American colleges and universities are for the American public interest, not the interests of any foreign country or global organization. Likewise, state schools are founded for, and sustained by, the citizens of that state.
Accordingly, American higher education can and should favor American citizens—or, for a state school, citizens of that state—for admissions, financial aid or stipends, and other educational opportunities.
Learning about foreign countries and cultures is a necessary part of a liberal arts education and is done best through foreign language instruction, exchange programs, and study-abroad semesters, along with a number of foreign students formally enrolled at America's schools on student visas.
But such activities should never threaten or detract from the mission of American education for Americans who pay for it—not just with their tax dollars but also with forgone revenues, since most schools do not pay into the tax base the way businesses or individuals do.
Notwithstanding the above, many schools take enormous sums of money from foreign sources, inviting them to neglect their primary duty to Americans. This money also allows schools to amass wealth—many have endowments in the billions—which, unsurprisingly, can compromise or corrupt them. “He who pays the piper calls the tune.”
A 2020 report by the Education Department found that over 6 billion dollars were received by American colleges and universities but not reported to the public, as is required by federal law (Section 117 of the Higher Education Act of 1965). Groups which lobby on behalf of American higher educational institutions—such as the American Council on Education (ACE)—then formally opposed Section 117 and its enforcement. Their solution to flouting the law? Get rid of the law.
ACE and the institutions it represents oppose basic, minimal financial transparency and simple reporting. Schools want foreign money on the Q.T. even as the risks to America are obvious—not just "mission creep" away from the American public interest but also threats to national security. The Justice Department routinely indicts both foreign students and professors on espionage offenses, many involving the transfer of technology or trade secrets from highly sensitive, national-defense areas such as computer science or nanotechnology to countries potentially hostile to the U.S., like China.
There is also the issue of "soft power," or information and thought control, which sets the terms and limits of how Americans can think or speak about foreign nations, including adversarial ones.
If past is prologue, schools will continue to take foreign money and hide it from the American public, kicking the can of risks down the road. To stop this malfeasance, the NAS proposes policies to restructure higher education finance:
First, ratio funding: Congress should immediately require the Internal Revenue Service (IRS) to audit any school receiving federal funds to determine how much money comes from foreign sources. This includes foreign tuition. Congress must then reduce the dollar amount of federal funds given to the school by the same number of dollars received from foreign sources. In this way, the incentive to take foreign money is removed.
Second, tax endowments: Congress should also tax the endowments of schools where the endowment exceeds $1 billion. That tax should be levied and collected annually, as income taxes are. Congress should require that those tax revenues be given to a trust, managed by federal, state, and local officials, to be used for local economic development, including grants for small business.
Third, amend the Foreign Agent Registration Act (FARA): Congress must amend FARA to remove exemptions for those in academia, the arts, and business. Congress must also transfer enforcement authority of FARA from the Justice Department to the Department of Homeland Security in partnership with state law enforcement, as well as with the United States Secret Service.
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