American universities have become strategic targets in an era of intensifying competition with China. Universities concentrate advanced research, train future scientific and technical elites, and generate knowledge with direct military and civilian applications. Yet despite higher education’s importance to national defense, it remains one of the least policed channels through which foreign money enters the United States. Monitoring foreign funding is no longer sufficient. The government needs a watchdog capable of policing what that money buys.

That reality is reflected in the Department of Education’s relaunched foreign funding tracker in collaboration with the Department of State. China, designated a “foreign country of concern” under U.S. law, has donated roughly $6.4 billion in total foreign funds to top U.S. universities such as Harvard, NYU, Stanford, Yale, or MIT since the reporting begun, including more than $528 million in 2025 alone. The State Department’s involvement signals that higher education can be exploited to access research and data vital to U.S. competitiveness and defense. However, the tracker does not show exactly how foreign money is used. Make no mistake, these payments are not acts of charity.

Concerns deepen when foreign funding is routed through intermediaries like Bermuda and Guernsey. Each has a population of fewer than 70,000—roughly the size of a mid-sized American university town—and economies dominated by offshore finance and trust services, not higher education or scientific research. Yet millions of dollars have flowed from these jurisdictions to elite U.S. universities, including Carnegie Mellon, Columbia, and Yale. Such routing strongly suggests evasions of U.S. disclosure requirements. Who is actually providing this money, and why?

The risks are not hypothetical. The National Association of Scholars (NAS) has reported instances in which sensitive defense technology research was tied to China. For example, Georgia Tech and Alfred University conducted research with Chinese involvement on hypersonic missile technology, and the University of Michigan on biological materials. These cases demonstrate how academic openness can be exploited for strategic gain.

The NAS has also revealed how universities fail to report the foreign funds they receive. Asking universities to self-report the foreign support they receive is like letting the fox run the henhouse. Institutions are only required to disclose transactions exceeding $250,000, allowing foreign entities to avoid scrutiny by splitting funding into smaller payments. Imagine receiving such a donation without having to report it to the Internal Revenue Service (IRS).

To make things worse, since the tracker was launched, universities have received about $67.6 billion in total foreign funding, 74.6 percent of which arrived through contracts that typically do not disclose their purpose. The ten largest recipients are private universities—among them Harvard, MIT, Stanford, Yale, Columbia, and Carnegie Mellon—placing their records largely beyond public access through the Freedom of Information Act (FOIA).

These weaknesses point to a deeper institutional gap: No federal agency is responsible for tracking how foreign money moves through universities, how it is structured, or how influence accumulates over time. The Departments of Education and State can collect disclosures and assess diplomatic risk, but they lack the tools to investigate financial flows. By contrast, the Treasury Department and the IRS already monitor complex funding structures across the economy. They identify intermediaries and flag suspicious patterns in banking, contracting, and political finance. Higher education stands out as an exception.

Oversight of foreign funding in higher education should be assigned to a financial enforcement authority—specifically, the IRS working with the Treasury Department. These agencies already possess the expertise to trace ownership and investigate complex funding structures. Applying their tools to university funding would close major gaps in transparency without restricting legitimate academic collaboration.

Recent reforms show that the U.S. government is moving in the right direction. The Education–State partnership on the foreign funding tracker reflects a growing awareness that money flows in universities raises real economic and security concerns. Until the Treasury Department and the IRS are empowered to investigate and police these flows, universities will remain a soft entry point for foreign influence, and a strategic vulnerability the United States can no longer afford.

Lilla Nora Kiss, PhD., Senior Fellow for International Affairs & Academic Integrity, National Association of Scholars

Ian Oxnevad, PhD. Senior Fellow for Foreign Affairs and Security Studies, National Association of Scholars