At the end of July, colleges and universities that accept $250,000 or more in foreign funding must make their semiannual report to the Department of Education (ED) under Section 117 of the Higher Education Act. Historically, this information was rarely shared inside the government and never released to the public. Those days are over. ED officials now say the information will be shared across government agencies, including the Department of Justice (DOJ). Having spent years as a national security prosecutor, I read that shift plainly: the government wants compliance that reaches the actual risk, not compliance that checks a box.

College campuses attract students, scholars, benefactors, and research collaborators from around the world. They are the bazaars in the marketplace of ideas. As with other marketplaces in today’s age, they too could be subject to a version of targeted advertising. The government has even issued a primer to colleges about foreign influence. So it is no surprise that longstanding worries about foreign influence have not only survived into this administration but sharpened. The April 2025 Executive Order addressing potential foreign influence on campuses directed the ED to work with other agencies on audits, investigations, and enforcement. An Interagency Agreement has since formalized that data-sharing.

Colleges should be prepared for information to be shared with other agency stakeholders in the government contracting process, and also with the DOJ for exploration of civil actions under Section 117, the False Claims Act, or even criminal action, such as those in the first Trump administration. This heightened attention is ostensibly designed to gain better visibility into how foreign entities may attempt to shape and manipulate campus personnel, ideas and activities, but it also represents the threat of another tool to police the administration’s own policy agenda. The prophylaxis is to get ahead of that scrutiny. 

Many Tools at the Government’s Disposal

The government is making clear that it will use its many tools to discover whether an institution may be carelessly or knowingly permitting foreign interests to manipulate them. While different compliance regimes may identify different technical issues, the government is now considering these risks collectively, and institutions should also widen their aperture. Colleges are becoming laboratories for government enforcement. For foreign influence, this includes Section 117 of the Higher Education Act, the Foreign Agents Registration Act (FARA), the False Claims Act (FCA), as well as the Foreign Corrupt Practices Act (FCPA/FEPA) and export control compliance. While each of these regimes has historically been separately administered, it is evident that as the unitary executive grows, so does the information sharing between agencies.

The enforcement of some of these laws is in a state of flux, but they could still be brought to bear on this issue. For example, the FCPA anti-bribery law has long focused on U.S. businesses paying bribes to get favors overseas, but with the advent of the Foreign Extortion Prevention Act (FEPA), foreign entities that pay U.S. institutions could also be subject to its restrictions. If universities obtain foreign support, the government will want to know what strings are attached.

Similarly, export laws regulate the transfer of sensitive data, including dual-use technologies and defense information. Colleges and institutions are long-familiar with the robust classification, licensing, and compliance requirements under these laws. However, during a collaboration, providing access to controlled information to foreign nationals, even of technical data, could provide the basis for a criminal investigation. I had conducted these investigations myself, and that was before the advent of AI and data analytics that help detect potential violations. 

Complicating matters is that the False Claims Act, with its whistleblower provisions, has been a tool of choice for the current administration. There are multiple certifications required for schools to receive federal funding, whether under specific government contracts or under the financial aid requirements of Title IV. ED has made clear that they take the position that representations regarding Section 117 compliance are material to the award. Consequently, these certifications should not be viewed as boilerplate – an FCA claim could be in the offing. 

This increases the risk that a mere whistleblower allegation can lead to ED re-examining the Program Participation Agreement, limiting federal funding, considering debarment of institutions or individuals, bringing suit, or simply attempting to shame a school that resists its policy interests. 

Section 117

The Department recently relaunched its Foreign Funding Portal to improve reporting. As the latest cycle closed, Department officials responsible for administering the program laid out the compliance stakes. They reported that 559 institutions filed, the highest turnout yet. They also estimated that at least 30 percent of schools remained noncompliant, making it clear the Department would go after the most “arrogant” offenders first.

Section 117 is fundamentally a transparency tool. For most of its history, Section 117 was a low-visibility compliance obligation, enforced and complied with inconsistently.

There are many areas of friction to the compliance requirement, which has contributed to the inconsistency. It is not always black and white, and recent years have turned it into an instrument of policy. Until now, for example, it was not routine to ask whether a foreign funder was also tied to antisemitic activity; according to ED, that question is suddenly live, and it adds a whole dimension to donor diligence. Even if a recipient of foreign funds is a student group, the government could well have questions.

The reporting triggers may sound simple but could be difficult to discern without systems in place. For example, determining whether a counterparty is a foreign source is not always straightforward. A counterparty owned or controlled by a foreign source triggers a separate obligation regardless of dollar value, and designated countries of concern warrant added scrutiny. At a more basic level, smaller gifts or contracts within multiple components of a university may not ordinarily be centralized for aggregation purposes so the school may not know. There are many potential pitfalls.

Convergence with FARA Concerns

Section 117 has some similarities with another foreign-influence detection law — FARA. However, because Section 117 is institutionally focused, concerns for individual personnel may not be top of mind, but they can be related. Several trends in the current administration’s posture suggest the government is inclined to share data among agencies and use all tools at its disposal to make deterrent examples out of individuals as well as institutions. 

There is political support for this posture, even if unlikely to pass this year. In the Defending Education Transparency and Ending Rogue Regimes Engaging in Nefarious Transactions Act (DETERRENT Act), Congress has also proposed strengthening these reporting requirements. Among other tightening, it includes a deliberate effort to ensure that anyone who would be required to register as a foreign agent under FARA is also, by definition, captured as a "foreign source" under Section 117, and vice versa.

In practice, this leads to a convergence in regulatory regimes. A funding relationship that looks like an ordinary gift or sponsored research contract on its face may also raise a registrable-agent question for the individual faculty member, administrator, or consultant facilitating it. Moreover, reporting of a foreign source by the university may lead to sharing information with the investigative agencies looking into that foreign agent question, bringing with it the risk of enforcement using seemingly unrelated tools, including FARA, immigration, espionage, export laws, or other federal laws. Corroborating this approach, some of ED’s letters requesting information have asked for identification of particular personnel associated with foreign source activities. 

For its own part, Section 117 authorizes civil action to compel compliance and permits the federal government to recover the costs of investigation and enforcement from noncompliant institutions. ED officials have explained that although these tools have not been historically used, they are on the table and could be prioritized for institutions that are not taking their obligations seriously. ED also takes the position that compliance with Section 117 is a condition of an institution's participation in Title IV student financial aid programs, meaning that noncompliance can expose an institution to False Claims Act liability or violation of the PPA, up to termination of program eligibility.

Institutions evaluating their foreign funding risk in silos are likely missing this fuller regulatory picture. Senior leadership is often unaware of the extent of foreign funding, and the government perceives them to be all too eager to raise money for the university. Universities should insulate themselves and their people by building a foreign-influence program scaled to their risk and aligned with the Justice Department’s guidance on evaluating compliance programs. In practice, that means centralizing data, building a protocol to detect foreign sources across research, transfers, gifts, and personnel, auditing against Section 117, FARA, and export rules, and training people to use it. Creating a system before the government asks questions will help identify the scope of risk, demonstrate institutional responsibility, and discourage the government from spending its time doing the investigation for you.