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The Education Showdown: Funding, Federal Control, and the Fight for Reform

The Education Showdown: Funding, Federal Control, and the Fight for Reform
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With a decade of experience in education journalism, Lauren Robinson leads The EduTimes with a sharp editorial eye and a passion for academic integrity. She specializes in higher education policy, admissions trends, and the evolving landscape of online learning. A firm believer in the power of data-driven reporting, she ensures that every story published is both insightful and impactful.

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Political leaders, education experts, and policymakers are profoundly divided on the department's function, effectiveness, and necessity, as the debate regarding the U.S. Department of Education has reached a critical juncture. Recent Congressional hearings, data analyses, and policy proposals have reignited debates regarding the efficacy of education funding and the appropriateness of the federal government's continued supervision of K-12 education. The debate is fundamentally driven by two critical issues: the potential reform or elimination of the Department of Education and the influence of education funding on student achievement.

Note: U.S. Department of Education / Source: https://www.eschoolnews.com/educational-leadership/2024/11/21/trump-linda-mcmahon-lead-education-department/

On February 5, 2024, a significant controversy ensued when Rep. Kevin Kiley (R-Calif.) presented a graph that appeared to indicate a direct correlation between declining student test scores and increased education expenditure. His argument, which was intended to support initiatives to reallocate federal funding and increase subsidies for private education, was founded on a study conducted by the Edunomics Lab at Georgetown University. Nevertheless, Kiley's critics contend that the data was misrepresented, as she oversimplified the correlation between academic outcomes and funding. The Edunomics Lab report endeavored to investigate the most effective methods and locations for financing increases rather than implying that spending had no effect on academic performance. Nevertheless, the danger of misleading policymakers was present when spending and test scores were presented on the same chart without additional context. The potential for test scores to have declined even further without increased funding, variations in the allocation of education funds by states and districts, and economic and social challenges that affect student performance were all identified by researchers as missing factors. Morgan Polikoff, an education policy expert, cautioned that the misinterpretation of such data could facilitate misguided arguments for the reduction of school funding, rather than its effective allocation. However, the study has already had an impact on state legislatures, as legislators in states such as Oregon, Alabama, and New Jersey have cited the data during discussions regarding school funding policies. The comparisons were rendered even more problematic by the failure of certain reports to consider inflation adjustments or historical funding contexts.


Higher test scores are not directly correlated with education funding in a linear fashion. The National Assessment of Educational Progress (NAEP), which evaluates the abilities of fourth- and eighth-grade students in mathematics and reading, has demonstrated progressive fluctuations that are influenced by a variety of factors, such as policy changes, student demographics, and the quality of instruction. It was anticipated that the recent infusion of nearly $200 billion in pandemic relief funds for K-12 schools would assist in the mitigation of learning losses. Harvard and Stanford research indicates that federal relief funds were instrumental in averting even more severe declines, particularly in low-income districts. Nevertheless, the results were inconsistent among states as a consequence of the varying spending strategies and policy responses. While some districts prioritized academic recovery, others encountered obstacles such as labor shortages and the inability to expand tutoring programs. The discussion is further complicated by the fact that the long-term trend of declining academic achievement predates the pandemic. Experts contend that the enhancement of student outcomes necessitates more than merely increased funding; it is imperative to implement strategic planning, policy innovation, and effective resource allocation.

Source: https://www.usnews.com/news/education-news/articles/2021-08-04/americas-children-head-back-to-school-amid-growing-uncertainty

The destiny of the U.S. Department of Education is the subject of another significant controversy, in addition to the ongoing funding debates. Linda McMahon reiterated her dedication to implementing President Donald Trump's agenda, which involves the department's dismantling or substantial reduction, during her confirmation hearing before the Senate Health, Education, Labor, and Pensions (HELP) Committee. McMahon contended that the Department of Education imposes excessive bureaucracy and red tape, while concurrently contributing only a small portion of national education funding. She acknowledged that congressional approval is necessary for the department's formal abolition; however, she indicated that the administration was already taking steps to reduce its influence through downsizing, internal investigations, and prospective executive orders.


McMahon did not provide any specifics on how these functions would be managed if the department were dismantled, despite her assurances that critical funding sources, such as those for the Individuals with Disabilities Education Act (IDEA), would continue. She proposed measures that were consistent with the conservative Project 2025 agenda, including the transfer of the Office for Civil Rights (OCR) to the Department of Justice and the transfer of IDEA oversight to the Department of Health and Human Services. Her proposals raised concerns about the potential for a reduction in civil rights enforcement for students. McMahon acknowledged that she was unaware of numerous details concerning the department's ongoing restructuring, such as the number of employees who had been placed on leave and the scope of Elon Musk's Department of Government Efficiency (DOGE) team's involvement in evaluating agency operations. Additionally, her lack of direct experience in education policy created additional skepticism. Her career has been primarily focused on business and politics, despite her initial aspiration to become a teacher. She co-founded World Wrestling Entertainment (WWE), served briefly on Connecticut's state school board, and led the Small Business Administration under Trump before becoming a senior official in the Trump campaign.

Note: U.S. new Education Sec. Linda McMahon / Source: https://i.abcnewsfe.com/a/6d9c473b-6411-4519-ac23-fd372938ee48/linda-mcmahon-3-gty-gmh-250213_1739459359579_hpMain_16x9.jpg?w=992

Republicans praised McMahon as a critical force in the pursuit of education reform, contending that federal supervision should be diminished in favor of state and local control. Sen. Bill Cassidy (R-La.) underscored the importance of parents' involvement in their children's education, particularly in the areas of curriculum decisions and school choice programs. Nevertheless, Democrats expressed apprehension that McMahon's leadership would result in the diversion of public education funding to private institutions and the erosion of civil rights protections. The hearing was described by Sen. Maggie Hassan (D-N.H.) as "surreal," as she contended that McMahon was simultaneously discussing her role as Education Secretary and preparing to dismantle the department. The executive orders of Trump, which McMahon supported, were one of the most contentious topics. These orders included the defunding of schools that promote Diversity, Equity, and Inclusion (DEI) initiatives, the prohibition of transgender girls from participating in girls' sports teams, and the redirection of federal funds to expand school choice and private school subsidies.


Critics of the Department of Education contend that it has failed to fulfill its mission of ensuring equal access to quality education and enhancing student outcomes. They argue that despite substantial increases in federal funding, student performance has remained stagnant, parental control has been undermined by federal overreach into local education matters, and there is inefficiency and excessive bureaucracy. This is illustrated by the fact that thousands of employees earn six-figure salaries, while schools are challenged with resource allocation. In contrast, those who oppose the department's elimination contend that it is essential for the enforcement of civil rights laws and the promotion of educational equity. They caution that the agency's dissolution could have a detrimental impact on marginalized students, including those with disabilities, by disrupting critical federal programs, creating funding disparities (as wealthier states would be better equipped to compensate for lost federal support than poorer ones), and reducing oversight and accountability (allowing some states to implement policies that could exacerbate inequality).


The U.S. education policy debate is far from resolved. The federal government's role in education has been the subject of renewed discussion following McMahon's confirmation hearing, and the misinterpretation of education expenditure data has exacerbated the debate regarding the effectiveness of federal funding. The fundamental question that persists as Congress addresses these issues is whether education policy should continue to be managed at the federal level or whether states and local governments should assume full control. For generations to come, the outcome will influence the future of American education, affecting students, instructors, and parents.

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Lauren Robinson
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Vice Chief Editor, [email protected]
With a decade of experience in education journalism, Lauren Robinson leads The EduTimes with a sharp editorial eye and a passion for academic integrity. She specializes in higher education policy, admissions trends, and the evolving landscape of online learning. A firm believer in the power of data-driven reporting, she ensures that every story published is both insightful and impactful.

Universities Under Fire: The Growing Crisis of Trust in Higher Education

Universities Under Fire: The Growing Crisis of Trust in Higher Education
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Megan Donovan
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Education & Admissions Correspondent, [email protected]
Megan Donovan covers the fast-changing world of college admissions, standardized testing, and student success strategies. With a background in academic counseling, she brings a deep understanding of the challenges students face. Whether she’s analyzing Ivy League acceptance trends or uncovering flaws in the education system, her work provides invaluable insights for students and parents alike.

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Universities are experiencing a precipitous decline in public confidence on a global scale. Institutions of higher education, which were once regarded as centers of innovation, knowledge, and societal progress, are currently being scrutinized by the general public, media outlets, and political leaders. The erosion of trust is a pressing concern that jeopardizes the integrity and sustainability of higher education, whether in Australia, where universities are accused of prioritizing commercial interests over education, or in the United States, where ideological concerns dominate the discourse. Concerns regarding political bias, financial mismanagement, declining research integrity, questionable academic practices, affirmative action controversies, and the increasing cost of education have led to this crisis. The public's confidence in universities is eroding, which has prompted discussions regarding how to reestablish their credibility and relevance in society.

Note: University Students Sources: https://www.luminafoundation.org/news-and-views/we-cant-ignore-a-crisis-of-confidence-in-american-higher-education/

Universities have emerged as a focal point for criticism from both main political parties as Australia prepares for a federal election. Peter Dutton, the Opposition Leader, has accused universities of prioritizing "woke" issues that are not in accordance with the commonplace concerns of Australians. Similarly, the Albanese government has initiated a Senate inquiry into university governance, which is focused on high executive salaries and financial malfeasance concerns. Numerous universities have been discovered to consistently underpay their employees, while vice-chancellors and senior executives receive salaries that are disproportionately high. Growing dependence on international student fees raises concerns regarding financial sustainability and the prioritization of profits over education. The University of Tasmania was criticized in a 2024 parliamentary review for prioritizing commercial interests over its primary educational mission. Although political leaders have criticized universities, the current crisis is largely the consequence of long-term governmental policies. Direct public funding for universities has been consistently diminished by successive Australian administrations. Despite the fact that enrollments tripled, government funding (excluding HECS/HELP) decreased from 0.9% of GDP in 1995 to 0.6% in 2021, according to a 2023 Australia Institute report. Universities were compelled to implement business-oriented models, which resulted in a decline in public confidence, job losses, weakened educational standards, and increased commercialization.

Trust in higher education has also declined in the United States. Confidence in universities declined from 57% in 2015 to 36% in 2023, as indicated by a Gallup poll. Political agendas, financial concerns, research integrity, and the diminishing value of a college degree have all contributed to this decline. In 2023, Republican confidence in universities decreased from 56% in 2015 to 20%, as conservatives increasingly perceive academia as dominated by liberal ideologies. Universities are accused of promoting progressive narratives while suppressing conservative perspectives. Republican legislators and media figures have initiated campaigns against higher education institutions, characterizing them as "liberal indoctrination" centers rather than sites of open academic inquiry, as conservative dissatisfaction has increased. In order to mitigate perceived ideological bias, certain states have implemented governance restructuring or defunding of public universities.

The replication crisis, particularly in the social sciences, is another substantial factor that undermines public trust. Many groundbreaking studies in psychology and related disciplines have failed to replicate, which has raised concerns about the validity of the research. The crisis has revealed research misconduct and data manipulation, or p-hacking, thereby eroding trust in academic expertise. Universities' reputations have been further tarnished by their tardiness in addressing these concerns. The transparency and ethical standards of universities have been further undermined by a series of high-profile scandals. In response to plagiarism allegations, Harvard President Claudine Gay resigned, with Harvard's initial efforts to defend her being perceived as an institutional cover-up. The double standard in academic honesty, which dictates that students are subject to severe penalties for plagiarism while administrators are not, has exacerbated skepticism. Similar incidents, such as the Francesca Gino data falsification scandal at Harvard Business School, indicate a trend in which universities prioritize their own interests over academic integrity.

Additionally, university admissions and employment policies have generated controversy. Universities have been attempting to maintain affirmative action through indirect means in response to the Supreme Court's 2023 ruling against race-based admissions. Numerous elite institutions have been accused of favoring racial diversity quotas over Asian and Caucasian applicants. The use of Diversity, Equity, and Inclusion (DEI) statements in faculty hiring has also prompted concerns regarding ideological filtering in academic appointments. In addition to these reservations, the increasing expense and diminishing return on investment of higher education have resulted in a significant number of Americans losing faith in it. Many individuals are questioning whether a degree is worth the financial burden due to the significant increase in college tuition. Many graduates are experiencing difficulty in obtaining high-paying employment due to the unprecedented levels of student loan debt. Employers are progressively reporting that college graduates lack the essential workforce skills, which diminishes the perceived value of a degree.

These issues were further exacerbated by the COVID-19 pandemic, which revealed deficiencies in academic institutions, particularly in the fields of public health and medicine. The public's skepticism regarding academic expertise was precipitated by the conflicting and evolving guidelines that emerged during the pandemic. Later, prolonged school closures and mask mandates were criticized as overreactions, resulting in the silencing of dissenting academics. Public confidence was further eroded by the perception that universities were aligning with political agendas rather than objective science. A Reddit discussion on "The Erosion of Trust in Higher Education" elicited concerns from a variety of users. Some individuals observed inconsistencies in academic integrity policies, in which plagiarism was selectively disregarded. Some individuals questioned the consistency with which academic standards are applied by universities, particularly in high-profile cases. Users also noted that media outlets selectively construct academic issues to align with political agendas, which further polarizes public opinion.

In order to regain public trust, universities must implement tangible reforms that address these systemic issues. In order to restore academic integrity, it is imperative to strengthen peer review processes, enforce more stringent data transparency standards, and hold fraudulent researchers accountable. Rather than prioritizing one political ideology over another, universities must cultivate a culture that embraces a diverse array of viewpoints. Merit and equity should be prioritized in the admissions and hiring processes, with the aim of eliminating race-based policies and assuring transparency. In an effort to render higher education more affordable, it is imperative to implement cost reforms, such as financial accessibility, expanded scholarship opportunities, and reduced tuition fees. The same standards for misconduct must be applied to all individuals, regardless of their status, in order to maintain academic honesty.

Sources: https://news.wsu.edu/press-release/2022/09/20/pandemic-did-not-weaken-student-trust-in-higher-education-overall/

The erosion of public confidence in universities is not a partisan matter; it is a pervasive issue that impacts higher education in a variety of national and political contexts. Universities must implement tangible measures to reestablish their credibility, regardless of whether it is the result of ideological bias, commercialization, academic dishonesty, or financial negligence. The erosion of trust will persist if institutions of higher learning do not address these concerns, which will undermine their role in society and threaten the future of academia. Universities must make a commitment to intellectual diversity, accountability, and transparency in order to regain their status as pillars of public welfare and knowledge. By doing so, they can reaffirm their critical role in the development of a society that is informed, innovative, and equitable for future generations.

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Education & Admissions Correspondent, [email protected]
Megan Donovan covers the fast-changing world of college admissions, standardized testing, and student success strategies. With a background in academic counseling, she brings a deep understanding of the challenges students face. Whether she’s analyzing Ivy League acceptance trends or uncovering flaws in the education system, her work provides invaluable insights for students and parents alike.

Academic publishing could be facing a watershed moment

Academic publishing could be facing a watershed moment
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Megan Donovan
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Education & Admissions Correspondent, [email protected]
Megan Donovan covers the fast-changing world of college admissions, standardized testing, and student success strategies. With a background in academic counseling, she brings a deep understanding of the challenges students face. Whether she’s analyzing Ivy League acceptance trends or uncovering flaws in the education system, her work provides invaluable insights for students and parents alike.

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Academic publishing is currently at a critical juncture. The imminent transformation of scholarly communications is indicated by the expiration of significant Transformative Agreements (TAs) by the end of 2025, the withdrawal of numerous UK universities from Elsevier's Read-and-Publish agreements, and the increasing criticism of the conventional subscription-based model. The global academic publishing landscape is enduring a substantial transformation as a result of the financial constraints that are tightening institutional budgets and the ongoing struggle of open access (OA) models to establish long-term sustainability.

Sources: https://www.axiell.com/solutions/special-library-software/

The broader financial and structural issues that affect academic publishing are underscored by the decision of several UK universities, including Sheffield, to withdraw from Elsevier's Read-and-Publish agreements. The reevaluation of library expenses is a result of the sector-wide budget cuts that UK universities are currently experiencing. Sheffield allocated 30% of its content budget to significant publishing agreements, with Elsevier alone accounting for 12%. TAs were initially perceived as a means to transition to full open access; however, they have since become financially unsustainable. The OA transition has been halted, as indicated by Jisc's report on UK TAs. By 2024, it is anticipated that 25% of TA expenditures will be dependent on UKRI block grants. The value of subscription-based publishing models is being increasingly questioned by libraries. Alternative access strategies, including document delivery services, rights retention policies, and open repositories, are being investigated as cost-effective solutions.


Renegotiations or the potential collapse of the current big deal model may be initiated by the expiration of the main TAs with Elsevier, Wiley, Springer Nature, Taylor & Francis, and Sage by the end of 2025. The utilization of post-cancellation access rights, the expansion of open-access repositories and preprint servers, the strategic use of Article Processing Charges (APCs), and the limited resubscriptions to key journals are all strategies that institutions are currently experimenting to operate without traditional publisher agreements. Researchers are compelled to adjust to new content-access methods as a result of their departure from Elsevier's agreement. Institutional support is necessary to facilitate the implementation of these new access models. Historically, academic publishers have depended on the escalation of subscription fees. Publishers will be compelled to reevaluate their pricing and access models if numerous universities terminate these agreements. Publishers must either adjust to more transparent, cost-efficient pricing or face obsolescence, while institutions must determine the type of OA system they wish to support.


TAs were initially intended to serve as a transitional tool to complete OA publishing; however, they have evolved into a means for publishers to preserve their revenue streams. Despite the growing adoption of open access (OA), subscriptions continue to account for 80% of publisher revenue in the $11 billion academic journal market. Research institutions are still subjected to financial constraints as a result of subscription-based publishing. The introduction of TAs was intended to address the inefficiencies of hybrid OA models, which led to institutions paying twice—once for subscriptions and again for OA publication fees. The Max Planck Digital Library (MPDL) White Paper (2015) demonstrated that the current subscription allocations were adequate to facilitate the transition of journals to open access. Peter Suber (2012) had previously contended that research institutions do not require additional funding to support open access; rather, they must redirect existing resources. Institutions were able to ensure that research was accessible and maintain control over financial streams by incorporating OA publishing costs into library acquisitions.

Source: https://blog.library.gsu.edu/2013/01/29/library-computer-availability-widget-currently-offline/

The initial negotiations with publishers encountered significant resistance, as they were hesitant to consolidate subscription and OA costs into a singular budget under library control and relinquish control over distinct financial streams. Institutions in Germany, Sweden, Norway, Hungary, and the University of California have all canceled significant subscriptions as a result of this resistance. Publishers were compelled to recognize the changing power dynamics as a result of these cancellations, which granted libraries a larger advantage in negotiations. In order to prevent revenue losses, major publishers incorporated TAs into their business strategies by selling TAs as commercial products, shifting perceptions of TAs from an institution-driven initiative to a publisher-driven model, and maintaining fixed payments for access and OA publishing, which occasionally align with old subscription fees. Many libraries were skeptical of TAs at this juncture, as they believed they were reinforcing publisher dominance rather than disrupting the conventional publishing model.


Early TAs were successful in increasing OA content; however, they continued to rely on fixed pre-payment models that included lump sum fees, article limits, and legacy subscription costs that were incorporated into the agreements. This posed a risk of securing libraries in an evolved version of Big Deals, rather than allowing them to achieve full financial flexibility. In Sweden's Bibsam consortium negotiations, a novel approach is emerging that involves the transition from pre-paid article caps to post-payment models. This model involves institutions paying based on actual article output rather than pre-set quotas, the complete elimination of reading fees, and the alignment of budgets with researcher activity, allowing funds to follow authors rather than publishers. Libraries may guarantee that financial obligations adhere to researchers rather than being confined to publisher-controlled agreements by implementing post-payment models.


Journal quality, reputation, and audience are prioritized by researchers over publishing models. Historically, researchers have been burdened by OA mandates, which has resulted in reluctance to adopt new platforms. TAs reduce administrative friction by incorporating open access into established journals, thereby minimizing disruption. TAs facilitate the transition by providing researchers with OA options, rather than imposing behavioral change. The Max Planck Digital Library (MPDL) was an early adopter of TAs and has been actively involved in their evolution. Cost-neutral agreements facilitated the transition to publishing models; however, MPDL soon acknowledged the necessity of transitioning to post-payment structures. MPDL effectively reduced its dependence on subscription publishers, redirected funds to researcher-driven OA publishing needs, and expanded agreements to include smaller publishers by aligning budget allocations with publishing output, thereby leveling the playing field.


Although TAs are not an ideal solution, they are essential for the transition to OA. They offer transient financial transparency; however, they must transform into sustainable OA business models. Post-payment models provide greater flexibility by transitioning from fixed pre-payment structures, thereby guaranteeing cost fairness and budget flexibility. Libraries must participate in negotiations, as the acceptance of publisher-driven TA models may result in the perpetuation of the same financial inefficiencies. Collective action is necessary for systemic change, and initiatives such as OA2020 and ESAC assist institutions in the negotiation of more intelligent agreements. Transformative Agreements are merely a preliminary measure, not the ultimate objective. They are not an end in themselves; rather, they are a transitional tool that is used to thoroughly restructure academic publishing.


The rare opportunity for institutions to reset their relationships with publishers is represented by the expiration of key TAs in 2025. Universities must embrace this opportunity to advocate for open-access agreements that are transparent, cost-effective, and researcher-focused. Although TAs have facilitated a transition, they are not the definitive solution. Institutions that neglect to adopt a proactive strategy may be compelled to adopt yet another unsustainable financial model. In contrast, those who prioritize alternative access strategies and demand genuine cost transparency will be at the vanguard of influencing the future of scholarly communication. The actions of universities, libraries, and funding bodies in the coming years will determine whether academic publishing experiences a crucial moment that results in significant change or a rebranded version of the same system.

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Education & Admissions Correspondent, [email protected]
Megan Donovan covers the fast-changing world of college admissions, standardized testing, and student success strategies. With a background in academic counseling, she brings a deep understanding of the challenges students face. Whether she’s analyzing Ivy League acceptance trends or uncovering flaws in the education system, her work provides invaluable insights for students and parents alike.

Finding a "safe" way to collaborate with China on research?

Finding a "safe" way to collaborate with China on research?
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Megan Donovan
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Education & Admissions Correspondent, [email protected]
Megan Donovan covers the fast-changing world of college admissions, standardized testing, and student success strategies. With a background in academic counseling, she brings a deep understanding of the challenges students face. Whether she’s analyzing Ivy League acceptance trends or uncovering flaws in the education system, her work provides invaluable insights for students and parents alike.

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Collaboration in research has always been a key component of scientific advancement, encouraging creativity and cross-border knowledge sharing. However, because of economic competition, national security issues, and geopolitical tensions, research collaborations with China have grown more complicated in recent years. Countries across the world, but especially the US and Europe, are reevaluating their research partnerships with China, balancing the advantages of scientific collaboration against the hazards. The changing nature of research cooperation with China underscores important ramifications for other countries and the associated difficulties.

Note: Navigating Research Collaboration with China: Balancing Innovation, Security, and Geopolitical Tensions.

Particularly in vital areas like artificial intelligence (AI) and quantum computing, the US has adopted a tough posture in limiting research and technical cooperation with China. The Decoupling America’s Artificial Intelligence Capabilities from China Act is one of the most important pieces of legislation. It restricts U.S. companies and universities from conducting AI research in China or working with Chinese institutions, and it forbids the importation of AI technology and intellectual property created in China. Although American tech firms may oppose the law, it represents a larger movement in policy toward technological decoupling. This illustrates a zero-sum mentality in which technological and scientific superiority are seen as strategic advantages rather than simply commonplace worldwide breakthroughs.

Because of worries about espionage dangers in academia, China's military-civil fusion policy, which incorporates civilian research into military applications, and intellectual property theft and technology misuse, the U.S. government has increased its inspection of academic cooperation. As a result of these worries, the Department of Justice (DOJ) launched programs like the China Initiative, which investigated possible incidents of research theft. However, the initiative faced significant backlash for racial stereotyping and ultimately shut down in 2022. Concerns regarding the loss of talent and creative potential have been raised by the unintended implications of these measures, which have had a chilling impact on Chinese-American scholars and students in American colleges. According to some experts, overly securitizing research agreements could hinder scientific innovation and make it more difficult for American researchers to access important breakthroughs occurring in China.

Source: https://www.chinadailyhk.com/hk/article/600079

Europe has approached scientific relationships with China in a less combative but more cautious manner than the U.S. Concerns in Europe are less about direct security threats and more about ethics, data protection, and regulatory compliance. China is viewed by the EU as a structural rival in governance and ideology, a competitor in technology and trade, and a partner in areas like public health and climate change. But the rivalry element is becoming more noticeable, which makes scholarly partnerships more closely examined. Data transfer limitations impede the transmission of research data, and stringent medical data protection laws make medical research partnerships with China more challenging. Dual-use research concerns also make it difficult for European universities to determine whether their partnerships with Chinese institutes could be used for military purposes.

Europe and China continue to have a robust scientific partnership in spite of these worries. In contrast to the U.S., where such partnerships decreased, co-publications between China and key European countries such as Germany, France, and Italy increased significantly between 2013 and 2022. This demonstrates Europe's complex strategy, which appreciates the scientific and economic advantages of cooperation with China while simultaneously acknowledging the hazards. In an effort to overcome these obstacles, European institutions have introduced research security rules and due diligence procedures to evaluate partnerships on an individual basis. While some nations, like Germany, have been more reluctant to impose legally binding laws on institutions, others, like the Netherlands and Norway, have put regulatory tools in place to protect sensitive knowledge.

Some analysts think that some scientific areas are still possible for international collaboration with China, even in the face of tightening limitations. For tackling the world's environmental problems, climate science and environmental research—in which China possesses a wealth of climate data and expertise—remain essential. Research on topics like food security and renewable energy that supports the Sustainable Development Goals (SDGs) is seen as politically neutral and advantageous to all stakeholders. Collaboration is still essential for global readiness and response in the important fields of public health and disaster mitigation. The Association of Pacific Rim Universities (APRU) and the Max Planck Society are two groups that support ongoing collaborations in these areas, prioritizing reciprocal advantages over geopolitical antagonism. China's increasing sway over international standards-setting for new technology, however, raises worries since it may reshape the regulatory landscape to support Chinese businesses and research agendas.

In addition, some academics contend that it is impractical to try to distinguish between politically sensitive and safe study topics. Like the United States, China might utilize research partnerships as a bargaining tool in trade negotiations. Furthermore, open collaboration is becoming more difficult due to worries about intellectual property and economic security. China and the West both fear intellectual property theft, which results in further restrictions on collaborative research, and European firms are concerned about losing their patented environmental innovations to Chinese rivals. The lack of trust in the world is growing, which makes it more difficult for scientists to work together freely. China is developing an independent innovation ecosystem while lowering its reliance on Western research partnerships. However, many Chinese scientists still value international collaborations to advance technical innovation, obtain international patents, and publish in prestigious publications.

China is expanding its AI research partnerships with nations in Asia, the Middle East, and Latin America. Countries such as India, Saudi Arabia, and Singapore are developing closer research partnerships with Chinese universities. While Malaysia's AI research partnerships with China and Saudi Arabia are expanding due to investments in blockchain and cloud computing, Saudi Arabia's AI research is concentrated on partnerships with Pakistan, India, and Egypt rather than Western nations. Through encouraging academic and technological exchanges among participating nations, China's Belt and Road Initiative (BRI) has contributed to the development of these collaborations. These partnerships mark the beginning of a more multipolar research ecosystem in which nations other than the conventional Western power centers are increasingly influencing the direction of science and technology.

A comprehensive, well-rounded strategy is crucial given the challenges of conducting research with China. Protecting academic freedom while enforcing risk assessments based on evidence, encouraging selective collaboration by finding projects that are beneficial but don't pose many security risks, making clear policies that allow ethical and safe cooperation, and ensuring research security without racial profiling or unnecessary restrictions are all things that governments and academic institutions should do. To guarantee that scientific discoveries benefit all parties involved while lowering risks, policymakers should also take into account frameworks for ethical AI development, data-sharing agreements, and global research governance.

Note: Graph illustrating the trends in research collaborations with China from 2013 to 2022.

Geopolitical, economic, and security concerns are becoming more and more prevalent in research collaborations with China. Europe is taking a risk-based strategy, other countries are establishing autonomous partnerships with China, and the United States is heading toward technical decoupling. The ability to navigate these obstacles with openness, diligence, and honesty will be crucial for the future of international research. In an increasingly fragmented world, ensuring that collaborative research continues to fuel global innovation will require striking the correct balance between scientific advancement and national security. The worldwide research community can strive toward a more cooperative and sustainable approach to global scientific growth by enacting practical policies and encouraging inclusive discourse.

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Megan Donovan
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Education & Admissions Correspondent, [email protected]
Megan Donovan covers the fast-changing world of college admissions, standardized testing, and student success strategies. With a background in academic counseling, she brings a deep understanding of the challenges students face. Whether she’s analyzing Ivy League acceptance trends or uncovering flaws in the education system, her work provides invaluable insights for students and parents alike.

Linda McMahon auditions to lead Education Department Trump wants to eliminate

Linda McMahon auditions to lead Education Department Trump wants to eliminate
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Lauren Robinson
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Vice Chief Editor, [email protected]
With a decade of experience in education journalism, Lauren Robinson leads The EduTimes with a sharp editorial eye and a passion for academic integrity. She specializes in higher education policy, admissions trends, and the evolving landscape of online learning. A firm believer in the power of data-driven reporting, she ensures that every story published is both insightful and impactful.

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President Donald Trump has nominated former WWE executive and Small Business Administration director Linda McMahon as his nominee for Secretary of Education. As Trump and his administration continue their efforts to completely demolish the Department of Education, her nomination coincides with a period of major upheaval in the American educational system. In her testimony, McMahon discussed her nomination with the Senate Health, Education, Labor, and Pensions (HELP) Committee. She has been a longstanding supporter and close ally of Trump, and she has promised to carry out the administration's education plan, which includes expanding school choice programs, reducing federal monitoring, and giving states more authority. Her inexperience with education policy, however, has alarmed politicians and educators alike, who doubt her capacity to successfully run such a vital federal department.

Sources: https://abcnews.go.com/Politics/trump-picks-linda-mcmahon-head-department-education/story?id=116033211

The Department of Education has long been criticized by Trump, who has called it a "con job" and said he would rather see it shut down completely. Executive orders, policy changes, and budget cuts are just a few of the actions his administration has done to weaken the agency. Budget cuts, the termination of research contracts, and the transfer of duties to other government agencies have all been made possible by the establishment of the Department of Government Efficiency (DOGE), which was spearheaded by tech entrepreneur Elon Musk. Important education research initiatives have been essentially put on hold as a result of DOGE canceling 89 contracts totaling $881 million inside the Institute of Education Sciences. The administration has also cut $101 million in funding for education programs devoted to diversity, equity, and inclusion (DEI). According to reports, DOGE employees obtained millions of students' private and financial information, raising ethical and legal questions about data security and privacy.


Trump's plan has received broad backing from Republican lawmakers who contend that state and local governments, not the federal government, should be in charge of education policy. House Speaker Mike Johnson, who supports school choice and greater parental authority, has called for the department's dissolution. They contend that giving states more control over education will increase competition and raise academic achievement. Critics worry that in the absence of federal supervision, gaps in funding and educational quality would increase, depriving low-income kids of chances and resources. However, civil rights organizations, educators, and Democratic leaders have denounced the action, stating that it would unfairly hurt kids who are low-income, have disabilities, or are dependent on federal student aid. Major teachers' unions have joined Senator Bernie Sanders in protesting McMahon's candidacy and the department's overall destruction. Senators Andy Kim and Elizabeth Warren have openly attacked the administration's lack of transparency and questioned McMahon's qualifications. Citing the department's responsibilities for paying special education services, enforcing anti-discrimination laws, and administering Pell Grants, Representative Jahana Hayes has sponsored legislation to safeguard it.


There would likely be serious repercussions if the Department of Education is abolished or severely weakened. With less government monitoring, Title I funding—which helps schools in low-income communities—could be transformed into block grants, possibly depleting resources for millions of students. According to the Center for American Progress, 2.8 million pupils in impoverished communities would be impacted by the loss of 180,000 teaching posts. The $15 billion in financing from the Individuals with Disabilities Education Act (IDEA) might be transferred to another federal agency, which would mean less money for special education programs and less protection for students with disabilities. Federal supervision of school discrimination lawsuits may be reduced if the Office for Civil Rights (OCR) is transferred from the Department of Education to the Department of Justice. This could increase inequality in the educational system by making it more difficult for students to report discrimination on the basis of gender, race, and disability. Furthermore, students in underserved neighborhoods would encounter more obstacles to obtaining a top-notch education as a result of the possible lack of federal monitoring, which would exacerbate already-existing socioeconomic inequalities.


Additionally, the Education Department oversees Pell Grants and federal student loans, which enable millions of students to afford higher education. The privatization or downsizing of federal loan programs could result in higher tuition costs and fewer affordable options for students, as 30% of college students in the United States rely on these programs. Higher education may become even less accessible to low-income students if federal subsidies and loan forgiveness programs are reduced or canceled, which would further solidify economic inequality in the nation. Financial instability may also affect universities and colleges that rely on federal financing, which could result in higher tuition and fewer options for student support services.

Note: US Department of Education / Sources: education-department.jpg (1200×675)

The public is generally opposed to eliminating the Department of Education, even though Republicans embrace the idea. More than 60% of Americans are against the department's closure, according to a recent Wall Street Journal poll. To guarantee that every child has access to a high-quality education, families and educators contend that public schools require more funding, not less. Without federal norms, many parents and educators worry that educational standards would become inconsistent, resulting in inadequate education for pupils in certain states. National Education Association (NEA) President Becky Pringle has referred to Trump's moves as "an abandonment of our nation’s commitment to equal educational opportunity," promising that supporters and educators will keep up their struggle to keep federal education programs intact. She underlined how important the Department of Education is to upholding equity and making sure kids have the help they require to thrive.

Note: The projected impacts of cutting the U.S. Department of Education

Linda McMahon's nomination as Secretary of Education marks a significant milestone in the Trump administration's efforts to abolish the Department of Education. Opponents warn of disastrous repercussions for public schools, students with disabilities, and college affordability, while her defenders contend that the action will offer states greater authority. The department's future is still unclear due to legal issues, congressional conflicts, and mounting public opposition. The upcoming months will determine whether Trump's school reform succeeds or faces insurmountable resistance. As McMahon negotiates the difficult terrain of carrying out Trump's divisive education plans, she will be under tremendous pressure from both political supporters and detractors if she is confirmed. The continuous discussion concerning the future of the Department of Education raises more general issues regarding the function of federal supervision in guaranteeing fair educational opportunities for all American kids.

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The McDonaldisation of higher education in the age of AI

The McDonaldisation of higher education in the age of AI
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Sociologist George Ritzer created the word "McDonaldization" to describe how concepts from fast-food chains—efficiency, calculability, predictability, and control, or ECPC—have permeated many aspects of society. Teaching, learning, and administration are undergoing a fundamental revolution as a result of these concepts being increasingly embedded in higher education in the age of artificial intelligence (AI).

Note: Class Seminar on AI Ethics / Source: Qin Mian / http://en.tju.edu.cn/info/1010/8779.htm

One characteristic that sets AI-driven education apart is its effectiveness. Tools that automate curriculum distribution and assessment include Gradescope, Blackboard Learn, and Coursera. This reduces instructor workload and improves scalability. AI-powered analytics, which allows educational institutions to measure learning results, productivity, and student retention, are an example of calculability. Standardized online courses provided by companies like edX and Coursera ensure constant distribution of content, but they frequently lead to a loss of diversity in viewpoints. These classes are blatantly predictable. Lastly, while monitoring systems like Respondus Monitor and Proctorio are used to ensure academic integrity, they also bring up moral questions about privacy and impartiality.

Even though AI increases accessibility and efficiency, it also has the potential to turn education into a transactional experience where the focus is moved from intellectual growth to measurable performance indicators. This change is congruent with McDonaldization, a process that dehumanizes learning by standardization and automation, turning it into a quantitative and predictable routine instead of an intellectually stimulating adventure.

AI's effects on higher education are marked by both possibilities and challenges. Institutions are incorporating AI to improve administrative effectiveness, streamline educational procedures, and increase educational accessibility. However, these benefits come with significant trade-offs that impact student engagement, creativity, and ethical considerations.

Examples of adaptive learning systems that use artificial intelligence to tailor instructional materials based on student performance are DreamBox and Smart Sparrow. While this increases productivity, it may also perpetuate a calculability mindset, which reduces learning to a data-driven process that puts results ahead of deep intellectual engagement. Algorithmic decision-making streamlines academic advising, admissions, and course scheduling, leading to more dependable and effective procedures. However, an excessive dependence on AI-powered decision-making limits human judgment and reduces intricate educational choices to inflexible, mechanical judgments. Examples of generative AI technologies that support writing, research, and teaching are ChatGPT and Jasper AI. Even if they increase productivity, they pose serious concerns because they undermine the critical thinking abilities and one-on-one mentoring that are essential elements of transformative education.

AI puts quantifiable results, like exam scores and completion rates, ahead of creativity, moral judgment, and social skills. Instead of encouraging a thorough intellectual development, this narrow concentration could turn education into a number exercise. Furthermore, AI-driven automation weakens the bonds between teachers and students, which are crucial for mentoring and intellectual discussion. Despite its efficiency, automated evaluation and feedback fall short of traditional teaching in terms of nuance and individualized attention. Artificial intelligence-driven surveillance tools also violate privacy and autonomy. Concerns regarding equity and justice are raised by the extensive usage of programs like Proctorio, which disproportionately affect students from various backgrounds.

Source: https://www.ssbr-edu.ch/revolutionizing-learning-how-ai-is-uplifting-higher-education/

These conversations reveal a range of opinions about AI's potential in higher education, from hope to concern about its dehumanizing consequences. Proponents of AI in education argue that automation fosters creativity, productivity, and accessibility. AI is seen as a way to democratize education by institutions that integrate it into their research, student services, and courses. To educate students for businesses driven by artificial intelligence, universities are increasingly offering courses on AI ethics. Additionally, AI-powered research tools speed up the creation of new technologies in fields like genetics and historical text analysis.

Furthermore, others argue that AI literacy is a critical skill for the workforce of the future. As AI changes employment markets, students who are skilled in data analysis, AI-assisted research, and prompt engineering will have an advantage. However, detractors warn that AI-driven standardization has the unintended consequence of devaluing innovation and critical thinking. They argue that education is more about intellectual discovery than it is about efficacy. They fear that by emphasizing uniformity and speed over depth and uniqueness, McDonaldization is undermining the humanistic nature of education.

As AI automates knowledge-based jobs, there is serious concern about the declining value of higher education. "Educated but Unemployed: Will AI Make Your College Degree Meaningless?" is a Reddit topic that highlights worries about AI's ability to replace white-collar workers, especially in writing, design, and marketing. AI-driven automation is predicted to reduce the number of career options available to professionals with a degree, raising widespread concerns that the economic sustainability of education may be jeopardized.

According to many academics, artificial intelligence (AI) compromises academic integrity by making cheating invisible. Unlike typical plagiarism, AI-generated solutions adapt to the subtleties of the course, making them nearly impossible to detect. Because AI-detection techniques often produce false positives and negatives, their dependability is called into doubt, raising questions about the objectivity of academic assessments. In addition, there is a great deal of disagreement over the analogy between calculators and artificial intelligence (AI). Calculators help people who already understand mathematical concepts, but AI discourages autonomous thinking by replacing cognitive effort. John Stuart Mill's educational philosophy holds that real learning comes from intellectual engagement and comprehension rather than just artificial intelligence processing information.

The next challenge is integrating AI responsibly while upholding education's revolutionary aim. To avoid the pitfalls of McDonaldization, educational institutions must strike a balance between human-centered learning strategies and technology developments. Human-centered learning should be given top priority when implementing ethical AI to make sure that it complements rather than replaces critical thinking, creativity, and social interaction. AI must be integrated into interdisciplinary courses that integrate technical knowledge with ethics and philosophy in order to encourage responsible AI use. To ensure academic integrity, diversity, and impartiality, colleges should establish clear norms surrounding the usage of AI. Furthermore, rather than replacing traditional educational paradigms, AI must be used in conjunction with them. Project-based learning, experiential learning, and mentoring must all remain crucial elements of higher education.

Higher education has both potential and risks as a result of the McDonaldization effect of AI. Institutions must put equity, innovation, and human connection first even when artificial intelligence (AI) increases productivity, accessibility, and scalability. The careful incorporation of AI, which must be utilized as a tool for intellectual empowerment rather than as a means of standardization, is essential to the future of education. A successful future depends on interdisciplinary curriculum that combine AI with ethics and the humanities, open AI policies that ensure equitable and responsible AI use, and balanced AI integration that maintains relational engagement and deep learning. Universities must make sure AI complements rather than replaces the core educational ideals of critical thinking, ethical reasoning, and intellectual curiosity if they hope to ensure that higher education continues to be a transformational and meaningful experience.

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Court orders hold on Trump’s medical research funding cuts

Court orders hold on Trump’s medical research funding cuts
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A federal district judge in Boston, United States, has issued an injunction that prevents the National Institutes of Health (NIH) from implementing its proposed $4 billion reduction in research funding. The cutbacks, which were announced on February 7, would have had a substantial impact on prestigious research institutions, such as Johns Hopkins University, Caltech, and MIT. The decision was made in response to a lawsuit filed by Massachusetts and 21 other states, which challenged the 15% limitation on indirect costs that was implemented without consulting affected institutions. The ruling has provisionally protected critical research funding, thereby preventing immediate disruptions to ongoing projects and scientific advancements.

Note: President Donald Trump signs a series of executive orders at the White House. Sources: Jabin Botsford /The Washington Post via Getty Images.

The National Institutes of Health (NIH), a crucial federal agency within the Department of Health and Human Services (DHHS), provides funding for biomedical research throughout the United States. Its grants facilitate the development of innovative remedies for a variety of diseases, drug discoveries, and medical advancements. The limit was defended by the Trump administration, which claimed that certain institutions were overcharging for indirect costs in NIH grant agreements. Essential expenditures, including facility maintenance, administrative expenses, security, and regulatory conformance, are included in these indirect costs. The NIH asserted that the 15% ceiling is consistent with the indirect cost limitations of private research funders such as the Bill & Melinda Gates Foundation. Research institutions, on the other hand, argued that federal grants are subject to stringent regulatory and compliance obligations, which necessitate indirect costs to conduct high-quality research, in contrast to private foundations.

Note:  Trump has decided to impose a 15% cap on ‘indirect costs’ for NIH grants / Sources: Grandbrothers/Alamy

NIH violated the Administrative Procedure Act (APA) by arbitrarily imposing funding cuts without considering institutions' reliance on previous agreements, violating existing APA provisions that prevent sudden policy changes, failing to publish rule changes for public comment, and retroactively applying the new policy to existing grants, according to the lawsuit, which was supported by universities and the American Council on Education (ACE). The Trump administration is required to submit reports every two weeks that provide a detailed account of the National Institutes of Health's compliance with the injunction, as determined by Judge Angel Kelley. The restoration of funding across multiple federal agencies, including the NIH, was also mandated by a separate judgment by Judge John J. McConnell Jr. The broader conflict between the necessity to maintain research and innovation and the governmental cost-cutting measures is underscored by these legal challenges.

Major research universities were at risk of losing millions in funding, which could result in employment losses, lab closures, and a decrease in scientific innovation in the United States. Michigan State University was projected to experience a $27 million loss, Rutgers University a $57 million reduction by 2026, Oregon Health & Science University a $80 million loss, and California State University significant financial setbacks across multiple campuses. Many research programs would have been unable to conduct studies in critical areas, such as cancer treatment, genetic disorders, and neurodegenerative diseases, due to severe financial constraints. Critics cautioned that the reductions would impede essential research on diseases such as cancer, heart disease, and dementia. The potential long-term harm to U.S. leadership in biomedical research, workforce development, and economic innovation was emphasized by the ACE and other organizations. Additionally, they underscored that diminished funding could potentially deter young scientists from pursuing careers in research, thereby influencing the future of American scientific advancement.

The academic and scientific communities enthusiastically embraced the decision to prevent the cutbacks. The importance of indirect costs in the maintenance of the infrastructure required to conduct innovative medical research was underscored by researchers. Universities were granted temporary relief by the ruling; however, there are still reservations regarding the sustainability of future funding. Additionally, legislators expressed bipartisan concerns. Senator Katie Britt of Alabama urged for a more "targeted approach" to prevent the injury of life-saving research, while Senator Bill Cassidy of Louisiana expressed apprehensions about the adverse effect on universities in his state. Senator Susan Collins of Maine was adamantly opposed to the NIH cuts, stating that they would have a catastrophic impact on biomedical research and result in employment losses. The opposition's bipartisanship is indicative of the widespread recognition of the NIH's contribution to the advancement of medicine and the promotion of economic development. According to reports, Collins conversed with Robert F. Kennedy Jr., Trump's nominee for HHS Secretary, who expressed his willingness to reevaluate the policy upon confirmation. His confirmation vote is anticipated to occur shortly, and his perspective on NIH funding may influence the agency's future policies.

The reductions are perceived by scholars, such as Bryan Alexander of Georgetown University, as a component of a more extensive anti-science trend in the United States. The reductions have the potential to erode America's competitiveness in research and development, harm international collaborations, and transfer financial responsibilities to universities. Many institutions may be compelled to pursue private funding, which is frequently more restrictive and less stable, in the absence of sufficient NIH support. The lawsuit seeks to permanently reverse the cutbacks, thereby reaffirming the necessity of consistent NIH funding to preserve America's status as a global leader in medical research. The outcome of this legal dispute could potentially determine whether research institutions continue to receive the necessary government support or experience additional financial instability in the future.

The Trump administration's intention to reduce NIH funding has been halted by the nationwide injunction issued by the federal court, which guarantees that research institutions can continue their operations without any urgent financial constraints. The decision underscores the significance of NIH funding for public health, scientific innovation, and economic stability, as it reflects the pervasive opposition from both Democratic and Republican leaders. Nevertheless, the matter continues to be politically contentious, and the potential for policy changes is contingent upon the confirmation of Robert F. Kennedy Jr. and subsequent legal proceedings. The outcome of this case is expected to establish a precedent for future federal research funding policies, thereby influencing the future of medical innovation and scientific advancement in the United States.

The injunction has garnered an overwhelming amount of public support, particularly among the scientific and medical communities, in addition to its legal implications. The court's intervention has been met with relief by numerous researchers, healthcare professionals, and patient advocacy organizations, who contend that sustained NIH funding is essential for the advancement of public health and the development of new treatments. These cuts would have had an impact on the availability of research-driven medical treatments for millions of patients in the United States and beyond, in addition to their prospective academic consequences. The preservation of funding guarantees ongoing advancements in critical fields, including neurology, oncology, and infectious disease research.

The case has also rekindled debates regarding the government's role in scientific research. While some conservative policymakers contend that restricting indirect costs can aid in the reduction of wasteful spending, numerous experts warn that significant reductions could undermine the stability of the research ecosystem in the United States. A talent outflow could result from the indiscriminate reduction of funds, as top researchers may seek funding opportunities in other countries, thereby eroding the United States' global reputation for innovation.

The long-term implications of the ruling will become more apparent as the case advances. Universities and research institutions continue to advocate for transparent policies that guarantee sustainable and equitable funding mechanisms, remaining vigilant. The result is expected to significantly influence the future of federal research grants and establish a precedent for the implementation of administrative changes to funding policies in the years to come. The preservation of research funding is a critical issue that will significantly impact America's capacity to be a leader in science and medicine for future generations, irrespective of political affiliations.

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Samsung Life, Fire sell $280 million in Samsung Electronics shares to comply with law

Samsung Life, Fire sell $280 million in Samsung Electronics shares to comply with law
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The sale of $280 million worth of Samsung Electronics shares by Samsung Life Insurance and Samsung Fire & Marine Insurance was primarily motivated by regulatory compliance rather than performance or market sentiment. The Financial Holding Company Act of South Korea, which prohibits financial institutions from owning more than 10% of a non-financial company, must be followed, so this action is crucial.

Note: Samsung. Source: https://arstechnica.com/gadgets/2024/10/samsung-says-its-in-crisis-apologizes-for-missing-profit-target/

By February 17, ₩3 trillion ($2.25 billion) worth of shares will be burned as part of Samsung Electronics' ₩10 trillion ($7.5 billion) stock buyback. This action will automatically increase the shareholding of current shareholders, such as Samsung Life and Samsung Fire & Marine Insurance, by lowering the total number of outstanding shares.

Their aggregate position would surpass 10% if they didn't sell shares, which would be against financial regulations.

If a financial institution owns more than 10% of a non-financial affiliate, they are required by South Korean law to either decrease their holdings or secure special regulatory approval.

Samsung Life is selling 4.25 million shares and Samsung Fire is selling 743,104 shares in order to avoid legal problems in advance.

The sales will take place through a block deal, which enables big transactions to be carried out without significantly affecting market prices, prior to the market opening on February 12.

The sale price will be close to the market price if institutional demand is high; if not, a discount may be applied. Over the last six months, $15 billion (₩22 trillion) worth of Samsung Electronics shares have been aggressively sold by foreign investors. Consequently, for the first time since January 2023, foreign ownership has dropped below 50%. This sell-off is mostly due to decreased semiconductor demand and disappointing performance in key areas like AI chips and foundry services.

Samsung Electronics has been falling behind rivals: SK Hynix is the global leader in high-bandwidth memory (HBM), particularly in circuits related to artificial intelligence. Samsung's lack of faith in its semiconductor division is seen in the upcoming Galaxy S25, which will use Qualcomm's Snapdragon 8 Elite rather than Samsung's own Exynos. Deepseek, a Chinese AI company, is launching more affordable AI models, which could lower demand for Samsung's memory processors.

Note: Samsung Electronics. Source: http://koreabizwire.com/samsung-electronics-boosts-semiconductor-division-bonuses-as-chip-market-recovers/286014

Samsung Electronics' stock has declined from a peak of ₩88,800 ($61.06) in July 2024 to ₩54,000 ($37.13). The U.S. CHIPS Act offered a short-term boost, but the stock is on a declining trajectory. Analysts are cutting target prices, citing weak profits and uncertainty in the semiconductor sector.

Fourth-quarter operational earnings are predicted to fall by 30.8% to ₩9.38 trillion ($7 billion). U.S.-China tensions could lead to more tariffs that may negatively harm Samsung’s HBM business.

Analysts believe Samsung could come back if it improves its technological competitiveness and enhances shareholder returns. A projected bottoming-out of semiconductor pricing could give a recovery chance later in 2025.

In conclusion The selling of Samsung Electronics shares by Samsung Life and Samsung Fire is required by law, not because they don't trust the business. However, the rebound of Samsung Electronics' stock price is hampered by broader market factors, such as sell-offs by foreign investors, difficulties with semiconductors, and poor earnings. If the company can regain its competitiveness in AI and chipmaking, analysts are still cautiously hopeful and are counting on a long-term recovery.

Amid Samsung Electronics' buyback, Samsung Life and Samsung Fire sell shares to comply with financial law. Before the stock market opened on February 12, 2025, the top life and non-life insurers in South Korea, Samsung Life Insurance Co. and Samsung Fire & Marine Insurance Co., sold 280 billion won ($193 million) worth of Samsung Electronics shares in a block sale.

Note: Samsung. Source: https://www.androidheadlines.com/2017/01/samsung-stocks-hit-new-high-following-latest-guidance.html

Samsung Electronics' ongoing share purchase and cancellation plan, which would have raised the insurers' ownership shares above the legal cap set by South Korean financial regulations, served as the impetus for this action.

Legal Restrictions and Regulatory Compliance

The Act on the Structural Improvement of the Financial Industry (ASIFI), which forbids financial institutions from owning more than 10% of the shares of non-financial companies, is what the share sales are intended to prevent.

Prior to the sale  8.51% of Samsung Electronics was owned by Samsung Life Insurance, 1.49% was owned by Samsung Fire & Marine Insurance, in which the total combined is 10% (the highest amount allowed by law). In the absence of sales, the insurers' interests would have grown to: Samsung Electronics' cancellation of 3 trillion won worth of treasury shares as part of a 10 trillion won repurchase plan. 

For 236.4 billion won, Samsung Life Insurance sold 4,252,305 shares (0.071%). For 41.3 billion won, Samsung Fire & Marine Insurance sold 743,104 shares (0.013%). As a result, their combined holdings remained below 10%, with their interests falling to 8.44% and 1.48%, respectively.

In November 2024, Samsung Electronics announced a 10 trillion won stock buyback as part of a plan to increase shareholder value. By February 17, 2025, the business promised to repurchase 3 trillion won worth of shares, with the remaining 7 trillion won to be completed by November 2025.

The initial stage of the buyback is intended to help Samsung's stock price, which has been falling because of low demand for semiconductors, loss of high-bandwidth memory (HBM) competitive advantage, samsung shares being sold by foreign investors for $15 billion in six months. The number of outstanding shares falls as treasury shares are retired, increasing the percentage ownership of current shareholders and necessitating regulatory compliance.

Samsung Life and Samsung Fire might have to further cut their ownership if Samsung Electronics moves on with the second phase of the repurchase, which involves canceling an additional 7 trillion won in treasury shares.

According to Jung Jun-seop of NH Investment & Securities, if Samsung Electronics cancels the entire 10 trillion won worth of stock, Samsung Life will have to sell an extra 760 billion won ($524 million) worth of shares in order to keep its 8.51% stake.

A similar action was taken in 2018 when Samsung Life sold shares after Samsung Electronics had already canceled and repurchased them. The market's supply may rise as a result of the divestment, according to some analysts, which might negatively impact Samsung Electronics' stock performance. This coincides with Samsung's efforts to increase its valuation by repurchasing shares.

Samsung Life and Samsung Fire could increase shareholder returns with the 280 billion won revenues from the sale of their shares. These shares are within the category of financial assets assessed at fair value through other comprehensive income (FVOCI) under IFRS 9 accounting standards. This means that the sale does not produce accounting profits, but it may be used to pay dividends or repurchase shares. For the first time since January 2023, foreign investors have reduced their stake of Samsung shares below 50% after selling $15 billion worth of shares. In the market for high-bandwidth memory (HBM), which is essential for AI applications, Samsung trails SK Hynix. The Galaxy S25 will use Qualcomm's Snapdragon 8 Elite chip rather than Samsung's Exynos chip, indicating internal semiconductor competition challenges.

Note: Line graph illustrating Samsung Electronics' stock price decline and the increasing sell-offs by foreign investors from 2023 to 2025.

Possible Trade and Regulatory Risks

Samsung's semiconductor business in China may be impacted by geopolitical risks, such as US tariffs on China. Earnings may suffer if global memory demand recovers more slowly.

Even though Q4 2024 earnings would be lower, some analysts are still hopeful that Samsung might experience a recovery if it maintains its shareholder-friendly policies and boosts its technological competitiveness.

The block sale of Samsung Electronics shares by Samsung Life and Samsung Fire is not a result of a lack of trust in the company, but rather of a regulatory need brought on by South Korean financial legislation. However, Samsung Electronics still has to deal with more general market issues like regulatory uncertainty, semiconductor difficulties, and sell-offs by foreign investors.

Future stake sales by Samsung Electronics' financial affiliates might be necessary if the company proceeds with additional treasury share cancellations. In the meanwhile, Samsung Life and Samsung Fire stockholders may get dividends or buybacks from the sale's proceeds.

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Dongfeng, Changan hint at merger that could create world's 5th largest auto group

Dongfeng, Changan hint at merger that could create world's 5th largest auto group
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Due to reports of a merger between state-owned automakers Dongfeng Motor and Changan Automobile, China's automobile industry is witnessing a significant upheaval. The potential merger of Dongfeng and Changan is one of the most significant developments in China's automobile industry in recent years. With the revelation of reorganization plans by two of its state-owned automotive titans, Dongfeng Motor and Changan Automobile, China's car sector is set to undergo a substantial shift. The merging of Dongfeng and Changan symbolizes a fundamental revolution in the Chinese auto industry. Despite the fact that neither company has formally declared a merger, industry speculation suggests that it could lead to the formation of the world's fifth-largest auto group. A merger between Dongfeng and Changan would increase competition in the industry and maybe produce a state-backed competitor that could challenge BYD's hegemony.

Note: Merger of Dongfeng and Changan. Source: https://leixing77.medium.com/changan-dongfeng-group-a-super-bowl-sunday-super-blockbuster-merger-0ee12876b9b1

Dongfeng's Dominance in the New Entity

According to reports, Dongfeng will be in charge of the combined business, and Yang Qing, its current chairman, will serve as the group's leader. Dongfeng is now in a position of power, and Zhu Huarong, the chairman of Changan, is conspicuously missing from the leadership structure—possibly because he will be retiring in 2025.

This new auto group's main goal will be supply chain integration, which will enable both businesses to reduce expenses and streamline procurement. This is a crucial tactic, particularly as Chinese automakers continue to use aggressive pricing tactics and government subsidies to undercut international rivals. The merger would generate a larger innovation pool for electric vehicle (EV) and autonomous driving technology, enabling the combined organization to better compete with Tesla, BYD, and other global competitors.

The possible merger is in line with a larger trend in the global automotive sector, where businesses are banding together to maintain their competitiveness. Traditional automakers are under increased pressure to dominate the electric vehicle (EV) market, and consolidation offers a means of pooling resources, cutting expenses, and gaining market share.

Note: Chinese Electric Vehicles. Source: https://jalopnik.com/unsold-chinese-evs-are-piling-up-at-ports-1851415290

With local brands now controlling 70% of the domestic market, the competitive landscape in China is changing quickly. This is in sharp contrast to just five years ago. Both Chinese and foreign automakers are finding it difficult to stay profitable as a result of the fierce price war in the EV market, which is being driven by the government's aggressive support for domestic brands.

China’s State-Owned Automakers and the NEV Transition

China’s State-owned Assets Supervision and Administration Commission (SASAC) has hinted at policy changes to accelerate NEV production, citing concerns that state-owned carmakers have been too slow in their transition to electrification. The restructuring of Dongfeng and Changan could be part of a broader effort by Beijing to push its state-controlled automakers to compete with private firms like BYD and foreign EV leaders like Tesla.

Note: Research and Development of New Energy Vehicle (NEV). Source: chatgpt.ai

The rumored Dongfeng-Changan merger is not happening in isolation. Similar moves are being discussed globally. For instance, Honda and Nissan recently explored a merger to strengthen their position in the EV race but ultimately called off the deal due to disagreements over control.

This reflects a broader global auto industry trend, where companies are being forced to consolidate, form alliances, or risk falling behind in the technological and economic race.

While the Chinese EV industry has rapidly grown, its export strategy is now under threat. Countries like the U.S., EU, and India are raising trade barriers to prevent China from dominating their local auto markets. With tariffs on Chinese EVs increasing, many Chinese automakers are setting up overseas manufacturing plants to bypass trade restrictions. However, even this strategy is facing obstacles, as seen in Brazil halting BYD’s factory project due to poor labor conditions.

Given these challenges, Chinese carmakers are focusing more on their domestic market, making mergers like Dongfeng-Changan a strategic necessity rather than a mere corporate maneuver.

If the Dongfeng-Changan merger materializes, it will not only create a dominant force in the Chinese auto market but also pose a serious challenge to international automakers. The new entity will be better positioned to compete with global players, particularly in EV and autonomous driving technologies.

However, the success of the merger will depend on execution. Integrating two massive companies comes with organizational and operational challenges, and the ability to effectively streamline production, supply chains, and R&D efforts will determine whether this new giant can truly reshape the global auto landscape.

As China’s auto industry faces an existential battle for survival and global dominance, mergers like Dongfeng-Changan represent a pragmatic response to the increasing pressure from competition, policy shifts, and trade restrictions. The next few months will be crucial in determining whether this potential auto giant becomes a market powerhouse or struggles under the weight of its own ambitions. 

In Dongfeng-Changan’s potential merger, this would reshape China’s automotive hierarchy given that the combined annual vehicle sales of Dongfeng and Changan in 2024 were 5.16 million units, compared to BYD’s 4.27 million. A merger would create China’s largest car manufacturer, overtaking BYD in both market share and production capacity. The potential merger is a strategic move aimed at tackling overcapacity, enhancing competitiveness, and responding to shifting industry trends, particularly in the EV sector. Below, we explore the key implications of this merger and how it might reshape China’s automotive landscape.

Note: graph comparing the projected production capacity of the potential Dongfeng-Changan merger against key competitors such as BYD, Tesla, and Volkswagen.

This is significant because BYD, backed by strong government subsidies and aggressive pricing strategies, has dominated the EV market in China. 

One of the key benefits of consolidation is the capacity to distribute resources more effectively. Morgan Stanley’s research indicates that a merged Dongfeng-Changan group could prioritize investment in its most competitive brands and technologies, improving overall efficiency.

In the era of electrification, state-owned automakers maintain their competitiveness. However, overcoming managerial, operational, and market obstacles will be necessary to carry out the merger successfully. If executed well, this might serve as a model for upcoming SOE consolidations in China, significantly altering the automobile industry's worldwide landscape. A Dongfeng-Changan merger aligns with Beijing’s long-term industrial policy goals by boosting the worldwide competitiveness of Chinese brands, particularly in the NEV (New Energy Vehicle) industry.

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Stefan Schneider brings a dynamic energy to The Economy’s tech desk. With a background in data science, he covers AI, blockchain, and emerging technologies with a skeptical yet open mind. His investigative pieces expose the reality behind tech hype, making him a must-read for business leaders navigating the digital landscape.

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EU announces €200-billion AI investment push

EU announces €200-billion AI investment push
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The European Union has proposed an ambitious €200 billion investment project targeted at advancing the region’s artificial intelligence (AI) industry. European Commission President Ursula von der Leyen made the remark at the AI Action Summit in Paris, highlighting the need for Europe to catch up with global giants like the United States and China.

A Major Public-Private Investment Effort Von von Leyen underlined the EU’s pledge to contribute €50 billion from existing digital projects, while the remaining €150 billion is projected to come from private investors, technology suppliers, and industry players. This large-scale investment endeavor, known as the "EU AI Champions Initiative," brings together more than 60 European enterprises, including Airbus, Volkswagen, and Mistral AI, to drive AI-related economic growth in Europe over the next five years

Note: AI Action Summit. Source: https://indianexpress.com/article/opinion/columns/dont-expect-much-from-the-ai-summit-in-paris-9830107/

One of the core projects of the strategy is the building of four AI gigafactories, with €20 billion committed to allow open and collaborative development of advanced AI models. The purpose of these gigafactories is to boost Europe's AI industry and guarantee that European businesses maintain their competitiveness in the rapidly changing global AI market.

Innovation and Regulation in Balance

Since its stringent regulations, like the recently passed EU AI Act, have been criticized for possibly stifling innovation, Europe has been under increasing pressure to relax its AI regulatory framework. Von der Leyen supported the rules during the Paris summit, stating that AI needs to be reliable and safe. She did concede, though, that in order to support AI development, procedures must be made simpler and administrative obstacles must be removed.

This view was mirrored by French President Emmanuel Macron, who pledged to streamline regulatory procedures and reduce red tape in order to increase the appeal of AI development in Europe. In order to illustrate how simplified laws could accelerate technological advancement, he cited the quick reconstruction of Notre-Dame Cathedral.

International Responses and American Criticism

The EU's drive for AI investment coincides with escalating regulatory disputes. Speaking right after von der Leyen at the meeting, U.S. Vice President JD Vance cautioned that overly stringent regulations could impede European AI progress. He argued that AI should be viewed as an opportunity rather than a threat and called for a regulatory framework that encourages rather than inhibits its development.

At the summit, the United States and the United Kingdom chose not to sign a declaration that focused on ensuring AI development is transparent, inclusive, and sustainable. According to the UK government, the document fell short in addressing national security and AI governance issues.

JD Vance, the vice president of the United States, stressed that strict regulation of AI could "kill a transformative industry just as it's taking off." Seeing AI as a strategic and economic opportunity, the Trump administration has refocused attention from safety regulations to accelerated AI development. Experts, including Stanford's Russell Wald, see this as a definite change in the U.S. AI policy, where securing quick advancement and preserving technological leadership take precedence over safety concerns.

Disapproval of the European Regulatory Framework

The EU's AI Act, which unveiled a comprehensive framework governing AI in August, was met with suspicion by the United States.

Vance raised concerns about content filtering and regulatory overreach in his argument that AI should stay "free from ideological bias" and not be used for "authoritarian censorship."

Instead of enacting restrictive laws that might impede advancement, the United States wants its allies in Europe to promote a more open and competitive AI environment.

Divergence from Global Governance Proposals

The U.S. did not provide a direct explanation but showed reluctance to commit to a global AI governance framework, possibly to retain control over its own policies.

The declaration included provisions for a public-interest AI platform and observatories to monitor AI’s labor impact, which might be seen as constraints on market-driven AI progress.

France’s President Emmanuel Macron’s call for Europe to be a leader in AI—urging investors and firms to "choose Europe over the U.S. and U.K."—may have influenced U.S. resistance to a European-led initiative.

Note: Image depicting EU, UK, and US in its talks. Source: https://newssourcegy.com/news/usuk-and-eu-call-on-president-to-immediately-set-elections-date-claim-govt-now-in-breach-of-constitution/attachment/eu_uk_usa_flags_sl-1346683848/

Alignment with the U.K.’s Stance

The U.K. also declined to sign the declaration, citing concerns that it lacked "practical clarity on global governance" and failed to address "harder questions around national security."

The U.K.’s AI industry association, UKAI, argued that the energy demands of AI must be balanced with environmental commitments, another point of contention in the Paris summit.

The U.K. held its own AI Safety Summit in 2023, which took a different approach, and likely did not want to undermine its independent AI governance initiatives.

Strategic & Economic Considerations

The U.S. sees itself as the worldwide leader in AI and wants to mold the industry with a pro-growth attitude rather than tight governance frameworks.

The government may also want to retain flexibility in AI policy, particularly as the AI industry is crucial to U.S. economic competitiveness and national security.

Conclusion: The U.S. choice not to join the Paris AI proclamation accords with its wider approach of favoring innovation over regulatory constraints, avoiding European-style AI governance, and keeping national sovereignty over AI policies. By pursuing a more market-driven and competitive AI environment, the U.S. hopes to assure its continued leadership in the area without committing to international frameworks that would hinder growth.

AI and Public Supercomputers for Good

Von der Leyen also declared that AI researchers and startups would have access to Europe's public supercomputers as part of the EU's initiative, guaranteeing them vital computing resources. She emphasized the need for cooperation as well as competitiveness in the AI industry, saying, "We want AI to be a force for good."

Note: AI Supercomputer. Source: https://www.rtinsights.com/microsoft-ai-supercomputer/

Current AI, a new public-private partnership involving nations like France and Germany as well as tech behemoths like Google and Salesforce, was also introduced during the summit. The initiative, which has a $400 million initial investment, intends to create open-source tools, enhance data accessibility, and support AI projects of public interest.

The European AI Road Ahead

The EU's €200 billion investment plan demonstrates its resolve to take a leading position in the global AI race, as AI becomes more and more important in both economic and technological advancement. Even though there are still regulatory obstacles to overcome, the bloc's readiness to adjust and encourage innovation through joint investments may make Europe a major hub for artificial intelligence in the years to come.

Note: EU AI Investment Plan (2024-2029), showing the contributions from both public (EU) and private sectors.

In order to keep Europe competitive and uphold its commitment to ethical AI development, this initiative will need to strike a balance between innovation and responsible AI governance. The U.S. rejected to join the AI proclamation at the Paris AI Action Summit partly owing to worries about excessive regulation, potential constraints on innovation, and ideological control over AI content.

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Madison O’Brien
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[email protected]
Madison O’Brien blends academic rigor with street-smart reporting. Holding a master’s in economics, he specializes in policy analysis, market trends, and corporate strategies. His insightful articles often challenge conventional thinking, making him a favorite among critical thinkers and industry insiders alike.

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