The Trump administration has escalated its campaign against Harvard University, placing new restrictions on the Ivy League school's ability to access federal funds for student aid, citing concerns about the "financial position" of the oldest and richest university in the United States.

The Department of Education said on Friday it had placed Cambridge, Massachusetts-based Harvard on "heightened cash monitoring" status, a shift from the typical practice that will force it to use its own funds to disburse federal student aid before drawing down funds from the department.

President Donald Trump has cracked down on universities and threatened to cut federal funding over a range of issues like pro-Palestinian protests against US ally Israel's assault on Gaza, transgender policies, climate initiatives and diversity, equity and inclusion programs.

The Education Department is also seeking to have Harvard post a letter of credit for US$36 million to ensure its financial obligations are met. In a letter, it said recent events raised concerns about Harvard's finances, citing its decision to issue bonds and conduct layoffs amid its conflict with the White House.

The Education Department said Harvard was at risk of losing access to all federal student aid funding by not complying with requests for records from its Office of Civil Rights, which a separate letter warned may pursue an enforcement action.

That office has been reviewing whether Harvard still considers race in its undergraduate admissions process even after the US Supreme Court in 2023 ruled that affirmative action practices that schools relied on to boost enrollment of racial minorities were unlawful.

The government in July settled its federal investigations with Columbia University, which agreed to pay more than US$220 million to the government, and Brown University, which said it will pay US$50 million to support local workforce development. Both accepted certain government demands.

The Trump administration has been seeking a settlement with Harvard. Trump has said Harvard should pay "nothing less than $500 million."

The government had separately proposed settling its probe into the University of California, Los Angeles through a US$1 billion payment from the university. California Governor Gavin Newsom called that offer an extortion attempt. The government froze nearly US$600 million in funding for UCLA, the university said in August.

UCLA unveiled new protest rules on Friday that formalized interim policies put in place last September. UCLA experienced large demonstrations last year and a violent attack by a pro-Israeli mob on a pro-Palestinian encampment.

The policies unveiled on Friday at UCLA include measures that restrict unauthorized encampments, ban masks or face coverings for those who violate rules and make outdoor spaces off-limits for demonstrations that are not pre-approved.

UCLA says it will allow pre-approved overnight events and outlined some designated areas for public expression for which prior approval was not needed. Policy violations could lead to disciplinary action or even arrest, UCLA said.

The University of California system, of which UCLA is a part, has called this period one of the gravest threats in the institution's history.

Harvard, which has a US$53 billion endowment, has not suggested it was on the verge of financial catastrophe but it has cut spending after Trump's administration launched a campaign to leverage federal funding to force change at it and other universities, which the president says are gripped by "radical left" ideologies. (Reuters)