Understanding Section 117: The Law at the Heart of the Controversy

At the core of this Republican-led investigation is Section 117 of the Higher Education Act of 1965, a provision designed to promote transparency in foreign funding flowing into American institutions of higher education. This law requires colleges and universities that receive federal financial assistance to semiannually disclose any gifts or contracts from foreign sources valued at $250,000 or more in aggregate during a calendar year. The reporting includes details on the source, amount, and purpose of the funds, aiming to safeguard academic integrity and national security from potential undue influence.

Enacted decades ago, Section 117 has gained renewed urgency as global competition intensifies, particularly in fields like artificial intelligence, biotechnology, and quantum computing where research dollars can sway outcomes. Universities must submit these reports by January 31 and July 31 each year, but historical compliance has been spotty, leading to waves of scrutiny from lawmakers and regulators.

A History of Underreporting: Billions Discovered in Past Probes

Concerns over unreported foreign funding are not new. During the first Trump administration in 2019 and 2020, the Department of Education launched investigations into a dozen prominent universities, uncovering more than $6.5 billion in previously undisclosed contributions. Institutions like Harvard, Yale, and the University of Texas at Austin were found to have failed to report hundreds of millions, prompting fines and corrective actions.

A pivotal 2023 report by the Network Contagion Research Institute highlighted even larger discrepancies, estimating that over 200 US colleges and universities received approximately $13 billion in undocumented contributions between 2014 and 2019 alone. This figure represented funds that should have been disclosed under Section 117 but were not, raising alarms about systemic failures in tracking.

The pattern persisted into the Biden years, with compliance rates dropping as enforcement waned. By early 2025, cumulative reported foreign funding since 1986 exceeded $57 billion, but experts suspect the true total, including unreported amounts, is substantially higher.

The Spark: Republican Leaders Launch Fresh Scrutiny

In February 2025, House Oversight Committee Chairman James Comer (R-KY) and Education and the Workforce Committee Chairwoman Virginia Foxx (R-NC) ignited the current probe with a letter to the Department of Education's acting secretary. They accused the Biden administration of rolling back Trump-era investigations and failing to enforce reporting requirements, allowing billions to flow unchecked since 2020.

The lawmakers demanded documents on all Section 117 investigations opened or closed since January 2021, referrals to the Attorney General, and organizational charts for monitoring staff. Their concerns centered on how lax oversight creates a 'black hole' for foreign spending, potentially compromising research and curricula.

This initiative built momentum through 2026, with Chairman Tim Walberg (R-MI) convening a March hearing titled 'U.S. Universities Under Siege: Foreign Espionage, Stolen Innovation, and the National Security Threat.' Witnesses, including the University of Michigan's interim president, testified on risks from adversarial nations, particularly China's Communist Party-linked entities.

Latest Data Revelations: $5.2 Billion in 2025 Funding

The Department of Education's February 2026 release of 2025 disclosures painted a stark picture: over 8,300 transactions totaling more than $5.2 billion in reportable foreign gifts and contracts. This pushed the grand total since 1986 to $67.6 billion, with the bulk disclosed post-2019 reforms.

Qatar led donors at over $1.1 billion, followed by the UK ($633 million), China ($528 million), Switzerland ($451 million), and Japan ($374 million). Top recipients included Carnegie Mellon and MIT (nearly $1 billion each), Stanford ($775 million), and Harvard ($324 million).

Alarmingly, over $2 billion was reported late, violating deadlines. The DoE responded by launching a upgraded public portal in January 2026 at foreignfundinghighered.gov, featuring searchable data, visualizations, and 11 new fields for better transparency.

Photo by Giorgio Trovato on Unsplash

Spotlight on Elite Institutions: Harvard, MIT, and Beyond

Elite universities dominate the recipient list. Harvard tops 'countries of concern' funding at over $610 million since 1986, followed by MIT ($490M), NYU ($462M), Stanford ($418M), and Yale ($400M). Carnegie Mellon and Cornell faced earlier scrutiny for billions tied to Qatar medical campuses and China-linked deals.

Over 200 institutions are implicated in historical underreporting per the NCRI analysis, spanning public and private schools. Recent DoE probes target Harvard, UPenn, UC Berkeley, and Michigan for inaccurate disclosures, signaling ongoing enforcement.

These funds often support research centers, scholarships, and branch campuses abroad, but critics argue they enable influence without oversight. For instance, Qatar's billions correlate with studies linking such funding to campus antisemitism surges.

National Security and Academic Integrity Risks

Republicans highlight dual threats: intellectual property theft and ideological sway. Chinese entities, including military-linked firms, have been accused of exploiting joint research for tech gains, as seen in UMich smuggling cases and Stanford recruitment attempts.

Qatar's funding raises concerns over pro-Hamas rhetoric and antisemitism, with NCRI data showing 300% higher incidents at funded campuses. Broader risks include curriculum bias, silenced dissent, and compromised national security research.

Universities counter that global partnerships foster innovation, but lawmakers demand better safeguards like affiliated entity disclosures and 'countries of concern' waivers.

• IP Theft: Espionage via student/agent networks.
• Influence Ops: Funding think tanks, events pushing foreign agendas.
• Research Security: Conflicts in sensitive fields like AI, biotech.

University and DoE Responses: Steps Toward Compliance

Institutions have ramped up reporting post-scrutiny. Cornell acknowledged $1.3B for its Qatar med school, emphasizing doctor training benefits. Harvard and others implemented internal audits and compliance teams.

The DoE's new portal marks progress, partnering with State Dept for verification. Acting Secretary Carter faces pressure to refer non-compliers to DOJ, with fines up to $1.5M possible.

Higher ed leaders advocate balanced reform, warning overreach could stifle legitimate collaborations vital for US competitiveness. Comer-Foxx letter details demands.

Legislative Push: The DETERRENT Act and Beyond

Republicans champion the DETERRENT Act (H.R.1048/S.1296), passed House 241-169 in 2025, awaiting Senate. It slashes threshold to $0, mandates donor identities, bans aid to non-compliers, and flags 'countries of concern' (China, Iran, Russia, Qatar, Cuba, Venezuela, North Korea).

Over 26 orgs urged passage in May 2026, citing disclosure gaps. Model state laws track funds too. These aim to end loopholes like foundation exemptions.

Photo by Marek Studzinski on Unsplash

Impacts on US Higher Education: Challenges and Opportunities

For colleges, probes mean higher compliance costs, potential funding losses, and research hurdles. Intl students (key revenue) face visa scrutiny amid security fears.

Positive: Enhanced transparency builds donor trust, protects IP. Unis adapt with risk assessments, diversified funding.

Looking Ahead: Reforms for a Secure Academic Future

As probes continue, expect stricter DoE enforcement, more hearings, and DETERRENT passage. Universities must prioritize compliance to sustain global edge.

Balanced oversight can shield innovation while curbing risks, ensuring US higher ed remains a beacon of free inquiry. Stakeholders watch closely for impacts on research, enrollment, and campus discourse. NCRI report on undocumented funds.