If terrorists or a rogue nation wanted to get their hands on some bomb-grade uranium-235, one source would be the research reactor at the University of Wisconsin or five other universities (Oregon State, Washington State, Purdue, Texas A&M and the University of Florida) operating small reactors running on weapons-grade uranium. Fuel for the reactors was originally supplied by the federal government, and the universities have been waiting for over twenty years for a program to trade in their highly enriched uranium for a lower grade similar to that used in commercial reactors. The fuel was initially supplied to small reactors around the world under the "Atoms for Peace" program, but in 1978, the Department of Energy realized that the material presented a proliferation hazard and started a quiet campaign to reclaim it. According to a July 2004 GAO report, only 39 of the 105 worldwide research reactors had been converted or were in the process of converting to less lethal grades of uranium. Converting the reactors to lower grade fuel has been held up due to a lack of funding. 

Actually stealing the material would be a bit difficult and awkward, since the highly-radioactive fuel is typically  stored at the bottom of a pool of water, 27 feet deep, in two dozen bundles (weighing 58 pounds each). The six university reactors do not have the heavy security measures that the military and Department of Energy have for weapons-grade fuel or even the measures commercial nuclear power plants have taken. With foreign graduate students running around campus, non-proliferation and homeland security experts are concerned about the potential for mischief. Student reactor technicians make around $10.50 per hour. 

A typical commercial power reactor has fuel that has been enriched to 3 to 5 percent uranium-235.  Material is considered bomb-grade if it is enriched at 90 percent or better. The university research reactors are operating with material enriched from 70 to over 90 percent uranium-235. An alternative nefarious use for the uranium, for a nation possessing enrichment technology, would be to steal it, smuggle it back to a processing plant and then reprocess the acquired material to a higher level of enrichment. It is easier and quicker to take 70 percent enriched material and get it to 90 percent (i.e. bomb-grade) than to start from uranium that is not enriched at all. Doug Mohney