The House has approved a controversial bill to intensify college foreign gift reporting rules under the Higher Education Act, with a bipartisan vote of 246-170, raising significant debate and concern over implications for academic institutions.
The Legislation in Perspective
The bill, officially known as the Defending Education Transparency and Ending Rogue Regimes Engaging in Nefarious Transactions (DETERR) Act (H.R. 5933), was introduced following concerns raised during the Trump administration over compliance with Section 117 of the Higher Education Act. Previously under the radar, attention was drawn to the obscure federal law associated with colleges' foreign gifts disclosure requirements.
Despite a quieter approach from incumbent President Joe Biden, bipartisan scrutiny continues to heighten on foreign gift reporting, fueled in part by rising geopolitical disputes with nations such as China.
The Impact of the DETERR Act
Under the proposed Republican bill, colleges would need permission from the Education Department to freely receive globally sourced contributions, mainly from identified "countries of concern," including China, Russia, and Iran.
In addition to supplementary regulations, the legislation demands faculty at colleges with federal research and development funding exceeding $50 million to reveal foreign gifts valued over $480 and contracts worth $5,000 or more. Colleges with a notable financial weight - holding endowments over $6 billion or "investments of concern" exceeding $250 million - must also disclose transactions to the Education Department.
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The Arguments For and Against
As the chief sponsor, California Republican Rep. Michelle Steel supported the bill as a step towards enforced responsibility. However, detractors, including Washington state Democrat Rep. Pramila Jayapal, criticize the legislation as weaponizing the Department of Education and burdening the institutions and the department with unwieldy reporting demands.
Simultaneously, the American Council on Education, a top lobby for higher education, voiced apprehension. President Ted Mitchell expressed concern over data collection, describing potential outcomes as capturing "an ocean of data, much of it trivial and inconsequential." Mitchell recommended lawmakers revise the bill to allow the Education Department to engage in regulatory negotiations on Section 117.
Despite the introduction of four amendments by Democrats to moderate the proposal and one that proposed a substitution with a plan reducing the reporting threshold to $100,000, none were approved. The bill successfully moved to the full House after a 27-11 committee vote.
The Aftermath of the Decision
Arguably, transparency of foreign funding in higher learning institutions is an area much of the House agrees upon. However, the bill's detractors, like Virginia Democrat and the committee's ranking member Rep. Bobby Scott, suggest it fails to address research security adequately within universities.
Given the implications of this legislation and the potential impact on academic institutions' functioning or their access to federal funding, support and advice from legal professionals specializing in education law may prove beneficial. If you are concerned, we strongly encourage seeking legal advice to understand better and navigate these potential challenges.
