A flag hangs on campus at Harvard University in Cambridge, Massachusetts, U.S., September 4, 2025. REUTERS/Shannon Stapleton

By Nandita Bose, Brad Brooks and Nate Raymond

WASHINGTON (Reuters) -U.S. President Donald Trump said on Tuesday that his administration had reached a deal with Harvard University after months of negotiations and that the Ivy League school will pay $500 million.

"Linda is finishing up the final details," Trump told reporters at an event in the Oval Office, referring to Education Secretary Linda McMahon. "And they'll be paying about $500 million and they'll be operating trade schools. They're going to be teaching people how to do AI and lots of other things, engines, lots of things."

Cambridge, Massachusetts-based Harvard had no immediate comment on Trump's remarks.

The Trump administration has threatened schools, universities and colleges with the withholding of federal funds over issues including pro-Palestinian protests against U.S. ally Israel's war in Gaza, climate initiatives, transgender policies, and diversity, equity and inclusion practices.

Rights advocates have raised free speech, privacy and academic freedom concerns over the Trump administration's probes into universities.

Trump has said that universities such as Harvard allowed displays of antisemitism during pro-Palestinian protests.

Protesters, including some Jewish groups, say the government wrongly equates criticism of Israel's assault on Gaza and its occupation of Palestinian territories with antisemitism, and advocacy for Palestinian rights with support for extremism. The government has not announced probes into Islamophobia.

Harvard task forces said in late April that the school's Jewish and Muslim students faced bigotry and abuse during the course of Israel's war in Gaza.

Three other Ivy League schools have made deals with the administration, including Columbia University, which in July agreed to pay $220 million to restore federal research money that had been denied because of allegations the university allowed antisemitism to fester on campus.

As with Columbia, the Trump administration took actions against Harvard related to the pro-Palestinian protest movement that roiled its campus. It moved to terminate more than $2 billion in research grant funding to the university.

The administration's decision to cancel grants was one of many actions it has taken against Harvard. It has also sought to bar international students from attending the school, threatened Harvard's accreditation status, and opened the door to cutting off more funds by finding it violated federal civil rights law.

Harvard President Alan Garber has said that the various federal actions since Trump returned to office in January could strip the school of nearly $1 billion annually, forcing it to lay off staff and freeze hiring.

Harvard challenged some of those actions in court, arguing the Trump administration was retaliating against it in violation of its free-speech rights after it refused to meet officials' demands that it overhaul its governance, hiring and academic programs to align with their ideological agenda.

Its two lawsuits were assigned to U.S. District Judge Allison Burroughs, a Boston-based appointee of Democratic President Barack Obama who blocked the administration from closing the door to international students and on Sept. 3 barred it from continuing to cut off Harvard's research funding.

But the administration in the days since the ruling has continued to escalate its fight with Harvard. A day before the settlement was announced, the U.S. Department of Health and Human Services said that it would start a process that could lead to the school being barred from contracts with all government agencies or receiving funding.

(Reporting by Nandita Bose in Washington, Brad Brooks in Colorado and Nate Raymond in Boston; Additional reporting by Jasper Ward and Kanishka Singh; Editing by Donna Bryson, Daniel Wallis and Edmund Klamann)