“California will not bankroll schools that sell out their students”: Governor Gavin Newsom rejects Trump's 'academic compact'

In a move that underscores the widening clash over academic freedom in the United States, California Governor Gavin Newsom has firmly rejected the Trump administration ’s proposed “Compact for Academic Excellence in Higher Education.” The compact, offered to nine prominent universities including the University of Southern California (USC), seeks to impose strict federal oversight on curricula, hiring practices, and student admissions. In response, Newsom warned that any California university agreeing to the terms would “instantly” lose state funding, including Cal Grants , the $2.8 billion student aid program.

A compact with conditions
The Trump administration’s proposal offers universities “substantial and meaningful federal grants” in exchange for a series of significant policy changes. Among them: the closure of departments deemed hostile to conservative ideas, limits on international undergraduate enrollment to 15%, adherence to the administration’s definition of gender, and a ban on considering race or sex in hiring and admissions.

Additional requirements include freezing tuition fees for five years, cracking down on grade inflation, and restricting political speech by university employees. The compact targets institutions that, in the administration’s view, have leaders committed to “higher-quality education,” according to senior White House adviser May Mailman, who told the Wall Street Journal that participating universities would be considered “good actors.”

Newsom’s rebuke
Newsom’s office characterised the offer as “nothing short of a hostile takeover of America’s universities,” The Guardian reports. “It would impose strict government-mandated definitions of academic terms, erase diversity, and rip control away from campus leaders to install government-mandated conservative ideology in its place,” the statement added.

“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 said, according to The Guardian.

Implications for USC and other universities
For private institutions such as USC, which holds an $8.2 billion endowment, compliance would present both ideological and economic challenges. More than a quarter of USC’s 2025 freshman class comprises international students, with over half coming from China or India. The compact’s limits, restricting total international enrollment to 15% and capping students from any single country at 5%, could therefore have a significant impact on campus demographics and tuition revenue.

USC has stated that it is “reviewing the Administration’s letter” but has not commented directly on Newsom’s statement, The Guardian reports. Federal data indicates that while most US universities comply with the 15% international student cap, around 120, including USC, Columbia University, Emory University, and Boston University, exceed it, highlighting the practical and financial challenges of adhering to the proposed compact.

The wider debate
The dispute over the compact reflects broader tensions between federal authority and state autonomy in higher education. By linking federal funding to compliance with politically charged criteria, the administration has raised questions about the role of government in shaping university policy and preserving academic freedom. California’s response signals a firm commitment to protecting institutional independence, with Governor Newsom positioning the state as a defender of universities’ ability to set their own academic and social agendas.

As universities across the nation weigh their options, the standoff illuminates the growing friction between federal priorities and the principles of academic self-governance, a debate that will likely define the landscape of US higher education in the coming years.