New Bill Bans College Funds from 'Risky' Foreign Nations—But Creates a Massive Transparency Loophole

The “Securing Academia from Foreign Entanglements Act” is essentially a new set of rules for colleges and universities about who they can take money from internationally. The goal is to protect U.S. national security by cutting financial ties between higher education institutions and countries the government deems a risk.

This bill creates a new section of law that strictly bans universities from receiving any gift or signing any contract with a “foreign country of concern.” This term includes nations already labeled as “covered nations” under existing law, but it also gives the Secretary of Education, in consultation with Defense, State, and Intelligence officials, the power to designate any other country that they decide is harming U.S. national security or foreign policy (SEC. 2).

The Ban: National Security Over Academic Funding

For universities, this ban is a big deal. Imagine a major state university that relies on international partnerships to fund a cutting-edge engineering lab. If the country providing that funding is suddenly designated a “country of concern,” the university must immediately stop accepting any gifts or entering new agreements. This could yank the rug out from under research programs, potentially costing jobs and stalling innovation. However, the bill does make one critical exception: it doesn't stop students from those countries from paying standard tuition, fees, or housing costs, which is a relief for university budgets and international students alike (SEC. 2).

The Transparency Trapdoor

Here’s where things get tricky and frankly, a little weird. Under current law, colleges have to report large gifts they receive from foreign governments to maintain transparency. This bill, however, updates those rules to say that institutions don't have to count money or assets coming from a “foreign country of concern” when reporting under the existing disclosure rules (SEC. 2).

Think about that for a second. The whole point of this bill is to sever ties with nations deemed risky. Yet, it simultaneously exempts universities from having to report gifts they receive from these very same risky nations. It’s like saying, “We’re worried about foreign spies, so we’re going to make it easier for them to sneak money in without telling anyone.” This creates a huge transparency trapdoor, potentially hiding significant influence efforts that might not be structured as formal contracts but are still designed to sway academic research or policy.

Who Gets to Decide?

Another key provision is the wide-ranging authority given to the Secretary of Education. They get the final say on designating a country as a “foreign country of concern.” While they must talk to the Secretaries of Defense and State, and the Director of National Intelligence, the power to label a country based on vague criteria—like “acting in a way that harms U.S. national security or foreign policy”—is broad. This means the list of prohibited nations could expand quickly, and potentially be influenced by shifting political winds rather than strictly defined security threats. For universities, this creates significant regulatory uncertainty; a partnership that is fine today could be illegal tomorrow, making long-term planning for international research collaborations a nightmare.