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Latest Cases & Developments
Date:
Court Grants Joint Motion by Parties to Dismiss NEA Lawsuit challenging February 14 Dear Colleague Letter (Feb. 18, 2026)
A federal district court judge in New Hampshire has formally dismissed a year-long lawsuit brought by the NEA, ACLU, and others challenging the Trump Administration’s February 14 2025 Dear Colleague Letter (“DCL”) after the parties submitted a joint motion to drop the case. The lawsuit challenged the DCL, as well as a related certification requirement for schools and Frequently Asked Questions document, alleging that the guidance violated the First and Fifth Amendments and was in violation of the Administrative Procedure Act (APA). The joint motion to dismiss was filed on February 3, shortly after the DCL was vacated and set aside by a district judge in Maryland in American Federation of Teachers, et al. v. United States Department of Education. The joint motion requires the Department to agree that “[t]he challenged Agency Actions will not be relied on in any way by Defendants including by way of seeking to enforce its substance through [the Department of Education] or [the Department of Justice] civil rights enforcement procedures.”
Topics:
Admissions | Discrimination, Accommodation, & Diversity | Diversity in Employment | Faculty & Staff | Financial Aid, Scholarships, & Student Loans | Race and National Origin Discrimination | StudentsDate:
Young Americans for Freedom, et al. v. Department of Education (8th Cir. Feb. 17, 2026)
Plaintiffs’ Motion to Voluntarily Dismiss Appeal. Plaintiffs, the Young Americans for Freedom, sought an injunction prohibiting the Department of Education from utilizing race eligibility criteria to award grants for the Ronald E. McNair Postbaccalaureate Achievement Program. The district court denied the motion, finding that plaintiffs lacked standing because they failed to include the relevant higher education institutions, which control applicant selection, not the Department. Plaintiffs appealed the denial of their request for an injunction to the Eighth Circuit but before the court could render a decision, the parties agreed to drop the lawsuit. In requesting the court to dismiss the case, the motion highlights (1) the Department’s determination that the program’s race eligibility criteria is unconstitutional and (2) it’s commitment to rescinding the race criteria in an upcoming rulemaking.
Topics:
Constitutional Issues | Discrimination, Accommodation, & Diversity | Equal Protection | Financial Aid, Scholarships, & Student Loans | Race and National Origin Discrimination | StudentsDate:
Department of Education NPRM on Graduate Student Loan Eligibility (Jan. 30, 2026)
The Department of Education issued a Notice of Proposed Rulemaking (NPRM) which would establish new loan limits for graduate students, professional students, and parents, and phase out the Graduate PLUS Program. The proposal would also phase out existing Income-Contingent Repayment (ICR) plans, create a new tiered standard repayment plan option, and implement a new income-driven repayment plan known as the Repayment Assistant Plan. This action follows the Department’s announcement in November that the negotiators of the Reimagining and Improving Student Education (RISE) committee reached consensus on a definition of a professional degree. Comments are due by March 2, 2026 and, if finalized, the policy is set to take effect July 1, 2026.
Topics:
Financial Aid, Scholarships, & Student Loans | StudentsDate:
American Federation of Teachers, et al., v. U.S. Department of Education, et al. (4th Cir. Jan. 21, 2026)
The Department of Education dropped its appeal of an August 2025 federal court ruling that blocked the Department’s February 14, 2025 Dear Colleague Letter and a related requirement that school districts certify they do not engage in “illegal DEI” practices. With this withdrawal, the district court’s decision will stand.
Topics:
Admissions | Constitutional Issues | Discrimination, Accommodation, & Diversity | Diversity in Employment | Due Process | Financial Aid, Scholarships, & Student Loans | First Amendment & Free Speech | Race and National Origin Discrimination | StudentsDate:
Department of Education Program Participation Agreement Signature Requirements (Jan. 16, 2026)
The Department of Education Office of Federal Student Aid announced that in response to a challenge to the legality of 34 C.F.R. § 668.14, which requires an owner-entity of an institution of higher education to sign a Program Participation Agreement (PPA), the Secretary of Education has agreed to no longer enforce the owner-entity signature requirement. The change in enforcement follows the Department’s settlement in Hannibal-LaGrange University v. Department of Education (E.D. Mo. 2025). Moving forward, enforcement of the provision will be on a case-by-case basis, and the Department also indicated that it intends to revise the regulation consistent with the results of the settlement agreement.
Topics:
Financial Aid, Scholarships, & Student Loans | StudentsDate:
ACE Comments on the Department of Education’s Proposed Revisions to the Accreditation Handbook (Jan. 26, 2026)
The Department of Education Office of Federal Student Aid announced that in response to a challenge to the legality of 34 C.F.R. § 668.14, which requires an owner-entity of an institution of higher education to sign a Program Participation Agreement (PPA), the Secretary of Education has agreed to no longer enforce the owner-entity signature requirement. The change in enforcement follows the Department’s settlement in Hannibal-LaGrange University v. Department of Education (E.D. Mo. 2025). Moving forward, enforcement of the provision will be on a case-by-case basis, and the Department also indicated that it intends to revise the regulation consistent with the results of the settlement agreement.
Topics:
Financial Aid, Scholarships, & Student Loans | StudentsDate:
Corzo v. Brown Univ. (N.D. Ill. Jan. 12, 2026)
Opinion and Order Denying Defendants’ Motion for Summary Judgment. Plaintiffs, a putative class of alumni from 17 selective universities, sued the universities for violating section 1 of the Sherman Act, alleging that the schools colluded through the “568 Presidents Group” to standardize financial-aid calculations in ways that reduced competition and raised prices for students receiving aid. The court held that plaintiffs presented sufficient evidence for a reasonable jury to conclude there was an antitrust violation, finding (1) the universities “agreed on the Consensus Approach to avoid bidding wars and then adhered to it”; (2) the universities held “high enough market shares to infer market power”; and (3) plaintiffs had “suffered an injury when they paid too much.” The court rejected the universities’ section 568 antitrust exemption defense, reasoning that the defense did not apply because some of the universities in the Presidents Group were not admitting students on a “need blind” basis. While several universities maintained that they were still need blind, the court rejected this argument as unpersuasive and contrary to the statutory text, finding that plaintiffs had demonstrated their processes favored wealthier applicants.
Topics:
Antitrust | Financial Aid, Scholarships, & Student Loans | Students | Taxes & FinancesDate:
Virginia AG and DOJ Submit Joint Settlement Agreement to enjoin enforcement of Virginia Dream Act (E.D. Va. Dec. 30, 2025)
In late December, the federal government sued the Commonwealth of Virginia challenging the Virginia Dream Act, which provides in-state tuition and financial assistance to undocumented students. The Department of Justice (DOJ) alleges that the law discriminates against U.S. citizens “who are not afforded the same reduced tuition rates, scholarships, or subsidies, [and] create[s] incentives for illegal immigration, and reward[s] illegal immigrants with benefits that U.S. citizens are not eligible for.” A day after the complaint was filed, the Virginia Attorney General and the DOJ submitted a joint motion for consent judgment to the court, which, if approved, would deem the law unconstitutional and bar state authorities from enforcing it. The lawsuit follows two Executive Orders signed by President Trump last year: “Ending Taxpayer Subsidization of Open Borders” and “Protecting American Communities from Criminal Aliens.” A copy of the complaint can be found here.
Topics:
Financial Aid, Scholarships, & Student Loans | Immigration | International Students | StudentsDate:
Department of Education Announces Agreement with Missouri to End SAVE Plan (Dec. 9, 2025)
The Department of Education announced a proposed legal settlement with Missouri that would end the “Saving on a Valuable Education” (SAVE) Plan. Under the proposed agreement, the Department would deny any pending applications for the SAVE Plan, prohibit future enrollment of borrowers in the plan, and move all current SAVE borrowers into other repayment plans. The Department has also agreed to hold a negotiated rulemaking session to remove the SAVE Plan from federal regulations, apart from the forbearance and deferment provisions that were included in the final SAVE Plan rule that will continue to count for Income-Driven Repayment (IDR) forgiveness. The Department is still awaiting approval from the court. A copy of the settlement agreement can be found here.
Topics:
Financial Aid, Scholarships, & Student Loans | StudentsDate:
Department of Education AHEAD Negotiated Rulemaking (Dec. 8, 2025)
The Department of Education continues its work to develop regulations related to the implementation of the One Big Beautiful Bill Act (“OB3”) with meetings for a second negotiated rulemaking committee. The Accountability in Higher Education and Access through Demand-driven Workforce Pell or “AHEAD” Committee, will meet to discuss regulations related to the new “workforce Pell” program as well as a change in the law preventing students from receiving a Pell grant if the students’ other non-Federal aid equals or exceeds their cost of attendance. A discussion paper on this week’s session can be found here and a list of all committee members can be found here. A second session looking at institutional and program accountability metrics in OB3 (also referred to as the “Do No Harm Framework”) has been scheduled for January 5-9, 2026.
Topics:
Financial Aid, Scholarships, & Student Loans | Students
NACUA Annual Conference
Join us in the Music City June 29 – July 2 to connect, learn, and lead alongside higher education attorneys shaping policy, practice, and impact nationwide together.