House Education and Workforce Committee Introduces First in a Series of Bills to Reauthorize the Higher Education Act

U.S. Rep. Virginia Foxx (R-NC), Chairwoman of the U.S. House of Representatives’ Education and Workforce Committee, and U.S. Rep. Michelle Steele (R-CA) introduced the Defending Education Transparency and Ending Rogue Regimes Engaging in Nefarious Transactions (DETERRENT) Act. This bill strikes and replaces the existing Section 117, which requires biannual reports for gifts or contracts above $250,000. The new Section 117 created by the bill requires institutions to file reports annually on July 1 for gifts or contracts above $50,000. The amount of information now required in the reports has also significantly increased. The Department of Education (ED) will also be required to establish and maintain a searchable, public database on its website of the reports submitted. Additionally, the bill establishes harsher punishments for violations of Section 117, including the imposition of fines—some of which can range from 5% to 10% of the total amount of federal funds received by the institution. The fines are in addition to paying for all costs associated with the investigation and enforcement of Section 117, which was previously included in the statute.

The Education and Workforce Committee (the Committee) has noted that this bill is the first in a series of bills to reform the Higher Education Act (HEA).

Throughout the current Congress, the Committee has held several oversight hearings focusing on Section 117 of the Higher Education Act. Section 117 of the Higher Education Act of 1965 (HEA) requires institutions of higher education that receive federal financial assistance to disclose semiannually to ED any gifts received from and contracts with a foreign source that, alone or combined, are valued at $250,000 or more in a calendar year. The statute also requires institutions to report information regarding gifts or contracts received from organizations that are owned or controlled by a foreign source.

Committee Republicans expressed their concern that ED has not properly enforced adherence to Section 117. A press statement released by the lawmakers stated, “Postsecondary education in America has been compromised. Malignant foreign entities, like the Chinese Communist Party, have taken root at colleges and universities by simply flashing their checkbooks and opening the floodgates to an endless stream of cash – every dollar comes with strings attached. The DETERRENT Act is our prescription to unleash accountability, transparency, and much-needed clarity into a system that has allowed foreign actors to entice well-meaning institutions and boldly partner with other shameless institutions to work against the interests of the American people. By erecting this xxxxxx, we are bringing bad actors directly into blinding sunlight while holding colleges and universities accountable. Covert attempts to influence postsecondary education in America will no longer be obscured by the shadows.”

There is concern in the higher education community that the DETERRENT Act will impose significant additional administrative burdens, specifically copious reporting requirements, on universities—without providing additional funding to pay for the increase in costs.