The DETERRENT Act aims to increase transparency and oversight of foreign funding and influence in higher education by strengthening disclosure requirements, prohibiting contracts with certain foreign entities, and enforcing stricter penalties for non-compliance.
Thom Tillis
Senator
NC
The DETERRENT Act aims to increase transparency and oversight of foreign funding in higher education by amending the Higher Education Act of 1965. It requires institutions to disclose foreign gifts and contracts, particularly those from countries or entities of concern, and establishes penalties for non-compliance. The Act also mandates policies to manage conflicts of interest and potential espionage risks, and enhances interagency coordination for enforcement. Ultimately, the bill seeks to protect U.S. national security and academic integrity by ensuring greater accountability in foreign funding of higher education.
College Foreign Funding Crackdown: DETERRENT Act Sets $50k Disclosure Rule, Bans Contracts with 'Countries of Concern'
This bill, the DETERRENT Act, significantly overhauls how U.S. colleges and universities handle money and contracts from foreign sources. It lowers the reporting threshold for foreign gifts and contracts to $50,000, mandates detailed public disclosures, and outright prohibits agreements with specific 'foreign countries and entities of concern' unless a waiver is granted. The main goal, according to the text, is to boost transparency and flag potential foreign influence or security risks on campus.
Turning Up the Lights: New Disclosure Demands
The biggest shift is the reporting threshold. Previously, institutions only had to report foreign gifts or contracts worth $250,000 or more. Section 2 drops that number sharply to $50,000. Even more stringent, any gift or contract, regardless of value, from a designated 'foreign country of concern' or 'foreign entity of concern' must be reported. These reports, due annually by July 31st, require extensive detail: the source, value, purpose, and any conditions attached. By May 31st of the year after enactment, the Department of Education must launch a public, searchable database of these disclosures (though individual donor names are generally kept private). Critically, Section 2 also mandates sharing unredacted reports within 30 days with a wide array of federal agencies, including the FBI, intelligence community, and Departments of State, Defense, and Homeland Security.
Red Lines: Contract Bans and the Waiver Maze
Beyond just reporting, Section 2 introduces a flat prohibition: universities cannot enter into contracts with 'foreign countries of concern' or 'foreign entities of concern'. There's a waiver process, but it's not simple. Institutions need to apply to the Secretary of Education 120 days before signing a contract, detailing the agreement. Waivers are only valid for one year and specific to the contract submitted. If an existing partner gets designated as 'of concern' during a contract, the university has just 60 days to terminate the agreement. This could disrupt ongoing research or programs. For example, a university language center funded by a foreign government could face shutdown if that government is designated 'of concern' and a waiver isn't granted or renewed.
Campus Check-In: Faculty Reporting and New Policies
The bill reaches inside university walls, too. Section 3 adds new requirements specifically for faculty and staff at institutions receiving significant federal research funding (over $50M in recent years) or certain HEA Title VI funds. These individuals must annually report foreign gifts above a minimal threshold and foreign contracts valued at $5,000 or more (or of indeterminate value), plus any contract with a 'country or entity of concern'. Universities must then create their own public, searchable database for this information, updated within 30 days of receiving a report. Section 4 also mandates that affected institutions establish formal compliance policies and designate specific officers responsible for certifying adherence.
The Price of Non-Compliance: Enforcement Gets Serious
Section 4 puts significant teeth into these new rules. The Department of Education is tasked with investigating violations, and the Attorney General can sue institutions to force compliance, making the school pay all associated costs. The financial penalties are steep: failing to report a gift could cost $50,000 or the gift's value (whichever is higher) for a first offense, doubling for subsequent ones. Failing to report any information or violating the contract ban rules can trigger fines calculated as a percentage (up to 20% or more for repeat offenses) of the institution's total federal funding received under the Higher Education Act. Perhaps the most severe consequence, added via amendment to Section 487 of the HEA, is that institutions hit with three civil judgments for violations become ineligible to participate in federal student aid programs (like Pell Grants and federal loans) for at least two years. Finally, Section 4 mandates a GAO study on how well federal agencies are coordinating on enforcing these complex new rules.