The U.S. Department of Education (DOE) announced an investigation into Harvard and Yale on Wednesday and accused both universities of failing to report foreign gifts and contracts worth hundreds of millions of dollars.
The federal agency claimed Yale failed to report at least $375 million in foreign transactions and hasn't reported any gifts or contracts for the last four years. The DOE did not say how much Harvard might have failed to report.
Section 117 of the Higher Education Act requires American Title IV-eligible colleges and universities to report any foreign gifts or contracts that exceed $250,000 in value. Institutions must also disclose any foreign ownership or control, twice each year -- something many schools have failed to do, according to federal officials.
A spokesperson from Yale's office of public affairs and communications provided a statement to Fox News, saying: "Yesterday, Yale received a Department of Education request for records of certain gifts and contracts from foreign sources under Section 117 of the Higher Education Act of 1965. We are reviewing the request and preparing to respond to it."
Education officials also highlighted concerns about Harvard's lack of "institutional controls" over foreign funds and cited the case of Dr. Charlies Lieber.
"Dr. Charles Lieber, chair of Harvard University’s Chemistry and Chemical Biology Department, was indicted for lying about his involvement with the Chinese government’s Thousand Talents Plan and admitting that Harvard lacks adequate institutional controls for effective oversight and tracking of very large donations," the DOE said.
The Harvard office of public affairs and communications also confirmed to Fox News that it had received a notice of Investigation from the DOE, and said it is currently formulating a response.
These accusations come just four days after Secretary of State Mike Pompeo sounded the alarm about Chinese infiltration into the U.S. education system.
The secretary said this isn't uncommon for Chinese officials based in the U.S. to actively seek to sow seeds of chaos and gain access to sensitive information -- specifically on college campuses.
“Maybe some of you have heard about the time when the Chinese consulate paid the UC San Diego students to protest the Dalai Lama," Pompeo said. “It shows depth. It shows systemization. It shows intent.”
Education Secretary Betsy DeVos said taxpayers are owed an explanation about where schools are getting these monetary gifts from, adding that the more the agency investigates, the more they discover a total lack of transparency.
“If colleges and universities are accepting foreign money and gifts, their students, donors, and taxpayers deserve to know how much and from whom," she said in the statement.
"Moreover, it’s what the law requires. Unfortunately, the more we dig, the more we find that too many are underreporting or not reporting at all," DeVos added. "We will continue to hold colleges and universities accountable and work with them to ensure their reporting is full, accurate, and transparent, as required by the law.”
The Education Department’s records since approximately 1990 show American universities and colleges have reported donations from Qatar, China, Saudi Arabia and the United Arab Emirates in the amount of $6.6 billion. However, with alleged gaps in reporting, the number may actually be much higher.
The DOE also mentioned high tuition costs in its statement and said it's ironic that despite large, consistent, foreign donations, the price tag at these institutions remains high for students.
"Although foreign money generally flows into the largest and richest colleges and universities, such money apparently does not reduce or otherwise offset American students’ tuition costs," the department added.