‘Their sins are forgiven’: Donald Trump ends Harvard University feud with $500 million trade schools deal

The Trump administration and Harvard University have been locked in a months-long standoff over federal funding.

US President Donald Trump on Tuesday claimed that his administration is nearing a deal with Harvard University, which would involve the Ivy League institution paying $500 million to set up trade schools.

President Donald Trump speaks in the Oval Office of the White House, Tuesday, Sept. 30, 2025, in Washington. (AP)

Several universities in the US are facing a funding crunch from the Trump administration over issues such as pro-Palestinian protests against Israel's war in Gaza, campus diversity and transgender policies.

“We are in the process of getting very close. Linda is finishing up the final details,” Trump told reporters at an event in the Oval Office. Linda McMahon is the US Education Secretary.

"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," he said. “Their sins are forgiven,” he added.

Harvard did not immediately react to the development.

Trump earlier accused universities, including Harvard, of antisemitism during pro-Palestinian protests. His administration and Harvard were locked in a months-long standoff over federal funding to the institution.

Trump has said that Harvard and other universities 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 after the October 2023 Hamas attack.

Earlier, Columbia University agreed to pay more than $220 million to the government, and Brown University said it will pay $50 million to support local workforce development.

The Trump administration zeroed in on the pro-Palestinian protest movement that roiled Harvard's campus, moving to terminate more than $2 billion in research grant funding to the university.

It 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 alleging that it had violated federal civil rights law.

Harvard President Alan Garber has stated that the various federal actions taken since Trump returned to office in January could result in the school losing 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.

(With inputs from agencies)