Gov. Gavin Newsom (D-CA) said he will cancel state funding for any state university that accepts a deal with the federal government for funding.
On Wednesday, the Trump administration sent letters proposing a deal to the leaders of nine schools, including the University of Southern California.
“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 wrote on X on Thursday.

Education Secretary Linda McMahon and other top officials sent letters on Wednesday outlining the “compact” to the University of Arizona, Brown University, Dartmouth College, Massachusetts Institute of Technology, the University of Pennsylvania, the University of Texas, Vanderbilt University, the University of Virginia, and USC.
The compact would give schools “multiple positive benefits” if they accept, the New York Times reported. However, the administration would require the schools to quell anti-conservative sentiment, cap the enrollment of international students, and freeze tuition for five years.
The benefits include “priority access” to federal funds and looser guidance on overhead costs. It would also serve to repel any civil rights investigations from the government because the agreement would mean compliance with the law.
“Our hope is that a lot of schools see that this is highly reasonable,” May Mailman, senior adviser for special projects at the White House, told the Wall Street Journal.
At least one school has responded to the compact.
“The University of Texas system is honored that our flagship — the University of Texas at Austin — has been named as one of only nine institutions in the U.S. selected by the Trump administration for potential funding advantages under its new Compact for Academic Excellence in Higher Education,” Kevin P. Eltife, the chairman of the University of Texas Board of Regents, said in a statement on Thursday. “We enthusiastically look forward to engaging with university officials and reviewing the compact immediately.”
The Trump administration has sought to punish schools that haven’t listened to the federal government’s demands, often rescinding federal funding. Because of the threat, most schools have listened to the administration on issues, with exceptions such as Harvard University.
California is home to several elite schools, including USC, the University of California, Los Angeles, and the University of California, Berkeley.
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USC, the only California school that was asked, told the Associated Press that it was reviewing the letter. The administration singled out USC as a school in need of particular attention from its antisemitism task force. The school has shown signs of listening to the administration, removing mentions of diversity, equity, and inclusion from programs earlier this year.
The school is a private university, meaning Newsom’s threat to rescind funding wouldn’t affect it as much as state schools. Most of USC’s funding comes from the federal government, tuition, and its endowment.