S. 1684 requires the Department of Education to audit at least 30 colleges and universities every two years to ensure they are properly reporting foreign gifts and contracts, with priority given to institutions with large endowments, previous foreign funding, or past compliance problems. The bill imposes steep financial penalties on institutions that fail to comply: a 300 percent excise tax on income from designated "foreign countries of concern" and a 110 percent tax on any foreign funding that institutions fail to report. Audit results must be submitted to Congress and posted publicly within 30 days, giving lawmakers and the public visibility into foreign financial relationships at higher education institutions. The new auditing and tax requirements take effect 60 days after the bill is enacted, affecting colleges and universities with at least 500 tuition-paying students, more than half of whom are U.S.-based. This legislation aims to strengthen government oversight of foreign donations to American educational institutions amid broader concerns about foreign influence in higher education.
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