New Executive Order Signals Heightened Section 117 Enforcement Priority
- Alan Grose, XL Law Consulting
- May 5
- 2 min read
On April 23, 2025, President Trump issued an Executive Order directing the Secretary of Education to step up enforcement of Section 117 disclosure requirements.
The Executive Order also raises the stakes of noncompliance to include loss of federal funds and potentially significant civil penalties.
On April 23, 2025, President Trump issued an Executive Order, entitled “Transparency Regarding Foreign Influence at American Universities,” directing the Secretary of Education to take more robust measures to enforce the requirements of Section 117 of the Higher Education Act. As we reviewed in an earlier article[, Section 117 requires institutions of higher education to report all gifts or contracts from a foreign source totaling $250,000 or more in a calendar year.
The order calls for the Secretary to:
“reverse or rescind any actions by the prior administration” that are inconsistent with the current administration’s priorities;
“require universities to more specifically disclose details about foreign funding, including the true source and purpose of the funds;”
“provide the American people with greater
access to information about foreign funding to higher education institutions;” and
“work with the heads of other executive departments, agencies, and offices, where appropriate, to conduct audits and investigations … to ensure compliance.”
In a press release following the order, the Department of Education announced it had moved its Section 117 enforcement functions from the Office of Federal Student Aid to the Office of General Counsel. In the same press release, the Department also announced its second Section 117 compliance investigation in as many weeks.
Prospective Certifications of Compliance
The order also directs the Secretary “and the heads of other appropriate executive departments and agencies” “to prospectively ensure that certification of compliance by higher education institutions with [Section 117] and any other applicable foreign funding disclosure requirements is material for the purposes of 31 U.S.C. 3729 [the False Claims Act] and for receipt of appropriate Federal grant funds, which shall not be provided in cases on noncompliance.”
In addition to the potential loss of federal funds, the designation of materiality for False Claims Act purposes entails that the consequences of noncompliance could include significant civil penalties.
Implications for IHEs
With this intensifying enforcement environment, colleges and universities may wish to assess their procedures for identifying, documenting, and reporting gifts and contracts that might be subject to Section 117’s reporting requirements.