The House passed (246-170) H.R.5933, to establish financial disclosure requirements for colleges and universities that receive funds from foreign sources, including gifts from or contracts with foreign governments, companies and individuals valued at $50,000 or more.

Representative Michelle Steel (R-CA) and Education and the Workforce Committee Chairwoman Virginia Foxx (R-NC) introduced the Defending Education Transparency and Ending Rogue Regimes Engaging in Nefarious Transactions (DETERRENT) Act, legislation they argue brings much-needed transparency, accountability, and clarity to foreign gift reporting requirements for colleges and universities across the nation. This is the first in a series of bills to reform the Higher Education Act.

“Postsecondary education in America has been compromised. Malignant foreign entities, like the Chinese Communist Party, have taken root at colleges and universities by simply flashing their checkbooks and opening the floodgates to an endless stream of cash – every dollar comes with strings attached,” said the lawmakers. “The DETERRENT Act is our prescription to unleash accountability, transparency, and much-needed clarity into a system that has allowed foreign actors to entice well-meaning institutions and boldly partner with other shameless institutions to work against the interests of the American people. By erecting this bulwark, we are bringing bad actors directly into blinding sunlight while holding colleges and universities accountable. Covert attempts to influence postsecondary education in America will no longer be obscured by the shadows.”

This bill amends the Higher Education Act to establish new disclosure requirements for colleges, universities and other institutions of higher education that receive funds from certain foreign sources — including gifts from, or contracts with, foreign governments, companies and individuals valued at $50,000 or more (down from the current $250,000 threshold).

It generally prohibits institutions of higher education from entering into contracts with foreign countries of concern or foreign entities of concern, and for gifts requires institutions to disclose any gifts they receive from such countries or entities. It also requires private institutions to disclose whether their endowments are invested in assets issued by foreign countries or entities of concern, and it establishes new penalties for institutions that violate the bill's new requirements.

Finally, it requires the Education Department to establish an online searchable database where the required disclosure reports would be available to the public.

The DETERRENT Act:

• Slashes the foreign gift reporting threshold for colleges and universities from $250,000 down to $50,000, with an even stricter $0 threshold for countries of concern.
• Closes reporting loopholes and provides transparency to Congress, intelligence agencies, and the public.
• Requires disclosure of foreign gifts to individual staff and faculty at research-heavy institutions to protect those targeted the most by our adversaries.
• Holds our largest private institutions accountable for their financial partnerships by revealing concerning foreign investments in their endowments.
• Implements a series of repercussions for colleges and universities that remain noncompliant in foreign gift reporting such as fines and the loss of Title IV funding.

Supporters of the bill say it would improve transparency and accountability at colleges and universities that receive funding from foreign governments and donors. They say the increased disclosure requirements are necessary to protect against undue foreign influence from China and other malign actors at institutions of higher education, limit the theft or misuse of federally funded academic research, and ensure that institutions are held to rigorous standards that protect academic freedom from interference by authoritarian countries. They also argue that stronger reporting thresholds and enforcement mechanisms are necessary given the Biden administration's unwillingness to utilize existing authorities under the Higher Education Act to compel U.S. colleges and universities to reveal foreign donors.

Opponents of the bill say it would impose overly burdensome reporting requirements on institutions of higher education that many colleges and universities would be unable to meet, and would thereby limit international collaboration and potentially stir up xenophobia without actually improving security or oversight. They say most colleges and universities continue to comply with existing disclosure requirements under the Higher Education Act, as well as numerous other federal laws governing research security, undue foreign influence, and intellectual property theft. Finally, the say Republicans are attempting to score political points by accusing the Biden administration of being "weak on China," rather than working on policies that would actually strengthen research security at U.S. colleges and universities.

Do you think Congress should pass H.R.5933, the DETERRENT Act?