Appendix C

Regulatory and Compliance Issues

As noted in the introduction to Chapter 4, U.S. institutions of higher education are responsible for complying with several requirements that, when met, address many of the concerns that a foreign-funded language and culture institute might pose. The following sections discuss the reporting requirements of Section 117 of the Higher Education Act of 1965; the role that accrediting bodies play to assess whether institutions implement oversight mechanisms and maintain key principles; and research security.

FOREIGN GIFT AND CONTRACT REPORTING

Section 117 of the Higher Education Act of 1965¹ requires institutions to report gifts from and contracts with any foreign source where the aggregate amount of gifts and contracts from the foreign source is $250,000 or more in a calendar year. Institutions submit reports to the Department of Education twice annually. The required reporting elements include the name and address of the foreign source; whether the payments are for a gift or a contract; and a description of any restrictions on the gift or contract. The Department of Education maintains a publicly facing website² with summary information for each institution reporting under the Section 117 requirement. The Department of Education defines restrictions to include provisions regarding the following:

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¹ Higher Education Act of 1965, Public Law No. 89-329, 89th Congress, 1st session (November 8, 1965), Section 117 (U.S. Congress, 2022).

² See https://sites.ed.gov/foreigngifts/.

• The employment, assignment, or termination of faculty
• The establishment of departments, centers, research or lecture programs, or new faculty positions
• The selection or admission of students
• The award of grants, loans, scholarships, fellowships, or other forms of financial aid restricted to students of a specified country, religion, sex, ethnic origin, or political opinion

Section 10339B of the CHIPS and Science Act of 2022³ imposes a further reporting requirement on institutions of higher education receiving funding from the National Science Foundation (NSF). This new requirement includes annual reporting of gifts and contracts with a value of $50,000 or more from a foreign country of concern each year. This act also imposes record retention requirements on the institutions related to such contracts, including the requirement that the contracts be made available to NSF upon request. The committee is aware of the Department of Education Information Collection Request on this subject in December 2022,⁴ to which the American Council on Education and other higher education associations provided comment in February 2023.⁵ The American Council on Education notes that the Department of Education has yet to issue formal regulations implementing Section 117 following its enactment in 1986 and that this recent letter asks for clarification and streamlining in support of “a regulatory framework to help ensure that institutions of higher education understand and can comply with their statutory obligations” (Mitchell, 2023).

THE ROLE OF ACCREDITATION

Colleges and universities depend on a variety of mechanisms to protect academic freedom, freedom of expression on their campuses, and academic governance. One mechanism that those outside of academia may not be familiar with is the system of institutional accreditation. The U.S. system of institutional accreditors with statutory power to review whether institutions maintain key principles—including academic freedom and the authority of the faculty to define curricula—serves as an important defense of the values of U.S. higher education. It is these institutional accreditors—collective associations of diverse colleges and universities that are approved by the U.S. Department of Education—that have the power and statutory authority to maintain core values of U.S. higher education and to hold U.S. institutions of higher learning accountable through their

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³ H.R. 4346 – Supreme Court Security Funding Act of 2022, Public Law No. 117-167, 117th Congress (August 9, 2022) (U.S. Congress, 2022).

⁴ Docket No. ED-2022-SCC-0159; see https://www.federalregister.gov/documents/2022/12/27/2022-28119/agency-information-collection-activities-comment-request-foreign-gifts-and-contracts-disclosures.

⁵ See https://www.acenet.edu/Documents/Comments-ED-Sec117-022723.pdf.

power to sanction an institution for failure to uphold these principles (Bonilla, 2021; Gellman-Danley, 2021). The U.S. Department of Education regulates and reviews the activities of institutional accreditors.

The defense of academic freedom in its several facets is included, for example, within the Southern Association of Colleges and Schools Commission on Colleges (SACSCOC) Principles of Accreditation (2017), as well as in the guiding documents of other comprehensive accreditors, such as the Middle States Commission on Higher Education Standards for Accreditation and Requirements of Affiliation (MSCHE, 2015). SACSCOC Standard 6.4, for example, explicitly states: “The institution publishes and implements appropriate policies and procedures for preserving and protecting academic freedom.” SACSCOC standard 10.4 stipulates a role of faculty in academic governance and faculty authority over the curriculum. “The institution (a) publishes and implements policies on the authority of faculty in academic and governance matters, (b) demonstrates that educational programs for which academic credit is awarded are approved consistent with institutional policy, and (c) places primary responsibility for the content, quality, and effectiveness of the curriculum with its faculty.”

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