Harvard University’s endowment surged to a record $68 billion in the past fiscal year, underscoring its position as the wealthiest university globally, according to its latest annual financial report released Thursday. The endowment’s value increased by nearly 20 percent from the previous year, driven largely by robust stock market returns and a substantial rise in private equity holdings, which now constitute almost half of the university’s investment portfolio.

Despite the endowment’s strong performance, Harvard undertook significant cost-cutting measures amid ongoing financial pressures. The university restructured staff positions across all 12 of its schools, resulting in job eliminations and a hiring freeze, although it declined to specify the total number of positions affected. Much of the restructuring focused on the Faculty of Arts and Sciences, which faced a $365 million deficit. These interventions helped Harvard avoid a budget shortfall, allowing it to close the 2026 fiscal year with a $100 million surplus—its first positive net operating result since the pandemic began.

Harvard’s endowment generated a 27 percent return, with distributions totaling $2.6 billion, which funded nearly 40 percent of the university’s operating revenue. Tuition, room, and board, before financial aid, accounted for 22 percent of revenue, while philanthropy was the largest revenue source, contributing close to half of the total.

The university enrolled nearly 25,000 students across its various schools during the year. Financial aid remained a priority, bolstered by donor support and recent policy changes including the elimination of tuition for students from families earning under $200,000, as noted by Meredith Weenick, Harvard’s executive vice president.

At the same time, Harvard is bracing for the impact of a significant new federal tax on university endowments. A provision enacted during the Trump administration will increase the excise tax rate on endowment income from 1.4 percent to 8 percent, which Harvard estimates will cost approximately $300 million annually. This tax, aimed at wealthy private universities with large endowments relative to enrollment, is expected to divert a substantial share of investment gains away from academic activities and financial aid.

Harvard Management Company CEO Narv Narvekar warned that the tax would reduce funds supporting teaching, research, and scholarships. Critics like Larry Ladd, a former Harvard budget director, described the tax as punitive, arguing it undermines donor intent by forcing universities to redirect some endowed funds to the federal government instead of their designated uses.

The university is also grappling with rising legal expenses connected to ongoing disputes involving the Trump administration. Legal fees increased to $210 million in the 2026 fiscal year, up from $126.6 million in 2025 and a pre-2024 average of about $20 million annually.

Despite controversy surrounding allegations of antisemitism and resulting donor concerns, Harvard received $1.5 billion in new contributions during the year, including a record $684 million in "current use" gifts that are immediately available for university programs.

The financial results highlight a complex picture for Harvard: robust endowment growth and philanthropic support coexist with operational challenges, tax policy uncertainties, and internal workforce restructuring. Some faculty members, including researchers affiliated with Harvard’s Academic Workers union, have characterized the university’s financial position as strong and called attention to stalled contract negotiations that could lead to labor action this summer.