Which Colleges Refuse Federal Funding — and Why?

Most American colleges and universities accept federal funding. The money flows through research grants, Pell Grants, Stafford Loans, and dozens of other programs — and it comes with an ever-expanding set of conditions.

A small number of institutions have decided the trade-off isn't worth it. They refuse all federal money — both to themselves and to their students — in order to operate free from government mandates. Here's the full picture: which schools, what strings, and why it matters.

The Schools That Said No

The two most well-known examples are Hillsdale College in Michigan and Grove City College in Pennsylvania.

The pivotal moment came in 1984 with the Supreme Court case Grove City College v. Bell. The Court ruled that if any student at a college receives federal aid — even individual Pell Grants — the entire institution must comply with all federal mandates. Hillsdale withdrew from all federal assistance beginning with the 1984–85 academic year. Grove City College followed four years later.

Since 2007, Hillsdale's entire operating budget — including all student scholarships — has come from private donations and endowments.

The Full List

Beyond Hillsdale and Grove City, these colleges also decline to participate in federal funding programs:

Patrick Henry College — Purcellville, Virginia
Pensacola Christian College — Pensacola, Florida
Wyoming Catholic College — Lander, Wyoming
New Saint Andrews College — Moscow, Idaho
Christendom College — Front Royal, Virginia
Gutenberg College — Eugene, Oregon
Principia College — Elsah, Illinois
New College Franklin — Franklin, Tennessee
Highlands College — Birmingham, Alabama
Hildegard College — Costa Mesa, California
Mount Liberty College — Provo, Utah
Weimar University — Weimar, California
Mid-America Baptist Theological Seminary — Cordova, Tennessee
Southern Baptist Theological Seminary — Louisville, Kentucky
Southwestern Baptist Theological Seminary — Fort Worth, Texas

To truly opt out, a school must decline aid both to itself and to its students. That means it won't participate in or facilitate federal loan and grant programs like Pell Grants or Stafford Loans. It's a significant financial sacrifice, which is why the list is so short.

What the Federal Government Requires in Exchange for Funding

The conditions attached to federal money are extensive. Here is every major category of mandates that come with accepting federal dollars.

Policy Mandates That Shift by Administration

These are the most controversial conditions — they change depending on who occupies the White House:

DEI / Affirmative Action programs — Under Obama and Biden, institutions were pushed to adopt diversity, equity, and inclusion programs. A 2024 report found that two-thirds of U.S. colleges require students to complete a DEI-related course to graduate. The NSF and NIH required diversity statements and inclusion metrics in research grant proposals. Under Trump (2025), the pendulum swung the opposite direction: the Department of Education now threatens to end funding for schools that maintain “race-based preferences” or DEI programming. The NSF flags terms like “LGBT,” “biases,” and “trauma” in grant proposals. The NIH requires institutions to certify they do not operate DEI programs. Schools that built out massive DEI infrastructure under one administration are now being told to dismantle it under the next.
Title IX gender identity expansion — Biden's 2024 Title IX rewrite extended protections to gender identity, including transgender access to facilities and athletics. Trump's DOE rescinded this. Between 2013 and 2021, over 120 religious schools sought Title IX exemptions specifically to avoid gender identity requirements. George Fox University, a Quaker school in Oregon, applied for a religious exemption after a transgender male student requested to move into male housing. Spring Arbor University in Michigan requested exemptions covering admissions, housing, restroom access, and athletic participation. Simpson University in California received DOE approval to discriminate against both gay and transgender students under its religious exemption.
COVID vaccine mandates — A 2025 executive order bars federal funding to schools that require COVID-19 vaccination for attendance. Under the previous administration, the pressure ran the opposite direction. The University of Oklahoma's president warned that non-compliance with Biden's vaccine mandate risked losing “hundreds of millions of dollars each year” in federal funding. The University of Florida, receiving over $1.6 billion in federal contracts, was subject to the mandate. Mississippi's Board of Trustees voted to reverse its own prohibition on vaccine mandates at public colleges specifically to avoid losing federal revenue.
Research restrictions — Specific grant conditions around foreign collaboration (especially with China), conflict-of-interest disclosures, and data sharing requirements.

Civil Rights and Non-Discrimination

Title IX (Education Amendments of 1972) — No sex-based discrimination. This is the mandate that has generated the most conflict with religious institutions. Title IX governs admissions, athletics, housing, and sexual harassment procedures. Different administrations have expanded or narrowed it to cover gender identity, transgender athlete policies, and campus due process requirements.
Title VI (Civil Rights Act of 1964) — No discrimination based on race, color, or national origin in any federally funded program.
Section 504 (Rehabilitation Act of 1973) — No discrimination based on disability.
Americans with Disabilities Act (ADA) — Accessibility requirements for facilities and programs.
Age Discrimination Act of 1975 — No age-based exclusion from federally funded programs.

Accreditation and Institutional

Accreditation requirements — Must be accredited by a federally recognized agency to participate in Title IV programs. Accreditors themselves enforce federal standards — and sometimes go further. The Western Association of Schools and Colleges added “diversity” requirements that attempted to force all schools under its supervision to restructure curricula, alter boards of trustees, and end religious faith requirements for faculty. Only after widespread objection did WASC soften its demands. Gordon College in Massachusetts had its accreditation threatened in 2014 after its president signed a letter to President Obama requesting religious exemptions from LGBTQ hiring mandates. The city of Salem ended its contract with Gordon; the Lynn school district terminated a longstanding partnership. The Chronicle of Higher Education published an argument that accreditation should be denied to any Christian college that requires professors to sign statements of faith — a practice at Wheaton College in Illinois and many others.
Program Integrity Rules — State authorization, credit hour definitions, and substantive change reporting.

Campus Safety and Reporting

Clery Act (1990) — Must publish annual campus crime statistics, maintain a public crime log, and issue timely warnings about threats.
VAWA (Violence Against Women Act) — Mandates campus sexual assault response procedures, prevention programs, and victim rights protocols.
DFSCA (Drug-Free Schools and Communities Act) — Must maintain drug and alcohol abuse prevention programs and policies.

Student Data and Privacy

FERPA (Family Educational Rights and Privacy Act) — Strict rules on student records, disclosure, and consent. Governs what the school can share, with whom, and under what conditions.

Financial and Administrative

Uniform Guidance (2 CFR 200) — Standardized rules for managing federal grants: cost accounting, procurement, subrecipient oversight, and annual audits.
Title IV (Higher Education Act) — Financial aid compliance including satisfactory academic progress rules, default rate management, “gainful employment” requirements, and return-of-funds calculations.
Single Audit Act — Institutions spending over $750,000 in federal funds must undergo an annual federal audit.
Foreign Gift Reporting (Section 117) — Must report gifts or contracts from foreign sources exceeding $250,000.

Why Religious Colleges Specifically Object

Most of the colleges on the “no federal funding” list are small, private, religiously-affiliated institutions. Patrick Henry College states it directly: “In order to safeguard our distinctly Christian worldview, we do not accept or participate in government funding.”

The mandates that most directly conflict with religious institutional missions include:

Title IX sexual conduct policies — Federal rules dictate how schools handle sexual harassment investigations, often conflicting with religious disciplinary codes. At Visible Music College in Memphis, a student who reported a sexual assault was accused by administrators of breaking school rules against premarital sex and threatened with expulsion unless she signed a confession. Title IX procedures would have required a fundamentally different response — but the school's religious conduct code pointed in a different direction. Schools that accept federal money must navigate both systems simultaneously.
Gender identity policies — Requirements around transgender student housing, restroom access, and athletic participation. George Fox University applied for a religious exemption rather than house a transgender student according to his gender identity. Spring Arbor University sought exemptions covering admissions, housing, bathrooms, and athletics. Between 2013 and 2021, over 120 religious schools claimed Title IX exemptions specifically to maintain their existing policies on gender identity.
Hiring autonomy — Non-discrimination rules can conflict with faith-based hiring practices. In 1975, the federal government ordered Hillsdale College to sign an affirmative action compliance document and provide demographic data on the race and ethnicity of all students and employees. Hillsdale refused — not because it discriminated (it was one of the first colleges in America to admit Black students and women, in 1844), but because it rejected the principle that the government had authority to dictate its hiring and admissions practices. That refusal launched the legal battle that led to Hillsdale's full withdrawal from federal funding. Today, approximately 200 of America's 600 Christian colleges have policies on employee conduct that would conflict with federal non-discrimination rules. These schools collectively receive $4.2 billion in federal aid — and a federal lawsuit has argued the religious exemption is unconstitutional precisely because they receive taxpayer money.
Curriculum autonomy — Accreditation standards tied to federal funding can pressure content standards and program design. The Western Association of Schools and Colleges attempted to force schools to restructure curricula around diversity requirements. Dayspring Bible College in Illinois sued the state Board of Higher Education because accreditation law allowed Bible colleges to issue “certificates” but not “degrees,” effectively limiting what they could offer. Patrick Henry College, by refusing federal funds, is relieved from DOE requirements on demographic makeup, does not ask about race or ethnicity on applications, and is not required to follow federal guidelines on sex-based discrimination. If they accepted funding, all of that would change.
Student conduct codes — Religious behavioral standards can conflict with federal non-discrimination interpretations. Grace University expelled a student in 2012 for a lesbian relationship, then billed her $6,000 in back tuition. Under Title IV, the school was required to return federal scholarship dollars proportionally — creating a direct collision between religious conduct codes and federal financial aid rules. Bethel College, North Greenville University, and Spring Arbor University all submitted Title IX exemption requests specifically noting their intent to expel students and fire employees who are unmarried and pregnant, have had abortions, or are in same-sex relationships. In 2021, dozens of LGBTQ students at Christian colleges filed a federal lawsuit arguing that the religious exemption to Title IX is unconstitutional when schools receive government funding.

The Deeper Principle

The schools that opt out are not objecting to any single rule. They are objecting to the principle that accepting federal money gives the government an ever-expanding lever over institutional decision-making.

What's required under one administration gets reversed under the next, but the compliance infrastructure and legal exposure remain permanent. The Biden DOE pushed schools in one direction on gender identity; the Trump DOE pushes them in the opposite direction on DEI. The only constant is that the government holds the lever.

For institutions that view their educational mission as rooted in enduring principles — whether religious, classical, or philosophical — the instability of politically-driven mandates is the core problem. Independence from federal funding is not just a financial decision. It is a decision about who gets to define what the institution teaches, who it hires, and how it operates.

What This Means for Families

For homeschool families and parents choosing colleges, the federal funding question is worth understanding. Schools that accept federal money operate under a layer of regulation that shapes everything from admissions to student life to curriculum. Schools that don't accept it operate with significantly more freedom — but students at those schools cannot use federal financial aid.

That trade-off is real, and every family weighs it differently. But knowing the full scope of what federal funding actually requires — and how those requirements shift with each administration — is essential context for making an informed decision about where to send your children.

The same principle applies at every stage of education. The more clearly you understand what shapes your child's learning environment, the better equipped you are to choose the one that aligns with your family's values and your child's needs.

Last updated: February 2026. Sources: Dean Clancy, Hillsdale College / Imprimis, Philanthropy Roundtable, Patrick Henry College, Washington Post, Inside Higher Ed, Higher Education Compliance Alliance, NAICU, U.S. Department of Education, TIME, Goldwater Institute, NBC News, Chronicle of Higher Education, Grove City College v. Bell (1984).