Bills give states a blueprint for policing colleges’ foreign funds
Statehouses could be the new focus of efforts to more strictly police the foreign ties of American colleges.
Two national groups, the Manhattan Institute and State Shield, have drafted model legislation to create state-level disclosure requirements for funds coming to colleges from China and other countries. Bills reflecting the prototypes have been introduced in at least three states in the current legislative session.
The playbook for pursuing action in the states as well as in Washington is not a new one — scholars at the Manhattan Institute, a conservative think tank, also wrote a model bill, with the Goldwater Institute, that served as a template for states’ efforts to dismantle colleges’ diversity, equity, and inclusion programming.
This two-pronged strategy is now focused on international education. The U.S. House Committee on Education and the Workforce is expected to approve a measure on Wednesday to tighten federal reporting rules for overseas gifts and contracts to colleges.
Public officials have increasingly sounded the alarm about foreign influence in higher education, warning that campuses could be vulnerable to governments, particularly that of China, interested in obtaining American research and intellectual property.
In fact, six states have passed their own foreign-fund laws over the past four years. The model bills could give greater momentum to such efforts.
But state mandates could be burdensome and confusing for colleges forced to double their reporting, especially if state and federal rules differ or conflict, higher-education groups said. A patchwork of laws could also lead foreign governments and other actors to shift their funding to states with laxer requirements.
“The state legislation is well-meaning but not consistent,” said Sarah Spreitzer, vice president for government relations at the American Council on Education, or ACE. “This is better done at the federal level if there are national-security concerns about transparency.”
It doesn’t need to be an either-or, said Neetu Arnold, a policy analyst who drafted the Manhattan Institute model bill.
The four-decade-old federal rules, part of the Higher Education Act, have been irregularly enforced, Arnold said. For instance, the first Trump administration opened investigations into foreign gifts and contracts at nearly 20 prominent research universities, but the inquiries were largely dropped under President Joseph R. Biden.
Arnold charged that colleges have failed to report millions of dollars from overseas under existing federal law. She previously compiled a database of “hidden foreign funds” at the National Association of Scholars, another group that has warned of outside influence on campuses.
ACE and other higher-education groups have said the federal rules are unclear and that they need more guidance from the U.S. Department of Education, which is charged with collecting this information. Colleges’ disclosure of foreign gifts and contracts has increased in recent years as the issue has gained greater attention, Spreitzer said.
The Manhattan Institute model legislation builds on federal policy as well as state measures like a 2021 Florida law that requires colleges to report grants or gifts worth $50,000 or more from seven “foreign countries of concern,” including China, Iran, and Russia. Thirteen states now have some sort of higher-ed fund-disclosure law on the books; the oldest dates back to the mid-1980s.
Like Florida, the Manhattan Institute bill would require reporting overseas funds of $50,000 or more, lower than the current federal threshold of $250,000. (The congressional proposal would also lower the amount that triggers disclosure.)
The model legislation would apply to all countries, and annual reporting would be cumulative, meaning that all funds from a single source would count toward the total. Tuition paid by foreign governments or companies, like a scholarship program funded by the Saudi government, would have to be disclosed, but tuition paid by individual students or families would be exempt. The information would be published in a publicly available database.
The draft bill also deals with some of what Arnold sees as loopholes in the existing law. For example, it clarifies that funds that pass through college-related organizations would be reportable; colleges have argued that college foundations are not subject to current disclosure requirements because they are legally separate entities.
The measure would impose stiff fines on violators and order state officials to do random audits to ensure compliance. Under federal law, colleges that fail to submit reports risk losing access to federal student-aid funds.
Meanwhile, the draft legislation from State Shield, an organization that works to “combat [Chinese Communist Party] threats to U.S. peace, security, and values,” is more bare-bones. It applies to funds from Chinese sources only and does not contain an enforcement mechanism.
Officials from State Shield did not respond to requests for comment.
Arnold disputed that imposing state reporting rules would be duplicative. Colleges should already be collecting information that would have to be disclosed — like donor names and the purpose of funds — as a matter of good practice and would simply need to filter their databases for the specific reporting amount, she said.
“I think transparency is important,” Arnold said. “Hopefully, this legislation would promote accountability and rebuild trust with the public.”
