On Tuesday, December 17, 2019, the U.S. Department of Education (ED) posted a second information collection notice seeking public input on potential new foreign gift reporting requirements under Section 117 of the Higher Education Act (HEA). In response to the first notice on this matter, AGB circulated a Federal Policy Alert on October 29, 2019 and expressed concerns (as did much of the higher education community). This is a follow-up to that alert including information on changes made by this second notice and what this means for institutions going forward.
With this second notice, ED is seeking public comment by December 27, 2019 and asking that the Office of Management and Budget (OMB) clear a final set of foreign gift reporting requirements by January 3, 2020. This extremely tight comment and approval timeframe likely means that much of what is in this second notice will be final and institutions will need to comply with these reporting requirements by January 31, 2020. Should institutions wish to comment on this second notice, they may do so by submitting comments here.
In this revised posting, ED did address two concerns raised by AGB. First, the agency eliminated the need to report information about foreign donors outside of an institution’s knowledge, such as whether a foreign entity is substantially owned, controlled, or financed by a foreign source. Second, ED clarified that institutions must report only gifts from and contracts with a foreign source, the value of which are $250,000 or more, considered alone or in combination with all other gifts from and contracts with that foreign source within a calendar year. Institutions that receive less than $250,000 from a foreign source in aggregate will not be required to report the gift(s).
However, many of AGB’s other concerns and those voiced by others in the higher education community, particularly around the burden and cost of compliance and potential privacy and confidentiality risks, were not addressed. While the higher education community is currently working on a response to ED reiterating strong concerns and encouraging ED to address them, this truncated OMB approval period suggests that ED is aiming to implement new Section 117 reporting requirements by January 31, 2020. The higher education community has also requested additional time for stakeholders to submit comments to ED regarding this latest notice, but it is unlikely that this request will be granted. Therefore, AGB members should familiarize themselves with the information institutions will likely now be required to report to ED concerning foreign gifts, which can be found here, and how these new requirements might impact institutional policies and decisions.