Tag: Department of Education

In Rare Summer Opinion, Supreme Court Follows Sixth Circuit’s Lead

In Department of Education v. Louisiana, the Supreme Court issued a rare August opinion to maintain two preliminary injunctions that block the Department of Education’s new rule.  That rule expands Title IX to prevent sexual-orientation and gender-identity discrimination.  State coalitions brought challenges; district courts in Louisiana and Kentucky enjoined the rule during the litigation; the Fifth and Sixth Circuits denied the government’s requests to stay the injunctions, nor would the Supreme Court intercede for the government.

All the Justices agreed that aspects of the rule warranted interim relief, most centrally the “provision that newly defines sex discrimination” to include sexual-orientation and gender-identity discrimination.  But because the district courts enjoined the entirety of the rule, the scope of relief proved divisive.  A narrow majority agreed to leave the broad injunctions in place, while four Justices in dissent argued to sever the suspect aspects of the rule and allow the remainder of the rule to take effect.  With emphasis on the “emergency posture,” the majority explained that the government had not carried its burden “on its severability argument.”

Justice Sotomayor’s dissent proposed limiting the injunctions to just the three challenged aspects of the rule.  The dissent focused on the “traditional” limits on courts’ power to fashion “equitable remedies.”  That Justice Gorsuch joined Justices Sotomayor, Kagan, and Jackson should come as no surprise.  Justice Gorsuch has harped on limiting equitable remedies to party-specific relief (e.g. Labrador v. Poe); cast doubt on severability doctrine (Barr v. AAPC (opinion concurring in part and dissenting in part)); and, of course, authored the landmark Bostock v. Clayton County decision that interpreted Title VII to protect against sex discrimination in much the same way the Department wishes to interpret Title IX.

This decision is an unreliable forecast of the Court’s view of what Title IX sex discrimination encompasses.  The Court unanimously agreed to table the debate over the Department’s new definition of sex discrimination while the lower courts proceed “with appropriate dispatch.”  The case concerned the status of the rest of the rule as that litigation continues.

A truer tell on the merits is the Sixth Circuit panel’s order denying the government’s stay request.  The panel found it “likely” “that the Rule’s definition of sex discrimination exceeds the Department’s authority.”  Preliminarily at least, the court thought it unlikely that Title IX—last amended in 1972—addresses sexual-orientation and gender-identity discrimination.  The Sixth Circuit has been reluctant “to export Title VII’s expansive meaning of sex discrimination to other settings”—and so it was here.

If “past is not always prologue,” still sometimes it is.  The Sixth Circuit panel divided on the injunction’s scope just like the Supreme Court.  Chief Judge Sutton and Judge Batchelder formed the majority, finding that the three “central provisions of the Rule . . . appear to touch every substantive provision.”  Saddling school administrators with new regulatory requirements on the eve of the new schoolyear tipped the equities toward enjoining the full rule.  Judge Mathis dissented because the injunction disturbed provisions of the rule “that Plaintiffs have not challenged.”

For now, the Department’s new rule yields to the old one.  That rule, too, is being litigated in the Sixth Circuit because guidance documents say the Department will interpret Title IX the same way Bostock interpreted Title VII.  See Tennessee v. Dep’t of Educ. and this coverage at the Notice & Comment blog.  To close out with some Supreme Court trivia—this marks its first mid-summer opinion since Alabama Association of Realtors v. DHHS in 2021, where the Court ended the Biden Administration’s Covid-era moratorium on evictions.  Before that may be the Court’s September 2012 decision Tennant v. Jefferson County Commission involving a challenge to West Virginia’s congressional districts.

© Copyright 2024 Squire Patton Boggs (US) LLP
For more news on SCOTUS Decision in Department of Education v. Louisiana, visit the NLR Public Education Services section.

State of Washington Enacts Student Loan Servicing Law

Washington has become the latest state to impose a licensing requirement on student loan servicers. Yesterday, Governor Jay Inslee signed  SB 6029, which establishes a “student loan bill of rights,” similar to the bills that have been enacted in California, Connecticut, the District of Columbia, and Illinois.

The law’s requirements include the following:

  • Creation of Advocate Role: The law creates the position of “Advocate” within the Washington Student Achievement Council to assist student education loan borrowers with student loans. This role is analogous to that of “ombudsman” under proposed and enacted servicing bills in other states.  One of the Advocate’s roles is to receive and review borrower complaints, and refer servicing-related complaints to either the state’s Department of Financial Institutions (“DFI”) or the Attorney General’s Office, depending on which office has jurisdiction. The Advocate is also tasked with:
    • Compiling information on borrower complaints;
    • Providing information to stakeholders;
    • Analyzing laws, rules, and policies;
    • Assessing annually the number of residents with federal student education loans who have applied for, received, or are waiting for loan forgiveness;
    • Providing information on the Advocate’s availability to borrowers, institutions of higher education, and others;
    • Assisting borrowers in applying for forgiveness or discharge of student education loans, including communicating with student education loan servicers to resolve complaints, or any other necessary actions; and
    • Establishing a borrower education course by 10/1/20.
  • Licensing of Servicers: SB 6029 requires servicers to obtain a license from the DFI. There are various exemptions from licensing for certain types of entities and programs (trade, technical, vocational, or apprentice programs; postsecondary schools that service their own student loans; persons servicing five or fewer student loans; and federal, state, and local government entities servicing loans that they originated), although such servicers would still need to comply with the statute’s substantive requirements even if they are not licensed.
  • Servicer Responsibilities: All servicers, except those entirely exempt from the statute, are subject to various obligations. Among other things, servicers must:
    • Provide, free of charge, information about repayment options and contact information for the Advocate ;
    • Provide borrowers with information about fees assessed and amounts received and credited;
    • Maintain written and electronic loan records;
    • Respond to borrower requests for certain information within 15 days;
    • Notify a borrower when acquiring or transferring servicing rights; and
    • Provide borrowers with disclosures relating to the possible effects of refinancing student loans.
  • Modification Servicer Responsibilities: The bill imposes a number of requirements on third-parties providing student education loan modification services, including mandates that such persons: not charge or receive money until their services have been performed; not charge fees that are in excess of what is customary; and immediately inform a borrower in writing if a modification, refinancing, consolidation, or other such change is not possible.
  • Requirements for Educational Institutions: Institutions of higher education are required to send borrower notices regarding financial aid.
  • Fees: The bill also calls for the establishment, by rule, of fees sufficient to cover the costs of administering the program created by the bill.
  • Bank Exemption: The statute provides for a complete exemption for “any person doing business under, and as permitted by, any law of this state or of the United States relating to banks, savings banks, trust companies, savings and loan or building and loan associations, or credit unions.” Notably, this exemption does not expressly cover state banks chartered in other states.

As we recently noted, bills like  SB 6029 are being introduced in legislatures across the country at an increasing rate, and we are continuing to track the progress of these proposals as they move through various statehouses.

Hopefully the torrent of such proposals will soon be reduced to a trickle, now that the U.S. Department of Education has formally weighed in on this trend, issuing an interpretation emphasizing that the Higher Education Act, federal regulations, and applicable federal contracts preempt laws like SB 6209 that purport to regulate federal student loan servicers.

 

Copyright © by Ballard Spahr LLP 2018
This post was written by Jeremy C. Sairsingh of Ballard Spahr LLP.

               

Fourth Circuit Appeals Court Rules in Favor of Transgender Student

Schools across the country have found themselves at the forefront of the societal debate on the appropriate manner in which to address issues surrounding accommodation of transgendered persons. Conflicting regulatory rulings, contemplated state legislation, and in the case of North Carolina, state prohibitions on accommodation have led to a patchwork of inconsistencies and doubt in relation to a school district’s legal duties.

On Tuesday, April 19, the United States Court of Appeals for the Fourth Circuit ruled in favor of a transgender student, Gavin, who was born female and wished to use the boys’ restroom at his rural Virginia high school. The ruling, G.G. v Gloucester County Sch. Bd., No. 15-2056 (4th Cir., Apr. 19, 2016), is significant, as it marks the first time that a federal appellate court has ruled that Title IX extends to protect the rights of transgender students to use the bathroom that corresponds with the student’s gender identity.

Gavin had previously been granted approval by administration to use the boys’ restroom and did so for a short period of time until the school board adopted a policy prohibiting him from using the bathroom of the gender with which he identifies. Instead, according to board policy, Gavin was required to use the restroom of his biological gender or a separate, unisex restroom. Gavin filed a lawsuit claiming that the school board impermissibly discriminated against him in violation of Title IX and the Equal Protection Clause.

In reaching its decision, the Fourth Circuit Court of Appeals analyzed the Department of Education (“DOE”) regulations implementing Title IX. Those regulations permit schools to provide “separate toilet, locker room, and shower facilities on the basis of sex,” so long as the facilities are comparable. The question the Court faced in light of this regulatory guidance was how to apply the “separate but equal” mandate to transgender individuals.

The DOE argued that the regulation should be interpreted to mean that schools generally must treat transgender students consistent with their gender identity; the Gloucester school board argued for an interpretation that defined students consistent with their biological sex. The Court recognized that the plain language of the regulation clearly permits schools to provide separate toilet, locker room, and shower facilities for its male and female students. By implication, the regulation also permits schools to exclude males from the female facilities, and vice versa. Although the regulation is silent as to how a school should determine whether a transgender individual is a male or female for the purpose of access to sex-segregated restrooms, the Court concluded it is susceptible to two interpretations – determining maleness or femaleness is either a matter exclusively of biology, or it is a matter of gender identity.

The Court agreed that public restrooms, locker rooms, and showers historically have been separate on the basis of sex, and that individuals have a legitimate and important interest in bodily privacy. Nonetheless, the Court stated that these safety concerns or privacy interests should be addressed by the DOE or Congress, and not the Court. Thus, the Court held that it was required to afford deference to the DOE’s interpretation. In so doing, the Court held that an individual’s sex should be determined by reference to the student’s gender identity, i.e., consistent with DOE interpretation.

The Fourth Circuit only addressed the student’s claims with respect to Title IX and whether Title IX extends to gender identity. The case has been remanded back to the district court to decide whether the school board violated Title IX and the Equal Protection clause of the 14th Amendment. However, the Fourth Circuit’s ruling only has precedential value in that circuit (encompassing Maryland, Virginia, West Virginia, North Carolina, and South Carolina), which means those states are now required to follow the DOE’s interpretation of Title IX – that schools generally must treat transgender students consistent with their gender identity.

What Does This Mean for Your District?

Although not binding in the Seventh Circuit, which encompasses Wisconsin, the Fourth Circuit’s decision is instructive as to how Wisconsin school districts should address restroom, locker room, and shower concerns under Title IX. Additionally, the DOE has been aggressive in its efforts to ensure that transgender students can use bathrooms in public schools that correspond with their gender identities. In November 2015, the DOE Office of Civil Rights (“OCR”) issued a letter of findings to a Chicago-area school district demanding that the school district give unfettered locker room access to a transgender student for the facilities of the gender in which the student identified. The OCR gave the school district only 30 days to resolve the matter or risk forfeiting Title IX funding. The school district reached a settlement with OCR prior to having its federal funding rescinded.

School districts should begin the process (if they have not done so already) of developing policies to set the parameters and processes the district will follow when a transgender student seeks guidance and clarity. A district should further ensure that its non-discrimination policy is comprehensive in scope as to all protected classes of students. District policies should address how the district will ascertain the student’s gender identity; what proof, if any, a district will require; the manner in which a student should be addressed and allowed to change his/her name; student dress codes; student records; physical education class; school-sponsored and WIAA-sanctioned sports; and of course, restroom, locker room, and shower facilities.

If your district has a prior policy in place regarding transgender students and gender identity, your district should consider revising the policy to ensure it does not run afoul of Title IX. Ultimately, school districts should be prepared to respond to a request from a student seeking direction as to school processes and procedures. Now is the time to prepare for the inevitable and ensure the district has laid the framework to quickly and fairly respond.

Article By Christine V. Hamiel of von Briesen & Roper, S.C.

©2016 von Briesen & Roper, s.c

U.S. Department of Education Issues New Guidance on Incentive Compensation Regulations

On Friday, November 27, 2015, the U.S. Department of Education (the “Department”) will publish guidance in the Federal Register regarding its October 29, 2010 changes to the incentive compensation regulations at 34 C.F.R. § 668.14(b)(22) that took legal effect July 1, 2011. Those revised regulations removed a “safe harbor” that had previously permitted certain graduation-based or completion-based compensation, and further indicated that the Department interpreted its revised regulations to ban such forms of compensation to persons covered by the Higher Education Act’s incentive compensation prohibition.

In light of the federal court decision and subsequent order in APSCU v. Duncan, 70 F. Supp. 3d 446 (D.D.C. 2014), the Department states that it has now reconsidered its interpretation of the statutory prohibition and (subject to the caveats described below) that it does not interpret its July 1, 2011 regulations to proscribe compensation for admissions and recruiting personnel that is based upon students’ graduation from, or completion of, educational programs. Correspondingly, the Department also announced that it will not view references in its regulations to enrollment activities that may occur “through completion” by a student of an educational program as prohibiting graduation-based or completion-based compensation to admissions and recruiting personnel.

Importantly, the Department’s notice explicitly reserves its right to take enforcement action against institutions if compensation labeled as graduation-based or completion-based compensation is merely “a guise for enrollment-based compensation,” which remains prohibited. In assessing the legality of any compensation structure, the Department says it “will focus on the substance of the structure rather than on the label given the structure by an institution.” Thus, the Department further states that while compensation based on students’ graduation from, or completion of, educational programs is not per se prohibited, institutions are still prohibited from providing compensation that is based directly or indirectly, in any part, upon success in securing enrollments (as such activities are broadly defined in the Department’s regulations) even if one or more other permissible factors are also considered.

In this same notice, the Department also responds to the federal court’s order with respect to potential impacts of the regulations, as revised effective July 1, 2011, on the recruitment and enrollment of minority students. The Department acknowledges that its regulations could negatively affect outreach and enrollment generally, as well as student outreach that is specifically targeted at promoting diversity, which could result in fewer minority students recruited and enrolled. However, it states, neither the Higher Education Act nor any information presented by commenters to the regulations when proposed provide a basis for treating a recruitment program directed at minority students differently than an institution’s general or other specific recruitment programs.

A full copy of the Department’s Federal Register guidance is available here.

Article By John R. Przypyszny & Jonathan D. Tarnow of Drinker Biddle & Reath LLP

©2015 Drinker Biddle & Reath LLP. All Rights Reserved