DOJ opens compliance review into Harvard’s China-based financial aid programs

The Justice Department said Chinese donors have given money to Harvard to support financial aid programs limited to students from certain countries.

The Justice Department is reviewing whether Harvard University accepted foreign donations that improperly favored students from China and other countries over American students.

Harvard said on Monday it "does not unlawfully discriminate on the basis of race, ethnicity, or national origin in allocating financial aid."

The Justice Department is investigating whether Harvard University is allowing Chinese donors to create scholarships that exclude American students, adding to the barrage of federal inquiries the Trump administration has opened in its battle against the Ivy League school.Justice Department officials announced the new review Monday, saying Harvard's foreign funding disclosures "raised concerns" about possible discrimination against US students. The agency did not specify which scholarship programs are being targeted and emphasized it "has not reached any conclusions." The investigation is aimed at Harvard's "China-based financial aid programs," the Justice Department said. The agency said Chinese donors have given money to Harvard to support financial aid programs limited to students from certain countries. That restriction could amount to illegal discrimination based on country of origin, the department said."Schools cannot take federal dollars and then turn around and accept money from foreign sources to give financial aid that deliberately excludes American citizens - doing so is illegal, and we will stop it wherever we find it," said Harmeet Dhillon, who leads the department's Civil Rights Division.Harvard said it was reviewing the Justice Department notice."Harvard follows the law for required reporting of donations and, consistent with our legal obligations under Title VI, does not unlawfully discriminate on the basis of race, ethnicity, or national origin in allocating financial aid," the university said in a written statement.In a statement, Liu Chang, a spokesperson for the Chinese embassy in Washington, said China-U.S. education cooperation is mutually beneficial. "China maintains that normal education and academic exchange should not be disrupted for political purposes," Liu said.Like many US universities, Harvard accepts foreign funding through direct donations or contracts. The Trump administration has pushed for greater transparency around outside money, warning that accepting funding from foreign adversaries is a national security risk.Federal disclosures from Harvard show it has accepted USD 630 million from Chinese sources over a period of decades. Overall, it has reported about USD 4.5 billion in foreign funding. The Justice Department cited those figures but did not single out any donors or programs being reviewed.The investigation is a compliance review, meaning it's initiated by the federal government rather than responding to an outside complaint.Unlike the vast majority of U.S. universities, Harvard and a small number of other schools provide need-based scholarships to international students on the same basis as U.S. students. Grants and other aid from the federal government are reserved for American students, but Harvard "has its own job and scholarship money available to foreign students," according to a Harvard financial aid website.In some cases, foreign donors have given money to be used for international students.In 2014, Pan Shiyi and Zhang Xin, a Chinese couple that co-founded the real estate company SOHO China, donated USD 15 million to Harvard to provide financial aid for Chinese students. Their gift drew blowback from critics in China who said it was a betrayal to give money to foreign schools instead of Chinese universities.The Justice Department's announcement makes the unusual legal argument that steering private funding to students of certain countries amounts to a civil rights violation for U.S. students."Harvard appears to be accepting these funds and, in adherence to their restrictions, providing student financial aid to foreign students, presumably Chinese, based on their national origin - to the potential detriment of students of other national origins, including American citizens," the agency said.The Trump administration has repeatedly opened new federal investigations against Harvard in its battle to win obedience from the nation's oldest university.Harvard has been a prime target in the administration's push to end "wokeness" and fight alleged antisemitism in American higher education. A federal judge has blocked the White House from cutting billions of dollars in federal research funding from Harvard amid the feud.Even as the legal battle continues, the government has sought new lines of attack, seeking to limit Harvard's ability to enroll foreign students and U.S. military members, and launching investigations into the school's admissions process.

The DOJ is investigating whether Harvard allowed Chinese donors to create scholarships excluding American students, potentially violating the Civil Rights Act.