The US Department of Education initiated a federal investigation into the University of Michigan (U-Mich) on July 15, citing “inaccurate” and “incomplete” foreign funding disclosures. The Education Department demanded that the university deliver within 30 days all financial records, contracts and other documents related to foreign funding for the past five years.
The investigation is based on Section 117 of the Higher Education Act of 1965, largely unenforced for decades but aggressively revived during the first Trump administration. Section 117 mandates semi-annual disclosure of foreign gifts and contracts exceeding $250,000.
Between 2019 and 2021, the Department of Education initiated 19 compliance investigations of major universities, including Harvard, Yale and MIT. Upon retaking office, President Trump revived this campaign, reopening its Harvard inquiry and launching new investigations into the University of Pennsylvania, the University of California, Berkeley, and now U-Mich.
An April 23, 2025 executive order signed by Trump links Section 117 compliance to the False Claims Act, a federal law that penalizes false claims to the government, creating unprecedented civil liability for universities and potentially individual faculty members. The DETERRENT Act, which passed the House with bipartisan support in March, aims to introduce mandatory fines for Section 117 violations, potentially amounting to millions of dollars, a stark increase from previous penalties.
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