The Department is helping Americans understand the importance of foreign money to American colleges and universities

The pursuit of scientific and technological innovation by American higher education has created economic growth, an improved quality of life, and enhanced security.  Unfortunately, in recent years, certain foreign actors have taken steps to influence American colleges and universities in ways that do not benefit the United States by making to schools large and substantial gifts and contributions.

To prevent undue influence from hostile foreign actors, Congress has directed American colleges and universities to comply with Section 117 of the Higher Education Act, which requires institutions to report to the Department of Education any gifts and contracts from foreign sources exceeding $250,000 in a calendar year.  Unfortunately, recent investigations by the Department demonstrate that many institutions have failed to comply with this easily understandable statutory requirement, and the Department is taking measures to require schools to comply in the face of possible enforcement action by the Attorney General of the United States.

Preliminary investigations by the Department have discovered that at least six prominent universities have failed to report in excess of $1.3 billion from foreign sources, including from China, Qatar, and Russia.  Those same investigations have revealed other disturbing connections between China and American universities.  One university received research funding from a Chinese multinational conglomerate to develop new algorithms for crowd surveillance.  Another school had multiple contracts with the Central Committee of the Communist Party of the People’s Republic of China.  Five of the six investigated universities had multiple contracts with Huawei, a Chinese telecommunications company with a history of hostility to the U.S.

The Department has other cases pending, including an investigation into the University of Texas for its failure to report qualifying contracts, faculty exchanges, and other valuable transfers of technology with the Wuhan Institute of Virology, the maximum biocontainment laboratory in Wuhan, China.

Since July of 2019, universities have revealed more than $6.5 billion in previously undisclosed foreign source gifts and contracts.  Institutions have anonymized the identities of the donors of at least $1.14 billion in funds from China, Saudi Arabia, Qatar, and Russia.

To combat underreporting and to ease reporting burdens for schools, Secretary DeVos has directed the Department to create a modern and robust information collections system to capture contributions to schools by foreign sources, and the Department recently announced a new reporting portal for universities.  Institutions must file any Section 117 reports using this portal on or before July 31, 2020.

American’s universities have a legal and moral duty to provide transparency regarding foreign sources of influence.  The Department’s Section 117 investigations have shown the importance of foreign money to American institutions of higher education so that Americans may understand these transactions and decide whether this activity is in the best interest of the United States.

By Nick Bell, Center for Faith and Opportunity Initiatives