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In the handouts for Lesson 6 (p 11) it states that after coming "into power, he started his anti-clerical movement: first a drastic selection of the sangha..."

I've found some supporting detail regarding what this is in Zurcher's The Buddhist Conquest of China (ref p 260).

"he ordered that only the following three classes of monks would be permitted to continue in the religious life:
a) those who had a profound knowledge of the scriptures and who could explain their meaning
b) those who strictly observed the monastic rules and who were always living in the hermitage
c) those who "whilst dwelling in the mountains cherish their ideals without engaging in common and vulgar activities."

Interestingly, Zurcher states that Huiyuan "admits such measures are necessary."

Some further color around the basis for this can be found in Hong Yue Guo's Rebirth and Karmic Retribution in Fifth Century China. (ref p 205)

"the Buddhist community has not provided good role models, for what Huan Xuan especially notes is the seeming hypocrisy of Buddhist practitioners. Some monks shave their heads and wear robes, but inside they have stronger desires for fame and fortune than ordinary people. They become useless for both secular society and Buddhist communities because they do not practice skills that could serve either group."

Guo also notes (p 204) that "Huan Xuan's attitude [was] one which was shared by many literati of the day."

I've found a PDF of The Buddhist Conquest of China here, no subscription required, but copies of the text appear to be $130 and up.

I've found a PDF of Rebirth and Karmic Retribution here (subscription required), but have not found a copy of the text for order.

If anyone can find a PDF of Rebirth of Karmic Retribution or a reasonably priced text - please share.