New House Bill Tracks Foreign Funding For Universities

Rep. Michelle Steel (R-CA) and House Education and Workforce Committee Chairwoman Virginia Foxx (R-NC) have introduced a bill designed to force higher education to be transparent about funding from foreign countries.

The DETERRENT Act, an acronym for “Defending Education Transparency and Ending Rogue Regimes Engaging in Nefarious Transactions Act,” would amend the Higher Education Act of 1965 (HEA) — the main federal law governing higher education. The changes would heavily focus on Section 117, which requires colleges and universities to report gifts from foreign sources if they are equal to $250,000 or more.

The fact that schools are able to take in money from foreign sources while at the same time being subsidized by American taxpayers is extremely concerning, as it calls into question the amount of influence that the foreign money is buying — as well as what kind of influence that money will have on the education of American youth.

As American Greatness noted, “Colleges and universities are heavily subsidized by taxpayers not only with the federal student loan program but, in the case of public universities, with state legislative appropriations. But even private universities are subsidized with their non-profit status since that status means they pay less into the tax base.”

“Citizens provide these subsidies because schools are, theoretically, in the American public interest,” the outlet added. “But funding from foreign sources obviously calls that into question: If schools accept foreign money, whose interests will they serve? As the saying goes, ‘He who pays the piper calls the tune.’”

It has been confirmed through numerous investigations that major universities are taking large sums of money from foreign sources, including a report from the Trump administration’s Education Department in 2020 that found more than $6.5 billion had flowed into American schools from overseas.

However, these universities had not disclosed or reported the funds as they were legally required to do. They instead chose to take the money and keep silent, even funds from U.S. adversaries such as China.

Beyond just breaking the law, universities also complain about being required to follow it, and even go so far as to lobby to have the reporting requirements removed.

One such school taking money from China is the University of Pennsylvania, where Chinese funding has tripled since the school launched the Biden Center for Diplomacy and Global Engagement in 2017, according to records uncovered by Congress.

Another example happened at Harvard University, where the school’s former Chemistry Department Chairman Charles Lieber was paid $50,000 a month by China for developing the “Thousand Talents” program, which was known to “reward individuals for stealing proprietary information.”

Texas A&M University’s “Engineering Experiment Station” has also been found to have signed million-dollar contracts with both Russia and Qatar without disclosing or reporting any of the funding.

Meanwhile, Steele and Foxx are attempting to fix this problem with the DETERRENT Act, which will increase penalties for noncompliance with Section 117. The current penalty for not reporting foreign funds is simply for the school to pay the government’s cost of enforcement — which essentially amounts to a slap on the wrist. The new penalties would be a minimum fine of $50,000 for a first-time offense, and $100,000 for subsequent offenses — or a penalty of twice the value of the unreported funds.

However, if the money comes from a “country of concern,” the university would lose 5-10% of its federal funding for the first offense, with the percentage doubling for subsequent offenses. The bill would also lower the gift amount schools need to report from $250,000 to just $50,000. If the money comes from a “country of concern,” any amount must be disclosed.