The U.S. Department of Education has decided to shift the enforcement of Section 117 of the Higher Education Act back to the Office of General Counsel (OGC). This part of the act mandates that postsecondary institutions receiving federal financial aid must report foreign-source gifts and contracts worth $250,000 or more to the Department annually.
Responsibilities for foreign funding disclosure oversight were previously moved from OGC to the Office of Federal Student Aid (FSA) under the Biden Administration. By passing these duties back to OGC, the Trump Administration emphasizes its focus on enforcing Section 117.
Additionally, an investigation has been launched into the University of California, Berkeley. The inquiry, titled a Notice of Investigation and Records Request, follows suspicions that the university's foreign funding disclosures may be incomplete or inaccurate. The Berkeley probe comes on the heels of a similar investigation initiated against Harvard University the previous week.
"The Biden-Harris Administration turned a blind eye to colleges and universities’ legal obligations by deprioritizing oversight and allowing foreign gifts to pour onto American campuses. Despite widespread compliance failures, no new Section 117 investigations were initiated for four years, and ongoing investigations were closed prematurely," stated U.S. Secretary of Education Linda McMahon. "I have great confidence in my Office of General Counsel to investigate these matters fully, and they will begin by thoroughly examining UC Berkeley’s apparent failure to fully and accurately disclose significant funding received from foreign sources."
Background information notes that President Trump signed an Executive Order this week focusing on making foreign funding in American higher education more transparent. The order calls for reversing any actions by the previous Administration that let universities hide foreign funding details and demands universities disclose the true source and intent of these foreign gifts.
Reports in May 2023 revealed that UC Berkeley had not informed the Department about receiving hundreds of millions in funding from a foreign government. Following these revelations and Berkeley's own Section 117 disclosure submissions review, the Department, on June 6, 2023, asked Berkeley to respond to these claims. Berkeley acknowledged in their responses that some foreign government funding was not reported as required and outlined its long-term efforts to build relationships with foreign government-controlled entities. These responses suggest a misunderstanding of Berkeley's reporting duties under Section 117.
