Congress’s Missed Opportunity to Curb Foreign Influence in Higher Education
By Dan Lips, NSI Visiting Fellow
The CHIPS and Science Act of 2022, signed into law earlier this year, creates a new reporting regime for American colleges and universities, requiring them to disclose contributions from foreign sources to the National Science Foundation (NSF) if they also receive federal research grants. The measure is intended to address growing bipartisan concern that foreign financial relationships pose a risk to American higher education, the research enterprise, and our national security.
Despite this, Congress has failed to reform the Higher Education Act of 1965 to strengthen the Department of Education’s oversight of foreign contributions to postsecondary institutions. This was a missed opportunity: both the Senate and House of Representatives included language to do so in their respective competition bills, the U.S Innovation and Competition Act (USICA) and America COMPETES Act.
Since 1986, Congress has required American colleges and universities to disclose gifts and contracts totaling more than $250,000 to the Department of Education under Section 117 of the Higher Education Act. Thanks to this law, we know that American postsecondary institutions reported $1.1 billion in payments from foreign sources in 2021 alone, and that colleges and universities have received a total of $27 billion in foreign gifts and contracts since 2010. But even with this reporting, the full scope of foreign influence on American campuses is likely still undercounted.
Last year, National Security Institute (NSI) Visiting Fellow Dan Currell published a six-part series on foreign money in U.S. universities for NSI’s blog, The SCIF. Currell’s in-depth analysis covers the Department of Education’s historically lax enforcement of Section 117, colleges and universities’ resistance to disclosing foreign payments, and ways that Congress and the Department of Education can improve transparency. He summarized some of these recommendations in his final post, focused on improving transparency of Chinese contributions to American universities:
Obviously, Congress should fix the law to clarify and expand what must be disclosed, but the Department of Education (ED) can and should audit data being disclosed, too. Institutions need to disclose money from Chinese SOEs and Chinese government agencies as being from a foreign government, and they need to provide the same treatment to money coming from agents of a foreign government. ED staff should also be reading this data closely and ensuring other agencies are seeing it. ED should then follow up with schools when the disclosures seem incomplete or wrong, and schools should correct disclosure errors or affirm the data’s accuracy.
The 117th Congress came close to doing its part to reform Section 117. USICA, which passed the Senate in 2021, included language to lower the foreign contribution disclosure threshold to $50,000 and would have authorized the Secretary of Education to impose penalties to require compliance. The bill would also have required the Committee on Foreign Investment in the United States (CFIUS) to review foreign contributions to postsecondary institutions totaling $1 million or more. Likewise, the House-passed America COMPETES Act would have reformed Section 117 by requiring disclosures of contributions totaling $100,000 or more and also would have authorized Department of Education penalties to improve compliance.
But the compromise CHIPS and Science Act that President Biden signed into law in August did not include these reforms. Instead, the new law authorizes NSF to spend $6 million a year to track disclosures of foreign contributions to NSF-funded American postsecondary institutions and determine if the foreign financial ties pose a threat to federally-funded research. The law also requires institutions that receive NSF research funding disclose foreign contributions totaling $50,000 or more and directs a new Office of Research and Security Policy within NSF to suspend or terminate NSF awards if these financial ties pose a national security threat.
Additional oversight of potential risks to federally funded research is both welcome and necessary. But it’s unclear why Congress and the Biden administration have decided not to go further and reform the Higher Education Act and strengthen the Department of Education’s oversight of all foreign contributions to U.S. colleges and universities as well. While foreign contributions surely pose a threat to federally-funded research, they also influence what happens on American campuses and undermine academic freedom. For example, a 2019 bipartisan Senate Permanent Subcommittee on Investigations report detailed how the Chinese government’s funding of Confucius Institutes on American campuses involved agreements that “Export China’s censorship of political debate and prevent discussion of potentially politically sensitive topics.”
Addressing security threats to federally-funded research projects at American colleges and universities is a start. But lawmakers ought be prepared to address foreign influence in American higher education in its entirety, not just in research. To that end, reforming Section 117 of the Higher Education Act to strengthen transparency and public accountability should be a priority in the 118th Congress.
Dan Lips is Head of Policy at Lincoln Network and the coauthor of a new report: Foreign Influence in American Higher Education: The Case for Additional Transparency and Enforcement.
