Universities Face Federal Grant Threat Over China-Linked Funds
Several prominent American universities reported receiving millions of dollars from foreign entities that appear on federal watchlists. Some of those organizations have ties to China’s military.
Government data reviewed by CBS News shows that dozens of universities reported receiving $27.6 million from foreign entities on at least one federal watchlist during the second half of 2025. The schools included Northwestern University, the University of California, Irvine, the University of Connecticut, Bryant University and the University of California, Berkeley.
An Education Department spokeswoman told Fox News Digital that the total funding from entities considered a concern is much larger.
“American universities have received nearly $405 million from counterparties of concern — entities that pose a very real risk to our national security and that of our allies,” the spokeswoman said.
“While previous administrations often looked the other way or kept this data hidden, that policy changes now. Through our updated Section 117 Dashboard, the Trump Administration is bringing this cash out of the shadows so every student, family and taxpayer knows exactly who is signing the checks, while equipping the State Department to use that data to protect our nation.”
The federal government is now warning schools that continued relationships with those entities could carry a serious financial consequence. A letter sent last week by Under Secretary of State for Public Diplomacy Sarah B. Rogers said universities could face restrictions on federal grant funding if they do not address the issue.
“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,” the letter, obtained by CBS News, reads.
The Aero Engine Corporation of China is one example. The company is listed by the Treasury Department’s Office of Foreign Assets Control because of its relationship with the Chinese military. It paid $7.8 million to Northwestern University, UC Irvine and the University of Connecticut over several years.
The documents filed with the Department of Education do not explain how that money was used. They also did not previously identify the specific source of foreign funding. Instead, the records only listed the country where the money originated.
That changed after President Donald Trump issued an executive order in April 2025. The order directed the Education Department to collect more detailed information about the sources of foreign money received by universities.
The Aero Engine Corporation of China is also classified by the Commerce Department as a “military end-user entity.” It develops engines for fighter jets and attack helicopters used by China’s People’s Liberation Army.
UC Berkeley has also drawn attention because of its research work in technology fields where the United States and China compete directly. The university received a $7.6 million grant from Sun Yat-sen University, which hosts China’s National Supercomputing Center.
Sun Yat-sen University appears on the Pentagon’s “1286 List,” which identifies research institutions the department believes are engaged in “problematic activities.”
Berkeley said it follows the law and is reviewing the government’s data.
“We wish to state, unequivocally, that UC Berkeley complies with all of the statues and regulations that apply to contracts and gifts from foreign sources,” a spokesman for the university told Fox News Digital on Tuesday.
“Second, we are still in the process of analyzing and fact-checking the characterization of the government’s data and the referenced CBS reporting.”
The spokesman also said CBS’ report erroneously claimed that UC Berkeley manages the Department of Energy’s primary high-performance computing facility.
LJ Eads, founder of Data Abyss and director of research intelligence at Parallax Advanced Research, said concerns about foreign funding have circulated for years among research security officials.
“This has been a conversation going on for years now in research security circles,” Eads told CBS News. “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.”
The new reporting requirements give federal officials a clearer view of where university funding comes from. They also raise the pressure on schools to explain why they maintain financial ties with foreign organizations that may present national security risks.
Leave a Comment