Cases & Developments - National Association of College and University Attorneys

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Latest Cases & Developments

Date:
11/7/2023
Update: U.S. Dep.’t of Education Final Regulations on Financial Responsibility, Administrative Capability, Certification Procedures, Ability to Benefit (ATB) (Oct. 24, 2023)
U.S. Department of Education, Office of Postsecondary Education Final Regulations on Financial Responsibility, Administrative Capability, Certification Procedures, and Ability to Benefit (ATB). Among key provisions, the new regulations require that institutions provide adequate financial aid counseling and information, including cost of attendance information; new mandatory and discretionary triggers to give the Department with notice when an institution might not be able to be able to meet its financial responsibilities; a requirement that institutions certify that in each State where they enroll students, including through distance programs, that they meet applicable accreditation and licensure requirements and comply with State laws related to closures; a requirement that institutions provide, upon a student’s request, an official transcript reflecting all credit or clock hours for periods in which a student received Title IV funds; and a requirement that institutions provide adequate career services and clinical or externship opportunities. The Department also released a Fact Sheet on the new regulations, which become effective on July 1, 2024. Update: The Department of Education published the final regulations in the Federal Register on October 31, 2023.
Topics:
Accreditation, Authorizations, & Higher Education Act | Financial Aid, Scholarships, & Student Loans | Students
Date:
10/27/2023
Florance v. Barnett (7th Cir. Oct. 25, 2023)
Order affirming dismissal. Plaintiff, a former Indiana University School of Medicine student, brought due process claims against multiple University officials related to student loan collections. Plaintiff took a student loan through a program administered by the U.S. Department of Health and Human Services (HHS). Later, the Department of Veterans Affairs (VA), rated him as having a permanent and total disability. As he appeared to be gainfully employed and did not meet the statutory requirements for cancelation, the University declined to recommend cancelation of the loan and initiated collections proceedings against him. After plaintiff disputed HHS’s initial denial of his request for cancelation, HHS canceled his loan, and the University dismissed the collections case. In affirming dismissal of plaintiff’s claims, the Seventh Circuit held that he did not have a protected interest in loan cancellation since under the HHS loan program whether a borrower qualifies for cancelation due to a disability is a discretionary determination left to HHS, not an entitlement determined by the VA’s disability rating.
Topics:
Constitutional Issues | Disability Discrimination | Discrimination, Accommodation, & Diversity | Due Process | Financial Aid, Scholarships, & Student Loans | Students
Date:
10/27/2023
U.S. Dep.’t of Education Final Regulations on Financial Responsibility, Administrative Capability, Certification Procedures, Ability to Benefit (ATB) (Oct. 24, 2023)
U.S. Department of Education, Office of Postsecondary Education Final Regulations on Financial Responsibility, Administrative Capability, Certification Procedures, and Ability to Benefit (ATB). Among key provisions, the new regulations impose new mandatory and discretionary triggers to allow the Department notice when an institution might not be able to be able to meet its financial responsibilities, and also require that institutions (1) provide adequate financial aid counseling and information, including cost of attendance information; (2) certify that they meet applicable accreditation and licensure requirements and comply with State laws related to closures for each State where they enroll students, including through distance programs; (3) provide an official transcript reflecting all credit or clock hours for periods in which the student received Title IV funds, when requested by a student; and (4) provide adequate career services and clinical or externship opportunities. The Department also released a Fact Sheet on the new regulations. The new regulations become effective on July 1, 2024.
Topics:
Accreditation, Authorizations, & Higher Education Act | Financial Aid, Scholarships, & Student Loans | Students
Date:
10/20/2023
ACE Letter to ED re: FAFSA Release Date (Oct. 13, 2023)
Letter from the American Council on Education (ACE) and 11 other higher education associations to the Department of Education requesting a public release date for the new Free Application for Federal Student Aid (FAFSA) form. In requesting a firm release date for the new FAFSA form, ACE noted the need for institutions to plan for a smooth rollout, including through training for staff and outreach to appropriate stakeholders.
Topics:
Financial Aid, Scholarships, & Student Loans | Students
Date:
10/13/2023
Update: U.S. Dep.’t of Education Final Rule on Financial Value Transparency and Gainful Employment (Oct. 10, 2023)
U.S. Department of Education, Office of Postsecondary Education Final Rule on Financial Value Transparency and Gainful Employment. The new rule “amends regulations related to gainful employment (GE)” and “separately, seeks to enhance transparency by providing information about financial costs and benefits to students at nearly all academic programs at postsecondary institutions.” Under the new “financial value transparency framework,” institutions will be required to report information about their programs to the Department, and the Department will establish “a measure of the earning premium that typical program graduates experience relative to the earnings of typical high school graduates” and “a mechanism for measuring the debt service burden for typical graduates.” Information regarding each program’s performance against the Department’s performance benchmarks will be available on a program information website to be established by the Department, and “for certificate programs and graduate degree programs with poor outcomes under the debt-burden measures, prospective students will be required to acknowledge viewing this information before entering into enrollment agreements with an institution.” The Department released a Fact Sheet on the new regulations. The new rule becomes effective on July 1, 2024. Update: The Department of Education published the final regulations in the Federal Register on October 10, 2023.
Topics:
Accreditation, Authorizations, & Higher Education Act | Financial Aid, Scholarships, & Student Loans | Students
Date:
9/29/2023
U.S. Dep.’t of Education Final Rule on Financial Value Transparency and Gainful Employment (Sep. 28, 2023)
U.S. Department of Education, Office of Postsecondary Education Final Rule on Financial Value Transparency and Gainful Employment. The new rule “amends regulations related to gainful employment (GE)” and “separately, seeks to enhance transparency by providing information about financial costs and benefits to students at nearly all academic programs at postsecondary institutions.” Under the new “financial value transparency framework,” institutions will be required to report information about their programs to the Department, and the Department will establish “a measure of the earning premium that typical program graduates experience relative to the earnings of typical high school graduates” and “a mechanism for measuring the debt service burden for typical graduates.” Information regarding each program’s performance against the Department’s performance benchmarks will be available on a program information website to be established by the Department, and “for certificate programs and graduate degree programs with poor outcomes under the debt-burden measures, prospective students will be required to acknowledge viewing this information before entering into enrollment agreements with an institution.” The Department also released a Fact Sheet on the new regulations. The new rule becomes effective on July 1, 2024.
Topics:
Accreditation, Authorizations, & Higher Education Act | Financial Aid, Scholarships, & Student Loans | Students
Date:
8/23/2023
Career Colls. and Schs. of Texas v. U.S. Dep’t of Educ. (5th Cir. Aug. 7, 2023)
Order granting Plaintiff-Appellant’s Emergency Motion for Injunction Pending Appeal. Plaintiff, the Career Colleges and Schools of Texas, sued to challenge borrower-defense and closed-school provisions of Final Regulations on Institutional Eligibility Under the Higher Education Act of 1965, as Amended; Student Assistance General Provisions; Federal Perkins Loan Program; Family Education Loan Program; and William D. Ford Direct Loan Program, which became effective on July 1, 2023. The Fifth Circuit granted plaintiff-appellant’s request for an emergency injunction and ordered that the case be heard during the panel’s sitting commencing November 6, 2023.
Topics:
Financial Aid, Scholarships, & Student Loans | Students
Date:
8/11/2023
U.S. Dep.’t of Education Guidance on FAFSA Changes (Aug. 4, 2023)
U.S. Department of Education, Office of Federal Student Aid (FSA) Dear Colleague Letter (DCL) on FAFSA Simplification Act Changes for Implementation in 2024-25. The DCL “explains the final changes to the need analysis formulas and the calculation of Pell Grant awards that the Department is implementing beginning with the 2024-25 Award Year” to complete the implementation of the FAFSA Simplification Act. It highlights the transition from Expected Family Contribution to the new Student Aid Index, new requirements related to the use of Federal Tax Information, and changes to the Need Analysis Formulas and calculations of Pell Grant Awards.
Topics:
Financial Aid, Scholarships, & Student Loans | Students
Date:
7/14/2023
Biden v. Nebraska (U.S. June 30, 2023)
Opinion and Order reversing the judgment of the Eastern District of Missouri and remanding. Six States, including Missouri, challenged the Secretary of Education’s plan to discharge student loan debut under the Higher Education Relief Opportunities for Students (HEROES) Act of 2003. The district court dismissed the case, finding the States lacked standing, but the Eighth Circuit granted an emergency injunction pending appeal. In reversing the judgment of the district court, the Supreme Court found that Missouri had standing because the Missouri Higher Education Loan Authority (MOHELA), a public instrumentality, would lose an estimated $44 million in fees as a result of the Secretary’s plan. The Court then held that the plan cannot fairly be interpreted as either a “waiver” or “modification” of the provisions of the student financial assistance programs under Title IV of the Higher Education Act and, therefore, exceeds the Secretary’s statutory authority under the HEROES Act. It further held under the “major questions doctrine” that in the absence of clear statutory authorization a decision of such “magnitude and consequence” must be reserved to Congress. In the related case, Department of Education v. Brown (U.S. June 30, 2023), the Court vacated the judgment of the Northern District of Texas, finding that the respondents—two borrowers who would not receive the full benefit of the Secretary’s plan and who asserted they had been denied the opportunity to participate in a notice and comment rulemaking process—lacked standing.
Topics:
Financial Aid, Scholarships, & Student Loans | Students
Date:
7/14/2023
U.S. Dep.’t of Education Dear Colleague Letter on Pre-Dispute Arbitration Agreements and Class Action Waivers (July 3, 2023)
U.S. Department of Education, Office of Federal Student Aid Dear Colleague Letter (DCL) on Implementation and Policy Guidance of the Pre-Dispute Arbitration Agreement Provisions. The DCL provides guidance to institutions participating in the Direct Loan Program on amendments to agreements with students or notices to those students that might be required for compliance with new regulations, which became effective on July 1, 2023, prohibiting institutions from requiring students to agree to internal dispute resolution requirements, class action bans, or pre-dispute arbitration agreements in order to benefit from a Direct Loan.
Topics:
Accreditation, Authorizations, & Higher Education Act | Financial Aid, Scholarships, & Student Loans | Higher Education Act (HEA) | Students

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