California Gov. Gavin Newsom issued a stark warning to universities across the state, pledging to strip them of billions in state dollars if they sign onto President Trump’s new higher education agreement.

“IF ANY CALIFORNIA UNIVERSITY SIGNS THIS RADICAL AGREEMENT, THEY’LL LOSE BILLIONS IN STATE FUNDING — INCLUDING CAL GRANTS — INSTANTLY. CALIFORNIA WILL NOT BANKROLL SCHOOLS THAT SELL OUT THEIR STUDENTS, PROFESSORS, RESEARCHERS, AND SURRENDER ACADEMIC FREEDOM,” Newsom said in a statement Thursday.

The clash comes after the Trump administration unveiled the “Compact for Academic Excellence in Higher Education,” a 10-point memo offering universities priority access to federal grant funding if they comply with sweeping institutional changes.

Among the requirements: admissions and hiring overhauls, restrictions on transgender women in women’s sports and locker rooms, tuition freezes for five years, limits on international student enrollment capped at 15 percent, and adherence to “institutional neutrality” to foster what the administration calls a “vibrant marketplace of ideas.”

The compact was distributed to nine universities, including the University of Southern California, with plans to expand to more campuses nationwide. While schools that reject the deal can still receive federal money, they would not enjoy the same funding priority.

Newsom’s rejection underscores a growing confrontation between California’s leadership and the Trump administration, which has increasingly used federal financial leverage to push higher education reforms. Earlier this year, a federal judge ordered the administration to restore funding it had withheld from the University of California, Los Angeles.

With billions in student aid and research funding at stake, the dispute is expected to intensify, putting immense pressure on California’s public and private universities as they weigh political, financial, and academic consequences.

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