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Latest Cases & Developments
Date:
U.S. Dep’t of Education Proposed Rules to Authorize Debt Relief (Oct. 25, 2024)
The U.S. Department of Education (the Department) issued a Notice of Proposed Rulemaking (NPRM) that would authorize student debt relief to borrowers who struggle with high medical costs, childcare costs, natural disasters, and other financial hardships. The NPRM on Hardship (Unofficial), if finalized, would impact approximately eight million borrowers, and sets forth two potential pathways for relief. Option one codifies authority for the Secretary of Education (the Secretary) to grant individualized, automatic relief without an application on a one-time basis. The Department would glean qualified borrowers by applying seventeen non-exclusive factors to existing borrower data and consider relief for those with an 80% or greater chance of being in default within the next two years. Option two proposes a primarily application-based pathway to debt relief for both current and future borrowers based on a holistic assessment of their personal hardship. The thirty-day comment period will commence once the NPRM publishes in the Federal Register. The Department expects to finalize the new regulation in 2025.
Topics:
Financial Aid, Scholarships, & Student Loans | StudentsDate:
Choh v. Brown Univ. (D. Conn. Oct. 9, 2024)
Opinion granting Defendants’ Motion to Dismiss. Plaintiffs, current and former student athletes, filed a putative class action, claiming a violation of Section 1 of the Sherman Act, 15 U.S.C. § 1 against Brown University, the Trustees of Columbia University in the City of New York, Cornell University, the Trustees of Dartmouth College, Harvard University, the Trustees of the University of Pennsylvania, Princeton University, Yale University, and the Ivy League Council of Presidents. Plaintiffs allege the Universities formed a price-fixing agreement, referred to by the Universities as “the Ivy League Agreement,” “not to provide athletic scholarships to their Division I Athletes and not to pay Ivy League Athletes any compensation (or reimbursement of education-related expenses).” Plaintiffs further allege the Agreement is per se illegal because the Universities are “horizontal competitors in the commercial activities in the Relevant service markets.” The Universities argued that they hold authority in setting rules for financial aid and compensation, and the ban on sports scholarship is meant to “foster campus cultures that do not prioritize athletics.” In finding that plaintiffs do not allege a cognizable antitrust violation, a restraint that violates the Rule of Reason, or the requirements for defining a plausible relevant market, the court wrote “at best, the plaintiffs’ allegations of anticompetitive effects relate to just some market participants, not effects in the market as a whole.”
Topics:
Antitrust | Athletics & Sports | Financial Aid, Scholarships, & Student Loans | Students | Taxes & FinancesDate:
U.S. Department of Education Announces Successful Beta 1 Testing for the 2025–26 FAFSA form as Beta 2 Testing Begins (Oct. 16, 2024)
The U.S. Department of Education announced the launch of the second stage of testing (Beta 2), for the 2025-26 Free Application for Federal Student Aid (FAFSA). During the first stage of testing, (Beta 1) over 650 students successfully submitted applications; 586 institutions received 6,266 Institutional Student Information Records (ISIRs) generated by applications; and dozens of student corrections were successfully completed. During Beta 2, participating institutions will ask students to submit the FAFSA form as returning students for the 2025-26 cycle and begin downloading and testing ISIRs to the extent their financial aid systems are able to do so. Beta 1 testing results can be found at www.FAFSA.gov/beta.
Topics:
Financial Aid, Scholarships, & Student Loans | Students
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