Today, I submitted written testimony to the U.S. House Committee on Appropriations, Subcommittee on Labor, Health and Human Services, Education, and Related Agencies. Click here to download a pdf of the testimony.
Chairman Aderholt, Ranking Member DeLauro, and members of the Subcommittee:
My name is Dan Lips. I am Head of Policy at the Foundation for American Innovation, a think tank focused on promoting innovation, strengthening governance, and advancing national security. I am writing to respectfully urge the subcommittee to include report language requiring the Department of Education (ED) to annually report on its oversight of postsecondary institutions’ compliance with Section 117 of the Higher Education Act, which requires institutions to disclose foreign gifts or contracts totalling $250,000 or more. Moreover, I respectfully recommend that the subcommittee include report language requiring ED to improve its oversight of foreign contribution disclosures, and share information with Congress and other federal agencies. Finally, I recommend including report language requiring ED to establish an office for managing Section 117 compliance within the Department that is better suited to manage the program than Federal Student Aid.
For decades, lax enforcement of Section 117 disclosures has enabled unreported foreign influence in American higher education, which poses a threat to national security and academic freedom, among other problems. Requiring the Department to report on its oversight of Section 117 disclosures and to establish an office to manage the program appropriately will ensure that, over time, ED has adequate staffing and resources to enforce the law, ensure transparency about foreign influence on American campuses, and improve federal research security.
Background
For nearly four decades, Section 117 of the Higher Education Act of 1965 has required postsecondary institutions to publicly disclose to ED foreign payments of at least $250,000. However, enforcement of this law has been lax, despite growing bipartisan concerns about foreign influence on American campuses and threats to research security and academic freedom. For example, a bipartisan Senate investigation of China’s impact on the U.S. education system in 2019 found that ED had not updated its guidance for Section 117 disclosure since 2004. The report explained that “foreign government spending on U.S. schools is effectively a black hole, as there is a lack of reporting detailing the various sources of foreign government funding.” The Senate investigation revealed that “[n]early seventy percent of U.S. schools with a Confucius Institute that received more than $250,000 in one year failed to properly report that information to the Department of Education.”
The Senate investigation led the Department to renew its attention on overseeing foreign contribution disclosures, which resulted in at least a dozen compliance investigations and the disclosure of $6.5 billion in payments as of 2020. A 2020 report described the ED’s renewed commitment to enforcing Section 117, including the establishment of a new reporting portal to facilitate disclosures and public reporting, interagency collaboration to strengthen oversight, and a rulemaking to require additional information from postsecondary institutions to improve transparency. In addition, the ED report described the significant risks associated with foreign funding and influence on American campuses:
[T]here is very real reason for concern that foreign money buys influence or control over teaching and research. Disclosure and transparency might mitigate the harm to some extent. However, the evidence shows the industry has at once massively underreported while also anonymizing much of the money it did disclose, all to hide foreign sources (and, correspondingly, their influence on campus) from the Department and the public. Since 2012, institutions reported anonymous donations from China, Saudi Arabia, Qatar, and Russia totaling more than $1.14 billion.
During the last Congress, both the House and Senate passed legislation that would have expanded disclosure rules for postsecondary institutions to report foreign payments; however, these reforms did not become law. In December, the House of Representatives passed H.R. 5933, the DETERRENT Act, by a vote of 246-170. This bill would expand disclosure requirements for postsecondary institutions to report foreign contributions and strengthen the Department of Education’s ability to enforce the law. The bipartisan support for this bill, and similar legislation in the last Congress, shows a growing recognition of the need to improve public transparency about foreign influence in American education and strengthen the Department of Education’s ability to enforce the law.
First, the Committee should include reporting language to require the Department of Education to provide to Congress and publish an annual report describing its oversight of Section 117 disclosures, including a description of all enforcement actions taken, guidance provide to postsecondary institutions, summary data showing trends and totals of disclosed foreign contributions, and a description of how ED shares information with other federal agencies.Requiring an annual report would improve transparency and help Congress and the public understand the scope of foreign influence on American campuses and allow lawmakers to evaluate how and whether ED is enforcing federal law and postsecondary institutions’ compliance.
Second, the Committee should include report language requiring ED to further improve public transparency of foreign contributions disclosures by modernizing its public dashboard to allow users to review summary data of foreign contributions by institution, type, and country of origin.ED’s current online dashboard does not allow users to easily analyze foreign contributions to postsecondary institutions. A public dashboard that provides basic functions such as calculating total contributions reported by years, type, source and country of origin would improve public understanding of foreign influence in American higher education.
Third, the Committee should direct ED to establish an office with appropriate staffing and responsibilities to oversee Section 117 data collection, enforcement actions, and to share information with other federal agencies.These responsibilities are currently assigned to Federal Student Aid (FSA); however, this organization primarily focuses on delivering grants, work-study aid, and loans to postsecondary students. It is unclear why managing foreign payment disclosures should be assigned to FSA. During the prior administration, the responsibilities for managing and enforcing Section 117 were assigned to the Office of General Counsel. The Committee should require ED to establish a new office that has direct responsibility for managing the Department’s Section 117 responsibilities. This new office could directly report to the Under Secretary or the Office of General Counsel. The Committee should require the new office to establish information sharing agreements with appropriate federal agencies, including agencies that provide grants to postsecondary institutions. In addition to establishing a new office, Congress should require ED to provide a report to the Committee describing the necessary resources, including staff, needed to manage this program.
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Requiring ED to report on its management of Section 117 disclosure, provide summary data and accessible information online, and to establish an office with appropriate resources and information sharing agreements would improve national security and expose malign foreign influence on American campuses.
