The Key — Many Strings Attached: The New University Compact for Federal Funding
After months out of the national spotlight, Penn was thrust back in this week when the federal government named it as one of nine U.S. universities invited to join the Compact for Academic Excellence in Higher Education. If Penn agrees to the memo’s sweeping requests, the White House says it can expect “substantial and meaningful federal grants” and “multiple positive benefits,” according to the Wall Street Journal.
At a time of “considerable uncertainty regarding our core operating revenues,” as Penn Executive Vice President Mark Dingfield noted at last week’s Board of Trustees meeting, the offer could seem tempting. But the potential tradeoffs, including threats to academic freedom, precarious mechanisms for enforcement, and major hurdles to implementation, may prove too steep.
Sunday morning, President Larry Jameson told the Penn community that he is reviewing the compact with community input before the October 20th government imposed deadline. No universities have publicly signed yet, though others (including Dartmouth) have also publicly acknowledged the proposal. The White House aims to launch a final version “within the next few months.”
According to The New York Times, parts of the compact’s ideas and language reportedly originated from a document circulated by Marc Rowan (W ’84, WG ’85), who helped lead the 2023 campaign calling for the resignation of then-president Liz Magill. Penn, and the other universities involved, will likely counter with many changes to the proposal before any version becomes viable.
This is a pivotal moment for Penn, and the details of the proposal matter. Below, we unpack the compact and its ramifications for Penn. For easier navigation, we’ve outlined the sections below:
Overview of the proposal
Stipulations of the compact
Implications for Penn
Academic freedom
Obstacles to enforcement
Implementation challenges
The path forward
Overview of the proposal
The White House sent letters to President Larry Jameson and the leaders of MIT, Brown, Dartmouth, Vanderbilt, UT Austin, UVA, the University of Southern California (USC), and the University of Arizona, inviting feedback on the memo and the option to sign. White House senior advisor May Mailman said these schools were chosen because they “have a president who is a reformer or a board that has really indicated they are committed to a higher-quality education.”
The invitation follows Penn’s July settlement with the federal government over Title IX concerns. After those negotiations, Mailman suggested that Penn’s “goodwill” could allow it to potentially receive funding once intended for other universities like Harvard.
Mailman describes the ten-section compact as “highly reasonable.” Some of the memo’s requests are just that — reaffirmations of federal laws already applying to institutions receiving federal funding. Others introduce new, more vague and subjective requirements. Penn now must decide how to respond, giving feedback and determining whether the tradeoffs are worth the potential gain in funding.
If Penn declines to join the compact, the consequences are uncertain. The proposal notes that “institutions of higher education are free to develop models and values other than those below, if the institution elects to forego federal benefits.” However, the compact offers no estimate of how much funding might be at stake or the magnitude of disadvantages in grant processes for non-signers.
Stipulations of the compact
To gain an advantage in funding, universities must agree to all ten provisions. Below, we have outlined the terms, with notes in italics on how some of Penn’s current policies align. This isn’t an exhaustive list of Penn’s relevant policies, but it provides a picture of where the university stands on key aspects of the compact.
“Equality in Admissions”
Admissions decisions may not consider sex, ethnicity, race, nationality, political views, sexual orientation, gender identity, religion, or any proxies for these factors.
— Penn is already barred from considering race/race proxies under the Supreme Court decision in Students for Fair Admission vs. Harvard.
Standardized tests (SAT, ACT, etc.) are required for all undergraduate applicants, and results must be publicly reported by demographic group.
— Penn requires standardized test scores for all undergraduate applicants as of this year.
“Marketplace of Ideas & Civil Discourse”
Universities must foster viewpoint diversity and create an environment that welcomes conservative perspectives. Departments are expected to evaluate and publicly report on viewpoint diversity.
Students may not be punished for expressing their views.
“Academic freedom” and “harassment” must be distinguished from one another. Speech that incites violence, including “calls for murder or genocide” or support for terrorist organizations, is prohibited.
University policies must not violate the law, including civil rights laws overseen by the Department of Education.
Certain types of protest are banned, including disruptions to university operations or study spaces, heckling or accosting students, and blocking access to campus spaces based on race, ethnicity, nationality, or religion.
— Penn’s protest guidelines, revised last year, already require that protests are scheduled and do not harass or intimidate community members.
“Nondiscrimination in Faculty and Administrative Hiring”
Hiring and promotion decisions may not consider sex, ethnicity, race, national origin, disability, or religion, except where explicitly permitted under Title VII or other federal discrimination law.
“Institutional Neutrality”
No one in the school leadership, faculty, or departments may issue statements on social or political events unless directly relevant to the campus. Individuals may still express personal opinions, provided they clarify these do not represent the institution.
“Student Learning”
Universities must maintain defensible and objective academic standards, ensuring grades reflect actual student achievement. They may not engage in grade inflation or deflation for non-academic reasons.
Grading policies and distributions must be made public.
“Student Equality”
Universities must adopt definitions of “male, female, woman, and man” based on “reproductive function and biological processes” and maintain female-only bathrooms, locker rooms, and sports.
They must prohibit differential treatment, access, and discipline based on race or other characteristics (including for buildings, spaces, scholarships, and programs).
“Financial Responsibility ”
Effective tuition for U.S. citizens must be frozen for the next five years.
Data on post-graduation job outcomes must be publicly disclosed by program.
— Penn already publishes job and earnings data by school.
Students who drop out in their first semester of college must be refunded.
Universities with endowments above $2 million per undergraduate must offer free tuition for students in hard sciences, unless the students have “substantial means.”
— Penn’s endowment is ~$2.5 million per undergrad, and tuition is already free for families making under $200,000 annually.
“Foreign Entanglements”
Universities must comply with all applicable laws governing foreign gifts, investments, and money transfers, and they must disclose all federal funding.
Foreign undergraduate enrollment is capped at 15%, with no more than 5% from a single country.
— Penn reports that 15% of the undergraduate class of 2029 has a “home address outside of the U.S.”
All international students will be screened for “hostility to the United States.”
“Exceptions”
Religious institutions may maintain admissions and hiring preferences based on faith and same for single-sex schools for sex-based preference. All institutions may give preference to U.S. citizens.
“Enforcement”
University leadership is responsible for ensuring compliance through internal or external audits and campus-wide surveys assessing adherence to the compact’s principles. Results must be published each year.
The Department of Justice (DOJ) will determine violations. A first violation triggers a loss of grant privileges for one year and the mandatory return of that year’s federal funding, and further violations for two or more years.
Donors may request refunds in violation years.
Implications for Penn
The government has invited Penn to provide feedback before signing. Joining the compact as it is could mean trading a significant degree of institutional independence for financial gain. Three key concerns from adoption of the compact stand out for Penn: threats to academic freedom, risks of unpredictable enforcement, and steep implementation hurdles.
Threats to academic freedom
The university, the government, and many alumni (Franklin’s Forum included) believe Penn needs institutional change to strengthen its mission of academic excellence. But, any approach to enact lasting change must preserve academic freedom. Mailman said the compact “will signal to students, parents and contributors that learning and equality are university priorities.” Yet some higher education leaders warn it could jeopardize academic freedom and politicize higher education further at a time when universities are struggling to rebuild trust.
While reform across universities is overdue, many agree that preserving academic freedom requires change that cannot come entirely at the direction of the federal government. “The parts of the order that drive me crazy are the ones that I actually agree with,” Penn professor Jonathan Zimmerman told the New York Times. “We should have ideological diversity, we shouldn’t stigmatize conservative thought… Keeping tuition down… But the federal government being the determinant of that is terrifying.”
Former Harvard President Larry Summers called the proposal “ill conceived and counterproductive.” The president of the American Council on Education, Ted Mitchell, fears for the impacts on free speech, telling the WSJ, “who decides if the intellectual environment is vigorous and open-ended? This is not something the federal government should be involved in and adjudicating.”
The Foundation for Individual Rights and Expression (FIRE)’s lead counsel put it even more plainly: “A government that can reward colleges and universities for speech it favors today can punish them for speech it dislikes tomorrow.”
Risks of unpredictable enforcement
Another major risk is that enforcement of the compact could become inconsistent or politically driven. Under the proposed system, Penn would conduct polling of the university community to evaluate compliance with federal rules, either internally or through an external party. Then, it will be the role of the DOJ to determine whether violations occurred.
While political priorities always shift between presidential administrations, this compact could further exacerbate and magnify those swings. For example, leaders at invited schools worry the compact essentially includes a “waiver of varied legal protections,” such as the procedural safeguards Harvard cited in its lawsuit against the government for suspending federal funding without following Title VI procedures.
As control of Washington changes hands, enforcement could swing more sharply than before. This tension already shows: in August, fourteen Democratic members of Congress sent Harvard a letter threatening to investigate the university if it settled with the Trump administration.
Frederick Hess of the American Enterprise Institute articulates the point well. “Do we really want to wind up with each successive administration blasting out fast-pass conditions for federal research funds and federal aid?”
Implementation hurdles
Penn also faces practical challenges in implementing the current proposal. On paper, Penn begins to check several boxes already, such as requiring standardized tests for undergraduate admissions and having an institutional neutrality policy. Other sections could require such rapid, drastic changes that full adherence could prove nearly infeasible.
For example, financially, the compact’s proposed tuition freeze and free tuition for hard science majors could challenge Penn’s budget model. With an endowment of over $2 million per undergraduate, thousands of students studying science could qualify for free tuition (Penn Engineering undergraduate enrollment alone is 1,790).
The Quaker Commitment already guarantees free tuition for families making under $200,000 per year. However, extending that promise further would likely carry major budget consequences and alter the university’s financial model unless it could guarantee that the cost would be offset in additional research funding. Because the exact level of grant advantage is unknown, this would be a risky financial decision for Penn on top of existing uncertainty.
Politically, the compact could also require Penn to redefine existing university policies and procedures in ways that may sharply diverge from its current model and campus culture. Provisions range from “public accountability mechanisms” for grading to adoption of “reproductive function and biological processes” focused definitions of ‘male,’ ‘female,’ ‘woman,’ and ‘man.’ These changes risk igniting conflict and confusion around academic and administrative policies.
The challenge isn’t the potential for controversy (reform often invites debate), but whether such top-down directives can align with Penn’s mission or could instead undermine the progress Penn has already made, such as adopting institutional neutrality.
The path forward
If Penn signs the compact, it could secure stability in federal funding. If it declines, it risks falling behind peers who join. Either way, the compact sets up a defining moment for Penn and for the future of higher education itself.
At Franklin’s Forum, we agree that enduring academic excellence depends not only on resources but also on principle. As President Jameson reminded the community Sunday morning, any response must reflect Penn's mission and values, including “freedom of inquiry and thought, free expression, non-discrimination, adherence to American laws and the Constitution of the United States, and our own governance.”
The Almanac
Provost for climate, science, policy, and action Michael Mann resigns
Mann resigned as Vice Provost for Climate, Policy, and Action, citing conflict between his research and policy work and role as an administrator. Mann highlights his work on a new book, Science Under Siege, as a major challenge to adherence with Penn’s institutional neutrality policy for administrators.
Mann also faced criticism from Senator Steve McCormick (R-PA) over now-deleted posts and reposts on X about the murder of Charlie Kirk. While McCormick called for Mann to be disciplined, Provost John Jackson Jr. told The DP that it was Mann’s choice to step down.
So what? Penn’s institutional neutrality policy is a major shift. Mann’s decision can be seen as proof that the policy is working. He will remain a professor in Earth and Environmental Sciences, free to voice his opinions as a scholar, while Penn appoints an administrator committed to neutrality, helping to ensure administrative decisions and statements reflect the institution’s core mission rather than individual views.
Lawsuit claiming Penn engaged in tuition price fixing for divorced parents dismissed
Last fall, the College Board, Penn, and 39 other universities were sued by a Cornell alum and a Boston University student, who alleged collusion in setting prices. The universities required financial information from both parents, even when the noncustodial parent didn’t contribute to tuition, leading to higher tuition charges.
U.S. District Judge Sara Ellis dismissed the case, ruling the plaintiffs lacked evidence of collusion, though she acknowledged the practice generally raised prices.
So what? With public trust in higher education already low, dismissal doesn’t relieve concerns about rising prices at elite universities. Penn still faces a House antitrust investigation and another price-fixing lawsuit. To regain credibility, Penn will need to continue highlighting its commitment to affordability and reform its cost structure.
Penn partners with Amazon and water industry on Water-AI research center
Penn, the Water Environment Federation (WEF), Amazon, and The Leading Utilities of the World launched the Water-AI Nexus Center of Excellence to study sustainable water use in AI and how AI can address global water management challenges.
Recently, Penn’s Water Center has partnered with the Water Research Foundation, local utility leaders, and other industry experts on water infrastructure and management projects.
So what? This initiative reinforces Penn’s push to lead in AI research and academics. After last year’s introduction of the first Ivy League major in AI at Penn Engineering, followed this spring by Wharton’s AI undergraduate concentration and MBA major, the key question is whether Penn’s AI initiatives will set it apart as a leader, or blend into the noise of the growing AI rush across higher education.
Platt family funds expansion of Jewish Studies program in the School of Arts and Sciences
Julie is Vice Chair of the Board of Trustees, Marc serves on the Penn Live Arts Director’s Advisory Council, and both have funded initiatives in performing arts and Judaic studies.
So what? Last year’s University Task Force on Antisemitism Final Report recommended expanding Jewish Studies through new faculty and programming. This week, philosophy professor Michael Weisberg (who is leading implementation of the task force’s recommendations) told Penn Today about his plans to continue building Jewish community. These new programs represent Penn’s follow-through and come after last month’s posthumous gift from the estate of Louise Strauss to support the Katz Center for Advanced Judaic Studies.
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