Politics February 23, 2026

U.S. expands interagency effort to track foreign funding at colleges

State Department to lend national security expertise to Education Department’s enforcement of foreign funding disclosures

By Nina Shah
U.S. expands interagency effort to track foreign funding at colleges

The U.S. government is intensifying its scrutiny of foreign financial relationships with American colleges and universities, adding the State Department to a Department of Education-led compliance push. Officials say the move is intended to improve reporting and transparency under Section 117 of the Higher Education Act, while critics raise concerns about academic freedom after presidential threats to cut federal support over campus activism and policy disputes.

Key Points

  • Federal response: The State Department will support the Department of Education’s enforcement of foreign funding disclosure rules to strengthen compliance and transparency.
  • Regulatory basis: Enforcement follows an April 2025 executive order to apply Section 117 of the Higher Education Act, which requires reporting of foreign gifts or contracts over $250,000.
  • Scale of foreign funding: In 2025 U.S. colleges and universities disclosed 8,300 transactions totaling $5.2 billion; the largest reported foreign sources were Qatar ($1.1 billion), Britain ($633 million) and China ($528 million).
  • Sectors impacted: Higher education and research funding ecosystems may face increased reporting burdens and scrutiny; public finance and institutions that rely on federal grants could see policy and reputational effects.

The federal government is amplifying efforts to detect and manage what officials describe as malign foreign influence at U.S. institutions of higher education, with the State Department now taking a formal role in a Department of Education initiative.

Administration officials said the collaboration aims to strengthen oversight and compliance around foreign funding disclosures required of colleges that receive federal aid. Those requirements derive from Section 117 of the Higher Education Act, which the president directed to be enforced in an executive order issued in April 2025. Section 117 obliges recipient institutions to report gifts or contracts from any foreign source that exceed $250,000.

The Department of Education opened a new reporting portal in December to collect the disclosures called for under the statute. Officials told reporters the addition of the State Department is intended to bring national security and counter-influence expertise to those oversight efforts.

Under Secretary for Public Diplomacy Sarah Rogers said the department’s participation will "ensure an invigorated compliance assurance effort by the federal government." Rogers made the comment during a briefing at the State Department and framed the move as bolstering the Education Department’s ability to monitor adherence to the disclosure rules.

Administration officials declined to provide specific cases in which foreign funding had improperly shaped academic activity, saying instead that their immediate objective is to improve university compliance and transparency. The officials emphasized that the priority is ensuring institutions meet their reporting obligations rather than detailing particular instances of misuse.

The stepped-up enforcement follows earlier scrutiny of foreign engagement in U.S. higher education. A U.S. Senate subcommittee on investigations produced a report in 2019 that documented China’s influence on the U.S. education system, a development the federal government says prompted renewed attention to enforcement of the disclosure rules.

Data released by the Department of Education show that colleges and universities disclosed 8,300 transactions totaling $5.2 billion in 2025. Those totals cover contributions from foreign governments as well as private companies and individuals. The largest reported foreign source in 2025 was Qatar at $1.1 billion, followed by Britain at $633 million and China at $528 million, according to the department.

Policy debates and enforcement actions have unfolded against a backdrop of potential federal pressure on universities. The president has threatened to withhold federal funding from institutions over a range of campus issues, including protests in support of Palestinians amid Israel’s war in Gaza, transgender policies, climate initiatives and diversity, equity and inclusion programs. Those threats have prompted concerns about the implications for free expression and academic freedom on campuses.

Officials said the immediate aim of the new interagency arrangement is improved reporting compliance and greater transparency about foreign financial relationships, rather than singling out particular institutions or publishing new allegations of undue influence.


Context for readers: The administration’s approach combines a regulatory tool - enforcement of Section 117 disclosures - with the State Department’s national security perspective. The outcome, officials say, should be stronger compliance by universities and clearer public accounting of foreign funding flows.

Risks

  • Academic freedom concerns: Presidential threats to cut federal funding over campus activism and certain policies have raised questions about potential impacts on free speech and institutional autonomy, affecting universities and donors.
  • Compliance and administrative burden: Expanded oversight and new reporting requirements may increase operational and legal costs for colleges and universities, with implications for budgets and administration.
  • Transparency-driven reputational risk: Greater disclosure of foreign funding could prompt reputational scrutiny for institutions and may influence future private and foreign funding decisions, affecting university funding mixes and research programs.

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