Harvard University pushed back against the U.S. government after President Donald Trump said the school should lose its tax-exempt status, warning that such a move would endanger its ability to carry out its mission and threaten higher education in America.

“There is no legal basis to rescind Harvard’s tax-exempt status,” university spokesman Jason Newton said in a statement, adding that it would damage Harvard’s medical research efforts and ability to offer financial aid for students. He also cautioned that using this “instrument” would have “grave consequences for the future of higher education in America.”

Trump has escalated his fight with the oldest and richest U.S. university after the school refused to bow to his administration’s demands. The U.S. froze more than $2.2 billion of multiyear grants this week, Trump suggested the Internal Revenue Service should tax the university as a “political entity” and then his homeland security chief threatened to prevent the school from enrolling foreign students.

The White House has sought to overhaul elite education arguing that schools need to combat antisemitism after protests against Israel broke out on campuses across the U.S. in the wake of Hamas’s attack on the Jewish state and the resulting war in Gaza — but its efforts have sparked concern the administration is trying to suppress free speech and imperil academic freedom.

Harvard president Alan Garber said the university was willing to work with the administration to fight antisemitism, but the U.S. demands made clear that wasn’t their intent. Instead Harvard said the government was seeking to determine what the university teaches and who it hires and admits — and that it won’t “surrender its independence or its constitutional rights.”

CNN first reported the IRS was looking at revoking the tax-exempt status, a move that would deal a significant financial blow to the university and send a message to other institutions that they face a similar risk. A Bloomberg News analysis estimated that Harvard’s tax benefits totaled at least $465 million in 2023.

The White House hasn’t yet formally confirmed it’s pursuing the IRS path, which would almost certainly face legal challenges.

With a $53 billion endowment, Harvard has emerged as the highest-profile university to contest Trump’s attempts to force sweeping changes. Other university leaders, including Princeton’s, have expressed support for Harvard’s stance, but they also face pressure from the White House. The administration has already canceled $400 million in federal money to Columbia University and frozen dozens of research contracts at Princeton, Cornell and Northwestern universities.

While Harvard’s rebuke sparked cheers from Democrats and many Harvard alumni, including former President Barack Obama, the university’s resistance has come at a cost that could spiral. U.S. agencies previously said they are reviewing about $9 billion of grants and contracts to the Cambridge, Massachusetts-based school.

On Wednesday, Homeland Security Secretary Kristi Noem also threatened to prevent Harvard from enrolling international students if it doesn’t comply with sending records to the government related to foreign student visa holders. This would threaten Harvard’s ability to attract students from foreign countries, which make up more than 27% of the university’s student body in this academic year.

“Harvard bending the knee to antisemitism — driven by its spineless leadership — fuels a cesspool of extremist riots and threatens our national security,” Noem said in a statement.

A Harvard spokesperson said in a statement that the federal scrutiny, including funding cuts and the threat to its tax status, “follows on the heels of our statement that Harvard will not surrender its independence or relinquish its constitutional rights.”

“We will continue to comply with the law and expect the Administration to do the same,” according to the statement.

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—With assistance from Catherine Lucey.

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