The investigation focuses on UPenn's compliance with federal laws concerning foreign funding, particularly Section 117, which mandates transparency in funding sources.

UPenn has drawn scrutiny for its significant relationships with Chinese entities and its connections to former officials from the Biden administration.

On May 8, 2025, the U.S. Department of Education announced an investigation into the University of Pennsylvania (UPenn) regarding foreign donations, citing inaccuracies in the university's financial disclosures.

Noncompliance with the Department's requests could lead to enforcement actions from the Department of Justice or loss of federal funding eligibility.

The current administration aims to enforce compliance with disclosure laws more rigorously than its predecessor, reflecting heightened concerns about foreign influence.

Concerns have been raised about potential national security risks and compromised academic integrity due to undisclosed foreign funding in U.S. colleges and universities.

The Department's Office of the General Counsel accused UPenn of submitting incomplete and untimely disclosures, violating the Higher Education Act of 1965.

The investigation revealed that UPenn misidentified many foreign funding sources and failed to disclose the identities of numerous foreign donors, which is now prohibited by federal regulations.

UPenn has been given 30 days to respond to the Department's request for detailed information, including tax records since 2017 and agreements with foreign governments.

A recent report indicated that Chinese entities contributed $176.6 million to U.S. educational institutions in 2024, with UPenn being a major recipient.

Officials are particularly focused on potential ties to foreign governments, especially those considered adversarial, amid ongoing discussions about the implications of foreign funding.

This investigation adds to UPenn's challenges, as the university is also under scrutiny for its handling of transgender athlete Lia Thomas's participation in women's sports.