No Contracts with Foreign Adversaries Act

This bill would bar colleges and universities from signing contracts with “foreign countries of concern” or related organizations unless they get special permission from the U.S. Department of Education. Examples include China, Russia, Iran, or North Korea. Any permission would last only one year and is tied to the exact contract terms. Schools must apply at least 120 days before signing, and the Education Department must consult national security and science agencies before granting approval. Existing contracts with these countries or entities must be reported within 30 days of the law taking effect, and if a partner later gets labeled a concern, the school has 60 days to end the deal. Schools must name a compliance officer to personally certify they are following the rules.

Penalties can be severe. The Education Department can investigate and ask the Justice Department to go to court. Schools can be forced to pay the government’s enforcement costs and face fines: 5–10% of their most recent year’s federal funding for a first knowing violation, and at least 20% for later violations. After multiple violations, a school can lose its ability to get waivers, and if it violates the rules for three straight fiscal years, it can lose access to federal student aid programs for at least two years. That could affect students’ financial aid until the school proves two years of full compliance.

Key points

• Who is affected: Colleges and universities; students who rely on federal financial aid.
• What changes: No contracts with certain foreign governments or entities without one-year, case-by-case permission; compliance officer required; preexisting and newly labeled partners trigger quick action.
• When: Apply 120 days before a contract; report existing contracts within 30 days of enactment; end a contract within 60 days if a partner becomes a “country/entity of concern.”