This story was originally published by CalMatters. Sign up for their newsletters.
By Jeanne Kuang, CalMatters
Gov. Gavin Newsom [last week] threatened to cut billions in state funding from the University of Southern California if it complies with a Trump administration request to impose the president’s political priorities on campus.
USC was one of nine public and private universities across the country that received offers of preferential access to federal funds from the White House Thursday in exchange for agreeing to a wide variety of policy directives, many of which align with conservative demands of higher education.
Newsom responded with his own ultimatum: sign the White House request, and “instantly” lose state funding, including CalGrants, the $2.4 billion in annual state-funded scholarships for California students. The vast majority of those grants go to public university students; USC received $28.4 million in CalGrants in the 2024-2025 school year, covering financial aid for 3,198 students, California Student Aid Commission spokesperson Shelveen Ratnam said.
The threat — which puts California universities in the position of choosing between losing state or federal funding — is the latest escalation in the state’s dealings with the Trump administration. It comes as an increasingly combative Newsom seeks both to push back on the Trump administration’s stretching of democratic norms, and to burnish his own standing as leader of the national Democratic resistance.
The state has sued the administration over its withholding of federal grants or attempts to tie unrelated federal funding to policy demands around diversity and inclusion initiatives or immigration. Now Newsom is threatening to punish California institutions that comply with Trump’s threats or assist with his agenda.
“California will not bankroll schools that sell out their students, professors, researchers, and surrender academic freedom,” he said in a press release, using all-caps quotes mimicking the president’s social media posts, which have become frequent fodder for the governor’s own communications.
It was not immediately clear how much state funding USC receives in addition to CalGrant scholarships.
In the 2024 fiscal year USC got $1.35 billion in federal funding — $650 million in student financial aid and $569 million for research. The university cut budgets and froze hiring in March in part over a persistent deficit and uncertainty surrounding federal funding. In July, interim president Beong-Soo Kim announced the university would likely conduct layoffs.
The White House letters come as universities across the country face increasing pressure from the administration over allowing transgender athletes to compete, their handling of pro-Palestinian protests last year and general accusations of liberal bias.
A federal judge recently allowed UCLA to reclaim many of its federal grants, but the university is contending with a more than $1 billion fine from the federal government over allegations of allowing antisemitism on campus; in settlement negotiations the Trump administration has made a litany of demands of the university, including that it not admit international students who have “anti-Western” views. Newsom has called it “extortion” and said in August he hoped to “stop folks from selling out.”
With Thursday’s letter, the Trump administration is seeking to incentivize compliance with other universities.
The letter sent to USC and other universities, according to The Associated Press, states that in exchange for complying with the White House directives, institutions would get benefits such as “substantial and meaningful federal grants.” The directives in the “Compact for Academic Excellence in Higher Education” include freezing tuition, capping the number of international students, banning the use of race and gender in admissions, limiting accommodations for transgender students and fostering a campus environment that is more welcoming to conservative ideas.
The universities that received the offer were selected because officials believed they could be a “good actor,” and had “a president who is a reformer or a board that has really indicated they are committed to a higher-quality education,” White House senior adviser May Mailman told the Wall Street Journal, which first reported on the letter.
USC officials did not say whether they would agree to the offer, stating only that they “are reviewing the administration’s letter.”
Darby Saxbe, a USC psychology professor, said in an email to CalMatters that the administration’s request “amounts to a form of blackmail.” Saxbe has been vocal in opposing federal research cuts and said two of her graduate students have had training grants canceled by the National Institutes of Health.
She said she’s concerned the administration would be “micro-managing” universities under the compact and called the request a “tremendous overreach” that “seems to fly in the face of the same free speech principles that the administration claims to endorse.” But she said Newsom’s response puts USC in a “tough spot,” too, given it’s the only school in California that received the White House letter, making it the only one subject to the state scrutiny.
White House spokesperson Abigail Jackson responded to Newsom’s threat in an emailed statement saying the governor should “worry about the disaster he’s created in his own state,” referencing state policies allowing transgender girls to compete in girls’ sports.
“By opposing the compact, Newscum is opposing efforts to cap wild tuition hikes and to protect free speech,” Jackson said, using Trump’s preferred derogatory moniker for the governor.
This story was updated with a comment from the White House.
This article was originally published on CalMatters and was republished under the Creative Commons Attribution-NonCommercial-NoDerivatives license.
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As a graduate of USC I have told the administration in full voice that I hope they will not succumb to Trump’s crap. I am, unfortunately not optimistic as the university has given in already to forces of the right.
If I were to bet I’d say the majority of SC alumni are Republicans. You know how they voted.
Good, I’m glad you did that and I hope many, many more alumni will do the same. We cannot allow any governmental administration to dictate what universities teach. Thank you for using your voice to stand up for academic freedom.
Love it! Newsom is trying to start a full-on pi$$ing contest with the President. Let’s get the popcorn ready. Either way, the University of Spoiled Children is sweating it right about now…
Lame comment. Looks like your thug Newscum is finally exposing his true colors. Can’t wait to get rid of this joke who has run our once beautiful state to the ground with his ridiculous priorities. Now he’s threatening his own schools for complying with our president. Just insane how entitled you Dems are. Yuck
Dan the man voted for supporting Qatari pilots on US soil in order to put more crypto currency into Jared Kushner’s portfolio.
DAN – why haven’t you left CA then?
Looks like Danny boy doesn’t know the definition of thug, or he would realize it applies superbly to the orange moron.
Dan Dayton Aldrich loves the taste of the boot.
Dan and Dayton are different (but both vile) people.
Basick supports a president who thinks Biden was president on January 6th 2021 and controlled the FBI to attack the Capitol. Basick supports a president that gives billions to soy bean farmers in Argentina as he leaves our own farmers to go bankrupt. Basick is happy the Epstein files are hidden by Mike Johnson to protect dear leader from being exposed. Basick is happy to have an HHS leader that believes circumcision causes autism.
I am not certain I agree with this or not but it is nice to see Newsom standing up and punching back. One of the absolute certainties of fascists is they perceive being nice and playing by the rules as a sign of weakness.
Dan maybe you don’t get it but USC is not “his own school”. Maybe you were thinking of Stanford.
I think this is a pretty bold and original move by Newsom, and it totally fits with the efforts he is making to counteract and thwart the blatantly and clearly fascist direction the Trump administration is lurching in, such as Prop 50, which I totally support. It’s also uncharacteristically aggressive for Democrats to fight back like this against Trump and I hope it inspires other governors to do the same, much like Oklahoma’s Republican governor Stitt is standing up to Trump’s anti-constitutional and illegal deployments of federal military into U.S. cities.
Trump and his bizarrely incompetent Cabinet want universities and all levels of American education -and media as well- to whitewash and dumb down history and science education in as many places as they can, and prop themselves up as the gatekeepers of knowledge, which would be hilarious if it weren’t so serious. They will fail miserably at this for a slew of reasons, but firstly because of people showing some courage and standing up to their fear tactics.This is how you treat bullies like Trump.
Newsome, unlike most traditional Democrats, is using a stick instead of a carrot, and I totally understand Democrats’ hesitancy and discomfort, just like the Prop 50 effort, which is designed to maintain the people’s honest representation at the federal level and counteract Texas’s extremely UNrepresentative political organizing (did you know that as of August ’25, Texas has over 46% of voters registered as Democrats and less than 38% Republican?). But here the impetus here is to retain and support academic freedom, to stay the course, as it were, and not kowtow to Trump and his corrupt and intellectually bankrupt forces. Newsome is telling USC not to be cowards, not to succumb to Trump’s anti-intellectual bullying and just keep doing what they’re doing to educate their students. Most of Trump’s allegations of anti-semitism or whatever he means when he says “DEI” against universities are cherry-picked, highly selective, and/or complete hogwash anyway and wouldn’t stand even the slightest test of time, but his efforts to control American education institutions must be decisively nipped in the bud, so good on our Governor for doing so.
While I agree with the general point Newsom is trying to make, but there is absolutely no way he will actually follow through with this threat. As usual, complete and utter political theater that plays well amongst all who hate the current occupant of the WH. I wish the pols would get of the stage, stop the nonsense, and get to work for a change. That trip to the French Laundry didn’t help his image at all, and at the end of the day making “Trumpian” threats won’t help much either.
Bend those Knees!
With Harvard on the verge of “folding like a cheap suitcase” to the orange one’s demands, what chance does USC have?
I’m with our Governor, fight fire with fire…. Yes on Prop 50. Yes to withholding $$$ from USC if they cave to the pressure….whatever it takes to remain a democracy, maintain our freedoms and end this dangerous, fascist, authoritarian nightmare.
Go back to building your gaudy ballroom, you dithering, ridiculous excuse of a POTUS…. this cannot end soon enough.
It’s funny how the usual crying and very ultralefties consider the enforcement of our country’s laws fascism, nightmares, and racism. That just shows how off they are. Redirect guys. We need YOUR party to find a way back to anything resembling common sense so Americans can resume some form of a two party system. Right now you’re all losing it off a cliff.
It’s not funny how ignorant cons like Dok don’t want the laws of this land enforced, giving a free pass to the orange moron and his motley band of fascist simpletons who ignore due process.