The Academic Advisor - Education Law Insights, Issue 8, October 2023

Welcome to the eighth edition of The Academic Advisor for 2023 – our e-newsletter focused on education law insights.  

We expect this publication finds your campuses bustling with activity. With the start of a new academic year in the rearview and Fall Break on the horizon, this edition covers the following topics of import for your institution: 

  • Why all Title IV-funded programs must meet U.S. Department of Education (ED) requirements for accreditation; 
  • The impact of anti-DEI legislation on research funding; 
  • How the White House’s new cybersecurity initiative intends to help schools; 
  • The ways that “education culture wars” legislation is impacting schools;
  • Ensuring 911 calls from multi-line telephone systems comply with Kari’s Law and the RAY BAUM Act;
  • The spreading unionization of graduate student workers; and
  • What institutions should know about the Corporate Transparency Act reporting regime effective January 1, 2024. 

In addition, please note that ED released Final Rules this week to protect consumers from unaffordable student debt and increase transparency. According to ED, the Final Rules have two key parts: (1) a revised “gainful employment” rule designed to protect students from “career training programs that leave graduates with unaffordable loan payments or earnings no better than what someone who did not pursue postsecondary education earns in their state[;]” and (2) a new “financial value transparency” framework to give students in all programs detailed information about “the net costs of postsecondary programs, and the financial outcomes they can expect.” For more information, please see this press release issued by ED earlier this week. 

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


U.S. Department of Education Takes Action Against Five Schools for Disbursing Federal Student Aid to Students Enrolled in Unaccredited Programs

“The settlement agreements include the payment of liabilities for all five schools and fines against three schools.”

Why this is important: In August 2023, the U.S. Department of Education (ED) announced settlements with five law schools following an investigation by Federal Student Aid (FSA), which concluded that the schools had improperly disbursed Title IV funds to students enrolled in their Master of Laws (LLM) programs without the requisite accreditation. According to FSA, 92 students received nearly $2.9 million in ineligible disbursements over a five-year period beginning in 2017.

In general, participation in Title IV, Higher Education Act (HEA) programs depends on an institution being accredited or, in the case of public or non-profit institutions, pre-accredited by a nationally recognized accrediting agency. The responsibility for ensuring Title IV funds are distributed only to students enrolled in eligible programs rests with schools. Under federal regulations, an “eligible program” is an educational program provided by a participating institution that also satisfies the requirements of 34 CFR § 668.8, which includes both quantitative and qualitative criteria that considers the weeks of instruction, clock hours and credit hours, ability to prepare students for gainful employment in a recognized occupation, and substantiated completion and placement rates. For purposes of this definition, a “participating institution” is an eligible institution that meets the standard for participation in Title IV, HEA programs as defined in subpart B of 34 CFR § 668.2 and also has a current program participation agreement with ED. 

According to ED, unlike most law schools, the law schools subject to these settlements, including New York Law School, New England Law-Boston, and Albany Law School, among others, are not part of a university system that has institutional accreditation. As explained by ED, while the American Bar Association (ABA) typically functions as a programmatic accreditor for schools with Juris Doctor (JD) programs that otherwise have institutional accreditation, the ABA does not accredit LLM programs. For freestanding law schools, the ABA is recognized as an institutional accreditor by ED, but only approved as a Title IV funds gatekeeper for JD programs. Thus, freestanding law schools institutionally accredited by the ABA that offer non-JD programs are required to secure institutional accreditation that provides a Title IV-approved scope for such programs. The penalties for disbursing Title IV funds without proper institutional accreditation include fines, reimbursing ED for the improperly disbursed funds, and certain related assurances.  

Ultimately, as this ED press release highlights, schools must ensure that their accreditation status meets Title IV funding requirements for all programs they administer before disbursing any Title IV funds to program participants. --- Erin Jones Adams

Will Anti-DEI Legislation Cause a Research Funding Drought in Higher Ed?

“A key challenge is that federal agencies — which funded more than $49 billion in university research and development projects in 2021 — typically require applicants to show they are considering diversity and equity in their work.”

Why this is important: Recent anti-diversity, equity, and inclusion (DEI) laws affecting higher education in states like Florida and Texas have raised concerns among research faculty and their supporters. These laws threaten future funding and collaboration opportunities with federal agencies, which often require DEI considerations in research proposals. The uncertainty surrounding whether state compliance or federal standards will prevail in determining research funding raises significant questions.

Shirley Malcom, senior advisor to the CEO and director of the STEM Equity Achievement Change initiative at the American Association for the Advancement of Science, warns that the biggest impact will be on STEM fields, emphasizing the importance of diversity in scientific research due to the historic underrepresentation of minority subjects and researchers in such fields. Scientific studies in healthcare are at risk as well due to the need for diverse participation in clinical trials, which also has been historically underrepresented and lacking in diversity.

The article highlights how bans on DEI offices and activities at public colleges and universities in Texas and Florida could affect overall research funding. Research funding is a significant source of economic support in these states, with billions of dollars at stake. In particular, the University of Florida received $469 million in research funding from federal agencies last year, almost half of its over $1 billion in research expenditures, including state and private funding. 

Due to Florida policies regarding DEI initiatives, many researchers are contemplating moving to another institution in a less restrictive state, even if it means accepting lower pay and a loss of status at a lesser renowned school. Even collaborators outside of Florida are taking notice and pause when considering working with researchers in the state. With many other collaboration options in research-friendly states, adding a Florida researcher to a federal proposal may prove to be too risky for highly competitive awards. 

The situation has led to concerns among researchers, with some contemplating changes to their project proposals to avoid explicit DEI language, including the specific phrase “critical race theory,” even if the general principles behind the buzz words remain in substance. This challenges the integrity of scientific research and raises questions about the future of research funding for DEI initiatives.

In response to these developments, organizations like SEA Change are focusing on systemic change to address the challenges posed by anti-DEI legislation, aiming to support inclusivity in higher education and research. The outcome of this battle could have far-reaching implications for the future of diversity and inclusion efforts in academia and scientific research.

For now, institutions across the United States that receive federal research funding should pay close attention to the agency policies and award terms and conditions regarding DEI initiatives attached to their awards, regardless of their particular state’s laws, as the federal agencies have signaled that there will not be exceptions based on state law. --- Shane P. Riley

White House Rolls Out Cybersecurity Initiative as Schools Face Devastating Hacks

“The Education Department will launch a coordinating council to provide formal collaboration between government officials and district leaders to help schools strengthen their cybersecurity capabilities in the face of attacks that have closed campuses and exposed highly sensitive student and educator information online.”

Why this is important: As we have discussed in previous editions of The Academic Advisor, the education sector has experienced devastating cyberattacks, ransomware attacks, and data breaches over the last few years. In fact, the education sector is one of the most targeted parts of the U.S. economy, outpacing health care, technology, financial services, and manufacturing. The education sector is such an inviting target because of the large number of vulnerabilities and the vast amount of easily available data. This data includes not just the personal data of students and staff, but in relation to higher education, sensitive research data. As IT specialists in the education sector try to change and adapt to these ever-evolving attacks, they are unable to keep up with the new tactics utilized by these bad actors. What is enabling bad actors to continue to be successful in attacking the education sector is the continuing trend to digitize instruction and daily operations. This trend has accelerated with the increased use of distance learning during the pandemic.   

The Biden administration wants to break this cycle of attack on public school districts. The school districts, especially the smaller ones, often lack the funding and resources necessary to effectively combat these attacks. In response to this problem, the Department of Education is going to establish a group to coordinate with school districts to thwart these ever increasing and sophisticated cyberattacks. This includes partnering with the Los Angeles and Minneapolis school districts, both of which have recently experienced devastating cyberattacks. The plan is to have teams of federal cybersecurity experts visit school districts to help them create incident response plans. Additionally, several technology companies have committed to partner with school districts to provide them with free and low-cost resources to combat these cyberattacks. The Department of Education’s goal is to make cybersecurity a greater priority by giving school districts the tools they need to protect their sensitive data. --- Alexander L. Turner

‘Education Culture Wars’ Legislation Heats Up

“Some 177 bills that would regulate school operations, climate or curriculum have been introduced nationwide this year.”

Why this is important: Education legislation is on the rise. In 2021, 42 bills were introduced across the country that would regulate school operations, climate or curriculum by limiting teacher or student self-expression. In 2022, that number dramatically increased to 174 bills. Legislation in 2023 has now surpassed that number to 177 bills. Notably, nine policies were adopted via an executive order or regulatory measures at the state level. Meanwhile individual school districts are considering whether they can take up their own measures through their boards of education.  

So, what are these bills and why does this legislation matter? The bills cover a wide-range of issues. Some include proposals requiring schools to report a student’s gender expression or orientation to their parents or restricting facility access for transgender students. Others permit direct surveillance of classrooms via online video feed or in-person. Still others restrict the type of reading materials that can be used or curriculum that can be taught.  

Some policymakers, advocates, and parents argue for more restrictive policies categorizing them as parental rights. These proponents believe they have a right to know and a right to have a say in all aspects of education and school operations. Others argue these policies have become a type of political intrusion into schools and create fear and stress amongst students and teachers concerning what teachers are allowed to teach and what students can ask in the classroom. In response to these pressures, students in the Miami-Dade County Public Schools protested in a walk-out in April.  

It is unlikely that this trend of introducing more bills and policies – at all levels – will decline in the near future. However, their measure of success may depend on whether and how hard teachers’ organizations and students push back against their enactment. --- Lisa M. Hawrot

Is Your Campus Compliant with Kari’s Law and RAY BAUM’s Act?

“Many think they are compliant when they aren’t, or think that they don’t need to be compliant because many have older systems that they think were grandfathered in under the law.”

Why this is important: As educational institutions well understand, identifying and implementing the best mechanisms for emergency response is challenging, even on small a campus. Ensuring that institutional phone, broadcast, and other communication systems provide students, faculty, and staff with quick and accurate information during a threat, and that first responders are swiftly dispatched to the appropriate campus locations, is a significant task. In addition to these essential logistics, schools and colleges must also ensure that their emergency response systems comply with applicable state and federal laws, including Kari’s Law and the RAY BAUM Act. 

As highlighted by this article, Kari’s Law arose from the tragic death of a woman in 2013, whose child was unable to reach 911 dispatchers because a motel phone system required users to press “9” before dialing outside lines. Signed into law in 2018, Kari’s Law requires that users making 911 calls from a multi-line telephone system (MLTS), such as those utilized by colleges and school districts, be able to directly dial 911 without any prefix code. Kari’s Law also requires that the MLTS be configured to provide a notification of the 911 call to someone on-site alerting them to the potential incident. Congress incorporated Kari’s Law into the Communications Act of 1934, thereby giving authority for its implementation to the Federal Communications Commission (FCC). 

Similar to Kari’s Law, the RAY BAUM Act also concerns 911 calls. Specifically, the RAY BAUM Act requires all organizations with an MLTS to equip their phone system with functionality that provides a dispatchable location and a call-back number for all 911 calls, unless it would be technologically infeasible. 

In January 2020, the FCC adopted regulations for the implementation of Kari’s Law and the RAY BAUM Act and consolidated the FCC’s existing 911 rules into a single rule part (47 CFR §§ 9.1-9.20). Pursuant to 47 CFR § 9.15, the regulations apply to any MLTS “manufactured, imported, offered for first sale or lease, first sold or leased, or installed after February 16, 2020.” As stated in the Preamble to this Final Rule, “Congress intended to balance the benefits of requiring direct dialing before that date against the cost to enterprises of having to implement these requirements with respect to existing, legacy equipment currently in use.”  

If you are uncertain whether your institution is complying with these laws, you are not alone. According to this article, some experts predict that less than 10 percent of organizations, including educational institutions, meet these standards. This article also explains the significant risk of liability to any institution for failing to comply, including most importantly the potential for casualties during an emergency, in addition to fines and litigation. Moreover, as the author of this article notes, the absence of these laws in 2013 did not stop a jury from awarding $41 million to the family at the center of the tragic motel death in their wrongful death action.

Though the compliance deadlines for these laws have passed, institutions should nonetheless take appropriate steps to achieve compliance as soon as possible. To support this process, school administrators should confer with their information technology, public safety, campus police, and emergency response personnel to determine whether existing infrastructure has this functionality, particularly if not grandfathered under the law, and to ensure that any new MLTS infrastructure meets these requirements. --- Erin Jones Adams

Duke University Doctoral Students Unionize

“The North Carolina college had argued to the National Labor Relations Board that its graduate workers were not employees.”

Why this is important: After a failed attempt in 2017, graduate students at Duke University successfully unionized this past August following an overwhelming 1,000-131 “yes” vote. The students will be represented by Southern Region Workers United, a branch of the Service Employees International Union. The news comes after a tough fight between the students and Duke administrators before the National Labor Relations Board (NLRB), which ultimately determined that the graduate students were employees “…compensated by and subject to the direction and control of Duke University…”

The push by Duke graduate students comes at the same time as similar efforts by graduate students across the United States higher education landscape to demand better pay, benefits, and working conditions. As of 2023, there are more than 25 graduate student unions in the United States, with Northwestern University, John Hopkins University, University of Chicago, and Dartmouth College also successfully unionizing in 2023. Similar efforts are underway at many other universities and colleges, including Kenyon College, Stanford University, University of North Carolina, and University of Pennsylvania.

With the NLRB ruling supporting graduate student workers’ employment status, it is expected that many other graduate student groups will join the effort and vote to unionize in the coming months and years. Both labor groups and higher education administrators should remain keenly aware of the issues and strategize on how to accommodate this new bargaining power. --- Shane P. Riley

Tax Exempt Entities and The Corporate Transparency Act

Effective January 1, 2024, most legal entities incorporated, organized, or registered to do business in a state must disclose information relating to their owners, officers, and controlling persons with the Financial Crimes Enforcement Network, a bureau of the U.S. Department of the Treasury, pursuant to the Corporate Transparency Act (CTA). However, entities exempt from taxation under Section 501(c) of the Internal Revenue Code (IRC) and exempt from tax under Section 501(a) of the IRC are not required to report under the CTA, including most education institutions.

Entities not exempt under the CTA must report information identifying the reporting company, its beneficial owners, and “company applicants” who made the filings to create the entity.

The reporting regime goes into effect on January 1, 2024. The due date for the initial report depends on when the entity was created:

  • If the company is created on or after January 1, 2024, the initial report is due within 30 calendar days of the date the entity is created.
  • If the company is or was formed before January 1, 2024, the initial report is due no later than January 1, 2025.

Although reports will not be accepted prior to January 1, 2024, covered entities should begin collecting information for the reports as soon as possible. For more information and to discuss your reporting obligations or exemptions under the CTA, please contact us. --- Joseph C. Unger

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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