Harvard Faces Increased Scrutiny: Education Department Initiates Heightened Cash Monitoring
On September 15, 2025, the U.S. Department of Education announced that it would place Harvard University under Heightened Cash Monitoring (HCM) status, raising concerns over the institution’s financial viability. This action marks the latest development in the ongoing scrutiny faced by the prestigious university during the Trump administration.
Under HCM status, Harvard will be required to utilize its own resources to initially fund federal student aid disbursements before seeking reimbursement from the federal government. Despite this change, students will continue to have access to federal financial support. Officials describe this measure as a “guardrail” meant to ensure the responsible use of taxpayer dollars.
Additionally, the Federal Student Aid office has mandated that Harvard secure an irrevocable letter of credit totaling $36 million due to the perceived financial risks associated with the university, which is currently under multiple investigations initiated by previous administration policies.
Education Secretary Linda McMahon stated, “Today’s actions are a response to Harvard’s own acknowledgment of serious concerns regarding its financial health. Hence, Harvard must first distribute federal aid and then seek reimbursement, alongside guaranteeing financial protections to safeguard taxpayer interests.”
The Department has also communicated that further enforcement actions could follow if Harvard fails to provide additional details regarding its admission processes. Notably, the Office for Civil Rights is investigating whether the institution is considering race in its admissions, potentially violating the Supreme Court’s ruling in 2023.
This latest episode adds to the ongoing tension between Harvard and the Trump administration, which faced a setback when a court recently ruled in favor of restoring billions in federal funding that had been temporarily halted. The situation continues to evolve as both parties prepare for further legal and administrative battles.
The Hill has reached out to Harvard for a response to these developments.