Universities receive millions in funding from foreign entities on U.S. government watch lists, records show

Major U.S. universities have received millions of dollars in funding from foreign entities that are on U.S. government watch lists, according to a CBS News review of university funding records submitted to the Department of Education. 

State Department and Education Department officials say the disclosure forms, which have not been previously reported, show a combined $27.6 million received in roughly the second half of last year by dozens of top American research institutions that originated from entities appearing on at least one federal government watch list. There are 10 cautionary and restricted watch lists overseen by the departments of Treasury, Commerce, Homeland Security, Defense and State, which flag companies and organizations that should be subject to extra scrutiny due to their ties to foreign government interests.

The two agencies are working together to crack down on academic partnerships with foreign companies and organizations that the Trump administration says could threaten national security. 

In one example from the disclosure forms, a company in China that develops state-of-the-art aeronautics for the People's Liberation Army gave more than $7 million total to three American universities considered top-tier research institutions. The largest amount, disclosed in 2020, was $22.6 million for a 50-year contract from the Beijing Institute of Technology to Bryant University in Rhode Island.

On Wednesday, Under Secretary of State for Public Diplomacy Sarah B. Rogers sent a letter to the governing boards of major research universities alerting them that future grant-making agencies will be checking if institutions take money from foreign entities on U.S. watch lists — and could pull federal funding for those that do.

"In light of the above, I urge you, as board members, to ensure heightened diligence on this matter which has important national security implications for our country," Rogers wrote in the letter, obtained by CBS News.

The letter went to 187 schools classified as Research-1, or R-1, universities — those that award the most doctorates and have the most significant research programs.

The total amount of foreign funds flowing into American universities has been increasing in recent years and reached $1.5 billion in 2022, the most recent year data is available, according to the National Center for Science and Engineering Statistics. But that is less than 2% of the total $117 billion in research and development funding awarded to universities in the U.S., more than half of which comes from the U.S. government, according to NCSES data. 

Most higher education institutions value collaborations with educational partners around the world and say research collaboration can accelerate scientific and technological advancements. When funds from foreign companies and academic institutions facilitate new programming, universities have often gladly participated.

Universities have been required to disclose foreign gifts of $250,000 or more to the Department of Education under Section 117 of the Higher Education Act since 1986. But disclosures sometimes lapsed and there was no government system in place for accountability, according to current and former State and Education Department officials, the House Select Committee on the Chinese Communist Party, and independent analysts who track Section 117 compliance. They say no one was cross-referencing the donors against U.S. government watch lists, allowing for institutions directly linked to foreign militaries to fund programs and professorships at R-1 universities.

National security and intelligence analysts say the stakes are high, and increased scrutiny on funding from China flowing to programs at top American universities is better late than never.

"This has been a conversation going on for years now in research security circles," said LJ Eads, the founder of Data Abyss and director of research intelligence at Parallax Advanced Research. 

"It's been a huge policy fail in terms of implementing restrictions without follow-through over the years. I relate it to having kids and not parenting well. Or giving your teenager a cellphone and having no restrictions on cellphone use," Eads said.

Ties to China's military-industrial complex

Among the watch-listed entities putting money into U.S. universities, the majority of which is from China, is Aviation Engine Corporation of China, known as AECC, which develops engines for various Chinese military aircraft, including the J-11 fighter jet and the Z-10 attack helicopter. 

Given the AECC's direct ties to the People's Liberation Army, the Treasury Department lists it on the Foreign Assets Control List as well as another list of companies tied to the Chinese military-industrial complex. It is considered a "Military End-User Entity" by the Department of Commerce, making it subject to strict export licensing requirements.

AECC's research institutes paid Northwestern University, the University of California, Irvine, and the University of Connecticut a combined $7.8 million, according to the universities' records submitted to the Department of Education. The money was sent in multiple increments over several years.

Northwestern received a total of more than $3 million between 2017 and 2025. The documents do not indicate what the money was for. Northwestern did not respond to multiple requests for comment from CBS News. 

UC Irvine received almost $4 million in contracts between 2018 and 2020, according to the records. UC Irvine did not respond to CBS News' requests for comment. 

The University of Connecticut received almost $800,000 in contracts that spanned 2018 and 2021, according to data reviewed by CBS News. A UConn spokesperson said the university is looking into what the funding was for.

When CBS News called AECC for comment, an automated voice said, "The called party is temporarily unavailable." A request for comment via AECC's social media went unanswered.

Records show Bryant University's $22.6 million contract with Beijing Institute of Technology, which appears on two watch lists, was for "a jointly operated academic program in China." A spokesperson for Bryant did not immediately respond to a request for comment.

UC Berkeley, which manages the Department of Energy's primary high-performance computing facility, has received more than $25 million in contracts dating back to 2016 from China-based entities that are on U.S. government watch lists, according to disclosures to the Department of Education. That includes a grant of $7.6 million from Sun Yat-sen University, host of China's National Supercomputing Center. Sun Yat-sen University also appears on the Department of Defense's "1286 List," a roster of foreign academic and research institutions identified as engaging in "problematic activities," and a Commerce Department list of entities whose legitimacy the U.S. government has been unable to verify.

UC Berkeley did not respond to CBS News' request for comment.

The Trump administration's current push to enforce national security protections for research funding follows a series of efforts to defund research institutions based on a variety of other grounds, including diversity, equity and inclusion policies and what the administration called an "explosion of antisemitism" that swept across campuses after the Oct. 7, 2023, Hamas attack on Israel.

Since Mr. Trump took office in January 2025, the Department of Education has frozen or cut federal funding to many major universities, some of which was later restored after court challenges. 

A shift in higher education grant allotment is already underway.

In a July 8 "Dear Colleague" letter, the U.S. National Science Foundation (NSF), a federal agency that awards grants for the most sensitive research and development, announced a new policy prohibiting NSF funds from being expended in collaboration with entities on U.S. restricted parties watch lists. 

NASA is paying attention as well, particularly because the agency has been subject to the Wolf Amendment, a 2011 U.S. law that prohibits NASA from using government funds to engage in direct, bilateral cooperation with the Chinese government or China-affiliated organizations. 

Following a May 11 report from the Select Committee on the Chinese Communist Party, the space agency proactively froze all active grants identified as potentially involving prohibited cooperation with China or Chinese-owned entities while the allegations are investigated, according to a NASA spokesperson.

Analysts who have researched Section 117 are applauding the new push for compliance at universities. 

"In general it's good that we have more information to work with and it's good that the federal government is investigating these funds," said Neetu Arnold, a Paulson policy analyst at the Manhattan Institute, a New York City-based think tank. 

Arnold advocated for taking a targeted approach to known bad actors, since many research collaborations have accelerated technological advancement.

"A lot of foreign funds aren't necessarily harmful, but some of it could be a concern. We might be developing technology or knowledge that may be advancing other countries' interests that aren't aligned with ours," Arnold told CBS News.