Colleges call for more clarity on rules requiring disclosure of foreign gifts and contracts

  • The Department of Education is stepping up its review of colleges adhering to federal reporting requirements regarding disclosures of foreign gifts and contracts amid scrutiny of American universities ties with China.
  • Section 117 of the Higher Education Act has long required that institutions report to the federal government any gift or contract with a foreign source valued at $250,000 or more, “considered alone or in combination with all other gifts from or contracts with that foreign source within a calendar year.”
  • According to Senate testimony back in February, less than 3 percent of U.S. colleges report receiving such gifts or contracts and there are significant differences in how colleges report these as well.
  • “Foreign government spending on U.S. schools is effectively a black hole, as there is a lack of reporting detailing the various sources of foreign government funding,” said the Senate Committee on Homeland Security and Governmental Affairs’ Permanent Subcommittee on Investigations report.
  • Mitchell M. Zais, Deputy Secretary for Education, admitted a lack of clarity on the issue. At the February hearing he shared, “some colleges and universities have independent but affiliated nonprofit research, endowment and alumni foundations, which deliver contracts and gifts,” he said. “It’s unclear which schools report foreign gifts that are channeled through these foundations since the statute does not reference them.”
  • The American Council on Education (ACE) and six other major higher education associations have yet to receive the needed clarification of rules despite two letters sent to the Department of Education since January.