict. The outcome could reshape not only Harvard’s future, but also the relationship between the federal government and America’s leading universities for years to come.
With the stakes so high and the negotiations so closely watched, one thing is certain: the story of Trump, Harvard, and the $500 million trade school deal is far from over.
