Proper procedure when promised funding not given to Ph.D. graduate student I have a friend who was accepted into an interdisciplinary program at the University of Arizona a few years ago.

They are more than halfway to completing their Ph.D., however their advisor is indicating that they may not receive the full amount of funding this year.

Their offer letter and governing handbook all state that students will be funded at an annual rate of $25k for up to 5 years.

My friend has procured much of their own funding for many of the years through fellowships, so their salary was payed from outside money for over half of their time in the program.

The relevant handbook text is:


  The basic graduate stipend is $25,000 (pro-rated the first year due to
  August start date). Depending on the source of funding, you may
  receive this stipend in the form of bi-weekly paychecks or in larger
  lump sum amounts... In addition to your stipend, tuition is waived and
  single only health insurance is paid. Miscellaneous fees incurred each
  semester are the student’s responsibility to pay.


and


  All first-year students are funded from multiple university sources.
  By the middle of the second semester, students should have identified
  a dissertation advisor. From that point forward, financial
  responsibility for the student besides with the dissertation advisor.
  During dissertation research, students are typically paid as graduate
  research assistants (via payroll) for a period of up to five years,
  contingent on the availability of funds and continued satisfactory
  progress.


Now this was sold to them by the program recruitment as they would have complete coverage for 5 years at $25k salary, but the statement "contingent on the availability of funds," seems to be an escape clause here.

When a Ph.D. student is promised a certain level funding in the US, but legally the University can shirk that duty, what is the typical response, recourse, and avenues that the student should take when that funding is lowered or removed?

Note that my friend is still in negotiation about this with their advisor, and they may still obtain full funding, but I thought it would make a good question.
That "contingent on the availability of funds" is indeed an escape clause for the university, such that they technically have no responsibility to ensure funding.  

However, it is entirely unreasonable for a Ph.D. student in a STEM field in the US to not be paid a living wage for their work.  Your friend needs to make the department aware of this situation, as departments often have resources that can be used to help to cover small gaps.  Now it's possible that neither the department nor the professor is able to obtain the necessary funds, in which case, I would recommend that your friend consider seeking paid employment in industry and finish their Ph.D. part-time.

Having a student do this would be quite embarrassing to most professors, so making it known that this is a possibility may help ensure that appropriate support can be obtained.

The situation, unfortunately, is much worse if your friend is not a U.S. citizen.  In that case, if they have the ability to seek employment through the training option on an F-1 visa, then they may be able to pursue the same strategy.  Some professors, however, will attempt to effectively enslave foreign students through visa-related threats, and this can result in very difficult problems.