For decades, accepting large gifts and research contracts from overseas donors has been a routine — and legal — part of doing business for American colleges and universities. Institutions have long been required to disclose qualifying foreign gifts and contracts under Section 117 of the Higher Education Act, but disclosure itself has typically marked the end of the federal government's involvement.
Now, the Trump administration is beginning to scrutinize American institutions’ ties to certain countries, leveraging the Section 117 disclosures as a test for institutional loyalty, CBS News reports.
In a letter sent this week to 187 R1 universities, the U.S. Department of State warned governing boards that financial relationships with foreign entities appearing on U.S. government watch lists could factor into future federal funding decisions, signaling a significant escalation in the Trump administration's campaign to reshape higher education through federal oversight.
While the administration has not announced new regulations prohibiting foreign gifts or contracts, the letter sends a clear message that relationships that have long been legal and properly disclosed may now carry new consequences if federal officials determine they present national security concerns.
However, the administration's warning is not directed broadly at all international partnerships. Instead, officials have focused on financial relationships involving foreign entities that appear on various U.S. government watch lists, which include sanctions programs, export-control restrictions, and other national security designations. Whether — and how — those lists will be applied to existing university partnerships remains unclear.
America's largest research universities have the most at stake
An EDU Ledger analysis of the U.S. Department of Education's public Section 117 database suggests that any expansion of federal scrutiny would fall most heavily on the nation's largest research universities.
Among the institutions reporting the highest cumulative levels of foreign funding are Harvard University (more than $4 billion), Cornell University (more than $3 billion), Carnegie Mellon University (nearly $3 billion), the University of Pennsylvania (approximately $2.7 billion), the Massachusetts Institute of Technology (approximately $2.6 billion), and Stanford University (more than $2 billion).
These institutions rely extensively on international research collaborations, corporate partnerships, philanthropic gifts, and global academic exchanges that have become integral to modern research universities.
The data also complicate one of the central political narratives surrounding foreign influence in higher education.
Virginia Commonwealth University is one of several U.S. institutions with a satellite campus in Qatar.VCUarts
Although China frequently dominates public debate over foreign involvement on American campuses, U.S. Department of Education records show that Qatar is the largest cumulative reported source of foreign funding to U.S. colleges and universities, exceeding reported funding from China. Germany, England, Canada, and Saudi Arabia also rank among the largest reported sources of foreign gifts and contracts.
From transparency to enforcement
The warning letter fits within a broader effort to increase federal oversight of colleges and universities, which is ironic given that the effort to dismantle the U.S. Department of Education is rooted in an espoused desire to shift power back to individual states and local communities and rid institutions of the unwanted policies that come with federal oversight. Over the past year, institutions have faced heightened scrutiny over research funding, campus governance, diversity initiatives, international students, and compliance with federal civil rights laws.
The shift to scrutinizing foreign partnerships raises difficult questions for university leaders.
Many research universities maintain longstanding international partnerships supporting key STEM and innovation disciplines, including medical research, engineering, artificial intelligence, climate science, agriculture, and other fields that increasingly depend on global collaboration. Some agreements span years or even decades, raising uncertainty about how institutions should respond if a foreign partner later becomes subject to additional federal restrictions.
For now, foreign gifts and contracts remain legal, provided institutions comply with federal disclosure requirements.
