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Welcome
Welcome to the seventh issue of The Academic Advisor – our e-newsletter focused on education law insights.
In this final summer edition, we look ahead to the new academic year and cover the following topics of import for schools and other education-focused institutions:
- The latest on Title IX, including reversal by the U.S. House, additional injunctive relief precluding enforcement of the Final Rule, and appeals;
- NCAA denial of an appeal regarding treatment of college athletes as employees;
- A West Virginia Supreme Court appeal regarding the transgender sports ban;
- How the U.S. Supreme Court decision affecting race-conscious admissions practices has impacted college applications;
- A review of cybersecurity considerations for private schools;
- Crafting a Generative Artificial Intelligence Use policy in higher education; and
- An update on the SAVE Plan.
During the summer months, our firm hosts a talented group of law students, who continue to contribute to our publications and share their perspectives as both students and future legal practitioners. We welcome Addelyn Slyh, Sarah King, Jamie Martines, and Ethan Norris to The Academic Advisor team for this July edition.
In addition, earlier this year, regulations implementing the Corporate Transparency Act took effect, imposing requirements on certain businesses to submit information to the Financial Crimes Enforcement Network (FinCEN) about the beneficial owners of the business. For more information about who is required to file a report, who is considered a beneficial owner, and what information must be reported, please see our prior update on this topic, which can be found here or via FinCEN FAQs accessible here. We encourage your institution to determine whether it is required to file a beneficial owner report and if so, to begin collecting the information needed to make this submission. Please contact us if you have any questions about your reporting obligations or would like assistance filing your initial beneficial owner report.
As always, thank you for reading.
Erin Jones Adams, Member, Co-Chair of the Education Practice Group, and Co-Editor of The Academic Advisor
and
Kevin L. Carr, Member, Co-Chair of the Education Practice Group, Co-Chair of the Labor and Employment Practice Group, and Co-Editor of The Academic Advisor
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“For all schools that receive federal funding, the rule protects against discrimination for students based on ‘sex stereotypes, sexual orientation, gender identity, and sex characteristics.’”
Why this is important: On July 11, 2024, the U.S. House of Representatives passed a resolution, along party lines, that would use the Congressional Review Act to reverse the Title IX rule issued by the U.S. Department of Education (ED) in April seeking to extend federal discrimination protections for LGBTQ+ students (Final Rule). This Act is a procedural tool Congress can use to overturn certain actions from federal agencies. President Biden has vowed to veto it.
For schools that receive federal funding, the Final Rule protects students against discrimination based on “sex stereotypes, sexual orientation, gender identity, and sex characteristics.” In the Senate, legislation was also introduced to try to block the Final Rule under the same tool. The Senate version has gathered over 30 Republican co-sponsors. However, even if this would pass in the Democrat-controlled Senate, the President’s veto threat means there is virtually no possibility it could be adopted this year.
Proponents of the resolution say that Title IX provided women opportunities in education and competitions. They fear that these opportunities for young girls will fade if the Final Rule is allowed to stand, particularly with women’s sports programs. Opponents of the resolution say that it is being driven by misinformation and hatred of transgender individuals. Instead, they say the focus should be on defending women’s reproductive health care, making child care more affordable, and preserving opportunities in the workplace.
In the meantime, challenges to the Final Rule are playing out in federal courts across the country. Twenty-six states have sued to block the Final Rule. In June, U.S. District Judge Terry Doughty of Louisiana issued a temporary injunction barring the Final Rule from taking effect there and in Idaho, Mississippi, and Montana. In a Kentucky federal court, Chief Judge Danny Reeves temporarily blocked the Final Rule there and in Tennessee, Ohio, Indiana, West Virginia, and Virginia. Chief Judge Reeves rejected ED’s request for a partial stay of the injunction while its appeal plays out. Judge John Broomes of the U.S. District Court for the District of Kansas temporarily blocked the Final Rule from taking effect in the Sunflower State and in Alaska, Utah, and Wyoming. In a stunning move that splits university systems in numerous states, Judge Broomes’ order also blocks the Final Rule from taking effect at hundreds of schools attended by any members of the association plaintiffs in that lawsuit. Judge Broomes determined that ED lacked the authority to expand prohibited sex-based discrimination to include discrimination based on gender identity. However, Judge Broomes expressly indicated that his order does prevent a school or college from adopting new policies. Most recently, the U.S. District Court for the Northern District of Texas issued an injunction stating that “[t]he Final Rule inverts the text, history and tradition of Title IX[,]” adding that the Final Rule “…inserts men into spaces reserved to women.” The Texas order also blocks other changes, including new protections for pregnant and parenting students. Texas officials have already instructed public colleges and K-12 schools not to comply with the Final Rule. With Texas, there are now 15 states with temporary injunctions blocking the Final Rule from going into effect on August 1, 2024. The 15 states with temporary blocks are: Alaska, Idaho, Indiana, Kansas, Kentucky, Louisiana, Mississippi, Montana, Ohio, Tennessee, Utah, Virginia, West Virginia, Wyoming, and Texas, and a list of the schools affected by Judge Broomes’ expansive order is accessible via this link.
On July 22, 2024, the Solicitor General submitted applications to the U.S. Supreme Court seeking partial stays on injunctions from the Western District of Louisiana and the Eastern District of Kentucky. Interestingly, these applications were filed after similar requests had been denied by both the Fifth and Sixth Circuit Courts of Appeal.
While this political debate continues, enforcement of the Final Rule will continue to become more complicated. On August 1, 2024, the Final Rule will go into effect in some states but not in others. Perhaps other cases and rulings will be issued prior to August 1. Although these are only temporary injunctions and not final rulings, each appeals court will address these matters at a different pace such that the implementation of the Final Rule will continue to look different in each federal district. In the meantime, educational institutions, Title IX administrators, and compliance officers in states that are not blocked must move forward with policy and training updates. In those states that have issued a temporary injunction, the best practice is to comply with the existing Title IX regulations, maintain contact with legal counsel, and be prepared to pivot and issue policy updates quickly in the event that the injunctions are overturned. --- Lisa M. Hawrot
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“The ruling from the 6th U.S. Circuit Court of Appeals kept in place a preliminary injunction issued last month by a federal district judge in Kentucky.”
Why this is important: On April 29, 2024, the U.S. Department of Education (ED) published new Title IX regulations, which removed live hearing requirements and expanded protections to include gender identity (Final Rule). Though the Final Rule is scheduled to go into effect August 1, 2024, it has faced significant legal troubles since publication. As Spilman attorney Lisa Hawrot also details above, over the last several months, courts have blocked implementation of the Final Rule in 15 states, and a Kansas federal district court has blocked enforcement at nearly 700 Title IX-covered entities across the country. The regulations are facing more legal challenges in 12 other states.
Of the 15 states where the new regulations have been blocked, six come from an injunction placed by a federal district court in Kentucky, which was upheld by the Sixth Circuit Court of Appeals. At the center of the legal challenge is ED’s expansion of the definition of “sex discrimination” to include “gender identity” and the prohibition on “hostile environment harassment.” The states challenging the Final Rule argue that it goes beyond the rulemaking power of ED. The Kentucky district court held that the new definition of sex discrimination likely exceeds ED’s authority, and blocked enforcement in Kentucky, Indiana, Ohio, Tennessee, Virginia and West Virginia until the case is decided. On July 17, 2024, the Sixth Circuit Court of Appeals agreed and upheld the injunction, but also expedited the case to be heard in October 2024.
Beyond the challenged provisions, the Final Rule makes several updates to the procedural requirements such as adding procedures for dealing with sex discrimination other than sexual harassment, and removing the live hearing requirement. However, the current injunctions block the new rule entirely. Thus, with the current injunctions being limited to specific states and postsecondary institutions, Title IX as a whole will look different from state to state and institution to institution starting August 1. In general, states and entities located where the Final Rule has been blocked will continue to follow existing Title IX regulations issued in 2020, while all other jurisdictions must implement the new Final Rule. Further, on July 22, 2024, U.S. Solicitor General Prelogar requested that the U.S. Supreme Court limit the scope of the injunctions in 10 states to stop only the challenged portions of the new rule. This means that in the coming weeks, Title IX-covered entities affected by this appeal will need to keep up to date on which Title IX regulations they must follow. Otherwise, they risk utilizing policies that are either out of date or complying with a new law that is yet to take effect for them. --- Ethan S. Norris
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“In doing so, the Third Circuit rejected the NCAA’s longstanding position that college athletes cannot be employees and athletes at the same time—an edict with major consequences for college sports in America.”
Why this is important: On July 11, 2024, the Third Circuit Court of Appeals affirmed the dismissal of the NCAA’s motion to dismiss Johnson v. NCAA, a case determining whether college athletes may be seen as employees of both their schools and the NCAA. The Third Circuit’s decision to open the door for athletes to be seen as employees comes with major consequences for many.
In determining whether athletes constitute employees, the Third Circuit ordered a new test to be applied—an economic realities analysis. College athletes would be found to be employees, if they (a) perform services for another party, (b) necessarily and primarily for the college’s benefit, (c) under the college’s control or right of control, and (d) in return for “express” or “implied compensation” or “in-kind benefits.” The new test provides an easier standard for athletes to meet.
Compounding the impact of this decision, the consequences of classifying athletes as employees remain at an all-time high. If players are found to be employees, they would be required to be paid at least minimum wage and would be eligible for overtime when applicable, in addition to other employment benefits. In turn, the NCAA and colleges would be obligated to pay millions of dollars to fund these programs. The decision prompts many questions, including how schools would pay for these new requirements, whether scholarships and academic budgets would be impacted, and whether less profitable programs would need to be cut to offset these costs.
College athletes work extremely hard and do a lot of good for their schools, including bringing in revenue, and no one is questioning that. Instead, what is being questioned are the sacrifices that may have to be made in order to classify them as employees. Is there a perfect solution that would satisfy both sides? The court has yet to decide. --- Addelyn C. Slyh
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“State Attorney General Patrick Morrisey filed a petition with the court asking it to overturn an appellate court finding that the ban violated Title IX rights.”
Why this is important: Courts have come to different conclusions on whether sex discrimination laws like Title IX extend protections to transgender (an umbrella term for persons whose gender identity, gender expression, or behavior does not conform to that typically associated with their sex assigned at birth) persons. Thus, a court split exists among the states on whether disallowing transgender girls from participating on a girls’ sports team is a violation of Title IX. Title IX prohibits sex discrimination “on the basis of sex” in federally funded education programs and activities. Courts disagree on whether Title IX protects transgender students from discrimination on the basis of being transgender. This is an important issue for educational institutions in states where the legal landscape surrounding transgender student-athletes is changing.
West Virginia implemented the “Save Women’s Sports Act,” a law that prohibits persons who are assigned male at birth from participating in female-designated sports teams. In early 2024, the Fourth Circuit Court of Appeals decided that this Act violated Title IX because discrimination based on gender identity is sex discrimination. The road for this law is not yet over as the U.S. Supreme Court has granted certiorari on the question of whether this Act discriminates against transgender student-athletes “on the basis of sex.” If the Supreme Court decides that laws like the “Save Women’s Sports Act” violate Title IX, many educational institutions will need to reevaluate prohibitions on transgender student athletes’ participation in sex-designated sports teams to stay compliant with federal law. On the other hand, if the Supreme Court decides laws like West Virginia’s do not discriminate against transgender persons, schools that currently allow transgender student-athletes to participate in sports teams that align with their gender identity will need to reevaluate.
It is difficult to predict how the Supreme Court will rule on the issue, particularly given ongoing efforts to block implementation of the 2024 amendments to Title IX regulations and the delayed status of U.S. Department of Education regulations specifically addressing Title IX in athletics. In any event, the Supreme Court’s decision will impact at least 25 different state laws across the country. This makes matters difficult for educational institutions wanting to comply with current law. Nevertheless, there are steps that these institutions can take to ensure their compliance regardless of how the law comes out.
Due to the constantly changing landscape in federal, state, and local law, the first step that educational institutions should take is to ensure that they are apprised of the latest guidance from the U.S. Department of Education’s Office for Civil Rights (OCR). OCR guidance should be considered alongside any changes in federal or state law. Where the laws conflict, educational institutions should work with their counsel to determine an appropriate course of action.
Next, educational institutions should take inventory of any policies that could implicate transgender rights. Some of these policies are obvious to spot: for example, whether gender identity and expression are addressed (and how) in Title IX and anti-discrimination policies. Others are less obvious and involve evaluating how the information that is provided in student records (such as name and gender) might limit students' ability to participate on certain sports teams.
Because Title IX implicates more than just athletic programs, educational institutions should also evaluate their locker room and restroom policies. Additionally, schools should implement and enforce policies regarding locker room etiquette that protect students' privacy and prohibit behavior that contradicts student and athletic codes of conduct. Educational institutions may also wish to explore establishing single-occupancy, gender-neutral private restrooms that students may use if they wish. --- Sarah W. King
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“The portion of Asian and Black students referencing at least one race or ethnicity-related phrase in their Common Application essays fell in 2023-24.”
Why this is important: On June 29, 2023, the U.S. Supreme Court held that race-based college admissions programs were unconstitutional. Many wondered how this would impact the makeup of incoming classes. Fast forward to today, and we are now beginning to see subtle changes to incoming classes at universities. According to Common Application, the number of students referencing at least one race or ethnicity on their applications decreased in the 2023-2024 admissions cycle.
The Supreme Court’s decision has led to a multitude of changes within higher education. Schools have changed essay prompts in applications, adjusted financial aid initiatives to become race-neutral, and altered legacy preferences and standardized test requirements. The Supreme Court’s decision has also left many questions unanswered for higher education institutions. Are scholarships for minorities now against the law? Are bridge programs geared towards minorities at risk? Many of these questions will likely be addressed in federal and state courts across the country before the ambiguities are resolved.
While admissions in general as well as the college application process have undergone changes since the Supreme Court’s decision, definitive changes will take time to accurately measure. The admissions process has largely become a black box as schools are hesitant to release admissions information to organizations out of fear of potential litigation for their admissions practices. Even with the slight impacts already seen from Common Application with the incoming classes, a more definitive picture of the impact of the Supreme Court’s decision will likely not be evident for years to come. --- Isaiah C. Robinson
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“Cybercriminals might find independent and private institutions more attractive than public schools.”
Why this is important: Unlike public K-12 schools, private and independent schools charge tuition and may offer financial aid. This means they also store greater quantities of sensitive financial information about their students compared to their public counterparts, making them prime targets for hackers. This threat is compounded by the digital nature of today’s classrooms. Laptops have replaced textbooks in many schools. Students use phones and tablets to complete assignments or access school-related apps and platforms. The opportunities for hackers to gain access to schools’ networks are endless.
The goal, of course, is to prevent cyberattacks before they occur and to avoid the costly lawsuits and remedial measures that follow. But those preventative measures come with their own hefty price tags. While some private and independent schools have the donations and tuition fees to support a robust information technology department budget, others do not have the funds to pay for the equipment, software, and updates to maintain defenses against a cyberattack; and it is not just about the hardware and software. In fact, those investments may be ineffective if a school does not also expend time and resources to train staff, faculty, and students on how to use them. Preventing a member of the school community from clicking on a suspicious link or forwarding a viral email is among the most powerful defenses against a cyberattack.
So, what should school administrators do, especially if they are working with limited budgets? Experts suggest they start by implementing basic security tools, including multifactor authentication, firewalls, and data backup. Cyber liability insurance will also help offset the costs of remedying an attack. Regular security audits could help identify weaknesses or changes that occur over time, like when software updates are installed.
At the top of the list: Communication. Administrators should know how and why their school community is using technology, where the community might need support or oversight, and take the time to educate staff, faculty, and students about the risks of using technology in the classroom and how to prevent misuse and cyberattacks. --- Jamie L. Martines
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“With students, faculty and staff already using tools such as ChatGPT, universities need to set guardrails for how and why generative artificial intelligence is implemented.”
Why this is important: Higher education institutions across the nation are racing to establish generative artificial intelligence (AI) use policies before the upcoming fall semester. Although only 23 percent of institutions currently have such policies, there are numerous examples to follow. The EDUCAUSE AI Landscape Study reveals a significant need for AI policy guidance, with nearly half of the respondents feeling their institutions lack appropriate guidelines.
Developing these policies can be daunting due to concerns like cheating, fairness, and data security. Starting with basic guidelines and iteratively refining them is recommended. Policies should be flexible to adapt to rapid technological changes, as standardized policies are unsustainable long-term.
Addressing academic integrity is also crucial, as generative AI can facilitate cheating. Redesigning assignments to reduce the likelihood of cheating and using AI-generated text as a learning tool are potential solutions. Policies should help students become responsible digital citizens without being overly restrictive.
Three key areas of focus for AI policies are:
- Governance: Address ethical, equitable, and accurate AI use.
- Pedagogy: Allow professors to define AI use in their courses.
- Operations: Ensure technical training and support for AI infrastructure.
Policy development should involve engagement at individual, departmental, institutional, and multi-institutional levels. Measuring the success of AI policies through surveys and maintaining stakeholder engagement is also crucial to ensure that the policies have the intended effect and pivot where needed along the way.
If you need assistance forming an AI use policy for your institution, Spilman is here to help. Please reach out to start a discussion about your specific needs in this rapidly growing space. --- Shane P. Riley
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Federal Appeals Court Temporarily Blocks SAVE Plan | |
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Why this is important: The SAVE (Saving on a Valuable Education) Plan launched in August 2023. Borrowers who have been making at least 10 years of payments and originally took out $12,000 or less for college may qualify. For every $1,000 borrowed over and above that amount, an additional year is added before a borrower can receive relief. The White House estimated that approximately $1.2 billion in debt would be canceled. However, the U.S. Department of Education (ED) will now pause student loan payments for 8 million borrowers after a federal appeals court temporarily blocked the SAVE Plan.
Two legal challenges have been brought by several Republican-led states. They argue that the Biden administration does not have the legal authority to implement SAVE. The administration’s lawyers say they are relying on power provided by Congress to the executive branch under the Higher Education Act. On July 18, 2024, the Eighth Circuit Court of Appeals halted SAVE in a one-sentence, unsigned order. The new freeze will remain in effect until it decides whether to issue a longer-term block. In a separate case, Alaska, South Carolina, and Texas have asked the U.S. Supreme Court to review the SAVE Plan. Lawyers for the Biden administration argued that the Supreme Court should let the program move forward while the legal matters play out, stating that “borrowers would stand to suffer significant and irreparable harm” and many would “experience intense confusion” about the status of their loans if the court blocked the administration from lowering their monthly payments as planned.
In the meantime, borrowers enrolled in the SAVE Plan will be placed in an interest-free forbearance. Although payments are not required during a forbearance, borrowers are also not making any progress toward paying down their debt. Unfortunately, unless and until a different ruling is issued from the Eighth Circuit or a ruling is issued from the Supreme Court, borrowers will remain in a state of limbo. --- Lisa M. Hawrot
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