ED’s Office of General Counsel announced some major changes to institutions obligations under Section 117 of the Higher Education Act which requires institutions to disclose information about ownership and control by foreign sources, contracts with foreign sources, and gifts from foreign sources. Schools have historically reported this information on their E-App (Electronic Application) in question 71, however the Department announced that beginning on June 22, 2020 Section 117 information must be reported using the Department’s new reporting system available at https://partners.ed.gov/ForeignGifts.
Federal law requires most 2-year and 4-year postsecondary schools to report ownership or control by foreign sources and contracts with or gifts from the same foreign source that, alone or combined, have a value of $250,000 or more for a calendar year.
Generally, a school must report this information by January 31 or July 31 (whichever is sooner) after the date of receipt of the gift, date of the contract, or date of ownership or control. The January 31 report should cover the period July 1–December 31 of the previous year, and the July 31 report should cover January 1–June 30 of the same year.
As a condition of an institution’s Program Participation Agreement (PPA), colleges, universities and postsecondary schools are legally obligated comply with the statutory requirement to report on ownership/control by and gifts/contracts with foreign sources which is found in HEA Sec. 117 [20 U.S.C. 1011(f)]. Section 117 requires institutions to report ownership and control by foreign sources as well as gifts from, and contracts with, foreign sources that have a value totaling $250,000 in a calendar year. If an institution receives a gift or contract equal to or greater than that amount it must report it to the Department of Education by January 31 and July 31 each year. In a recent electronic announcement, the Department of Education reminded institutions that fail to comply might be referred to the Department of Justice for failing to meet their obligations. Institutions can submit their report by entering the information in Section K, Question 71 of their E-App, and submitting it through the usual process.
Presently the Office of Management and Budget is reviewing the regulatory burden for a new reporting system ED plans to roll out in time for the January 2020 reporting deadline. If it’s approved, schools will have an additional option for submitting the required reports. Should the OMB approve the new system, FSA will provide information in a future electronic announcement.
UPDATE: The OMB did not grant approval to ED for the emergency information collection of foreign gift reporting, thus the new portal is not available for this cycle. A notice was posted int he federal register informing stakeholders of a new information request which will allow the public 30 days to comment on the proposal.
Reauthorization of the Higher Education Act is starting to look more and more like a reality. The Senate HELP Committee raised the priority of HEA reauthorization after Republicans on the House Education Committee approved the PROSPER Act, H.R. 4508. The PROSPER Act made everyone in Higher Ed pause and consider that Higher Ed could change in novel ways, but it was so partisan that has very little change of ever passing a vote. The Senate Education Committee on the other hand has been busy trying to tackle Reauthorization of the Higher Education Act too, but in a more bi-partisan way.
Sen. Lamar Alexander (R-TN.), the Republican chairman of the Senate education committee, has been working with the ranking member, Sen. Patty Murray (D-WA.), to rewrite the 53-year-old Higher Education Act. Over the last few weeks the senate has been hearing testimony from experts and they are rumored to be released before the spring.