Source: https://lawprofessors.typepad.com/education_law/2017/04/index.html
Timestamp: 2019-04-23 10:44:20+00:00

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Earlier this month, the new secretary of education, Betsy DeVos, issued a memorandum withdrawing two Obama-era memoranda that, among other things, had directed the attention of the Education Department to attend to the quality of student loan servicing. It is not entirely clear yet what the effect of the policy change will be.
But the Department is not the only player. The deadline expired on Monday for comments requested by the Consumer Financial Protection Bureau on the need for the agency to gather information from student loan servicers, the businesses that manage loans made through the Education Department’s Direct Loan program.
Perhaps to bolster the argument for additional data collection, the CFPB today released a supervisory report describing unfair and deceptive practices identified in an investigation of student loan servicers.
The CFPB’s authority to gather information is not unlimited and sailing has not been smooth. A three-judge panel of the Court of Appeals for the District of Columbia Circuit dealt the agency a setback last week by ruling that it did not properly support a demand for information from the Accrediting Council for Independent Colleges and Schools, which accredits for-profit colleges.
The full opinion, which is narrower than the lower court decision that it affirmed, is here. The appellate panel left open the possibility that the CFPB could revise its demand for information and try again.
These are potentially difficult times for would-be aggressive regulators of business conduct, as Gary Rivlin of The New York Times recently warned. The CFPB may not get much support from the Trump Administration.
The combination of changes in policy at the Education Department, investigative initiatives at the CFPB, and resistance from businesses, suggests that student loans, and specifically student loan servicing, will continue to be a hot topic.
A Pennsylvania school district lost its appeal yesterday of an injunction to prevent the district from increasing property taxes after a state court found that the district misled taxpayers about its finances. The Lower Merion School District lost the appeal after it failed to file post-trial motions against the 2016 permanent injunction. That injunction ordered the Lower Merion School District to revoke a property tax hike because the district had amassed a $42.5 million surplus during ten fiscal years in which it projected deficits. Instead of adjusting its budgets or crediting taxpayers for the surplus, the district instead sought and received a a tax increase of 4.4 percent for the 2016-2017 school year. To do that, Lower Merion invoked a special exemption under the state's Taxpayer Relief Act, which allowed the district to raise taxes above the statutory maximum of 2.4 percent. Since 2006, the school district reportedly raised property taxes by approximately 53.3 percent. Lower Merion's schools are among Pennsylvania's most highly rated districts; Lower Merion High School was named in U.S. News and World Report's list of the nation's best high schools. The case is Wolk v. School District of Lower Merion (Pa. Commw. Ct., Apr. 20, 2017).
The Ninth Circuit held last week that a school district must pay attorney fees in a suit resolving which state agency bears the responsibility to pay for special education services for students in juvenile detention. In 2013, the Ninth Circuit held in the case that a school district had to pay for education services under under the Individuals with Disabilities Education Act (“IDEA”) for student K.G., who was formerly in juvenile detention. K.G. then sought attorney's fees to recover the costs of the suit. The district court below denied K.G.'s request for attorneys’ fees, finding that he was not a “prevailing party” under the IDEA because his victory—determining which agency would fund the free appropriate public education (FAPE) required by the IDEA—was “technical or de minimis.” The district court further found that K.G.'s argument was the same as the school district's--that the State was responsible for K.G.'s education rather than the school district. The Ninth Circuit rejected both grounds. The circuit court noted that K.G. had to prove that some state agency was responsible for his education, and his presence in the litigation was necessary even though he and the school district shared similar positions. However, the Ninth Circuit remanded part of the case for the district court to determine whether K.G. was entitled to any attorney fees for litigation after his graduation--that was presumably after he had gotten the education due him. The case is Irvine Unified Sch. Dist. v. Cal., No. 14-56457 (9th Cir. Apr. 13, 2017).
The D.C. Circuit denied a congressman's and a high school student's request to restore the student's artwork protesting the police shooting of Michael Brown to an art display at the U.S. Capitol. The federal court concluded that although the student's painting was removed because of its political expression about the Ferguson, Missouri police shooting and subsequent protests, an art display in the Capitol could be deemed government speech over which Congress has editorial control. In 2016, student David Pulphus won a place in the Congressional Art Competition to represent Missouri’s First Congressional District with his painting about the Ferguson police shooting incident. Pulphus's painting was selected to represent Rep. William Clay's district (Clay was a co-plaintiff in this case). But several members of Congress unilaterally and repeatedly took the painting down from the wall, objecting that the painting was “anti-police.” (In the painting, which NPR.org has posted here, a police officer is depicted with a warthog head and is pointing a gun at a young man who has a wolf's head and a tail.) Eventually, the Architect of the Capitol (who oversees the student art competition), permanently removed the painting for failing to meet the competition’s content suitability guidelines, which bans artworks that depict a "contemporary political controversy," or is sensationalistic or gruesome. Pulphus claimed that removing his painting was viewpoint discrimination in violation of the First Amendment. The district court agreed that the painting was banned because of its stance, but that because Congress sponsored the competition and each artwork was labelled with the congressperson's name and district and displayed in the Capitol, the art's content would likely to be perceived by the public as government speech. Because Congress maintains editorial control over that speech through the House Office Building Commission (HOBC), which is composed of the Speaker and the majority and minority leaders of the House, the student had no First Amendment right at issue. The court also found that Pulphus could not show sufficient irreparable injury or public interest to warrant a preliminary injunction. The case is Pulphus v. Ayers, No. 2017-0310 (D.C. Apr. 14, 2017).
The Kansas Supreme Court once again stood firmly on established precedent when, on March 2, the Justices declared Kansas school funding inadequate to support the actual cost of educating students to meet the state' s academic standards.
The ruling in Gannon v. State addresses head-on Governor Sam Brownback' s drastic reductions in public school funding, pushed through to pay for his massive tax cuts.
The Supreme Court has given the Legislature to June 30 to remedy the constitutional violation.
The latest Gannon ruling flows from the Kansas Legislature' s waffling on restoring Governor Brownback' s formula aid cuts. In 2014, the Legislature took steps to increase school aid, but reversed itself a year later.
The Gannon student and district plaintiffs, represented by Wichita attorney Alan Rupe and Newton attorney John Robb, turned again to the Supreme Court for relief. The Court bifurcated the issues in the case into equity and adequacy and sent the case to a lower court to develop an evidentiary record.
In February 2016, the Supreme Court ruled that the funding system was inequitable and ordered a remedy by June 30, 2016. The Legislature complied by the deadline.
In its March 2017 decision, the Supreme Court affirmed the lower court' s finding that Governor Brownback' s school aid cuts rendered the finance system constitutionally inadequate. The Court concluded that "every witness, including experts...confirmed that the costs of educating Kansas students and the demands on Kansas education had only increased since 2007...creating a gap between demands and resources in Kansas public education."
The Court relied on exhaustive evidence of severe deficits in essential resources in Kansas schools, including full-day kindergarten, extracurricular activities, and professional development. The resource deficits also included librarians, speech therapists, coaches, nurses, counselors and other staff, along with foreign language and art and music programs.
The Court also affirmed evidence of poor student outcomes, citing the unacceptable performance on state assessments of Kansas students overall, and students of color and low-income students in particular. The Court noted that, when the number of underperforming African American and Latino students is combined, the total equals all of the students "in every school district in every county with an eastern boundary beginning west of Salina-more than one-half of the state' s geographic area."
The Court also affirmed the lower court' s finding of a correlation between inadequate state funding and the decline in student achievement. The Court cited the "substantial evidence" that when funding increased after a previous school funding decision, student achievement also increased, and when funding was cut, student achievement also fell.
The Court concluded "the impact of the loss of funding" under the Brownback Administration was "endemic, systemic, and statewide."
The Gannon ruling follows the path taken by the New Jersey Supreme Court in Abbott v. Burke in 2011, when, based on a trial record of reductions in essential resources, the Court invalidated Governor Chris Christie' s $1.1 billion cut in formula aid and ordered the aid restored to urban districts.
But Gannon also stands in stark contrast to recent decisions by the Texas and Colorado Supreme Courts. Those Courts overturned trial court rulings of inadequate and unconstitutional school funding, ignoring both the overwhelming weight of the trial evidence and their own prior court precedents.
Unlike the Texas and Colorado Supreme Courts, the Kansas high court has stood steadfast in applying its precedent to vindicate the constitutional rights of the state' s school children to the resources needed to achieve Kansas's academic standards. The Kansas Supreme Court, in the face of deep recalcitrance by the Executive and Legislature, has demonstrated the institutional integrity that is the hallmark of an independent judiciary. And, by doing so, the Kansas Court has once again proved to be a true champion of equity.
It comes as no surprise that some of the most important jobs public-spirited graduates want to pursue do not offer high salaries. To make these careers feasible for indebted students, Congress in 2007 approved the Public Service Loan Forgiveness program, or PSLF, which provides for forgiveness of student debts of those who make payments on their loans for ten years and work for a qualifying public interest employer.
The trouble is, according to a lawsuit filed in December, the Education Department may be tinkering with the definition of qualifying employer.
The ten-year period will end this fall for early adopters, and now some of those student borrowers who counted on forgiveness say they have been told that they are no longer eligible after all. Last week, The New York Times ran a disheartening story about disavowals of forgiveness by the Department.
The subject started to get coverage after the American Bar Association filed a lawsuit against the Department in December on behalf of the students who were first told they could benefit from forgiveness, then were told later that they could not.
The lawsuit, filed in federal court in Washington, D.C., is worth watching. Changes to PSLF, codified at 20 U.S.C. §1087e(m), could have an impact on the lives of millions of students who rely on its availability when they make hard decisions about all aspects of their lives. Consider how the possibility of loan forgiveness influences choices about careers to pursue, retirement saving, major personal investments, marriage, children, and where to live.
No wonder the apparent decision by the Department to move the goalposts resulted in litigation.
According to the complaint filed by the American Bar Association (“ABA”) challenging the Department’s apparent decision that some student borrowers’ employment did not qualify them for forgiveness, some borrowers’ loan balances actually grew while they worked in what they thought were eligible public interest jobs. They used an income-dependent repayment plan and their payments did not make a dent in the principal.
The student borrowers believed that they would benefit from loan forgiveness because they filed “employment certification forms” and received confirmation that their employment qualified.
Then, after years of making payments, they received notice that their employment did not qualify – and that this finding applied retroactively, such that payments they had already made would not count toward the ten-year requirement. The law does not specify an appeals process, the ABA notes.
Why is the ABA suing the Department? Well, “high caliber employees” will leave or may not work for the organization if such employment does not qualify for loan forgiveness, according to the complaint.
The Department’s answer asserted that the Department had “ultimate authority to review” actions taken by the company that serviced the loans, suggesting that the Department considered no prior finding of eligibility for forgiveness to be binding. The Department’s response suggests also that perhaps the servicing entity did not have authority to make the eligibility findings that it had.
Further, the Department “does not make a final decision on whether a borrower has been employed by a qualified organization until the borrower submits an application for loan forgiveness,” suggesting that any interim confirmation of eligibility for PSLF is meaningless.
While the outcome matters greatly to students, the battle is also significant because it implicates the larger question of the extent to which the federal government will subsidize accessibility of higher education. Loan forgiveness to students in repayment reduces the cost of college, it just does so ex post rather than ex ante as a scholarship would.
Critics of PSLF warn of the program’s potential cost, at least implying that this subsidy is dangerous because of its expense. And perhaps a debate over national willingness to put higher education within reach of students ready to work in the public interest is one we should have.
In such a debate, we should take note of the distributive effects of PSLF: students with higher debts, often students who had less in the way of financial resources to begin with, are the ones who will be most affected by restrictions on the availability of forgiveness. The forgiveness program constituted a legislative effort to turn indebtedness into an incentive to go into fields that otherwise students might view as unaffordable.
But regardless, those students who have acted in reliance on PSLF deserve to have the promise of the 2007 legislation honored. They are, after all, working in the public interest.
According to the AP, Arizona just passed a bill that will make every student in the state eligible for voucher. It may become the biggest voucher program in the nation. The "program allows parents to take between 90 percent and 100 percent of the state money a local public school would receive to pay for private or religious education. The average student who isn't disabled will get about $4,400 a year, but some get much more." The funding mechanism and its expected cost to the state is murky. "The original Arizona plan was estimated to cost the state general fund at least $24 million." Now, a revised plan and estimate are supposed to save the state $3.4 million by 2022.
What is clear, however, is that Arizona's per pupil funding for public schools currently ranks 47 out of 50 states. To make matters worse, it distributes those meager funds unequally. The Education Law Center's 2017 School Funding Fairness Report grades Arizona's funding distribution as an "F." Schools with moderate levels of student poverty receive only 88 cents on the dollar in comparison to schools with no student poverty. The comparison is even worse between high poverty school districts and low poverty school districts. In other words, Arizona spends the least on students who need the most.
That same report also shows that Arizona is doing almost nothing to fix its low funding levels or unequal distribution. Arizona ranks 49th in the nation in terms of the level of fiscal effort it exerts to fund its schools.
These background facts place Arizona's new voucher program in a troubling light. These cold hard facts show that the state is not really interested in supporting adequate and equal education for its students. Thus, it is no surprise the state would double down and make matters worse. If gross inequity and inadequacy in public schools does not bother the state as a general principle, why would robbing those schools of more money be a problem? Why not just cap the state investment in a students' education, send that student to private school, and tell the family and or the private school that they need to make up the difference? If things do not work out in the future, that is on the family and the private school.
These background facts also mean that the rhetoric of political leaders lacks credibility. Speaking of the voucher program, the Governor tweeted: "When parents have more choices, kids win." If one understands the facts, one understands that this voucher program is not about helping kids in Arizona "win." It is about raw politics and continuing the longstanding trend of depriving public schools of the resources they need to succeed. If parents in Arizona want vouchers (or charters), it is not because those policies are normatively appealing. It is because the state has been robbing them of the public education they deserve. Many families now surely believe they have no other realistic option. In short, the state has created the factual predicate of failing public schools to create the justification for its own pet project of privatizing education. The kids caught up in the mess simply do not matter.
Is this a sign of an evolving school voucher position that not only should the public fund private education, it should fund it with no strings attached?
That choice advocates could take such a position shows just how far the ground has shifted in a few short months. This position is incredible on any number of levels.
First, it assumes an entitlement to public funding for private choice. The problem is that there is no such entitlement. If the federal or state government is giving money to private schools or facilitating private choice, it goes without saying that it has the right to regulate that money. In fact, conditioning federal money is the real reason for giving out federal money to begin with. The federal government knows that its ability to regulate state and private actors is relatively small. Thus, it achieves its policy objectives by exchanging money for conditions. We do this in everything from health care to education.
Second, state and federal government has funded public education for the past century and a half because it is public education. The state and federal interest in funding private education is extremely small at best. The only interest in funding private education is to offset certain costs that might otherwise fall on public education. In other words, there is no independent reason to fund private education.
Third, federal funds for public schools come with a long list of conditions. Why we would condition funds in public schools but allow private schools to take them free of conditions? The only obvious rationale I see is a normative preference for private schools over public schools. Few, however, are willing to publicly fess up to that rationale. If they did, it would be contrary to the second point. In effect, the justification for funding education at all would begin to collapse if we preferenced private education over public education.
Finally, public education is premised on a set of cultural and constitutional norms--non-discrimination, fair process, equal opportunity, social cohesion, and freedom from religious coercion. As a general principle, private education is neither premised on nor committed to any of these norms. Without regulation, they would not accept them. And if they did not accept them, the federal government could not in fairness give them public money. One might even seriously question whether a new set of constitutional concerns would arise if the federal government did so.
While the Supreme Court has upheld vouchers for private religious schools, the Supreme Court has also held that the federal government cannot achieve unconstitutional ends indirectly. For instance, the federal government clearly cannot segregate schools itself. Could it indirectly achieve segregation through its spending power and have private or state entities do it for the federal government? The Court has said no.
Of course, just because private individuals might use public money to segregate or pursue religious ends does not meant that is the federal government's design--hence the prior decision upholding vouchers. But if we converted into a system dominated by private choice and entirely free of constitutional and cultural norms, the question of whether the government was pursuing a new impermissible design could rise to the fore.
Minnesota Court of Appeals Holds that Education Quality Suit Raises Nonjusticiable Political Question.
In a case of first impression in the Minnesota appellate courts, the state court of appeals recently reversed a trial court's refusal to dismiss to dismiss a class-action lawsuit that claimed that economic and racial segregation led to students being denied their state constitutional right to an adequate education. The Minnesota Court of Appeals found that the suit's claims required the court to define what was an adequate education, which in the court's view presented a nonjusticiable political question. The class action plaintiffs alleged that hyper-segregated schools” throughout Minnesota is a per se violation of the Minnesota State Constitution's Education Clause (article XIII, sec. 1) and that children of color and children in poorer districts receive an inadequate education by "any objective standards." The district court below refused to dismiss the plaintiffs' claims on the merits. In reversing that decision, the court of appeals wrote that the definition of adequate education is a standard specifically assigned to the state legislature and would require the court to make an initial policy decision in an area under legislative control. Citing precedent, the appellate court noted, "we deem judicial review of educational policy inappropriate." The case is Cruz-Guzman v. State, No. A16-1265, 2017 WL 957726 (Minn. Ct. App. Mar. 13, 2017).

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