Regulation by Deal Comes to Higher Ed

David Pozen

Earlier this evening, Columbia University announced an agreement with the Trump administration in which Columbia makes a host of concessions in order to restore its eligibility for federal funding. The agreement is already being described as “unprecedented,” “the first of its kind.” These descriptions are true but ambiguous, because the agreement breaks new ground on any number of levels.

For instance, the agreement marks the first time that antisemitism and DEI have been invoked as the basis for a government-enforced restructuring of a private university. The agreement was engineered by a novel collaboration among the Department of Education, the Department of Health and Human Services, the General Services Administration, and the White House, which pooled their resources to ratchet up the pressure on Columbia (with some help on the side from the Department of Justice). The agreement is also the first to require a university to fork over money to the government as a condition of receiving money from the government, bringing a new brand of pay-to-play into the world of scientific and medical research.

And let’s not forget that the agreement grows out of the executive branch’s first-ever cutoff of congressionally appropriated funds to a university, so as to punish that university and impel it to adopt sweeping reforms, without any pretense of following the congressionally mandated procedures. Lawyers have been debating the exact circumstances under which the executive branch may freeze particular grants and contracts to particular schools. Yet as far as I’m aware, no lawyer outside the government has even attempted to defend the legality of the initial cutoff that brought Columbia to its knees and, thereafter, to the “negotiating” table.

In short, the agreement gives legal form to an extortion scheme—the first of its kind!—that defies the relevant statutes as well as the constitutional separation of powers and the First Amendment.

There is another unprecedented feature of the situation that is so obvious it is easy to overlook, and that might ultimately prove the most consequential of all: the way in which the federal government is seeking to reshape the internal operations of universities not through generally applicable directives, but rather through a series of bilateral “deals.” The Trump administration has made clear that while Columbia is first in line, it intends to reach comparable agreements with other schools—to scale the Columbia shakedown into a broader model of managing universities deemed too woke. As has already occurred with law firms, tariffs, and trade policy, regulation by deal is coming to higher education.

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Recent years have seen fierce debates over how universities should be regulated when it comes to matters of discrimination. The traditional paradigm is that Congress passes civil rights laws; the Department of Education promulgates rules, following a process of public notice and comment, to implement these laws; and the department then seeks to ensure compliance. Under President Obama, the executive branch began to rely more on Dear Colleague Letters and other informal policy statements, and less on notice-and-comment rulemaking, to promote its vision of antidiscrimination. Many commentators on the right cried foul. By 2024, they were joined by a growing chorus on the left, including some who accused the Biden administration of utilizing “subregulatory guidance” to undermine pro-Palestinian protests.

Without any clear grounding in the civil rights statutes themselves, the Trump administration has begun to effect another, more dramatic regulatory shift—away from guidance documents addressed to the entire sector, and toward bespoke deals foisted upon individual schools after summarily terminating or threatening their federal funds. It is important to emphasize that this shift does not reflect an increased interest in enforcement, leading to an increased number of consent decrees or out-of-court settlements. These deals will not be the product of thorough investigations or judicial findings of misconduct by the schools in question. No established legal process was followed for the Columbia agreement; no genuine legal dispute was resolved. The dealmaking is the main regulatory event from start to finish.

This emerging model raises profound concerns not just for universities’ budgets and independence but also for the rule of law. By relying on “particular transactions to effectuate government policy,” scholars have observed in other contexts, regulation by deal bypasses all of the “notice, comments, [and] due process standards that we ordinarily expect from public administration.” While guidance documents may share some of these deficits, they are not actually binding on regulated parties and at least aspire to uphold bedrock legal principles of “generality, clarity, publicity, stability, and prospectivity.” The style of regulation reflected in the Columbia deal is at once far more coercive and far more arbitrary—opaque in development, unpredictable in application, deeply susceptible to personalism and corruption, and only contingently connected to the laws Congress has written. As compared to the familiar fare of public administration, “one-off dealmaking is more about back-door terms, forceful results, and unequal application of standards, to the extent standards exist at all.”

Regulation by deal may have a useful role to play under certain conditions. For example, the executive might have an urgent need to partner with particular entities, legislative authorization to do so, and good cause to believe that the unpredictability of dealmaking will reduce moral hazard or enhance legal compliance. The financial crisis of 2007–2008 arguably satisfied these conditions. Whatever one thinks about Columbia or elite universities more generally, the current campus imbroglios plainly do not.

The spread of regulation by deal would be worrisome in any period, but it is especially worrisome at this time and in this domain. Authoritarianism feeds on manufactured emergencies and hardball tactics that give the executive leverage to attack political opponents and compel obedience. Basic research, on the other hand, thrives under stable institutional frameworks, reliable funding commitments, and a climate of free inquiry. Deals like Columbia’s enhance the power of presidents and their allies within targeted universities; sideline Congress, the courts, and most faculty; and sow fear and uncertainty throughout civil society. They are fundamentally inconsistent with the logic of academic freedom.

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But what if you believe that Columbia, Harvard, and their ilk have made grievous missteps of their own and therefore welcome the changes these deals will bring? Regulation by deal, as noted above, gets forceful results. And forceful results seem to be what many of these universities’ critics crave.

I cannot hope to convince those who are determined to “dismantle” universities like Columbia and Harvard that the ends don’t justify the means here. (Nor can I offer an assessment of the precise terms of the Columbia agreement, which I have not yet had a chance to study.) All I hope to convey is that the means being used to push through these reforms are as unprincipled as they are unprecedented. Higher education policy in the United States is now being developed through ad hoc deals, a mode of regulation that is not only inimical to the ideal of the university as a site of critical thinking but also corrosive to the democratic order and to law itself.