On October 1, 2025, a storm hit the heart of American higher education, and its reverberations are being felt from the halls of the White House to the leafy quads of some of the nation’s most prestigious universities. The controversy centers on a document with a grandiose name—the “Compact for Academic Excellence in Higher Education”—but, as many have pointed out, its implications are anything but straightforward.
The compact, distributed Wednesday by the Trump administration, was delivered to nine universities: Vanderbilt University, Dartmouth College, the University of Pennsylvania, the University of Southern California (USC), Massachusetts Institute of Technology, the University of Texas at Austin, the University of Arizona, Brown University, and the University of Virginia. According to reporting by The Associated Press and The Wall Street Journal, these institutions were handpicked for their perceived openness to reform and leadership that the administration believed might be receptive to a sweeping set of policy changes.
So, what’s in this compact? In exchange for “preferred access” to federal funding—including what the letter describes as “substantial and meaningful federal grants”—universities are asked to adopt a series of policy directives that align closely with right-wing priorities. These include banning the use of race or sex in hiring and admissions (a move already partly mandated by Supreme Court decisions on affirmative action), freezing tuition for five years, capping international undergraduate enrollment at 15%, requiring standardized test scores (SAT or ACT) from all applicants, and taking aggressive action against grade inflation.
But the requirements don’t stop at admissions and tuition. The compact also demands that universities ensure a “vibrant marketplace of ideas on campus,” bar employees from expressing political views on behalf of their employer, and make sweeping governance changes—including abolishing departments that, in the administration’s view, “purposefully punish, belittle, and even spark violence against conservative ideas.” The letter’s signatories—Education Secretary Linda McMahon, White House Domestic Policy Council director Vince Haley, and senior adviser May Mailman—describe this as an opportunity for universities to “work proactively” with the administration.
One of the most immediate and contentious impacts of these demands would be on international students. For USC, where international students make up 26% of the incoming 2025 freshman class—with more than half coming from China and India—the cap would represent a seismic shift. These students, who often pay full tuition, are vital not only to USC’s fiscal health but also to its campus culture. Under the compact, no more than 5% of the student body could come from any single country, a restriction that would force dramatic changes in recruitment and admissions strategy.
The compact’s provisions concerning free speech and political expression have also raised alarms. As reported by Creators Syndicate, the compact’s focus on policing the political climate on campus—requiring universities to root out perceived hostility to conservative ideas—has left many questioning who would decide what constitutes a “vibrant” intellectual environment, and how such standards could be fairly enforced. Ted Mitchell, president of the American Council on Education, which represents over 1,500 college and university presidents, didn’t mince words: “Who decides if the intellectual environment is vigorous and open-ended? This is not something the federal government should be involved in and adjudicating. The implications for free speech are horrifying.”
It didn’t take long for California Governor Gavin Newsom to respond—and he did so in characteristically forceful terms. On October 2, Newsom issued a stern warning to any California university considering signing the compact, threatening to cut all state funding—including the state’s $2.5 billion Cal Grants program—if they complied. “If any California University signs this radical agreement, they’ll lose billions in state funding—including Cal Grants—instantly. California will not bankroll schools that sell out their students, professors, researchers, and surrender academic freedom,” Newsom declared, as quoted in LGBTQ Nation and CalMatters. For USC, the only California school on the list, the stakes are enormous: in the 2024-2025 school year alone, the university received $28.4 million in Cal Grants, supporting financial aid for 3,198 students.
Newsom’s move puts USC—and potentially other California institutions—in a tight spot. They now face a choice between federal incentives and state support, a predicament that could have profound financial and reputational consequences. As Darby Saxbe, a USC psychology professor, told CalMatters, the administration’s request “amounts to a form of blackmail” and “seems to fly in the face of the same free speech principles that the administration claims to endorse.” Saxbe also noted that Newsom’s response puts USC in a “tough spot,” given it’s the only California school targeted.
USC officials have so far been noncommittal, stating only that they are “reviewing the administration’s letter.” The uncertainty comes at a time when the university is already grappling with budget deficits, hiring freezes, and the likelihood of layoffs—challenges compounded by persistent uncertainty around federal funding. In the 2024 fiscal year, USC received $1.35 billion in federal funding, including $650 million in student financial aid and $569 million for research, according to CalMatters.
For the Trump administration, the compact represents both a carrot and a stick. Until now, the administration has largely relied on the threat of withholding federal funds to compel universities to adopt its preferred policies. The compact, however, offers a new approach—one that uses the promise of additional resources as leverage. But critics like Ted Mitchell see it as a “power play” and a dangerous precedent. “It’s the biggest waiver of institutional protections that I’ve ever seen,” Mitchell told The New York Times. “A horrible precedent to cede power to the federal government.”
The White House, for its part, has dismissed Newsom’s threats as political grandstanding. White House spokesperson Abigail Jackson, responding to Newsom’s ultimatum, said the governor should “worry about the disaster he’s created in his own state,” referencing California’s policies on transgender athletes. “By opposing the compact, Newscum is opposing efforts to cap wild tuition hikes and to protect free speech,” Jackson stated, using the president’s preferred derogatory nickname for the governor.
The roots of the administration’s campaign against higher education run deep. As LGBTQ Nation reports, the targeting of certain universities may be influenced by figures like Stephen Miller, Trump’s deputy chief of staff and a Duke University alumnus with a longstanding grudge against his alma mater. The administration has previously investigated and pressured schools over issues ranging from diversity, equity, and inclusion (DEI) initiatives to the handling of protests and the admission of international students with “anti-Western” views.
As the dust settles, the fate of the compact—and the universities caught in its crosshairs—remains uncertain. What is clear, however, is that the battle over academic freedom, diversity, and the future of American higher education is far from over. The choices made in the coming weeks will reverberate for years, shaping not only the policies of individual institutions but the very definition of what it means to be a university in the United States.
