On Friday, the Department of Education (ED) published in the Federal Register a Notice of Interpretation (NOI) on its enforcement authority for failure to adequately report under Section 117 of the Higher Education Act (HEA), requesting public comments by December 14, 2020. With this NOI, ED is now stating that institutional eligibility to participate in the Title IV student aid programs hinges upon compliance with the Section 117 foreign gifts reporting requirement.
HEA Section 117 falls under Title I of the HEA and deals with the disclosure of foreign gifts received by institutions of higher education. Foreign gift reporting has been required by the HEA for decades, and requires institutional gifts and contracts from foreign sources valued at more than $250,000 to be reported to ED, but guidance has been virtually nonexistent and enforcement has been historically lax.
The Trump administration has taken a particular interest in foreign gifts to colleges and universities and has launched several investigations into alleged misreporting. In June of this year, ED developed a portal to facilitate institutional compliance with the law, and last month released a report finding that 60 institutions that filed reports since June had not submitted any reports between 1986 (when the foreign gifts reporting requirement was adopted into the HEA) and June 2020.
The NOI draws a link between the Section 117 foreign gifts disclosure and the conditions for institutional Title IV eligibility under the Program Participation Agreement (PPA), where institutions agree to comply with a number of requirements, including completing surveys “or any other Federal collection effort.”
The NOI clarifies that ED considers the Section 117 reporting requirement to be one of those other federal collection efforts and that, as such, an institution’s failure to comply with Section 117 is a failure to comply with PPA, giving ED the same enforcement authority it holds for other violations of PPA. ED concludes that it can take corrective actions, including termination of institutional Title IV eligibility, for failure to comply with the foreign gifts reporting requirement.
NOIs function similarly to Interim Final Rules in that they become effective immediately upon publication in the Federal Register, but are still subject to the notice and comment process. Comments are due by December 14, and NASFAA, along with the community, will be submitting feedback. Stay tuned for updates in Today’s News.
Publication Date: 11/13/2020