On April 23, 2025, President Donald Trump signed an executive order titled Transparency Regarding Foreign Influence at American Universities, aimed at reinforcing and expanding the enforcement of Section 117 of the Higher Education Act (HEA) of 1965 (20 U.S.C. § 1011f). This statute requires U.S. colleges and universities to disclose to the U.S. Department of Education any foreign gifts and contracts valued at $250,000 or more, alone or in combination with gifts from or contracts with that foreign source within a calendar year. The executive order alleges that for many years, universities failed to disclose or hid the true source of funding for more than half of foreign gifts that are required to be reported under the HEA. The order discusses the administration’s policy of “protect[ing] the marketplace of ideas from propaganda sponsored foreign governments, and safeguard[ing] America’s students and research from foreign exploitation.”
The executive order directs the secretary of education to take comprehensive actions to ensure full compliance with Section 117, including: (1) rescinding or reversing actions by prior administrations that allowed institutions to obscure details regarding foreign funding; (2) requiring universities to provide more specific information about the sources and purposes of foreign funds; (3) enhancing public access to information about foreign contributions to higher education institutions; and (4) collaborating with heads of other executive departments, agencies and offices to conduct audits and investigations into noncompliance, and seeking enforcement by the U.S. Attorney General. Under the HEA, the Attorney General is authorized to bring a federal civil lawsuit to compel compliance with foreign gift reporting requirements.
The executive order requires the secretary of education and other appropriate executive agency heads to prospectively ensure that institutions provide certifications of compliance with Section 117 of the HEA and any other applicable foreign funding disclosure requirements. These certifications will be treated as a material condition to the receipt of federal grant funds for purposes of the False Claims Act.
Shortly after this executive order was published, the U.S. Department of Education announced an investigation under Section 117 of a flagship public university. During Trump’s first term, the Department issued an October 2020 Report on Institutional Compliance with Section 117, which likely will serve as this Department’s playbook for Section 117 enforcement.
American colleges and universities should assess and, if necessary, strengthen their institution’s compliance programs related to foreign gift and contract disclosures. This includes reviewing current reporting practices, ensuring accurate and timely submissions, and preparing for potential audits or investigations. Noncompliant institutions risk potential suspension or termination of federal grant funds as well as potential liability under the False Claims Act, which carries the possibility of treble damages and statutory penalties on a per-claim basis.
Before making any certifications, institutions should consult with legal counsel to assess the extent of any potential noncompliance or impending investigations.
