CAMBRIDGE — The U.S. Justice Department opened a compliance review into Harvard University on July 20 to determine whether its China-based financial aid programs and practices exclude American-citizen students. The federal agency launched the probe to assess if the university's acceptance of restricted foreign funds violates civil rights laws by prioritizing non-U.S. recipients.

The Justice Department alleged that Harvard appears to be accepting funds from Chinese sources that restrict the use of those funds to provide financial aid to foreign students, presumably Chinese, based on their national origin. The department stated that providing student financial aid based on national origin to the potential detriment of students of other national origins, including American citizens, may constitute illegal discrimination. Concerns about possible discrimination against U.S. students arose from Harvard’s foreign funding disclosures, which the department reviewed as part of its initial assessment.

"Schools cannot take federal dollars and then turn around and accept money from foreign sources to give financial aid that deliberately excludes American citizens — doing so is illegal, and we will stop it wherever we find it." Assistant Attorney General for the Civil Rights Division Harmeet Dhillon said. The Justice Department emphasized that it has not reached any conclusions in the investigation. This compliance review was initiated by the federal government rather than in response to an outside complaint.

Harvard stated that it does not unlawfully discriminate on the basis of race, ethnicity, or national origin in allocating financial aid. The university stated that it follows the law for required reporting of donations and is consistent with its legal obligations under Title VI. A Harvard spokesperson said the university was reviewing the Justice Department's latest letter and would engage with the government on the topic.

Federal disclosures show Harvard has accepted $630 million from Chinese sources over a period of decades. The university has reported about $4.5 billion in total foreign funding. US law requires universities to report donations from foreign sources exceeding $250,000 in a year. Harvard has stated it has filed reports on foreign donations for decades as part of its ongoing compliance with the law.

Harvard provides need-based scholarships to international students on the same basis as U.S. students. Grants and other aid from the federal government are reserved for American students. The Trump administration has targeted Harvard with investigations and threats to suspend federal funding over issues including pro-Palestinian protests, diversity initiatives, transgender policies, and climate programs. Harvard has previously described Trump administration probes as retaliatory actions against the university for its refusal to surrender its independence and constitutional rights.

"China maintains that normal education and academic exchange should not be disrupted for political purposes," Spokesperson for the Chinese Embassy in Washington Liu Chang said. Liu Chang stated that China-U.S. education cooperation is mutually beneficial.

The compliance review examines whether Harvard's use of restricted foreign funds conflicts with its obligations under federal civil rights laws. If the university is found to have excluded American citizens from aid programs funded by foreign sources, it could face civil penalties or termination of federal financial assistance.

Harvard's long history of reporting foreign donations places this review within a broader pattern of federal scrutiny of university compliance with disclosure rules. The outcome may influence how other institutions manage foreign-sourced financial aid and their reporting obligations under Title VI.