DETERRENT Act

The bill would amend the Higher Education Act of 1965 to overhaul foreign-gift and foreign-contract disclosure requirements for colleges and universities. It would lower the reporting threshold for gifts and contracts from non-adversary foreign sources from $250,000 to $50,000, and require disclosure of any gift from a foreign country of concern (such as China or Russia) or foreign entity of concern regardless of dollar amount. It would prohibit institutions from entering contracts with foreign adversaries without a one-year, renewable waiver from the Department of Education — a waiver that can only be issued after consultation with national security agencies. It would require certain large research universities and Title VI institutions to maintain policies under which faculty and researchers disclose their own foreign financial relationships, and mandate that private universities with more than $6 billion in non-exempt assets and more than $250 million in adversary-linked investments file annual investment disclosure reports.

The bill would not apply to arms-length purchases of goods or services from non-adversary foreign sources, standard student financial-aid payments for fewer than 16 students, or routine intellectual property licenses unrelated to controlled technologies. Enforcement would be handled through Department of Education investigations and civil actions brought by the Attorney General, with penalties scaled to the severity and recurrence of violations, up to and including loss of eligibility to participate in federal student financial aid programs.

All institutions of higher education that participate in federal student financial aid programs would face new disclosure requirements. Faculty and researchers (covered individuals) at universities receiving more than $50 million in federal research funding or receiving Title VI funds would need to individually disclose foreign financial relationships. Private universities with endowments exceeding $6 billion in non-exempt assets and more than $250 million in adversary-linked investments would face additional investment reporting requirements.

Universities that accept gifts or enter contracts from foreign adversaries without proper disclosure or waiver could face fines equal to or greater than the value of the undisclosed gifts, a percentage of their total federal funding, and ultimately loss of federal student aid eligibility. Faculty who fail to disclose foreign contracts through institutional channels could expose their universities to substantial enforcement liability. The waiver prohibition for repeat offenders cuts off a key compliance pathway.

The Department of Education's General Counsel would investigate potential violations; confirmed knowing or willful violations would trigger a referral to the Attorney General, who would bring a civil action in federal district court. Convicted institutions must reimburse the government's full enforcement costs plus escalating fines. Institutions receiving three civil judgments and losing waiver eligibility would become ineligible for federal student aid for at least two fiscal years and must demonstrate clean compliance for two further years to regain eligibility. ED must establish a publicly searchable disclosure database by May 31 of the year following enactment and share all disclosure reports with the FBI, CIA, DNI, and other national security agencies within 30 days of receipt. ED must also designate a single compliance point-of-contact, publish a list of foreign countries and entities of concern, and provide Congress and investigated institutions with status updates every 90 days.