Colleges twist in the wind with foreign gift requirements in limbo

Published on
April 14, 2022

(Excerpts from Higher Ed Dive)

  • In October 2020, the Trump-run U.S. Department of Education held an eventtrotting out a report alleging colleges had not disclosed billions of dollars from foreign sources, which they are obliged to do under federal law.
  • Officials painted a dire picture: Foreign influence had pervaded U.S. colleges and universities, potentially threatening academic integrity, national security and human rights. 
  • By the time the Education Department published the report, it had begun investigating reporting practicesof a dozen high-profile universities and went on to open several more probes over the next year. It also later threatened to yank colleges' federal funding should they not adequately comply with Section 117, the part of the Higher Education Act requiring institutions to report foreign gifts and contracts totaling $250,000 or more in a year.
  • The Education Department has not publicly closed many of the investigations the Trump administration started. It has also not clarified or rescinded policies the previous administration enacted, including a complex checklistfor reporting foreign money. 
  • A lack of precise Education Department guidance leaves colleges in the lurch as they seek clarity about their legal requirements, higher education leaders have said. It's a challenge even as Congress debates legislation that would make Section 117 mandates stricter.
  • ACE has said it's willing to negotiate a regulation colleges could follow on Section 117. The department has not acted on this request. 
  • Mike Gallagher, a Republican of Wisconsin, wrote to Cardonain November questioning why the Biden administration appeared not to have opened additional Section 117 investigations. 
  • He also alleged that during Biden's time in office, colleges had only posted $4.3 million in foreign funding — while from July 2020 to the end of January 2021, the department recorded $1.6 billion in foreign money that colleges reported. 
  • The department "may have relaxed its enforcement standardsand, in the process, thrown the Chinese Communist Party an important lifeline at Beijing's request," wrote Gallagher, who also gave an interview to Fox News on the subject.
  • The issue has trickled down to the state level as well. Last year, Florida passed a lawrequiring public and private colleges to report to the state gifts from foreign entities worth $50,000 or more.