The Trump Administration stated last week that it will prioritize compliance and enforcement against colleges and universities with respect to the U.S. Department of Education (ED)'s foreign gift, contract and ownership disclosure regulations in Section 117 of the Higher Education Act (HEA) (Section 117). As reported in a prior Holland & Knight alert, Section 117 obligations generally require that colleges and universities report semiannually to ED regarding certain gifts and contracts from foreign sources valued at $250,000 or more, either individually or combined. Institutions must also report foreign ownership and control.
On April 23, 2025, President Donald Trump signed seven executive orders related to education, including an order directing ED to robustly enforce Section 117 compliance. The order directs ED to take "all appropriate actions" to enforce Section 117, including by working with other federal agencies and the U.S. Department of Justice (DOJ). Specifically, the order requires ED to 1) rescind or reverse any actions by the prior administration that permit higher education institutions to maintain improper secrecy regarding foreign funding; 2) take appropriate steps to require institutions to more specifically disclose details about foreign funding, including the true source of purpose of the funds; 3) provide the public with greater access to information about foreign funding; and 4) hold institutions accountable for failure to comply with the disclosure requirements, including through audits and investigations. The order also indicates that federal funding or potential False Claims Act liability may be at risk for noncompliance.
Following the executive order, ED announced that it would return enforcement of Section 117 to ED's Office of General Counsel (OGC), which is the same office tasked with enforcement during the first Trump Administration. During the Biden Administration, the Federal Student Aid office was responsible for Section 117 enforcement. According to ED, this change demonstrates the administration's prioritization of Section 117 enforcement.
Colleges and universities should assess their compliance with Section 117 requirements. It is anticipated that ED may continue to initiate compliance reviews and records requests in the coming months.
