Thirty higher ed groups are arguing that the U.S. Department of Education's proposal for how much information colleges and universities need to report on foreign donations and contracts may be too broad.

The organizations wrote in a letter to the department this week that its drafted instructions could be read as requiring institutions to disclose every foreign gift they receive — a far greater scope than what the Higher Education Act (HEA) has historically required.

This latest communication is part of an ongoing battle between the Ed Department and these groups, which have sought clarity on reporting mandates all year. The department has notified several universities this year that it is investigating whether they fully reported their foreign dealings.

Section 117 of the HEA requires U.S. colleges to report gifts from a foreign source if they total $250,000 or more within a calendar year. 

But heightened tensions with other countries, particularly China, have prompted more scrutiny over this part of the federal law governing American higher ed and, broadly, academe's relationship with foreign entities.

This summer, the department sent letters to Georgetown, Texas A&M, Cornell and Rutgers universities, informing them it would investigate whether they had failed to document to the federal government all the foreign money they had collected from countries such as Qatar, which is the largest foreign donor to American colleges, according to an Associated Press analysis of federal education data. It sent a similar letter to the University of Maryland, College Park, in September. 

The Ed Department has never publicly shared its interest in the specific colleges or countries, nor has it disclosed its reasoning for launching the probes. 

The American Council on Education (ACE), which represents leaders of more than 1,700 colleges and industry associations, first contacted the department in January asking for clarification on reporting requirements, Steven Bloom, its director of government relations, told Education Dive in an interview. 

The department did not return the group's message until early July — after ACE sent federal officials another reminder of its questions and the investigations into the colleges were underway, Bloom said. 

In its response, Mick Zais, deputy secretary of the department, did not answer the groups' questions, which included the value and volume of gifts institutions would be required to report. Instead, he referred ACE to Section 117 and wrote that the department was "pleased" that the council is "sensitive to the security, academic freedom, and other concerns associated with foreign funding."

ACE wrote back saying Zais' response was unhelpful in clarifying compliance regulations and that the department had so far "steadfastly declined" to answer specific questions about their instructions.

A 'black hole'

Colleges have long been uninformed about their reporting obligations under the law, Bloom said. 

Zais testified during a Senate committee hearing in February that fewer than 3% of American universities reported receiving foreign gifts or contracts. But reporting practices among institutions vary widely.

A Senate subcommittee investigation also found nearly 70% of institutions that received $250,000 or more in funding from a Chinese entity did not report those payments to the federal government. “Foreign government spending on U.S. schools is effectively a black hole, as there is a lack of reporting detailing the various sources of foreign government funding,” the subcommittee report states.

That body, Hanban, is an affiliate of the Chinese Ministry of Education and manages the controversial Confucius Institutes, which teach language and culture at U.S. colleges. They have been accused by lawmakers of threatening academic freedom. Some institutions have chosen to close their Confucius Institutes. 

Many institutions maintain entities legally separate from the university — endowment and alumni foundations, for instance — and Confucius Institutes usually fall in that category, too, Bloom said.

ACE was the lead for the 29 other groups that sent the letter to the department this week. In it, they outlined objections to the details colleges would need to disclose to the federal government.

Representatives from prominent systems and institutions — such as Carnegie Mellon University, the University of Michigan, Purdue University, the Texas A&M University System and the University of North Carolina System — wrote to the department separately with similar concerns. 

Pushing back on the proposal

The Ed Department's proposal is essentially an extensive checklist that universities would file twice a year. It asks for particulars on foreign gifts that Section 117 hasn't previously required and that the organizations say would be significantly time-consuming for administrators to gather, Bloom said. 

It also calls for colleges to upload documentation of a gift or contract to the department in a way that would be publicly available, potentially forcing colleges to share traditionally private information, Bloom said. Many of the foreign deals concern intellectual property, he added.

The way the department handed down the rules is highly unusual, the organizations said. Generally, when complex laws are open to interpretation, the department has issued guidance to institutions — which it has only ever done twice for Section 117 — or it has published regulations on the matter, which carry the force of law. 

In this case, the department did not formulate official regulations but rather published its proposal — the checklist — under the Paperwork Reduction Act.

Even though the public was still able to comment on the document, Bloom said department officials are following a "truncated" process in which they do not need to respond in-depth to feedback. The groups believe this is illegal and a way of circumventing traditional rulemaking.

ACE hired the law firm Hogan Lovells to create a memorandum detailing what it sees as legal flaws in the department's proposal.

"[B]y swamping the Department with such an enormous amount of information about relationships that universities have with every foreign entity (including those from allied nations such as the United Kingdom and Canada) it will actually make it more difficult to effectively identify, evaluate, and assess gifts and relationships that should be of real concern," the groups' letter reads. 

The 60-day window for commenting on the proposal closed Tuesday. The department is reviewing those submissions and would give each "the consideration it is due," spokesperson Angela Morabito told Education Dive in an email.