The
U.S. government rightly restricts the ability of foreign individuals, entities,
and governments to contribute to U.S. political campaigns. It does so because
financial influence over the outcomes of elections would distort policymaking
toward foreign—rather than U.S.—interests.
U.S.
universities do not directly make public policy decisions, but they train the
people who typically make and implement policy, and they shape elite culture
and ideas to set the agenda for policy discussions. Foreigners seeking to
influence these policy roles of U.S. universities currently face relatively few
restrictions on their ability to do so.
This
report explores the ways foreign individuals, entities, and governments can
convey funds to U.S. universities, why that flow of funding matters, how new
legislation could improve Americans’ understanding of the scope of this
funding, and what might be done to address its disadvantages. Foreign funding
flows to American colleges and universities in five primary ways: direct gifts
to institutions, indirect gifts to institutions, tuition paid by foreign
students—sometimes covered by their foreign governments—U.S. university
satellite campuses in foreign countries, and research grants provided to
professors.
How
Foreign Sources Purchase Influence with Universities
American
colleges and universities have disclosed $40.2 billion in foreign funding since
1981, reporting $1.1 billion in foreign payments in 2021 alone.1
Lars
Schönander and Dan Lips, “Foreign Influence in American Higher Education: The
Case for Additional Transparency and Enforcement,” Lincoln Policy, October 9,
2022,
https://cdn.sanity.io/files/d8lrla4f/staging/155926fc057d97f5e0020623f7cf41aecb4d8119.pdf
(accessed February 12, 2024).
However,
as scholars Lars Erik Schönander and Dan Lips detail, this is certainly a low
estimate given lax disclosure enforcement by the U.S. Department of Education.2
Schönander
and Lips, “Foreign Influence in American Higher Education.”
Universities
are required to report any foreign gifts in excess of $250,000 per Section 117
of the Higher Education Act of 1965, yet that provision is poorly enforced, and
the Department of Education’s data management is “deeply flawed.”3
Ibid.
Revenue
from foreign sources flows to U.S. colleges and universities in five primary
ways. While such funding is not automatically suspect simply because the source
is outside the United States, these are the primary ways foreign sources can
attempt to exert influence:
1.
Direct Gifts to Institutions. The most direct way to gain financial leverage
is to give gifts. Restricted gifts and grants may be used only as the donor
directs. Even unrestricted gifts establish relationships that facilitate
outsized influence. The federal government does not restrict this giving, but
it does impose a disclosure requirement: Any foreign gift in excess of $250,000
must be disclosed to the U.S. Department of Education. Remarkably few such
gifts are disclosed, however.4
Mitchell
G. Bard, “Arab Funding of American Universities: Donors, Recipients and Impact
2023,” Jewish Virtual Library, May 2023,
https://www.jewishvirtuallibrary.org/arab-funding-of-american-universities-donors-recipients-and-impact-2023
(accessed February 12, 2024).
It
is unclear whether institutions are intentionally or unintentionally failing to
disclose as required. Gifts may also be arriving in smaller annual quantities
to avoid reporting. Meanwhile, there are other, less transparent methods for
foreign sources to deliver money to universities, as described below.
2.
Indirect gifts. Gifts and grants to
nonprofit organizations, which then give the money to universities, do not
currently trigger disclosure requirements. Many universities, particularly
public ones, have created affiliated nonprofit foundations that have no
substantive purpose other than to pass funds directly to the university. In
this way, public institutions avoid open records and other disclosure
requirements that apply to most public institutions, as well as state rules on
how to manage public funds.
3.
Tuition Payments. Foreign students pay,
on average, much higher tuition than U.S. students do. They tend to pay the
full sticker price, while U.S. students at private colleges have their
undergraduate tuition discounted by about half or get their graduate tuition
covered by fellowships.5
Katy
McCreary, “Tuition Discount Rates at Private Colleges and Universities Top 50
Percent,” National Association of College and University Business Officers,
April 24, 2023,
https://www.nacubo.org/Press-Releases/2023/Tuition-Discount-Rates-at-Private-Colleges-and-Universities-Top-50-Percent
(accessed February 12, 2024).
Some
universities, especially more selective ones, have high rates of foreign
enrollment—for example, New York University is now at about 40 percent foreign
enrollment—so they receive large shares of tuition revenue from foreign
sources.6
Statista,
“U.S. Universities with the Most International Students 2020/21,” November
2023,
https://www.statista.com/statistics/237695/international-students-in-us-universities/
(accessed February 12, 2024), and New York University, “NYU at a Glance,” 2023,
https://www.nyu.edu/about/news-publications/nyu-at-a-glance.html (accessed
February 12, 2024).
While
students themselves or family members provide most tuition for foreign students
(57 percent), it is unclear what proportion of this funding originates with
foreign governments. (Only about 2.2 percent comes directly from foreign
governments.)7
Institute
of International Education, “International Students’ Primary Source of Funding
by Academic Level, 1999/00–2022/23,” 2023,
https://opendoorsdata.org/data/international-students/international-students-primary-source-of-funding/
(accessed February 12, 2024).
The
number and rate of foreign students in U.S. universities has grown dramatically
over the past several decades. More than 1 million foreign students attended
U.S. institutions in 2023.8
Ibid.
About
the same number of foreign students were enrolled as of 2019, representing 9.3
percent of total enrollment.9
U.S.
Department of Education, National Center for Education Statistics,
“Full-Time-Equivalent Fall Enrollment in Degree-Granting Postsecondary
Institutions, by Control and Level of Institution: 1967 through 2031,” December
2022, https://nces.ed.gov/programs/digest/d22/tables/dt22_307.10.asp (accessed
February 12, 2024).
In
1980, there were scarcely 300,000, constituting about 5 percent of total
enrollment. More than one-third of foreign students now come from Communist
China, up from less than 1 percent in 1980.10
U.S.
Department of Education, National Center for Education Statistics, “Foreign
Students Enrolled in Institutions of Higher Education in the United States, by
Continent, Region, and Selected Countries of Origin: Selected Years, 1980-81
through 2019-20,” January 2021,
https://nces.ed.gov/programs/digest/d20/tables/dt20_310.20.asp (accessed
February 12, 2024).
4.
U.S. Campuses in Foreign Countries. Another significant source of foreign funding
for U.S. universities is the operation of affiliated campuses in foreign
countries. These are foreign franchises that are largely operated independently
but pay significant fees to their home universities. Essentially, U.S.
universities are being paid large sums to license their names to overseas
universities, and the home universities claim the prestige of being
universities of the world for world citizens rather than merely provincial U.S.
institutions.
According
to Global American Higher Education, 58 campuses of U.S. universities are
operating in China. These include campuses affiliated with selective private
universities including the University of Chicago, Duke University, Johns
Hopkins University, New York University, and Washington University (St. Louis),
as well as flagship state universities including Arizona State University,
Georgia Tech University, Rutgers University, University of Arizona, University
of Michigan, University of Minnesota, and Utah State University. Operational
control is sometimes effectively ceded to China, and quality control is not
like one would expect at the home campus. When Chinese institutions operate in
the United States, they serve the Chinese Communist Party; when U.S.
institutions with foreign campuses operate in China, they also abide by the
rules of Communist China. Beijing wins in both contexts.
Six
campuses of U.S. universities are operating in Qatar. Four are affiliated with
private universities: Carnegie Mellon University, Cornell University,
Georgetown University, and Northwestern University. Two are affiliated with
public universities: Texas A&M University and Virginia Commonwealth
University.
Although
there are exceptions that include some high-quality programs, these
arrangements should be understood largely as vehicles for financial exchange
more than educational exchange. Evidence suggests that relatively few U.S.
students attend these foreign campuses, and few courses are taught by U.S.
instructors. As the Washington Post detailed in 2015, “The
Georgetown campus [in Qatar], like the others, is deeply international, with
students from Oman, Mexico, Iraq, Pakistan, Saudi Arabia, Lebanon and more.
Many have the zigzag life stories of the expatriate majority in Qatar.” The Post also
reported broadly on the challenges attracting U.S. faculty to these foreign
posts, noting that “Carnegie Mellon’s dean in Qatar, Ilker Baybars, called
faculty recruiting ‘the most difficult part of my job.’ It is hard to persuade
tenured professors to trade life on a bustling American campus for Doha, where
the academic community is small and the weather ranges from pleasant to
sweltering.”11
Nick
Anderson, “In Qatar’s Education City, U.S. Colleges Are Building an Academic
Oasis,” Washington Post, December 6, 2015,
https://www.washingtonpost.com/local/education/in-qatars-education-city-us-colleges-are-building-an-academic-oasis/2015/12/06/6b538702-8e01-11e5-ae1f-af46b7df8483_story.html
(accessed February 12, 2024).
Other
foreign campuses may represent the upper bound of U.S. enrollment. For example,
at NYU Shanghai, roughly one-third of the class of 2025 was from the United
States.12
NYU
Shanghai, “Meet the Class of 2025,”
https://shanghai.nyu.edu/is/meet-class-2025-0 (accessed February 12, 2024).
On
the whole, however, the data suggest that these are mostly foreign campuses
with foreign students taught by foreign staff. The main thing crossing borders
is money, not people or ideas. How much money is generally not disclosed.
5.
Research Grants to University Professors. Foreign grants to individual professors
must be disclosed along with university-level gifts when the $250,000 federal
threshold is crossed. But at Yale University, for one, such individual grants
have not been disclosed through the federal reporting requirement.13
Armin
Rosen, “What Yale Has in Common with Hamas,” Tablet, November 28, 2023,
https://www.tabletmag.com/sections/news/articles/yale-qatar-ivy-league
(accessed February 12, 2024).
Other
professors, even when they do not receive grants, receive all-expenses-paid
trips to foreign countries to speak about their research. Such trips alone
serve to strategically build goodwill to cash in later.
What
Do Foreign Nations Get in Exchange for Their Money?
Direct
gifts, indirect gifts, tuition payments, foreign campus licensing fees, and
research funding all enable foreign sources to deliver money to U.S.
institutions of higher education, providing influential leverage. What do
foreign nations expect or get in exchange?
A
key category is access. As with contributions to politicians, gifts that are
legal buy access to decision-makers when their interests are at stake. This is
one reason some universities found it difficult to abandon their
Chinese-sponsored Confucius Institutes. Financial leverage enables donors to
have special influence on policies, programs, and hires that could affect the
donors’ interests. That pattern is a normal and legitimate part of the U.S.
philanthropic landscape. But it looks different when donors are foreign
individuals, entities, or governments—especially if those foreigners are
hostile to U.S. interests.
For
example, Middle East studies centers at leading U.S. universities are
beneficiaries of funding from countries in that region. Those centers have
hired faculty and sponsored projects that regularly advocate for the interests
of those countries even when evidently against the interests of the United
States.14
Neetu
Arnold, “Hijacked: The Capture of America’s Middle East Studies Centers,”
National Association of Scholars, September 13, 2022,
https://www.nas.org/reports/hijacked/full-report (accessed February 12, 2024);
Adam Kissel, “Why Are Federally Funded University Centers Pushing
Antisemitism?,” The Daily Signal, November 21, 2023,
https://www.dailysignal.com/2023/11/21/stop-funding-university-programs-contrary-us-interests/;
and Martin S. Kramer, Ivory Towers on Sand: The Failure of Middle Eastern Studies
in America (Washington, DC: Washington Institute for Near East Policy, 2001),
https://www.washingtoninstitute.org/policy-analysis/ivory-towers-sand-failure-middle-eastern-studies-america
(accessed February 12, 2024).
The
graduates of those centers staff the State Department, Capitol Hill, and other
government agencies, and their research shapes policy discussions.
Financial
leverage also allows foreign students to protect themselves when things go
wrong. For example, many of the students involved in protests against Israel
following the Hamas attacks of October 7, 2023, are foreign nationals. Despite
repeated violations of university policies (and in some cases state law)—and
threats that they are exposing universities to liability for violations of
civil rights protections for Jewish students—the students involved in those
protests have faced little to no disciplinary action by universities. The
Massachusetts Institute of Technology (MIT), where foreign students comprise 30
percent of the student body, explicitly declined to discipline rule-breaking
foreign students for fear that suspension might jeopardize their student visas.15
Sally
Kornbluth, “Today’s Protest and Counterprotest,” Massachusetts Institute of
Technology, November 9, 2023,
https://president.mit.edu/writing-speeches/todays-protest-and-counterprotest
(accessed February 12, 2024).
It
takes significant financial leverage to get MIT to care more that foreign
students might be deported than to enforce their rules and avoid sanctions
under Title VI of the Civil Rights Act of 1964.
Financial
leverage also expands the opportunities for espionage. Universities are
repositories of a significant amount of commercial and national security
information, some of which is produced under contract with the government and
U.S. companies. Foreign money for graduate students and campus institutes, such
as China-supported Confucius Institutes, brings in potential spies on this
sensitive information and research—and in the case of China, offers entry to
spies on innocent Chinese students and citizens in America.16
Rachelle
Peterson, “Policy Brief: Confucius Institutes,” National Association of
Scholars, undated,
https://www.nas.org/storage/app/media/New%20Documents/PB%20CI%20d1.pdf
(accessed February 12, 2024).
Some
Chinese spies enroll in graduate programs and work under leading researchers,
even gaining access to labs working on pre-classified technologies. China also
recruits accomplished researchers through its Thousand Talents Program.17
News
release, “Former Harvard University Professor Sentenced for Lying about His
Affiliation with Wuhan University of Technology; China’s Thousand Talents
Program; and Filing False Tax Returns,” U.S. Attorney’s Office, District of
Massachusetts, April 26, 2023,
https://www.justice.gov/usao-ma/pr/former-harvard-university-professor-sentenced-lying-about-his-affiliation-wuhan
(accessed February 12, 2024).
Finally,
U.S. professors themselves can be turned: The chair of the Biochemistry
Department at Harvard became so close with the Chinese that he took hundreds of
thousands of dollars to serve as an adjunct faculty member at the Wuhan
Institute of Technology and supply the Chinese with information. He was
ultimately convicted and sentenced for lying about his relationship with China
and its Thousand Talents Program.18
Ibid.
Policy
Recommendations
Although
foreign entities have several ways to direct money to U.S. universities and
thereby purchase significant influence, distinguishing legitimate academic
support and cultural exchange from illegitimate influence is difficult. The
first step is to better understand the full scope of this issue. There are
several steps Congress and states should take to increase transparency around
foreign funding and to limit the influence of malign foreign influences on
American higher education.
Expand
and Strengthen Disclosure Requirements on Foreign Funds Provided to U.S.
Universities. While
U.S. donors should continue to enjoy the right of anonymity, especially to
avoid political harassment, this principle is not necessarily correct for
foreign donors, particularly those from countries that are hostile to American
interests. Congress should lower the amount of direct giving that triggers
disclosure requirements and more strictly enforce those disclosures with
tougher penalties for non-compliance. Congress could, for example, lower the
reporting threshold from its current level of $250,000 to $50,000.
Universities
should also be required to disclose, by country of origin, the number of
foreign students and the amount of tuition received, as well as the total
revenue generated from each foreign campus. Congress should condition access to
federal funding—including funding under Title IV of the Higher Education Act
for student loans and grants—on compliance.
States
should pursue similar reporting requirements pursuant to their authority to
authorize or de-authorize institutions to be incorporated and operate in the
states.
Limit
Foreign Financial Support of American Institutions of Higher Education. Once expanded and
strengthened disclosure requirements provide a better understanding of the
scope of foreign involvement and where to focus attention, explicit limits on
foreign financial leverage may be warranted. These include capping or prohibiting
both direct and indirect giving from foreign individuals, entities, and
governments that are located in countries of concern to U.S. security
interests. The list of countries of concern might be as narrow as in the
Creating Helpful Incentives to Produce Semiconductors (CHIPS) Act—China, Iran,
Russia, and North Korea—but must likely be broader and include other Middle
Eastern countries or additional countries that the disclosure requirements
reveal as purchasing risky levels of influence. It may also be sensible to cap
the share of university enrollment from each of those countries of concern as
well as the absolute number of student visas from these countries collectively.
Finally, following due investigation and other due process, it may be necessary
to prohibit or significantly curtail U.S. institutions’ foreign campuses in
countries of concern. U.S. foreign policy and security interests may need to
play a significant role in such decisions, and Congress should empower
appropriate federal agencies to make these decisions.
Enforce
the Foreign Agents Registration Act (FARA) and Amend It to Cover Universities. Colleges and
universities currently enjoy a “scholastic, academic, or scientific” exception
to the Foreign Agents Registration Act (FARA),19
U.S.C.
§ 611 et seq.
which
requires entities considered foreign agents to register with the Department of
Justice.20
Covington
and Burling, “The Foreign Agents Registration Act (FARA): A Guide for the
Perplexed,” January 31, 2023,
https://www.cov.com/en/news-and-insights/insights/2018/01/the-foreign-agents-registration-act-fara
(accessed February 12, 2024).
This
exemption does not apply, however, to political activities. FARA has been
sparsely enforced. Like Section 117 of the Higher Education Act, FARA is
another “backwater of American law…with just seven prosecutions between 1966
and 2016.”21
Ibid.
Policymakers
have recognized the need for greater FARA enforcement, particularly in higher
education. For example, Senators Jim Risch (R–ID), Tim Scott (R–SC), and Chuck
Grassley (R–IA) wrote to Attorney General Merrick Garland in late 2023 that there
is “clear evidence that [Chinese students and scholars associations] act as an
arm of the [Chinese government] for the purpose of shaping U.S. policy and
public opinion, and the United States should therefore evaluate whether they
are required to register as foreign agents.”22
Tessa
Capeloto, “Lawmakers Urge DOJ to Address Foreign Influence on College
Campuses,” Wiley, December 14, 2023,
https://www.wiley.law/alert-Lawmakers-Urge-DOJ-to-Address-Foreign-Influence-on-College-Campuses
(accessed February 12, 2024).
Beyond
enforcement already available under the law, FARA’s academic exception should
be dropped or at least dropped for countries of concern.
Support
Policies in the DETERRENT Act. U.S. universities are vital to American
interests, yet federal and state funding should not flow to institutions that
are significantly influenced by hostile foreign sources. Financial disclosure
and enforcement policies such as those pursued in the DETERRENT Act, at the
state and federal levels, would help protect U.S. universities and broader
American interests. The DETERRENT Act would not only reduce the disclosure
threshold to $50,000 for gifts and contracts with most foreign countries, but
it would also establish a $0 threshold for the countries and entities that
threaten U.S. interests the most.23
U.S.
House of Representatives, Committee on Education and the Workforce, “DETERRENT
Act,”
https://edworkforce.house.gov/uploadedfiles/10.11.23_deterrent_act_118th_congress_bill_fact_sheet_final_pdf.pdf
(accessed February 12, 2024).
Conclusion
American
colleges and universities, supported by American taxpayers, deserve
transparency around the sources of foreign funding that may exert influence on
these institutions. Enforcing existing transparency requirements, lowering
reporting thresholds, and requiring the disclosure of every penny from sources
that may threaten American interests are necessary reforms. Congress should
also work to prohibit both direct and indirect giving from foreign individuals,
entities, and governments located in countries of concern. Doing so will
strengthen colleges and universities and ensure they are oriented toward best
serving American student needs.
Jay
P. Greene, PhD, is Senior Research Fellow in the Center for Education
Policy at The Heritage Foundation. Adam Kissel is Visiting
Fellow in the Center for Education Policy. Lindsey M. Burke, PhD, is
Director of the Center for Education Policy and Mark A. Kolokotrones Fellow at
The Heritage Foundation.
https://www.heritage.org/education/report/protecting-american-universities-undue-foreign-influence
Norb Leahy, Dunwoody GA Tea
Party Leader
