Well, it's not that simple. Yes, Congress passes the bill saying that X billions of dollars have to be spent on universities, but that bill does not name every single university in US as beneficiary. That's what executive branch is for: to work out the details of how to implement the law passed by Congress.
So, Trump taking money from Harvard and giving it to say, a community college in Tampa is technically still correct implementation of the law. I mean, it all depends if he can defend his decision in court, because of course he cannot discriminate based on race, ethnicity, political affiliation etc.
It may not be unlawful, but institutions work best when there is stability of practice, even across leadership changes. Otherwise, you can’t do any long-range planning or undertake complex experiments or investments that could take years to bear fruit.
We used to have a shared sense of custom and mores that helped preserve this stability. But that seems to be out the window now, and regrettably so.
So, Trump taking money from Harvard and giving it to say, a community college in Tampa is technically still correct implementation of the law. I mean, it all depends if he can defend his decision in court, because of course he cannot discriminate based on race, ethnicity, political affiliation etc.