Executive Order Analysis: “Transparency Regarding Foreign Influence At American Universities”
Posted on May 7th, 2025
by Avery E. Smith
On April 23, 2025, President Donald J. Trump issued an Executive Order, “Transparency Regarding Foreign Influence At American Universities”, which targets Section 117 of the Higher Education Act of 1965 and its provisions regarding foreign gift and contract reporting.
In her latest Collegiate Comment, KingSpry’s Education and Higher Education Attorney and Employment Law Chair, Avery E. Smith, Esq., breaks down the Executive Order and offers guidance to colleges and universities regarding its implications.
Section 117 of the Higher Education Act of 1965
The Higher Education Act of 1965 (“HEA”) is a Federal law governing Federal higher education programs, and Section 117 specifically pertains to foreign gift and contracting reporting. Section 117 requires institutions of higher education that receive Federal financial assistance to disclose semiannually any gifts received from and/or contracts with a foreign source that, alone or combined, value at least $250,000 to the United States Department of Education (the “Department”). The Department makes this information publicly-available on its website.
Colleges and Universities. Institutions subject to Section 117’s requirements are generally those that offer a bachelor’s degree or higher or those that offer a transfer program of not less than two (2) years that allows for credit towards a bachelor’s and receive Federal financial assistance.
Foreign Sources. Section 117 defines “foreign source” as (1) “a foreign government, including any agency of a foreign government,” (b) “a legal entity, governmental or otherwise, created solely under the laws of a foreign state or states,” (c) “an individual who is not a citizen or a national of the United States or a trust territory or protectorate thereof,” and (d) “an agent, including a subsidiary or affiliate of a foreign legal entity, acting on behalf of a foreign source.”
The Executive Order
Purpose and Policy. The Executive Order suggests that Section 117 has not been “robustly enforced,” and therefore, the true amount of gifts from and contracts with foreign sources flowing to Federally-funded colleges and universities is unknown. The Executive Order indicates that it is the policy of the Trump Administration to “end the secrecy surrounding foreign funds.”
Robust Enforcement. To achieve the aforementioned purpose, the Secretary of Education is ordered to:
“take appropriate steps to reverse or rescind any actions by the [Biden Administration] that permit higher education institutions to maintain improper secrecy regarding their foreign funding;”
“take appropriate steps to require universities to more specifically disclose details about foreign funding, including the true source and purpose of the funds;”
“provide the American people with greater access to information about foreign funding to higher education institutions;” and
“hold accountable higher education institutions that fail to comply with the law concerning disclosure of foreign funding,” in conjunction with the Attorney General.
The Executive Order also authorizes the Secretary of Education to conduct audits and investigations to ensure compliance with the HEA.
Compliance. Lastly, the Executive Order provides that certification of compliance with disclosure and reporting obligations by higher education institutions is material for purposes of receiving Federal funding.
Key Takeaways for Pennsylvania Colleges and Universities
Although the Executive Order is rather ambiguous and does not specifically address how or when enforcement actions may take place, Pennsylvania colleges and universities are encouraged to review their policies and practices to ensure they are in compliance with Section 117 of the HEA and prepared for potential audits and investigations.
Higher education administrators who are unsure of their institutions obligations should collaborate with legal counsel to determine their obligations and potential liability for noncompliance under the HEA.
The Higher Education Law attorneys at KingSpry are a trusted resource for providing legal advice, counsel, and representation. If your institution has questions regarding its reporting obligations, KingSpry is prepared to assist you. Collegiate Comments are meant to be informational and do not constitute legal advice.
Executive Order Analysis: “Transparency Regarding Foreign Influence At American Universities”
Posted on May 7th, 2025
by Avery E. Smith
On April 23, 2025, President Donald J. Trump issued an Executive Order, “Transparency Regarding Foreign Influence At American Universities”, which targets Section 117 of the Higher Education Act of 1965 and its provisions regarding foreign gift and contract reporting.
In her latest Collegiate Comment, KingSpry’s Education and Higher Education Attorney and Employment Law Chair, Avery E. Smith, Esq., breaks down the Executive Order and offers guidance to colleges and universities regarding its implications.
Section 117 of the Higher Education Act of 1965
The Higher Education Act of 1965 (“HEA”) is a Federal law governing Federal higher education programs, and Section 117 specifically pertains to foreign gift and contracting reporting. Section 117 requires institutions of higher education that receive Federal financial assistance to disclose semiannually any gifts received from and/or contracts with a foreign source that, alone or combined, value at least $250,000 to the United States Department of Education (the “Department”). The Department makes this information publicly-available on its website.
Colleges and Universities. Institutions subject to Section 117’s requirements are generally those that offer a bachelor’s degree or higher or those that offer a transfer program of not less than two (2) years that allows for credit towards a bachelor’s and receive Federal financial assistance.
Foreign Sources. Section 117 defines “foreign source” as (1) “a foreign government, including any agency of a foreign government,” (b) “a legal entity, governmental or otherwise, created solely under the laws of a foreign state or states,” (c) “an individual who is not a citizen or a national of the United States or a trust territory or protectorate thereof,” and (d) “an agent, including a subsidiary or affiliate of a foreign legal entity, acting on behalf of a foreign source.”
The Executive Order
Purpose and Policy. The Executive Order suggests that Section 117 has not been “robustly enforced,” and therefore, the true amount of gifts from and contracts with foreign sources flowing to Federally-funded colleges and universities is unknown. The Executive Order indicates that it is the policy of the Trump Administration to “end the secrecy surrounding foreign funds.”
Robust Enforcement. To achieve the aforementioned purpose, the Secretary of Education is ordered to:
The Executive Order also authorizes the Secretary of Education to conduct audits and investigations to ensure compliance with the HEA.
Compliance. Lastly, the Executive Order provides that certification of compliance with disclosure and reporting obligations by higher education institutions is material for purposes of receiving Federal funding.
Key Takeaways for Pennsylvania Colleges and Universities
Although the Executive Order is rather ambiguous and does not specifically address how or when enforcement actions may take place, Pennsylvania colleges and universities are encouraged to review their policies and practices to ensure they are in compliance with Section 117 of the HEA and prepared for potential audits and investigations.
Higher education administrators who are unsure of their institutions obligations should collaborate with legal counsel to determine their obligations and potential liability for noncompliance under the HEA.
The Higher Education Law attorneys at KingSpry are a trusted resource for providing legal advice, counsel, and representation. If your institution has questions regarding its reporting obligations, KingSpry is prepared to assist you. Collegiate Comments are meant to be informational and do not constitute legal advice.