ACE and other higher education associations submitted comments last week strongly opposing the Department of Education’s (ED) Nov. 13 notice of interpretation (NOI) regarding the foreign gifts and contracts reporting provision in Section 117 of the Higher Education Act, noting the “interpretation” clearly exceeds the letter of the statute and increases the risk that ED will take harmful action against schools.
Enacted to enhance transparency particularly for large foreign gifts—the reporting threshold is $250,000 per gift—ED nonetheless has never issued formal regulations implementing the rule, and what guidance they have provided has been little help. Instead of engaging in remediation efforts with institutions to identify and correct insufficient or incorrect reporting as the law requires, ED instead launched expansive and burdensome investigations of 12 major public and private universities.
The November NOI is another attempt to expand Section 117 beyond the existing statute. It incorporates failure to report Section 117-covered gifts and contracts as a violation of ED’s Title IV “program participation agreement." Violation of the agreement could result in an institution losing its eligibility to accept federal student aid funds, as well as the ability for students to use their financial aid at that institution.
While colleges and universities must and will comply fully with foreign gift and contract reporting requirements, ED’s actions only make that more difficult.
To read the comments and the legal analysis included in our submission, click here.