At the end of July, colleges accepting $250,000 or more in foreign funding must file their semiannual report to the Department of Education under Section 117 of the Higher Education Act.
Historically, this information was rarely shared inside the government and never released to the public, but that era has now firmly ended.
Department of Education officials have confirmed the information will be shared across government agencies, including the Department of Justice, signalling a fundamental shift in enforcement posture.
The April 2025 Executive Order addressing potential foreign influence on campuses directed the Department of Education to work with other agencies on audits, investigations, and enforcement.
An Interagency Agreement has since formalised that data-sharing arrangement, meaning universities can no longer treat Section 117 reporting as an isolated administrative obligation.
Colleges should be prepared for information to be shared with the DOJ for exploration of civil actions under Section 117, the False Claims Act, or even criminal action of the kind seen during the first Trump administration.
The government is making clear it will use multiple legal tools to discover whether an institution may be carelessly or knowingly permitting foreign interests to manipulate personnel, ideas, and activities on campus.
Those tools include the Foreign Agents Registration Act, the False Claims Act, the Foreign Corrupt Practices Act, the Foreign Extortion Prevention Act, and export control compliance regimes.
The Department recently relaunched its Foreign Funding Portal, with officials reporting that 559 institutions filed in the latest cycle, the highest turnout yet, while estimating at least 30 percent of schools remained noncompliant.
Officials made clear they would go after the most “arrogant” offenders first, indicating that deliberate non-compliance will attract the sharpest federal attention.
The False Claims Act, with its whistleblower provisions, has been a tool of choice for the current administration, and the Department of Education has stated that Section 117 compliance representations are material to federal funding awards.
A mere whistleblower allegation could lead to the Department re-examining a school’s Program Participation Agreement, limiting federal funding, or considering debarment of institutions or individuals.
The proposed DETERRENT Act in Congress would deliberately link FARA registration requirements with Section 117 foreign source definitions, creating a direct convergence between the two regulatory regimes.
A funding relationship that appears to be an ordinary gift or sponsored research contract may simultaneously raise a registrable-agent question for the faculty member, administrator, or consultant facilitating it.
Institutions evaluating their foreign funding risk in silos are likely missing this fuller regulatory picture, and universities should build a foreign-influence compliance programme scaled to their actual risk profile.
In practice, that means centralising data, building a protocol to detect foreign sources across research, transfers, gifts, and personnel, and auditing against Section 117, FARA, and export rules simultaneously.