The Education Department has declined to make many of the changes sought by colleges and universities to the requirements for reporting foreign gifts.
The department is planning to finalize the reporting requirements following a 31-day public comment period on the updated information-collection request. The request is the latest step in a years-long process that began under the Trump administration in an effort to step up enforcement of Section 117 of the Higher Education Act of 1965, which requires colleges and universities to, twice a year, disclose all foreign gifts and contracts totaling $250,000 or more.
That effort included a new online reporting system that launched in summer 2020 and required institutions to submit more information about the gifts and contracts than they had previously. After the first round of reports, the Trump administration accused colleges and universities of “pervasive noncompliance” with the federal law.
The Biden administration is planning to keep the Trump-era disclosure requirements but shift enforcement of Section 117 from the Office of General Counsel to the Office of Federal Student Aid, which previously enforced the law, among its other responsibilities. The next deadline for Section 117 reports is July 31.
House Republicans, led by North Carolina representative Virginia Foxx, who chairs the House education committee, have raised concerns recently about the department’s enforcement of Section 117.
“Even the basic level of reporting under the statute was not met in the past, and the department has provided no substantive documentation to indicate it is taking its duties seriously,” Foxx said in a statement.
A department official told Foxx in a letter that the agency “is committed to the robust enforcement of Section 117.” The Biden administration has not opened any Section 117 investigations or closed the ones left unresolved by the Trump administration, according to the department’s website.
After releasing the proposed information-collection request in December, the department received nine comments that outlined issues with the portal used to report foreign gifts and concerns whether the agency was exceeding its statutory authority. The American Council on Education, along with dozens of higher education associations, urged the department to go through a formal rule-making process regarding the reporting of foreign gifts, which could address reporting issues and the burden on institutions.
“Interest in foreign gifts and contracts to institutions of higher education is not going away,” said Sarah Spreitzer, vice president of government relations for ACE. “It is only going to become of more interest to Congress and to the public. So all of our institutions are very tuned in to their Section 117 required reports. Our concern is making it easier for institutions to complete these reports and providing this information, because there is a lot of interest from Congress and bipartisan policy makers on these issues.”
Colleges and universities that fail to comply with Section 117 could lose access to federal financial aid, though that hasn’t happened yet.
The department said in a response to the comments that neither negotiated nor notice-and-comment rule making is required to address Section 117 compliance, brushing away many of ACE’s concerns as well as those of other commenters.
“They said that negotiated rule making is only required for programs under Title IV [of the Higher Education Act of 1965],” Spreitzer said. “That doesn’t mean that the department can’t carry out rule making.”
ACE and others commented that the reporting portal is difficult to use and suggested 23 changes, according to a department summary. Spreitzer said that one main issue is that institutions have to upload reports on each gift or contract individually rather than as a batch.
“Without a significant upgrade to the portal, compliance with Section 117 will remain burdensome, expensive, and likely to cause reporting mistakes,” ACE wrote in its comment.
The department said in its reply that some of the suggested changes were “not possible due to system limitations,” though it acknowledged the concern about the portal and noted that it is evaluating its ability to make improvements.
“We are not asking the department to roll back Section 117 or say that we don’t have to report under Section 117,” she said. “But we are trying to figure out how to make it less burdensome and easier for institutions to comply with these really important requirements.”
Spreitzer added that if the department were to put together a technical stakeholder committee to provide feedback on the portal, that would help make the system easier for institutions to use.
“But again, the department has rejected that,” she said.