Northwestern University Nears $75 Million Deal With Trump to Restore $790 Million in Frozen Research Funds

Northwestern University is closing in on a controversial agreement with President Donald Trump's administration that would require the institution to pay approximately $75 million to restore $790 million in frozen federal research grants and end a federal antisemitism investigation that has hung over the campus for months.

The deal, reported by The New York Times and confirmed by the US Department of Education as being in final negotiations, would represent the second-largest financial settlement extracted by the Trump administration from elite universities in its aggressive campaign to reshape higher education policies around diversity programs, campus protests, and allegations of antisemitism.

The Education Department spokesperson said Wednesday that while "the deal is not final," the parties are "negotiating in good faith and making progress," adding they look forward "to announcing a final agreement soon that will ensure all students have equal learning opportunities, hiring and admissions decisions are merit-based, and the university once again prioritizes truth seeking and academic excellence."

The Price of Federal Funding

Under the proposed terms, Northwestern would pay a $75 million fine directly to the federal government—money that will not support students, research, or any educational purpose but instead flow to federal coffers as what critics characterize as punishment for the university's handling of Gaza-related campus protests.

In exchange, the Trump administration would restore access to hundreds of millions in frozen federal research funding and close investigations into alleged "widespread antisemitic harassment" at the university.

The $75 million figure places Northwestern's settlement behind only Columbia University, which agreed to pay more than $200 million over three years earlier this year, but significantly higher than other institutions that have struck deals with the administration.

Cornell University committed to a $30 million fine plus an additional $30 million investment in agricultural research programs. Brown University agreed to steer $50 million into state workforce programs. The University of Virginia and University of Pennsylvania have also reached agreements, though the financial terms of those deals have not been fully disclosed.

A Nine-Month Crisis

The path to this settlement has been financially devastating for Northwestern. The Trump administration froze approximately $790 million in federal research funding in April 2025, triggering an immediate crisis for the university's extensive research operations.

According to data from Grant Witness, more than $1.06 billion in awards from the National Institutes of Health and National Science Foundation have gone unpaid since the freeze began—a figure substantially higher than the initially frozen $790 million, suggesting the financial damage has compounded as new grants were also withheld.

Northwestern responded by self-funding research operations from its own reserves, a stopgap measure that proved astronomically expensive. Faculty members told the Chicago Tribune the university was spending approximately $10 million per week to keep research projects alive during the standoff.

In July, facing what officials described as a "significant budget gap" that couldn't be bridged without cutting personnel costs, Northwestern announced it would eliminate more than 400 staff positions—425 jobs in total, though nearly half had been vacant.

University officials described the layoffs as "a drastic step" and "the most painful measure we have had to take," acknowledging the human cost of the federal pressure campaign.

In September, the university pledged to continue funding essential research needs through at least the end of 2025, though administrators urged "fiscal responsibility" and "conservative use of funds to help minimize University risk."

The Fall of a President

The federal pressure campaign contributed directly to a dramatic leadership change. Former Northwestern President Michael Schill resigned abruptly in September after facing months of attacks from Republicans over his handling of a pro-Palestinian encampment on campus during spring 2024.

Schill had appeared before a hostile congressional hearing where Republican lawmakers accused him of failing to adequately protect Jewish students. While he did not explicitly cite the federal funding freeze when announcing his resignation, Schill acknowledged "difficult problems" at the federal level.

His replacement, Henry Bienen—who previously served as Northwestern's president from 1995 to 2009—inherited the task of navigating negotiations with the Trump administration.

In October, Bienen told faculty members he wanted to strike a deal to restore research funding but would not sign an agreement that "hinders the autonomy of the university." The emerging $75 million settlement suggests the boundaries of that autonomy have now been defined.

What Northwestern Is Agreeing To

While the full terms of the deal have not been publicly disclosed, Bloomberg reported that Northwestern has taken steps to fight antisemitism and roll back diversity, equity and inclusion (DEI) programs that Trump has aggressively pushed schools to dismantle.

The agreement appears similar in structure to other university settlements, which have typically required:

• Enhanced efforts to combat antisemitism on campus
• Substantial rollback or elimination of DEI programs in hiring and admissions
• Commitments to "merit-based" admissions and employment decisions
• Implementation of new training programs and oversight mechanisms
• Regular reporting to federal authorities on compliance

These requirements align with the Trump administration's "Compact for Academic Excellence in Higher Education"—a standardized agreement designed by billionaire financier Marc Rowan that the White House has offered to universities in exchange for preferential funding treatment.

Northwestern was not among the original nine elite institutions that received the compact in October, but the administration subsequently indicated it would extend the offer to all higher education institutions willing to commit to the policy changes.

Faculty Revolt and Community Protest

The prospect of a settlement has deeply divided the Northwestern community. At an October 15 Faculty Assembly meeting, 595 faculty members voted to pass a resolution opposing capitulation to the Trump administration, with only four against and eight abstentions.

When news of potential negotiations emerged in August, hundreds of faculty members signed a statement calling the school "complicit in an assault on institutions of higher education."

Community protests have reinforced faculty opposition. In mid-November, more than 20 members of the Evanston and Northwestern communities rallied at The Arch, the campus landmark, urging the university "to stand strong" against federal demands.

Protesters waved signs reading "Stand Strong NU" and "NU Fight Fascism," chanting modified versions of the school fight song with lyrics changed to "Go Northwestern, win this game!"

McCormick Professor Michael Peshkin attended holding a sign that read "No 'Deal' With Fascists," telling the crowd: "We have a responsibility that is more than just securing our funding. We have a responsibility to academic freedom, we have a patriotic responsibility to supporting and defending democracy."

Seventh Ward resident David Bice criticized Northwestern for not fighting as Harvard has done, noting that Harvard "actually went to court to fight" rather than immediately pursuing settlement negotiations.

Mary Jo Barrett, a 1976 Northwestern graduate and Evanston resident, warned of financial consequences: "If they give money or take money or fold to being paid by the oligarchy, I, for one, will never give a dime to the school again."

The Extortion Debate

Critics across the political spectrum have characterized the Trump administration's approach to universities as extortion—using federal funding as leverage to extract both policy changes and direct financial payments.

Universities receive billions in federal research grants annually, making them highly vulnerable to funding freezes. When the Trump administration simultaneously withholds funding while offering "deals" to restore it in exchange for payments and policy changes, institutions face impossible choices between financial survival and institutional principles.

The pattern is now well-established. Columbia paid $200 million. Cornell paid $60 million. Brown paid $50 million. Now Northwestern appears ready to pay $75 million. Each payment flows directly to the federal government rather than supporting education, research, or students.

Defenders of the administration's approach argue universities have systematically failed to address antisemitism and have allowed DEI programs to compromise academic merit. From this perspective, the settlements represent accountability for institutions that ignored federal civil rights laws and misused taxpayer funding.

The debate reflects fundamental disagreements about academic freedom, the appropriate scope of federal oversight, and whether the government should use funding leverage to reshape university policies on contentious social and political issues.

Divergent Institutional Responses

Not all universities have chosen Northwestern's path. Harvard, despite similar pressure and funding threats, has fought back in court and successfully secured temporary restoration of some funding through litigation.

In a recent ruling, a federal judge determined that the Trump administration couldn't implement a "blanket policy of denying any future grants" to UCLA and other University of California institutions as a pressure tactic during civil rights investigations.

These legal victories suggest universities with sufficient resources and will to fight may be able to resist some federal demands, though the costs of litigation and continued funding uncertainty make settlement attractive even to wealthy institutions.

The divergent approaches—Harvard fighting, Columbia paying, Northwestern negotiating—will likely shape how other universities respond as the Trump administration extends its pressure campaign to additional institutions.

The Research Impact

Beyond the financial and political dimensions, the Northwestern situation has had direct impacts on research operations and scientific progress.

Stop-work orders have affected more than 100 federally funded research projects. Graduate students have faced uncertainty about funding for their dissertations. Postdoctoral researchers have seen positions eliminated or put on hold. Faculty members have scrambled to find alternative funding sources or mothball projects mid-stream.

The disciplines affected span the research spectrum—from biomedical research seeking cures for diseases to social science examining policy questions to engineering developing new technologies. When federal research funding stops flowing, scientific progress slows or halts, with consequences extending far beyond individual institutions.

"Research is central to Northwestern's mission of advancing knowledge for the greater good, and the discoveries made by our scholars contribute to life-saving innovations every day," Bienen and Board Chair Peter Barris wrote in September, emphasizing what was at stake.

The Broader Trump University Campaign

Northwestern represents just one front in the Trump administration's comprehensive campaign to reshape American higher education.

The administration has frozen funding at dozens of institutions, opened antisemitism investigations at more than 60 universities, launched civil rights probes into diversity hiring practices, and demanded compliance with the "Compact for Academic Excellence" that requires eliminating DEI programs and committing to "merit-based" admissions.

Education Secretary Linda McMahon has repeatedly signaled that deals with Harvard and other prominent institutions are "almost finished," suggesting Northwestern will not be the last to settle.

The cumulative effect is a fundamental restructuring of the relationship between federal government and higher education—moving from a partnership model where universities received research grants to pursue scientific questions toward a compliance model where universities implement federally mandated policies in exchange for funding access.

Whether this represents necessary accountability for institutional failures or dangerous politicization of higher education depends largely on one's perspective on the underlying controversies around antisemitism, DEI, and campus speech.