AAU Sues to Block Federal Transparency on Foreign Funding of Universities

Foreign influence on university campuses in the U.S. is a serious threat to national security. In 2024, a congressional investigation exposed nearly $40 million in unreported research contracts between the Chinese Communist Party and two top U.S. research universities.

To protect national security and provide greater transparency to the American people, the U.S. Senate should consider the Defending Education Transparency and Ending Rogue Regimes Engaging in Nefarious Transactions (DETERRENT) Act to shine sunlight on university dealings with foreign entities.

Yet some organizations are trying to stop any attempts to provide transparency over such funding. For example, earlier this month, the Association of American Universities (AAU) filed a lawsuit against the U.S. Department of Education in a bid to stop the second Trump administration from publishing data on foreign spending sources on U.S. colleges just as the administration was prepared to release it. A federal judge issued a temporary restraining order pausing the release of the data.

The Education Department intends to proceed, stating that “Americans deserve transparency about the billions flowing from overseas to U.S. campuses, and [the Department of Education] will fight AAU in court to deliver it.”

AAU noted that it was concerned that releasing such data on donors would lead to “harassment, reputational harm, and, in some cases, real danger [to donors] in their home countries…”

However, the Department of Education briefed senior leaders of the AAU on the precautions the Department of Education had taken so that the data would not reveal the identities of natural persons. The release of new data would be consistent with safeguards accompanying the department’s previous release of certain counterparty entities in mid-July.

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The AAU represents 69 universities, including all eight Ivy League institutions. Interestingly, five of the 10 universities receiving the most foreign funds are Ivy League schools, with Harvard ranked first on the federal foreign funding portal as receiving the largest amount of foreign funding.

In contrast to the AAU’s efforts to block the release, the Brandeis Center for Human Rights Under Law has called on the Education Department to provide greater transparency.

After the Department delayed releasing the information for several months earlier this year, the Brandeis Center said “the American public has a right to know who is funding our universities, particularly when that funding may influence academic programs, what is taught, and who is teaching it.”

Since 1986, the federal Higher Education Act (HEA) has mandated that universities report any foreign gifts or contracts over $250,000 (Section 117 of the HEA). This law is designed to provide transparency to the American people regarding foreign funding and influence in higher education.

The list of parties providing these gifts and contracts should concern Americans. The Department of Education has received reports of substantial gifts and contracts from entities on government watchlists including the China Nuclear Energy Industry Corporation, Beijing Institute of Technology, Beijing Shenzhou Aerospace Software, and other corporations and institutions affiliated with the Chinese military industrial complex.

Unfortunately, prior presidential administrations have failed to enforce the law for years. But during the first and second Trump administrations, the Department of Education made increased monitoring and enforcement a priority. The administration’s actions led to the reporting and discovery of over $6.5 billion in previously unreported foreign funding.

Congress can help with these efforts. Last year, the U.S. House of Representatives advanced the DETERRENT Act, which strengthens Section 117’s reporting requirements. The proposal lowers universities’ reporting thresholds from $250,000 to $50,000 and to any dollar amount for foreign entities or countries of concern, such as China, Iran, North Korea, or Russia.

The proposal also prohibits institutions from contracting with known threat actors listed on certain U.S. government entity lists (unless they have obtained a one-year waiver). The proposal would impose significant penalties on colleges for noncompliance, including fines and suspension from federal student aid programs.

Unfortunately, the Senate has yet to consider DETERRENT. Earlier this month, however, 27 organizations asked the U.S. House and Senate armed services committees to include DETERRENT in the final conference report for H.R. 8800, the National Defense Authorization Act (NDAA) for fiscal year 2027. Passed each year, the NDAA authorizes the operations of the Department of War and sets annual spending levels.

However, institutions don’t have to wait for federal action to take necessary steps to safeguard against the influence of foreign adversaries. Universities should strengthen internal reviews of foreign gifts and contracts, proactively disclose foreign funding, and refuse partnerships with entities tied to hostile governments.

By adopting these safeguards now and supporting stronger federal reporting requirements, institutions can protect academic independence, national security, and public trust.