This report was first published by American Enterprise Institute. You can download the report here. 

Editor’s Note:The Trump administration’s October 2025 Compact for Academic Excellence in Higher Education sparked an overdue conversation about the relationship between universities and the federal government. The administration identified issues that deserve to be addressed. But its approach provoked serious objections, even from sympathetic observers. That has created an opening for alternatives that are more workable and rooted in legislative authority. To that end, AEI’s Conservative Education Reform Network commissioned contributions from some of the right’s most thoughtful higher education thinkers. Each tackles one of the compact’s eight priorities, seeking to offer Congress, state lawmakers, and campus leaders a path forward.

In this report, Jay P. Greene takes on foreign entanglements.

Key Points

• The Trump administration’s proposals to cap foreign student enrollment at 15 percent of undergraduates and improve transparency regarding foreign gifts, grants, and contracts are useful steps to redirect universities toward American interests, but they do not go nearly far enough.
• The most serious threats to aligning universities with US interests come from the over-enrollment of foreign graduate students and the growing number of foreign-born faculty and administrators, neither of which the Trump administration’s proposal restricts.
• The Compact for Academic Excellence in Higher Education can easily be amended to include foreign graduate students in its enrollment cap and eliminate universities’ exemptions to H-1B visa caps and fees. States can also adopt these policies to cover public universities under their jurisdiction.

Introduction

After US universities significantly contributed to the American war effort in World War II, Office of Scientific Research and Development Director Vannevar Bush proposed creating permanent arrangements for the federal government to subsidize university research.¹ Those subsidies have expanded dramatically in scope and scale over the past eight decades, but the primary justification for taxpayer support remains the same—to advance the national interest.

In the Compact for Academic Excellence in Higher Education, the Trump administration addresses rising concerns that American universities have largely abandoned their end of the bargain by no longer prioritizing American interests, instead becoming mired in foreign entanglements.²This is especially the case with selective, research-intensive universities, which have come to think of themselves as institutions serving global rather than national interests.

In the compact, the Trump administration proposes capping foreign student enrollment at 15 percent of undergraduates and improving transparency regarding universities’ acceptance of foreign gifts, grants, and contracts. These are useful steps to redirect American universities toward American interests, but they do not go nearly far enough.

The Problem: Foreign Entanglements

Two factors accelerate the diversion of American universities from their focus on US national interests: foreign student enrollment and foreign funding.

Foreign Student Enrollment

The original motivation for granting foreigners student visas was to help US national interests by educating foreign elites in the virtues of the American political system.³ These elites, in theory, would return to their countries of origin, spreading American values and thereby building goodwill.⁴ But once foreign enrollment surpasses a certain level, the direction of the intellectual exchange is reversed: American elites learn the virtues and values of foreign political systems rather than the other way around. Therefore, the US government has an interest in capping the number of foreign students on American campuses.

But that number has only grown over time. Since 2008, foreign students have nearly doubled to more than 1.1 million—6 percent of total enrollment.⁵ At Ivy League universities, foreigners are 27 percent of total enrollment.⁶ Taking into account the Optional Practical Training (OPT) program, which allows foreign students to remain in the US on their student visa for up to three years after they graduate to work in their field of study—often as university staff—the percentage rises to 39 percent of total enrollment. Twenty-nine percent of these students are from India, almost a quarter come from China, and another 12 percent come from the Middle East, North Africa, and other majority-Muslim nations.⁷Undergraduate foreign students constitute only 32 percent of student visa holders in the US, while 46 percent are enrolled as graduate students, and another 22 percent are participating in OPT.⁸

The compact seeks to remedy this problem, but it falls short by limiting the share of foreign students among only undergraduate enrollments. As noted, nearly half the foreign students at universities are in graduate programs. Foreign graduate students help faculty run research laboratories and teach introductory courses, posing greater potential danger than undergraduates. Their involvement in research raises the risk of political and corporate espionage—indeed, there are well-documented cases of Chinese academic espionage in American universities.⁹ And their large role in undergraduate instruction means they are likely to have an outsized influence on campus culture.¹⁰

A related issue is hiring foreign faculty. Unlike corporations, universities face no cap on the number of H-1B visas, which allow foreign citizens to be employed in the US. And, despite its attempts to restrict access to the H-1B visa program, the Trump administration has so far decided not to charge universities the $100,000 application fee that private companies now face. Universities’ exemption from these restrictions on hiring foreigners has created a pipeline through which foreign students can eventually run academic institutions. And indeed they do: A recent review of 600 institutions found there were 173 foreign-born university presidents and chancellors between 2013 and 2024.¹¹ Additionally, 25 percent of today’s professors were born overseas, and that rate will grow dramatically as the larger pool of foreign graduate students matriculates into faculty positions.¹²

The saying “Personnel is policy” is as true of higher education as it is of other organizations. The antipathy toward the Western tradition,¹³promotion of antisemitism,¹⁴ and hostility to American interests¹⁵increasingly found in universities are facilitated by the growing proportion of students, faculty, and administrators from abroad and the socialization of native-born US citizens into their worldview.¹⁶

To be sure, plenty of native-born people at universities are critical of the Western tradition. But a critical mass of foreign-born people who were not raised in those values, many of whom openly oppose America’s role in the world, amplify the destructive efforts of those who are native-born. For example, I have found that the rate of pro-Palestinian protests during the 2023–24 school year—which were typically quite critical of the US and the West—more than doubled at universities where foreign enrollments exceeded 13 percent. The protestors were not all foreigners, but foreign students’ influence contributed to the intensity of those protests.¹⁷

Foreign Funding

A lesser but related problem is foreign funding. American universities are increasingly funded by foreign governments and entities, to the tune of billions of dollars over the past two decades. Notably, the exact scope of that involvement is obscured by universities laundering gifts through affiliated foundations and failing to comply with reporting requirements.¹⁸What we do know, which comes from independent analyses, is that Qatar has provided Georgetown University with $1.073 billion since 2005¹⁹ and Northwestern University with $737 million since 2007.²⁰ From the information that universities disclosed in required filings, the National Association of Scholars has found over $11 billion in foreign money flowing to more than 70 universities since 2010.²¹

But these numbers are not large enough to meaningfully sway university policy. For instance, Georgetown’s and Northwestern’s Qatari funding works out to around $50 million or less per year, a pittance compared to these universities’ total annual revenues of nearly $1.9 billion for Georgetown²² and more than $3.3 billion for Northwestern.²³ Qatar isn’t buying influence at Georgetown and Northwestern; it is helping expand the influence of those at these universities who are already favorably inclined toward Qatar.

The same is true for the tuition revenue generated by foreign undergraduate students, which is often paid by foreign governments and therefore might be considered another vehicle for foreign influence.²⁴ At Harvard, for example, foreign students are 27 percent of total enrollment²⁵but only 15 percent of undergraduate enrollment.²⁶ Harvard generates only 19 percent of its revenue from tuition,²⁷ and undergraduates make up only 30 percent of total enrollment. Even if undergraduates pay the bulk of tuition and foreigners contribute a disproportionate share, foreigners cannot provide more than a few percentage points of the total revenue Harvard generates.

The compact’s focus on undergraduate enrollment and improved transparency for foreign funding may stem from a failure to understand the extent to which the influence of foreign students and scholars rather than financial incentives causes this problem. It is easy to confuse the direction of causation. Foreign countries are not bribing universities to adopt hostile postures toward American values. Instead, universities accept funding from foreign governments because a critical mass of people who run the universities are either foreign-born or acculturated in these globalized institutions and thus already antagonistic toward American interests. The amount of money generated by foreign students or gifts is just too small to exercise control over these incredibly wealthy institutions. But the number of foreign students, faculty, and leaders is large enough to have an enormous influence over organizational culture and priorities. Therefore, the compact, which focuses on only undergraduate enrollment and foreign government donations, fails to address the primary problem of foreign entanglements.

A Better Solution

Fortunately, these shortcomings can be remedied without great difficulty. The Supreme Court has held that the executive branch has “broad discretion to suspend the entry of aliens into the United States,” meaning the Trump administration is likely on firm legal footing when imposing a 15 percent cap on undergraduate enrollment.²⁸ The administration should extend that cap to total enrollment as well.

The administration does not need to wait for Congress to pass new legislation, nor does it need to rely on voluntary cooperation with universities, as implied by the compact’s structure. Meanwhile, Congress should remove the exemption from the H-1B visa cap that universities enjoy. Indeed, legislation has already been introduced to do just that—but even if that legislation does not pass, the executive branch enjoys some discretion over this issue.²⁹ The same possibility for legislative change and executive discretion exists for the waiver universities enjoy from the $100,000 fee now being charged for H-1B applications.

In addition to Congress and the president, state boards of higher education and legislatures could adopt versions of these policies for the public universities under their jurisdiction. There is no reason why Florida, for instance, could not require its public universities to cap foreign enrollments, limit hiring faculty and staff who require H-1B visas, and restrain foreign funding even more than the compact does. Moreover, because state laws are harder to repeal than executive branch decrees, they would be more durable than the compact.

Conclusion

As with all policymaking, these decisions require balancing competing interests. Foreign students and faculty can provide talent and improve the quality of American university education, and foreign funding can help US universities increase their revenues. But the current practices of enrolling rising shares of foreign students, hiring ever more foreign faculty, and accepting unlimited amounts of foreign funding pose real dangers to the American system of higher education.

The compact places reasonable limits on these practices. The administration could make these limits even stronger. And states could impose stricter limits if they are so inclined. These limits—which would return American universities to levels of foreign enrollment, hiring, and funding seen only a few decades ago, when those institutions were no less impressive than they are today—may preserve American interests while posing little risk to the quality of US universities.

About the Author

Jay P. Greene is the director of research at Do No Harm. Previously he served as distinguished professor and founding chair of the Department of Education Reform at the University of Arkansas.