Newsom threatens funding cuts to colleges that sign Trump deal

Alicia Clanton, Bloomberg News on Oct 2, 2025

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California Gov. Gavin Newsom threatened to pull “billions of dollars” in state funding from any California university that signs a Trump administration proposal offering preferential funding in exchange for certain demands, including a cap on international students.

“California will not bankroll schools that sell out their students, professors, researchers and surrender academic freedom,” Newsom said in a statement. “If any California university signs this radical agreement, they’ll lose billions in state funding — including Cal Grants — instantly.”

On Wednesday, the White House sent a memo to nine universities promising them “substantial and meaningful grants” if they ban the use of race or sex in hiring and require standardized testing like the SAT or ACT, among other demands. The University of Southern California was the only California school on that list.

The governor’s office declined to provide a precise figure of how much money is at stake. Newsom would also require approval from the local legislature to be able to pull the funds.

The announcement has Newsom, often seen as a 2028 presidential contender, borrowing from a similar playbook President Donald Trump used against California. The White House has threatened hefty cuts in federal funds to the state, including more than $500 million to the University of California, Los Angeles. The Trump administration suspended the UCLA funding over allegations of antisemitism and bias on campus. A federal judge later ordered the money restored.

Federal officials are also investigating California State University for allegations of antisemitism and claims of racial discrimination tied to a diversity hiring initiative.

“President Donald Trump’s so-called proposed ‘compact’ is nothing short of a hostile takeover of America’s universities,” Newsom said in the statement. “It would impose strict government-mandated definitions of academic terms, erase diversity and rip control away from campus leaders to install government-mandated conservative ideology in its place.”