Newsom to Pull Funding from Schools Who Agree Not to Racially Discriminate Under Trump’s New Plan
California Governor Gavin Newsom has issued a strong warning to universities in the state regarding a proposal from the Trump management. The federal government offered a “Compact for Academic Excellence in Higher Education” to select universities, including the University of southern California, which would require schools to end racial discrimination in admissions and hiring, maintain institutional neutrality, and uphold free speech. In exchange, participating institutions coudl receive priority consideration for federal funding.
Newsom condemned the proposal as a “antagonistic takeover” that imposes government-mandated conservative ideology, restricts academic freedom, and takes control away from university administrators.He threatened that any California university signing the agreement would lose billions in state funding, including financial aid programs like Cal Grants. Newsom’s office criticized the compact for undermining diversity, dictating university spending, and threatening schools with fines or loss of federal research funds if they resist.
Although signing the compact is voluntary and schools refusing to sign would not face direct penalties, those that decline would forfeit preferential treatment in federal grant opportunities. Newsom portrayed the deal as harmful to students, faculty, and academic independence, reinforcing California’s stance against compliance with the federal agenda.
Democratic California Gov. Gavin Newsom issued an ultimatum on Thursday to universities in the state, warning them that entering an agreement with the Trump administration will put them directly at odds with the governor.
After the White House proposed a deal to nine universities promising that compliance with the administration’s agenda could grant them priority treatment in funding decisions, Newsom issued a harsh warning to any “sell-out universities” that might accept it.
The offer in Trump’s “Compact for Academic Excellence in Higher Education” asks schools to stop racially discriminating in admissions and hiring decisions and commit to institutional neutrality and upholding free speech. Newsom said any school that complies with the federal government will “lose billions in state funding” instead.
“If any California University signs this radical agreement, they’ll lose billions in state funding — including Cal Grants — instantly,” Newsom said in a press release. “California will not bankroll schools that sell out their students, professors, researchers, and surrender academic freedom.”
NEW: Governor Gavin Newsom just responded to Trump’s attempt to get California universities to sign a “loyalty pledge” saying: “CALIFORNIA WILL NOT BANKROLL SCHOOLS THAT SELL OUT THEIR STUDENTS, PROFESSORS, RESEARCHERS, AND SURRENDER ACADEMIC FREEDOM.” pic.twitter.com/0b2CrZUnI2
— Governor Newsom Press Office (@GovPressOffice) October 2, 2025
The University of Southern California is the only California institution that was offered the proposal on Wednesday, but more universities may be offered the terms in the future.
Newsom’s office called the proposed deal “nothing short of a hostile takeover of America’s universities.”
“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,” Newsom’s office stated. “It even dictates how schools must spend their own endowments. Any institution that resists could be hit with crushing fines or stripped of federal research funding.”
The compact sent to the schools explicitly states that universities are not required to sign the document and will not be punished for declining, but will lose out on benefits such as preferential consideration for federal grants. Signatories will not be offered any exclusive funding that is not available to schools that do not sign.
Several California schools have been the targets of the Trump administration’s funding cuts already, being accused of failing to address anti-Semitism, continuing to racially gerrymander their student bodies, and holding questionable ties with foreign nations.
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