New Bill Mandates Universities Disclose Foreign Gifts Over $50K, Restricts Deals with 'Countries of Concern'

This legislation, the DETERRENT Act, significantly ramps up the rules for how U.S. colleges and universities handle money and contracts from foreign sources. The main goal is to bring more transparency to foreign funding and potentially limit influence from certain countries deemed 'of concern' by the government.

Cracking Open the Books on Foreign Cash

The biggest change? Universities now have to report any foreign gift or contract worth $50,000 or more in a year – that threshold used to be $250,000. Even more stringent, any gift or contract, regardless of value, must be reported if it comes from a 'foreign country of concern' or a 'foreign entity of concern' (think governments or companies flagged for national security reasons). Institutions also need to report if they are 'substantially controlled' by a foreign source. These reports, due annually by July 31st, will detail who gave the money, its purpose, any strings attached, and will be compiled into a public, searchable database managed by the Department of Education. Imagine a university research department getting a grant from an overseas tech firm – if it hits $50k, or if the firm is on that 'concern' list, it triggers a detailed public disclosure.

Staff Reports and Investment Watchlists

The scrutiny extends beyond the institution itself. Universities receiving significant federal research funding (over $50M in the last 5 years) or Title VI funds must create policies requiring their own faculty and staff to report foreign gifts over a 'minimal value' and foreign contracts worth $5,000 or more annually. Any contract with a 'foreign country or entity of concern' must be reported regardless of value. This info also goes into a public database, though individual names might be protected in some cases. Separately, very wealthy private universities (over $6 billion in assets) holding more than $250 million in 'investments of concern' (like stocks or debt in flagged foreign entities) will need to file annual reports detailing these holdings. This means professors collaborating internationally might face new reporting duties, and universities with large global endowments need to track and disclose potentially sensitive investments.

The Waiver Maze and Big Sticks

The Act outright prohibits universities from entering contracts with 'foreign countries or entities of concern' unless they get a specific waiver from the Secretary of Education. Getting this waiver isn't automatic; institutions need to apply 120 days in advance, prove the contract benefits the university's mission and U.S. interests, and the Secretary consults with national security agencies before deciding. These waivers only last a year. Failure to comply with these new reporting and contracting rules comes with serious teeth. The Department of Education can investigate, and the Attorney General can sue institutions. Fines for non-compliance are steep, starting at $50,000 or the value of the unreported gift/contract for first offenses related to gifts, and potentially reaching 10-20% of an institution's total federal funding for certain violations or repeat offenses involving contracts with entities of concern. Multiple violations could even make a university ineligible for federal student aid programs for at least two years. This creates a high-stakes environment where navigating international partnerships requires careful legal and administrative attention, and mistakes could carry multi-million dollar consequences potentially impacting university budgets and programs.