Cambridge, Massachusetts - President Donald Trump on Tuesday threatened to strip Harvard of its tax-exempt status after the elite university refused to accept far-reaching policy changes ordered by the White House.

Trump had already moved to freeze $2.2 billion of federal funds on Monday in retaliation for the top university's defiance of the administration's push to bring campuses to heel.

Trump said Harvard "should lose its Tax Exempt Status and be Taxed as a Political Entity" if it does not submit to his demands for the college to change the way it runs itself, including selection of students and authority for professors.

Tax-exempt status is "totally contingent on acting in the PUBLIC INTEREST," he added in the post on his Truth Social network.

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In a letter to students and faculty, Harvard president Alan Garber had vowed to defy the government, insisting that the school would not "negotiate over its independence or its constitutional rights."

Trump's Joint Task Force to Combat Antisemitism responded Monday with a statement announcing the $2.2 billion hold in multi-year grants, plus a freeze on $60 million in government contracts.

Harvard and other universities have been aggressively targeted by the administration over Palestine solidarity student protests amid Israel's assault on Gaza, even going so far as to direct immigration officials to deport noncitizen student demonstrators who are legal residents of the US.