Education institutions such as universities are a conduit for spies and espionage. It's a simple principle to understand: allow spies to have access to valuable advanced research material and the spies will steal it!

In 2011 the Dept. of Defense wrote a report that explained various methods that spies use to steal information. Infiltration of our universities by foreign students and professors is one of the top threats to our national security.

The report is written in a surprisingly simple to understand format considering it's a government document:

The Near East’s exploitation of academic solicitation, including using students, professors, scientists, and researchers as collectors, will probably continue. Placing academics at U.S. research institutions under the guise of legitimate research offers access to developing U.S. technologies and cutting-edge research. The likely result will be better educated scientists and engineers able to provide the necessary intellectual infrastructure to indigenously create defense technologies to fulfill future military requirements.
Targeting U.S. Technologies, A Trend Analysis of Reporting From Defense Industry, Dept. of Defense, 2011

The DoD report is interesting for what is said, and also for what it didn't say. The topics of immigration and visas are avoided, so it never discusses how or why academic spies are allowed into the USA. Terminology such as "foreign collector" is used a term for people who spy but such politically correct vagaries are no help in determining where the spies are located because the term is used interchangeably for humans who are located anywhere in the world. 

Just to remind viewers: universities can import unlimited numbers of students and professors by using H-1B work visas and J-1 student visas. H-1B visa holders are authorized to work in the U.S. while students can get employment privileges by gaining "Optional Practical Training (OPT)" authorization. (For more detail on these visas please read my article: The Most Generous Nation in the World ..... At Giving Jobs Away.) Once the foreign academics gain work authorization they often work on scientific research projects that give them access to valuable technology.  

Of course not all people agree with the warnings in the DoD report — especially those who have financial interests in the higher education industry. According to a recent Bloomberg article, University of Maryland President Wallace Loh, chairman of the U.S. Department of Homeland Security’s academic advisory council, said that:

[foreign countries] can never become competitive by stealing. ... Once you exhaust that technology, you have to start developing the next generation.
American Universities Infected by Foreign Spies Detected by FBI, By Daniel Golden, Bloomberg, Apr 8, 2012

So, if Loh is to be believed, we shouldn't worry if spies steal our technology because by the time they steal it the U.S. is using the "next generation", whatever that means. Assuming Loh is right, then why not put all classified government documents in a public library so that everyone in the world can use whatever information they deem useful?

Arizona State University President Michael Crow sits on the National Security Higher Education Advisory Board, which was established by the FBI and CIA in 2005. At first blush it may seem that Crow would be patriotically inclined, but closer scrutiny reveals that he has spent his life in and out of government and academia, and is a lifetime member of the Council for Foreign Relations. Crow recognizes that there are foreign students and academics who are up to no good but argues that restricting them would be bad for university business (i.e. profits):

“It’s all a little perplexing and overwhelming,” he said. “We’re in the business of trying to recruit more students from China. We’re operating at a total openness mode, while we recognize there are people working beyond the rules to acquire information.” (Bloomberg)

As the population of foreign students grows, the potential for spying also increases. The Bloomberg article contained this alarming nugget of information about the population of foreign students:

Foreigners on temporary visas made up 46 percent of science and engineering graduate students at Georgia Institute of Technology and Michigan State and 41 percent at Massachusetts Institute of Technology in 2009, according to a federal survey. China sent 76,830 graduate students to U.S. universities in 2010-2011, more than any other country and up almost 16 percent from the prior year, according to the Institute of International Education in New York. (Bloomberg)

So, you might wonder, who's side are the universities on? The answer seems to be a matter of diversity politics — they treat everyone the same regardless of whether they are foreign spies or U.S. patriots:

University administrators have traditionally viewed their role as safeguarding academic freedom and making sure that all students, domestic or foreign, are treated the same. (Bloomberg)

Universities go as far as giving foreign students legal advice on what they must say to government investigators. This, according to David Major, president of the Centre for Counterintelligence and Security Studies in Falls Church, Virginia and a former FBI official:

“I’ve been to campuses where deans would say to Chinese students, ‘The FBI is coming to talk to you. You have no responsibility to talk to them,’” “Very hostile environments.” (Bloomberg)

This quote is equally disappointing:

Some faculty members remain uneasy about a partnership with federal investigators. “The FBI thrives on a certain degree of paranoia, and it operates in secrecy,” said David Gibbs, a history professor at the University of Arizona. “The secrecy goes against so much of what universities are about, which is openness and transparency.” (Bloomberg)