On February 23, 2026, the U.S. Department of Education (ED) issued a press release and Fact Sheet announcing its new interagency partnership with the U.S. Department of State (State Department) for Section 117 compliance. ED described that while it will retain all “statutorily required” duties, responsibilities, and oversight related to institutions' foreign gift and contract reporting, the State Department will provide “vital support” to “implement and execute Section 117 components.” Importantly, ED confirmed that current Section 117 guidance “remains static.”
ED’s announcement follows its February 11, 2026 update (the “February 11 Update”) on Section 117 data reported to ED through December 16, 2025, the date it deactivated the prior reporting portal. Institutions submitted their most recent Section 117 reports via a new portal launched on January 2, 2026, which we described in advisories on December 10, 2025 and January 16, 2026. The February 11 Update indicates that ED will publish by February 28 the Section 117 data submitted by institutions between December 17, 2025 and January 31, 2026.
State Department partnership
ED’s press release and Fact Sheet both characterize the State Department partnership as a way to “improve the accuracy and transparency of foreign gift and contract reporting,” including from a national security perspective. The Fact Sheet also indicates that the partnership is consistent with President Trump’s April 2025 Executive Order, “Transparency Regarding Foreign Influence at American Universities” (EO 14282), which instructs ED Secretary McMahon to work with other federal government units to confirm institutions’ compliance with Section 117.1
Section 117 of the Higher Education Act (20 U.S.C. § 1011f) requires an “institution” to file a disclosure report when it “receives a gift from” or “enters into a contract with” a “foreign source” that is valued at US$250,000 or more, either alone or when combined with other gifts and contracts with the same foreign source in the same calendar year. “Institutions” also must report when they are owned or controlled by a “foreign source.” Reports are due twice per year on January 31 and July 31.
The Fact Sheet indicates that the State Department will provide “vital support” to “implement and execute Section 117 components;” however, its role is described at a high level and in different ways. For example:
- The State Department “will support ED in managing the portal and use its national security and foreign national academic admissions expertise to review and assess the [higher education] industry’s compliance with the law, share data with the public and federal stakeholders, and identify potential threats.”
- The State Department’s involvement will “ensur[e] potential [national security] threats are addressed decisively and proactively by an agency that is best equipped to protect America’s most vital interests across all domains.”
- The State Department “will provide vital support in administering Section 117’s biannual reporting and information collection provisions, public inspection requirements, enforcement activities, and implementing programs and other initiatives promoting lawful compliance.”
ED confirms that it “will continue to perform all statutorily required duties and responsibilities” and that its Office of the General Counsel will maintain oversight of Section 117 compliance and enforcement efforts. Under the statute, only ED may initiate action against an institution for noncompliance with Section 117 requirements; such action may include referral to the U.S. Department of Justice’s Attorney General to compel compliance. ED has also interpreted Section 117 compliance to be a condition of participation in the federal student financial aid programs authorized under Title IV of the Higher Education Act, as amended.
According to ED, the State Department partnership will have “no anticipated adverse impact” on institutions, and all Section 117 guidance, including relevant points of contact, “remains static.”
February 11 Update
The State Department partnership was announced less than two weeks after ED’s February 11 Update in which ED expressed national security concerns related to Section 117 disclosures. Specifically, ED described that institutions’ Section 117 reports include “funding from countries and entities that are involved in activities that threaten America’s national security;” and ED reported data related to statutorily identified “countries of concern” (i.e., China, North Korea, Russia, Iran, “or any other country determined to be a country of concern by the Department of State”) (42 U.S.C. § 19221(a)(1)). Notwithstanding these characterizations, ED confirmed that it “is not responsible for regulating which foreign entities provide funding to colleges and universities.”
The February 11 Update also announced that the Section 117 Foreign Gift and Contract Public Transparency Dashboard had been updated with data through December 16, 2025 – the date on which ED deactivated the prior reporting portal. The dashboard does not currently reflect data that was reported by institutions for the most recent reporting cycle. ED confirmed in the February 11 Update that “[a]dditional disclosures filed during the period December 17, 2025, through January 31, 2026, will be updated on the portal by February 28, 2026.” (Note, however, that ED previously confirmed Section 117 reports due January 31, 2026, were still timely if submitted by February 2, 2026, since January 31 fell on a weekend.)
Next steps
These recent developments underscore the Trump Administration’s continued focus on foreign influence in U.S. higher education. Our Education practice regularly helps institutions comply with foreign gift and contract reporting requirements for ED and other agencies, and we work alongside our colleagues in other regulatory practices to meet the full spectrum of institutions’ needs related to foreign activities and relationships.
References
1. For more information, see our December 10, 2025 client advisory: “New portal for Section 117 foreign gift and contract reporting underscores continued focus on foreign influence in U.S. higher education.”
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