Congressman Glenn Thompson has highlighted a bill aimed at reducing the impact of foreign investments in American higher education

“Our nation is home to most of the premier academic institutions in the world, leading the way in groundbreaking research in health care, energy production, engineering, and agriculture,” Thompson said in his most recent newsletter.

“Unfortunately, that makes these institutions prime targets for our foreign adversaries to exert their influence and potentially compromise American research and intellectual property.”

Thompson said the House Committee on Education and the Workforce recently passed the DETERRECT Act, short for the “Defending Education Transparency and Ending Rogue Regimes Engaging in Nefarious Transactions Act.”

According to the Congressional Budget Office, the bill would “expand disclosure and reporting requirements for institutions of higher education that receive gifts from or enter into contracts with foreign countries or entities.”

The hammer to ensure compliance would be civil penalties and the potential to lose eligibility for federal student financial aid.

The legislation, introduced last month, reduces the value from $250,000 to $50,000 of gifts and contracts subject to disclosure and also requires institutions with endowments greater than $6 billion or more than $250,000 in specified investments to file investment disclosures.

It would also “prohibit institutions from entering into contracts with any foreign entity of concern (China or Russia, for example) without obtaining a waiver.”

“This critical piece of legislation helps mitigate these threats by increasing transparency in foreign investments, closely scrutinizing any gifts or contracts from countries of concern, and implementing concrete enforcement actions for noncompliance,” Thompson said.

The legislation would require a searchable database that tracks these foreign gifts, contracts and investments.

The CBO notes that “institutions that fail to meet the new requirements for three consecutive years would lose access to federal student financial aid for two years.”

“I was proud to also lead passage of an amendment aimed at improving our academic institutions’ ability to report required foreign investments or gifts,” Thompson added.

The CBO’s analysis is that “institutions would generally comply with the new requirements.”