Ed Dept steps up scrutiny of college foreign gifts reporting

Dive Brief:

  • The U.S. Department of Education this week changed how colleges are required to report foreign gifts and contracts to the federal government as the Trump administration and legislators continue to crack down on such deals.

  • The new digital portal for reporting foreign funding comes as the department investigates at least 10 institutions and their financial ties to people and organizations outside of the U.S. 

  • Higher education groups have said they tried working with the department for about a year to clarify reporting requirements but had little success.

Dive Insight:

The White House and the Education Department have intensified their scrutiny of colleges’ relationships with foreign entities, particularly China. Under the Higher Education Act, institutions must inform the department of donations and contracts coming from outside the U.S. that are worth $250,000 or more in a calendar year.

A Senate subcommittee investigation led to a report last year finding that a significant number of colleges failed to disclose payments meeting that threshold from Hanban, an educational arm of the Chinese government. The department then created new reporting standards, which amounted to an extensive checklist that colleges must file twice a year. The requirements were met with criticism by higher ed groups that said the move exceeded the department’s legal bounds.

The portal the Education Department introduced Monday asks for all the information on that checklist, with one deviation from the department’s original proposal: colleges do not need to provide documentation of a gift or contract. That would have revealed information that typically remains private, said Dan Madzelan, associate vice president of government and public affairs at the American Council on Education (ACE). 

ACE led the effort to get clarification from the department about reporting requirements, but said the department was vague and did not address its questions on multiple occasions. ACE still has questions for the department about “what is reportable,” Madzelan said.

A department spokesperson did not address Education Dive’s emailed questions by press time Tuesday. However, in a statement announcing the portal, the agency said it was not receiving “sufficient information” to determine whether colleges were complying with the law.

“Colleges and universities owe it to all of us to be transparent about their foreign financial ties,” Education Secretary Betsy DeVos said in the statement.

The department is investigating at least 10 colleges over their connections to foreign countries. In May, it began looking into Case Western Reserve University, in Ohio, citing the arrest of a former doctor with the institution’s Cleveland Clinic Foundation, who was accused of false claims and wire fraud. He allegedly received more than $3.6 million in National Institutes of Health grants while also collecting from the Chinese government.

The department said colleges have reported $6.5 billion in previously undisclosed foreign gifts and contracts since July 2019.

Meanwhile, a bipartisan group of senators, led by Sen. Rob Portman (R-Ohio) has put forth a bill to strengthen reporting requirements. It would lower the reporting limit from $250,000 to $50,000 and give the department the authority to fine colleges that don’t disclose their gifts.

Earlier this month, the Senate passed separate legislation that would force U.S. colleges that house the Hanban-affiliated Confucius Institutes to increase their oversight of the programs. Confucius Institutes teach Chinese language and culture at U.S. colleges, but they have been condemned for restricting academic freedom. Republican lawmakers have said the institutes exert undue influence on American colleges.

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