UPDATE: USC is embroiled in an urgent funding crisis as a political battle intensifies between Governor Gavin Newsom and former President Donald Trump. On October 2, 2023, Newsom threatened to cut billions in state funding, including vital Cal Grants, if California schools yield to Trump’s controversial demands regarding campus policies.
This standoff has immediate implications for USC and other major universities, putting their financial futures and academic freedoms at risk. The Trump administration has issued a directive requiring USC, along with eight other prominent institutions, to adhere to conservative views on critical issues such as gender identity, admissions, and diversity to gain priority access to federal funding.
The proposed “Compact for Academic Excellence in Higher Education” mandates that universities align with the government’s definition of gender, which excludes transgender individuals, and apply these definitions to facilities such as bathrooms and sports teams. Universities that opt-in would face strict caps on international student enrollment—limited to 15% of their total undergraduate population, with no more than 5% from any single country. Given that 26% of USC’s incoming fall 2025 class is comprised of international students, primarily from China and India, this could result in significant financial losses for the university.
Newsom has made it clear: “If any California university signs this radical agreement, they’ll lose billions in state funding— including Cal Grants—instantly.” The $2.5 billion in Cal Grants allocated for the 2024-25 academic year is crucial for many students across the state.
During a meeting with faculty on Monday, interim President Beong-Soo Kim stated that no final decision has been reached regarding Trump’s offer. Faculty members expressed strong opposition, labeling the proposal as “antithetical to principles of academic freedom.”
In a notable move, MIT has already rejected the White House’s offer, setting a precedent as other schools assess their responses. The selection process for the nine universities approached remains unclear, leaving many institutions under pressure to navigate this politically charged climate.
Students and faculty at USC view Newsom’s stance as a potential shield against federal pressure. According to reporter Jaweed Kaleem, many believe the governor’s threat provides USC the leverage needed to resist Trump’s demands: “They could say they can’t be blamed because they’re being forced to resist Trump,” he noted.
As the situation unfolds, USC must weigh its options carefully. The university’s financial health, its commitment to academic freedom, and the future of its diverse student body hang in the balance. The next developments in this funding battle will be critical to watch, as they may set a precedent for how universities across the nation respond to federal directives under political duress.
Stay tuned for further updates on this developing story.