Thompson Coburn's Higher Education Litigation Summary is your resource for legal updates on key rulings and ongoing cases shaping the higher education sector. This installment covers updates related to Gainful Employment, the Bare Minimum Rule, BDR, Student Loan Forgiveness, Title IX, False Claims Act, Nonprofit Institution Status, Federal Funding Freeze, DEI Executive Orders, the Executive Order Directing the Closure of ED, Grant Terminations, Student and Exchange Visitor Program Litigation, and the Legality of Nationwide Injunctions.
Updates in this edition include the Department of Education's defense of the 2022 BDR Rule, the potential use of the Disparate Impact Executive Order to defend DEI programs against government challenges, the current status of the Harvard funding freeze, and a new Rate Cap Policy for grants.
Gainful Employment
Overview
In October 2023, the U.S. Department of Education ("ED") published a new Gainful Employment Rule ("GE Rule"). The GE Rule sets forth complex debt and earnings metrics that ED uses to measure whether programs are preparing students for "gainful employment in a recognized profession" under the Higher Education Act of 1965, as amended ("HEA"). 20 U.S.C. §§ 1088(b)(1)(A)(i); 1002(b)(1)-(2), (c)(1)-(2). Programs failing the metrics risk losing Title IV eligibility.
Prior to its July 1, 2024, effective date, two lawsuits from the cosmetology school community challenged the GE Rule. American Association of Cosmetology Schools v. U.S. Dep't of Ed., No. 23-cv-01267 (N.D. Tex.); Ogle School Management v. U.S. Dep't of Ed., No. 24-cv-00259 (N.D. Tex.). Plaintiffs in both cases argued the GE Rule was unlawful because Congress's definition of "gainful employment" in the HEA did not contemplate ED using debt and earnings metrics. They argued the GE Rule was therefore in "excess" of ED's authority and was "arbitrary and capricious," in violation of the federal Administrative Procedure Act ("APA").
The Ogle School plaintiffs moved for a preliminary injunction to stop the GE Rule from becoming effective, but the Northern District of Texas denied the motion in June 2024. The court held that the GE Rule likely did not clearly violate the statutory definition of "gainful employment," and further, was not arbitrary and capricious. Significantly, the court ruled just days before the Supreme Court's landmark decision in Loper Bright overturning the Chevron deference doctrine. The Ogle School plaintiffs did not appeal the ruling denying its injunction motion. The two lawsuits were then consolidated in July 2024.
Current Status of Litigation
In September 2024, the parties filed cross motions for summary judgment. But in February 2025, after President Trump assumed office, ED asked the court for a 90-day stay of the litigation "to allow the new Administration to become familiar with and evaluate [its] position regarding the issues in this case." The court granted the motion and extended the remaining summary judgment briefing deadlines through May 16, 2025 (or four days after the stay is terminated, if the stay is modified). ED has also postponed GE reporting requirements until September 30, 2025.
On May 16, 2025, in a surprising turn of events, ED filed a reply in support of its summary judgment that revealed its intent to defend the Biden-era GE Rule—notwithstanding that the first Trump administration stripped a very similar rule from the books in 2019. ED's reply brief specifically defended both the financial value transparency framework, which applies to all Title IV-participating programs at all Title IV-participating institutions of higher education, and the gainful employment framework, which applies solely to "gainful employment" programs (non-degree programs at private, non-profit and public institutions, and all programs at proprietary institutions). A more detailed analysis of ED's filing is available here.
In considering the parties' cross motions for summary judgment, the district court is likely to revisit its prior analysis of the GE Rule under the new Loper Bright standard. Specifically, the court is expected to scrutinize the GE Rule to determine whether ED's interpretation of "gainful employment" in the HEA as permitting the use of debt and earnings metrics is the "best" under the statute's plain meaning, rather than whether it "so clearly contradicts" the statutory definition.
Bare Minimum Rule
Overview
In October 2023, as part of a broader final rulemaking, ED promulgated the so-called "Bare Minimum Rule." Effective July 1, 2024, the Bare Minimum Rule restricted Title IV aid to GE programs that required the minimum hours a state mandates for licensure in a given field. If a program's length exceeded the state's minimum hours, students are ineligible for Title IV aid for that program. The Bare Minimum Rule departed from a prior "150% Rule" under which ED previously restricted Title IV aid to GE programs that did not exceed 150% of a state's minimum hours. Two lawsuits were filed challenging the Bare Minimum Rule under the APA: 360 Degrees Education, LLC v. U.S. Dep't of Ed., No. 24-cv-00508 (N.D. Tex.); American Massage Therapy Association v. U.S. Dep't of Ed., No. 24-cv-01670 (D.D.C.).
Current Status of Litigation
In 360 Degrees Education, the Northern District of Texas granted the plaintiffs' motion and entered a nationwide injunction on June 21, 2024. The court held that the Bare Minimum Rule was likely "arbitrary and capricious," emphasizing that it "represents a sea-change from thirty years of established practice." The next month, ED announced that it would revert to enforcing its prior program hour length requirements (under the 150% Rule) while the injunction remained in place.
Later, in December 2024, ED initiated an administrative proceeding to terminate one of the plaintiffs' Title IV eligibility. After President Trump assumed office, both the administrative proceeding and the lawsuit were stayed. Recently, however, ED dismissed the administrative proceeding. It is expected that the lawsuit will now resume. The Bare Minimum Rule remains enjoined at this time.
Meanwhile, in American Massage Therapy, plaintiffs AMTA and ED filed cross motions for summary judgment in November 2024. However, the case has been stayed since February 2025. ED has asked the court for a stay so that it could "consider its position regarding [the] case and the underlying rule at issue." Most recently, on May 29, 2025, the court extended the stay through July 21, 2025, and ordered the parties to file a joint status report on the same date with a "proposal for future proceedings."
Borrower Defense to Repayment
2022 BDR Rule
Overview
In November 2022, ED published a final Borrower Defense to Repayment Rule ("2022 BDR Rule"). The 2022 BDR Rule, pursuant to the HEA, 20 U.S.C. § 1087e(h), created a new adjudication system that provided for ED's assessment of borrower defenses to repayment in administrative proceedings before the borrower's default, and further, permitted for ED's assessment of similarly-situated borrowers' defenses on a group basis. The 2022 BDR Rule also established, pursuant to 20 U.S.C. § 1087(c), new closed-school loan discharge provisions.
In February 2023, Career Colleges & Schools of Texas ("CCST") sued to challenge the 2022 BDR Rule's borrower defense adjudication and closed-school loan discharge provisions. Career Coll. & Schs. of Texas v. U.S. Dep't of Ed., No. 23-cv-00433 (W.D. Tex.), No. 23-50491 (5th Cir.), No. 24-413 (U.S.). The district court denied CCST's motion for a preliminary injunction, but the Fifth Circuit reversed in April 2024 and enjoined the challenged provisions on a nationwide basis.
Current Status of Litigation
In October 2024, ED petitioned the Supreme Court to review only the following two issues: (1) whether the Fifth Circuit erred in holding that the HEA does not permit ED's assessment of borrower defenses to repayment before default in administrative proceedings, and that the HEA does not permit such assessment on a group basis; and (2) whether the Fifth Circuit erred in ordering a nationwide injunction against the challenged provisions. In January 2025, the Supreme Court granted the petition but only on the first question presented—not on the propriety of a nationwide injunction. On January 24, 2025, ED filed a motion to hold the briefing schedule in abeyance "to allow for the Department to reassess the basis for and soundness of the borrower defense regulations." The Supreme Court granted the motion on February 6, 2025.
On May 29, 2025, ED moved to resume briefing, explaining that it intended to defend the 2022 BDR Rule and would argue that the Fifth Circuit erred on the first issue presented.
2016 BDR Rule
Overview
In a separate case related to BDR, students sued ED for failing to process borrower defense claims under the 2016 BDR Rule. Sweet v. Cardona, No. 19-cv-3674(N.D. Cal.), No. 23-15049 (9th Cir.). The 2016 BDR Rule, which set standards for student borrowers to assert claims based on institutional misconduct, faced delays after ED, under the first Trump administration, paused adjudication of claims. In June 2022, a settlement was reached between ED and a class of students, resulting in $6 billion in debt discharges for students who attended 151 schools that were identified as having likely engaged in substantial misconduct. Four schools opposed the settlement, but the court approved it, finding that ED had statutory authority to settle the students' claims under 20 U.S.C. § 1082(a).
Current Status of Litigation
Three of the four schools appealed the settlement approval order, but in November 2024, the Ninth Circuit dismissed their appeal, ruling the schools lacked prudential standing. In December 2024, one of the appealing schools, Everglades College, petitioned the Ninth Circuit for rehearing en banc. ED filed an opposition to the rehearing petition on May 2, 2025, arguing that the Ninth Circuit correctly concluded that Everglades lacked prudential standing to object to the settlement. On May 21, 2025, the Ninth Circuit denied the petition for rehearing en banc.
Student Loan Forgiveness
SAVE Plan
Overview
In July 2023, ED published a final rule creating a new plan to expand federal student loan borrowers' eligibility for loan forgiveness. Effective July 1, 2024, the "SAVE Rule" would have made borrowers eligible for forgiveness if they made repayments for 10 years, as opposed to 20 or 25 years under prior plans, and at substantially lower amounts compared to prior plans. ED claimed that it had authority for the SAVE Rule under 20 U.S.C. § 1087e(d)(1).
Two groups of states challenged the SAVE Rule, arguing that its early forgiveness and lower payment provisions were not Congressionally authorized and therefore violated the APA. State of Missouri et al. v. Biden et al., No. 24-cv-00520 (E.D. Mo.), No. 24-2332 (8th Cir.); State of Kansas et al. v. Biden et al., No. 24-cv-01057 (D. Kan.), No. 24-03089 (10th Cir.).
Current Status of Litigation
In State of Missouri, the district court in June 2024 preliminarily enjoined the 10-year loan forgiveness provision, citing the lack of clear statutory authority. But it did not enjoin the lower payment provision. Both the states and ED appealed; the states also moved for a temporary injunction against the entirety of the SAVE Rule pending appeal. On August 9, 2024, the Eighth Circuit granted the states' motion. ED immediately asked the Supreme Court to vacate the injunction but it was denied in a brief, unsigned order in late August 2024.
The Eighth Circuit on February 18, 2025, dismissed ED's appeal of the district court's preliminary injunction, holding that the statute did not authorize either the SAVE Rule's 10-year loan forgiveness provision or the lower payment provision. ED did not challenge that ruling.
On remand, the district court ordered the parties to file a joint status report by May 5, 2025, including a proposed schedule for briefing on the merits. The parties' May 5 joint status report stated that they had "conferred about possible paths toward a negotiated resolution" and that "those conversations are ongoing." The parties also noted that "a bill was introduced in Congress on April 28, 2025, which includes statutory changes that, if enacted, may affect the claims presented by Plaintiff States." The parties therefore requested the district court allow them to "continue their discussions regarding further proceedings." On May 6, 2025, the district court ordered the parties to file a status report by August 4, 2025. The SAVE Rule remains enjoined at this time.
In State of Kansas, the district court also issued a preliminary injunction order in June 2024. ED appealed, but the Tenth Circuit stayed the appeal pending the Eighth Circuit's decision, since the two cases presented the same issue. After the Eighth Circuit's February 2025 ruling, the Tenth Circuit requested supplemental briefs addressing the impact of the Eighth Circuit's opinion. Supplemental briefs were filed, but in March 2025, the Tenth Circuit continued the stay. During the continued stay, the parties must file a joint status report every 45 days. In May 2025 status report, the parties requested that the Tenth Circuit continue the stay. Meanwhile, in April 2025, the district court also stayed proceedings for 90 days and ordered a status report be filed within 90 days.
While the SAVE Rule litigation remains ongoing, given the Trump Administration's position regarding student loan forgiveness generally, it is unlikely ED will attempt to defend the SAVE Rule moving forward. This said, the Administration also may work to extend the litigation, such that Congressional Republicans can claim the significant savings associated with cancelling the program as part of their reconciliation strategy.
Proposed Rule Litigation
Overview
In April 2024, ED published a notice of proposed rulemaking ("Proposed Rule") that, like the SAVE Rule, would also have forgiven loan balances for qualifying borrowers. Eligibility for forgiveness under this Proposed Rule mirrored the eligibility criteria under the SAVE Rule, but ED claimed authority to forgive loans under an entirely different statute—20 U.S.C. § 1082(a)(6).
Current Status of Litigation
Several states filed a lawsuit and a motion for an injunction in September 2024, challenging the Proposed Rule. State of Missouri et al. v. U.S. Dep't of Ed., et al., No. 24-cv-00103 (S.D. Ga.), No. 24-cv-01316 (E.D. Mo.). As with the SAVE Rule challenges, they argued the Proposed Rule lacked clear statutory authorization. Ultimately, due to procedural issues regarding venue, the case has been in two federal district courts: first, a court in Georgia, and then a court in Missouri. Both courts—like those in the SAVE Rule cases—enjoined the Proposed Rule, again citing a lack of statutory authority for loan forgiveness. This time, however, ED did not appeal the injunctions.
In December 2024, ED withdrew the Proposed Rule. The litigation technically remains active today because of an unresolved challenge to whether the Missouri court was a proper venue. On April 9, 2025, the Eastern District of Missouri ordered the parties to file a joint status update by May 9, 2025, and to "include the parties' positions on whether a live case or controversy remains in this action..."
On May 9, 2025, the parties filed a joint status report, stating that "in recent weeks, counsel for the parties have met and conferred about possible paths towards a negotiated resolution of this litigation." Like in the SAVE Rule litigation, they also noted that "a bill was introduced in Congress on April 28, 2025, which includes statutory changes that, if enacted, may affect the claims presented by Plaintiff States." Accordingly, the parties asked the district court to "allow the parties to continue their discussions" and to file a future status report in 60 days.
On May 12, 2025, the district court ordered the parties to file a joint status update by July 11, 2025, and again to "include the parties' positions on whether a live case or controversy remains in this action."
Title IX
Overview
On April 29, 2024, ED published a new Title IX rule ("2024 Title IX Rule"), which went into effect August 1, 2024. The 2024 Title IX Rule, among other things, expanded the definition of "discrimination on the basis of sex" to include discrimination on the basis of "sex stereotypes, sex characteristics, pregnancy or related conditions, sexual orientation, and gender identity."
Current Status of Litigation
Twenty-six states and numerous private parties filed or joined lawsuits seeking to block the implementation and enforcement of the 2024 Title IX Rule. The litigation initially resulted in several preliminary injunctions issued by multiple federal courts, but none on a nationwide basis; the injunctions instead only applied to schools in the plaintiff states and to schools where a member of a plaintiff organization was a student. This resulted in a patchwork application of the 2024 Title IX Rule, with some schools following the prior 2020 Title IX Rule from the first Trump administration and others following the 2024 Title IX Rule.
However, on January 9, 2025, the Eastern District of Kentucky vacated the 2024 Title IX Rule on a nationwide basis. This decision was the first issued on the merits, meaning it is a final (not a preliminary) decision. The court's order noted several reasons for finding the 2024 Title IX Rule invalid, including that ED exceeded its statutory authority in expanding the definition of "sex," that the 2024 Title IX Rule was arbitrary and capricious, and that the 2024 Title IX Rule violated the First Amendment.
ED did not appeal the Eastern District of Kentucky's decision. But in late March 2025, two non-profit organizations moved to intervene in the case and filed notices of appeal to the Sixth Circuit. As for the other pending cases, after President Trump took office, ED withdrew their pending appeals in Louisiana v. U.S. Dep't of Ed.,No. 24-cv-00563 (W.D. La.) (5th Cir. No. 24-30399), Kansas v. U.S. Dep't of Ed., No. 24-cv-04041 (D. Kan.) (10th Cir. No. 24-3097), Oklahoma v. Cardona, No. 24-cv-00461 (W.D. Oka.) (10th Cir. No. 24-6205), Texas v. United States of America, No. 24-cv-00086 (N.D. Tex.) (5th Cir. No. 24-10832), and Arkansas v. U.S. Dep't of Ed., No. 24-cv-00636, (E.D. Miss.) (8th Cir. No. 24-2921).
An appeal remains pending in Alabama v. Cardona,No. 24-cv-00533 (N.D. Ala.) (11th Cir. 24-12444).
The effect President Trump's January 20, 2025, Executive Order 14168 will have on the pending 2024 Title IX Rule litigation is an open question. Because the Executive Order states that the current administration will define "sex" as male or female, based on biological sex assigned at birth, it seems likely that ED will have little appetite to defend the 2024 Title IX Rule, and may use the Executive Order's definition in its investigations going forward.
False Claims Act
Overview
The qui tam, or whistleblower, provision of the False Claims Act ("FCA") was challenged in a lawsuit, United States ex rel. Zafirovv. Florida Medical Associates LLC, No. 19-cv-01236 (M.D. Fla.), originally filed in 2019. In their February 2024 motion for judgment on the pleadings, the defendants challenged whether whistleblowers could represent the federal government in FCA actions without violating the Constitution's Appointments Clause.
Current Status of Litigation
In September 2024, the district court issued its decision declaring the qui tam provision of the FCA unconstitutional, raising significant questions about the future of whistleblower litigation. The opinion stated that in cases where the government does not intervene and private individuals proceed representing the government in FCA claims anyway, it is a violation of the Appointments Clause. The government appealed to the Eleventh Circuit (11th Cir. 24-13581, 24-13583).
This ruling contradicts prior appellate court decisions, but it aligns with concerns raised by Justice Thomas in a 2023 opinion. The Supreme Court may ultimately agree to hear the case given the textualist leanings of the current justices. The Eleventh Circuit's briefing is currently underway.
If the ruling stands, it could significantly impact whistleblower litigation. If the Supreme Court declares the qui tam provision unconstitutional, it could either foreclose FCA whistleblower claims altogether (if a broader application), or substantially limit them to cases only where the government intervenes (a narrower application). The ruling could have broad implications, particularly in higher education, where FCA suits are prevalent. Depending on the outcome of the litigation, Congress could seek a legislative fix due to the substantial federal revenue generated by these suits.
DOJ'S Civil Rights Fraud Initiative
On May 19, 2025, United States Deputy Attorney General Todd Blanche circulated a memo to the Department of Justice announcing the launch of the Civil Rights Fraud Initiative, a new effort aimed at leveraging the FCA and its qui tam provisions to pursue entities that "defraud the United States by taking its money while knowingly violating civil rights laws." Co-led by the Fraud Section of the Civil Division and the Civil Rights Division, this initiative marks a shift in the government's traditional FCA enforcement and could expose corporations, universities, and nonprofits to civil and criminal investigations. The announcement encourages private citizens to file qui tam suits, which will likely be filed under seal as required, allowing the government time to investigate and decide whether to intervene.
Nonprofit Institution Status
Overview
Grand Canyon University ("GCU") filed a lawsuit, Grand Canyon University v. Miguel A. Cardona et al., No. 21-cv-00177 (D. Ariz.), over ED's denial of GCU's request to convert to a nonprofit institution under the HEA. Although GCU had received IRS recognition as a 501(c)(3) nonprofit, ED denied its request because GCU failed to meet the HEA's nonprofit ownership and operational requirements. ED's denial was based on GCU's revenue-sharing agreement with its for-profit parent company, which ED argued meant the university did not meet the HEA's standards.
Current Status of Litigation
The district court's order sided with ED in GCU's challenge. GCU thereafter appealed and the Ninth Circuit reversed. The Ninth Circuit held that ED used incorrect standards for determining nonprofit status under the HEA and should have applied a less stringent test. The Ninth Circuit instructed ED to reconsider GCU's request using the correct standards.
ED did not seek rehearing in the Ninth Circuit. ED also did not file a petition for a writ of certiorari in the Supreme Court by its deadline to do so.
Federal Funding Freeze Litigation
Overview
On January 27, 2025, the Office of Management and Budget ("OMB") issued a memorandum directing federal agencies to pause all activities related to federal financial assistance impacted by various executive orders, including funding for foreign aid, DEI programs, and the Green New Deal. This pause was set to begin on January 28, 2025.
On January 29, 2025, however, OMB issued a new memorandum (M-25-14) purportedly rescinding the original directive, though White House Press Secretary Karoline Leavitt announced from her official social media account that the new memorandum was "NOT a rescission of the federal funding freeze," and instead only rescinded M-25-13. Post by Karoline Leavitt, X (formerly Twitter) (Jan. 29, 2025).
Several nonprofit organizations filed a lawsuit, National Council of Nonprofits, et al. v. Office of Management and Budget, No. 25-cv-00239 (D.D.C.), against OMB, claiming the pause violated the APA and the First Amendment.
Twenty-two states and the District of Columbia filed a separate lawsuit in Rhode Island, New York v. Trump, No. 25-cv-00039 (D.R.I.), against the President, several executive branch agencies, and the heads of those agencies. Both lawsuits were filed before OMB rescinded its original memorandum instituting the funding freeze.
Current Status of Litigation
On February 3, 2025, the D.C. court granted National Council of Nonprofits' motion for a temporary restraining order. It subsequently entered a preliminary injunction against OMB on February 25, 2025. The preliminary injunction enjoins OMB "from implementing, giving effect to, or reinstating under a different name the unilateral, non-individualized directives in [the OMB memorandum] with respect to the disbursement of Federal funds under all open awards." OMB appealed the district court's preliminary injunction order on April 24. The district court has since stayed the case pending the outcome of the appeal other than requiring OMB to produce the administrative record and allowing the nonprofit organizations to submit additional discovery requests, if needed.
The Rhode Island court issued a TRO against the government defendants on January 31, 2025, prohibiting the freeze on funds. The court later extended the TRO on February 6, 2025, and entered a preliminary injunction against the government defendants on March 6, 2025. The government defendants appealed the court's preliminary injunction order four days later and simultaneously sought a stay of the litigation while the appeal proceeded. The appellate court denied the motion to stay on March 31, 2025. The government defendants' opening brief on the merits of its appeal was filed on May 27, 2025.
DEI Executive Orders Litigation, the Dear Colleague Letter Litigation, and the Disparate Impact Executive Order
DEI Executive Orders
Overview
Shortly after taking office, President Trump issued two DEI Executive Orders: "Ending Radical and Wasteful Government DEI Programs and Preferencing," and "Ending Illegal Discrimination and Restoring Merit-Based Opportunity."
On February 3, 2025, higher education officials, restaurant workers, and the City of Baltimore together filed a lawsuit challenging the DEI Executive Orders in National Assoc. of Diversity Officers in Higher Educ. et al. v. Donald J. Trump, et al., No. 25-cv-00333 (D. Md.). Their complaint argues that the DEI Executive Orders violate constitutional protections, including the First and Fifth Amendments, and infringe on Congress's authority over federal funding. They seek a declaratory judgment that the DEI Executive Orders are unconstitutional and an injunction to prevent their enforcement.
Current Status of Litigation
The court granteda preliminary injunction, agreeing that plaintiffs are likely to succeed on their First and Fifth Amendment claims. The court found that provisions in the DEI Executive Orders, particularly those related to "equity-related" grants and certifications, were vague and created uncertainty for contractors and grantees about whether they could comply. The court also found these provisions could infringe on their free speech and due process rights, as they could result in retaliation or punishment for expressing certain viewpoints. As a result, the injunction blocked enforcement of these provisions but does not address the separation of powers or spending clause issues raised.
The government appealed the preliminary injunction to the Fourth Circuit and asked for a stay of the injunction pending its appeal. The Fourth Circuit agreed to stay the preliminary injunction pending the appeal. The briefing is finished in the Fourth Circuit, but the Fourth Circuit has not yet ruled.
A number of other cases also challenge the DEI Executive Orders, many of which also challenge Executive Order 14168, "Defending Women from Gender Ideology Extremism and Restoring Biological Truth to the Federal Government."
In National Urban League v. U.S. Dep't of Ed., No. 25-cv-471 (D.D.C.), the plaintiffs challenge the three DEI Executive Orders, claiming, among other things, they violated First and Fifth Amendments protections. On May 2, 2025, the district court denied the motion for preliminary injunction, ruling that plaintiffs were not likely to succeed on the merits of their claims because they lacked standing to assert some of them and, as to others, "the Constitution does not provide a right to violate federal antidiscrimination law." The Court "reserve[d] judgment on the merits of any as-applied challenges to specific enforcement actions that Defendants may initiate."
In San Francisco Aids Foundation v. U.S. Dep't of Ed., No. 25-cv-01824 (N.D. Cal.), the plaintiffs are claiming, among other things, the DEI Executive Orders violated the First Amendment. The court held a hearing on the motion for preliminary injunction on May 22, 2025. No order has yet been issued.
In Chicago Women in Trades v. U.S. Dep't of Ed., No. 25-cv-2005 (N.D. Ill.), the court granted the TRO on March 27, 2025, but it is limited. For now, it only applies to the Department of Labor ("DOL"). Until there is a decision on the merits of the preliminary injunction motion, the TRO in place restrains the DOL from acting under the DEI Executive Order's "Termination Provision," which terminates "equity-related grants and contracts," and its "Certification Provision," which requires grantees/contractees to certify that they are not engaged in "illegal discrimination." The court granted plaintiff's motion for preliminary injunction in part on April 15, 2025, but again, such injunction applies for now only to the DOL and anyone "in active concert or participation with" it, and as for the Termination Provision, only to plaintiff's Women in Apprenticeship and Nontraditional Occupations Act grant.
Thus, currently, the two original DEI Executive Orders are in force as of now as to the Department of Education.
Dear Colleague Letter Litigation
In response to ED's February 14, 2025, Dear Colleague Letter ("DCL") and follow-up "Frequently Asked Questions," a large teachers union sued ED to challenge the enforceability of the DCL on DEI issues. Am. Federation of Teachersv. U.S. Dep't of Ed., et al., No. 25-cv-00628 (D. Md.). Plaintiffs argue the DCL goes beyond merely reiterating Title VI's requirements and instead "upends and re-writes otherwise well-established jurisprudence," misrepresenting the state of the law under Title VI and the Constitution. The plaintiffs contend that the DCL deviates from ED's previous interpretations of the law and seek to have the court declare it unlawful and unconstitutional. The motions for preliminary injunction seek to enjoin ED from enforcing or taking any steps to implement the DCL and seek to hold in abeyance the deadline for state and local education agencies to respond to the Reminder of Legal Obligations Undertaken in Exchange for Receiving Federal Financial Assistance and Request for Certification under Title VI and SFFA v. Harvard, dated April 3, 2025 (the "Certification requirement"). The Court held a hearing on those motions on April 18, 2025. On April 24, 2025, the court stayed the DCL pending final resolution by the court. It did not stay the Frequently Asked Questions or the End DEI Portal, nor the Certification requirement. Plaintiffs have filed for summary judgment, and briefing is underway.
Another lawsuit has been filed challenging the DCL. National Education Assoc. v. U.S. Dep't of Ed., No. 25-cv-91 (D. N.H.). This lawsuit alleges, among other things, that the DCL threatens schools with a loss of federal funding if they continue DEI programs. One of the plaintiffs is the largest education union in the country. The Court entered a preliminary injunction order on April 24, 2025, enjoining ED from enforcing and/or implementing the DCL, the Frequently Asked Questions, the End DEI Portal, and the April 3, 2025, certification requirement, against the plaintiffs, their members, and any entity that employs, contracts with, or works with one or more plaintiffs or one or more of plaintiffs' members. If a higher education institution is an entity that employes, contracts with, or works with one of the plaintiffs or one of its members, then the DCL, the Frequently Asked Questions, the End DEI Portal, and the Certification requirement cannot be enforced as to it.
The DCL also has been recently challenged in a lawsuit filed on April 15, 2025, by the National Association for the Advancement of Colored People. NAACP v. U.S. Dep't of Ed., et al., No. 25-cv-1120 (D.D.C.). On April 24, 2025, the court entered an order granting in part the plaintiff's motion for preliminary injunction, preliminary enjoining ED's enforcement of the Certification Provision.
Effectively, enforcement of any penalties threatened by the DCL, the Frequently Asked Questions, the End DEI Portal, and the Certification requirement have been stayed for now, with the stay buying institutions additional time to determine what compliance with what this administration legally wants will be.
The Disparate Impact Executive Order
On April 23, 2025, the White House issued an Executive Order titled "Restoring Equality of Opportunity and Meritocracy," which seeks to "eliminate the use of disparate impact liability in all contexts to the maximum degree possible." "Disparate impact liability" is a legal concept whereby facially neutral policies might be illegal if they disproportionately or negatively affect a protected class, even if there is no discriminatory intent. Current Supreme Court precedent accepts disparate impact liability in the employment context. See Griggs v. Duke Power Co., 401 U.S. 424, 432 (1971). Note that after Griggs, Congress amended Title VII, which prohibits discrimination against certain protected classes in the employment context, to include disparate impact liability. It did not similarly amend Title VI, which prohibits discrimination based on race, color or national origin in programs and activities receiving federal financial assistance. Title VI is relevant to Higher Ed institution programs and activities that receive federal financial assistance.
While disparate impact is often thought of in the employment context, the Executive Order (EO) states that it is the policy to eliminate disparate impact liability "in all contexts." It directs "all agencies" to "deprioritize enforcement of all statutes and regulations to the extent they include disparate impact liability," to "assess all pending investigations, civil suits, or positions taken in ongoing matters ... that rely on a theory of disparate impact liability, and [] take appropriate action," and "evaluate existing consent judgments and permanent injunctions that rely on theories of disparate-impact liability and take appropriate action." It specifically instructs the Attorney General to "repeal or amend" all Title VI regulations that implicate disparate impact liability.
It is anticipated that the legal state of this EO will change quickly due to litigation and regulatory developments responding to the EO. For now, this EO is in force to the extent that it does not conflict with Supreme Court precedent or statutory law. Note that this EO could be used as a defense to a government challenge to DEI programs, scholarships or grant programs that are not facially discriminatory but that may give a greater benefit to certain protected groups, such as grants based on socioeconomic disadvantage.
Executive Order 14242 Directing the Closure of ED
Overview
On March 20, 2025, President Trump issued Executive Order 14242, titled "Improving Education Outcomes by Empowering Parents, States, and Communities."
The Executive Order directed the Secretary of Education "to the maximum extent appropriate and permitted by law, take all necessary steps to facilitate the closure of the Department of Education and return authority over education to the States and local communities." Several lawsuits immediately challenged the Executive Order.
The next day, President Trump announced that management of the federal student loan and special needs programs would be transferred to the Small Business Administration and Department of Health and Human Services respectively.
In NAACPv. United States, No. 25-cv-00965 (D. Md.), the NAACP, education advocacy groups, and three children sued challenging Executive Order 14242 on the basis that it violates the Constitution's take care and spending clauses, the separation of powers, and the APA. The plaintiffs are seeking a preliminary injunction to prevent enforcement.
In Somerville Public Schools et al. v. Trump et al., No. 25-cv-10677 (D. Mass.), the plaintiffs, including two Massachusetts school districts and five teacher unions, filed a lawsuit challenging Executive Order 14242 as unlawful. They too allege it violates the separation of powers, the Constitution's take care clause, and the APA. On April 1, 2025, plaintiffs filed a motion for a preliminary injunction.
Following a March 11, 2025 "reduction in force" at ED, on March 13, 2025, plaintiffs, including nineteen states and the District of Columbia, filed State of New York et al. v. McMahon et al., No. 25-cv-10601 (D. Mass.). Plaintiffs argued that the reduction in force (RIF) violated the separation of powers and the APA. After Executive Order 14242 was issued, on March 24, 2025, plaintiffs moved for a preliminary injunction arguing that the Executive Order is arbitrary and capricious under the APA and violates the separation of powers.
Given the overlapping issues in the Sommerville Public Schools and State of New York cases, the government asked for permission to modify the briefing schedule in the cases so that it could file a consolidated, and identical, response brief in both cases. The court granted the government's request. The government filed its response briefs on April 11, 2025. Plaintiffs' reply brief in support of their motions for preliminary injunction are due on April 18, 2025. The court heard oral arguments on the motions for preliminary injunction in both cases on April 25, 2025. No ruling has been issued at this time.
Finally, filed one week before Executive Order 14242, plaintiffs in Carter et al. v. U.S. Dep't of Ed., No. 25-cv-00744 (D.D.C.) filed a lawsuit seeking to enjoin ED's reduction in force and "decimation" of its Office of Civil Rights on the basis that it, among other things, violates the APA and Fifth Amendment protections. Oral arguments on the motion for a preliminary injunction will be held on May 20, 2025. Oral arguments on the motion for a preliminary injunction will be held on May 20, 2025.
Current Status of Litigation
The Massachusetts court consolidated the Sommerville Public Schools and State of New York cases and granted the plaintiffs' motions for preliminary injunction on May 22, 2025. Under the order, the court enjoined ED from 1) carrying out the RIF; 2) implementing the March 20, 2025, executive order directing ED to take all legal steps necessary to facilitate ED's closure; and 3) carrying out President Trump's announcement regarding the transfer of management of the student loan and special education programs from ED to the Small Business Administration and Department of Health and Human Services. ED and President Trump appealed the preliminary injunction order almost immediately after it was entered and asked the district to stay enforcement of the preliminary injunction during the pendency of the appeal. After the district court denied their motion, ED and President Trump asked the appellate court to stay the case, which the First Circuit denied. The next day (June 6, 2025), the Government filed an application to stay the injunction and requested an immediate administrative stay from the Supreme Court. The plaintiff's response to the application is due by June 13, 2025. A ruling is likely imminent.
The D.C. court denied the Carter plaintiff's motion for preliminary injunction on May 21, 2025. In denying the motion, the court determined that the plaintiffs were not likely to succeed on their claims because there was no evidence that OCR has failed to perform its duties and "broad programmatic attacks" are not viable claims under the Administrative Procedures Act.
Grant Termination
Teacher Grant Termination
Overview
In the wake of DEI Executive Orders, ED terminated over 100 teacher-related grants. ED – during the Biden Administration – had awarded these grants to institutions for the purpose of recruiting and training individuals who, upon graduating, would work as teachers. In February 2025, ED terminated the grants because they had promoted "illegal" DEI practices and were "inconsistent with, and no longer effectuated, Department priorities."
Two lawsuits challenged the grant terminations as violating the APA and the Constitution. American Association of Colleges for Teacher Education, et al. v. McMahon, et al., No. 25-cv-00702 (D. Md.), No. 25-1281 (4th Cir.); California et al. v. U.S. Dep't of Ed., No. 25-cv-10548 (D. Mass.), No. 25-1244 (1st Cir.), No. 24A910 (U.S.). The plaintiffs sought injunctive relief to restore their grants.
Current Status of Litigation
In March 2025, the district courts in both cases granted injunctive relief to the plaintiffs and ordered their grants be reinstated. ED appealed both injunctions and also moved to stay the injunctions pending the appeals. After the First Circuit in California rejected ED's motion to stay, ED filed an emergency application to stay the injunction in the Supreme Court.
On April 4, 2025, the Supreme Court granted ED's application and ordered the affected grants be re-terminated pending a future decision on the merits. The Supreme Court said the district court likely lacked jurisdiction to hear the plaintiffs' APA claims, and that, under the Tucker Act, the Court of Federal Claims likely had exclusive jurisdiction over the case. ED in California then voluntarily dismissed its appeal of the injunction in the First Circuit.
The California case is now back in the district court. On May 12, 2025, ED moved to dismiss the plaintiffs' APA claims based on the district court's lack of jurisdiction, or in the alternative, to transfer the case to the Court of Federal Claims. (While the Supreme Court in California had said the district court likely lacked jurisdiction, its opinion was not a final ruling on the issue). However, Plaintiffs filed an amended complaint on June 2, 2025, which mooted ED's motion to dismiss or to transfer. Thus, ED may now either file a new motion to dismiss or transfer the case, or file an answer to the claims in the amended complaint.
Meanwhile, on April 10, 2025, after the Supreme Court ruling in California, the Fourth Circuit in AACTE also granted a stay of the district court's injunction, ordering the affected grants be re-terminated as well.
On April 27, 2025, the plaintiffs in AACTE moved to dissolve the district court's injunction so that the case "can proceed in the ordinary course" in the district court—meaning the parties would address the jurisdictional arguments and the merits. However, on May 6, the district court denied the motion to dissolve. The parties in AACTE will now brief ED's appeal of the injunction in the Fourth Circuit. ED's opening brief is due June 16, the plaintiffs' response brief is due July 16, and ED's reply is due 21 days thereafter.
In sum, while the California case is back in the district court, the AACTE case will proceed in the Fourth Circuit. In both cases, however, the central issue will be whether the district court has jurisdiction or instead the Court of Federal Claims has exclusive jurisdiction under the Tucker Act.
NIH Grant Termination
Overview
Beginning in February 2025, the National Institutes of Health ("NIH") terminated hundreds of research grants that NIH had originally awarded to researchers at dozens of universities and to other research organizations. NIH stated that the grants were terminated because they promoted illegal DEI practices and therefore "no longer effectuated" NIH's "priorities."
Several lawsuits have been filed challenging the NIH grant terminations as having violated the APA and the Constitution and seeking injunctive relief to have the grants reinstated. American Public Health Association, et al. v. National Institutes of Health, et al., No. 25-cv-10787 (D. Mass); Commonwealth of Massachusetts, et al. v. Kennedy, Jr., et al., No. 25-cv-10814 (D. Mass); American Association of University Professors, et al. v. U.S. Dep't of Justice, et al., No. 25-cv-02429 (S.D.N.Y.).
Current Status of Litigation
In American Public Health Association, the plaintiffs filed a motion for preliminary injunction on April 25, 2025. The parties agreed to convert the plaintiffs' motion for preliminary injunction into a motion to dismiss by the defendants. Following briefing and oral argument, on May 30, 2025, the district court granted in part and denied in part the defendants' motion to dismiss. The district court first ruled in favor of the plaintiffs on the defendants' argument that the court lacked jurisdiction. The court ruled that it had jurisdiction notwithstanding the Supreme Court ruling about the Tucker Act in California. Regarding plaintiffs' claims that the NIH grant terminations violated the Constitution's Due Process clause because the terminations were founded on an impermissibly vague definition of "DEI," the court dismissed these claims. It also dismissed claims based on the defendants' violation of the separation of powers doctrine under the Constitution. However, the court denied the defendants' motion with respect to plaintiffs' claims that the grant terminations were arbitrary and capricious, unreasonable, and contrary to law under the APA.
In Commonwealth of Massachusetts, the plaintiffs filed a motion for preliminary injunction on April 14, 2025. After briefing and oral argument, on May 12, 2025, the district court ruled in favor of the plaintiffs on the defendants' argument that the court lacked jurisdiction, like in American Public Health Association, as both cases are before the same judge. A hearing is scheduled for June 16, 2025, at which the parties will further address the legality of NIH's termination of grants.
In American Association of University Professors, the plaintiffs filed a motion for preliminary injunction on April 3, 2025. The defendants filed an opposition on May 1, and plaintiffs filed a reply on May 8. Several supplemental filings have been submitted since May 8. Defendants have also informed the court that they plan to file a motion to dismiss following a ruling on the plaintiffs' motion for preliminary injunction. No hearing on the injunction motion has been set.
Harvard Funding Freeze
Overview
On April 21, 2025, Harvard College sued ED and numerous other federal agencies over the government's "freeze" of $2.2 billion in federal funding (including primarily multi-year NIH grants) to the university. President and Fellows of Harvard College v. U.S. Dep't of Ed., et al., No. 25-cv-11048 (D. Mass). The government had paused Harvard's funding on April 14 after determining that Harvard had failed to protect its students from anti-Semitic violence and harassment, and therefore was not compliant with Title VI's prohibition on discrimination based on race, color, or national origin (which covers discrimination rooted in anti-Semitism). Harvard alleges that the government's funding freeze violates the First Amendment, the APA, and Title VI.
Current Status of Litigation
Notably, Harvard has not moved for a preliminary injunction – it instead has told the district court that it "intends to seek a final judgment on an expedited basis" and therefore asked the court to set an expedited schedule for the government to produce an administrative record and for the parties to file motions for summary judgment.
Per the court's order, the defendants produced an administrative record in May 2025. On June 2, 2025, Harvard filed a motion for summary judgment. Per the court's order, the defendants are to file an opposition to the motion and a cross motion for summary judgment by June 16; Harvard is to file an opposition to the cross motion and reply in support of its motion by June 30, and the defendants to file a reply in support of their cross motion by July 14. Oral argument on the motions for summary judgment is scheduled for July 21, 2025.
Rate Cap Policy Litigation
Higher Ed filed several cases after federal agencies announced a new Rate Cap Policy of paying 15% across the board for reimbursement for facilities and administrative costs associated with grants. Reimbursement rates previously had been substantially higher. The Rate Cap Policies of NIH, HHS, DOE and NSF have all been enjoined nationally or self-paused. These cases include as plaintiffs the Association of American Universities, which is suing on behalf of its 71 member institutions, and the Association of Public and Land-Grant Universities, which is suing on behalf of its 222 member institutions. Those institutions effectively are parties to that litigation. Even if the Supreme Court prohibits nationwide injunctions, all of these member institutions will still have the benefit of the injunctions entered in these cases because AAU and APLU are plaintiffs suing on behalf of those institutions.
Ass'n of Am. Univ., et al. v. Dep't of Health and Human Services, Nat'l Inst. of Heath, et al, No. 1:25-cv-10346 (D. Mass.), on appeal no. 25-068 (1st Cir.). The district court entered a judgment and permanent injunction in this case as to the Rate Cap Policies of HHS and NIH. It is currently on appeal to the First Circuit where briefing is underway.
Ass'n of Am. Univ., et al.. v. Dep't of Energy, et al., No. 1:25-cv-10912 (D. Mass.). On May 15, 2025, the district court entered a nationwide preliminary injunction prohibiting the DOE from giving effect to its Rate Cap Policy with respect to any institution of higher learning until further order.
Ass'n of Am.Univ., et al. v. Nat'l Science Found., No. 1:25-cv-11231 (D. Mass.). NSF has paused the Rate Cap Policy until June 13, 2025. The parties have briefed the plaintiffs' motion for preliminary injunction, and plaintiffs are asking the court to grant such motion on June 13, 2025, if the policy does not remain paused.
Student and Exchange Visitor Program Litigation
On May 22, 2025, the Department of Homeland Security (DHS) announced that it would be revoking Harvard University's certification in the Student and Exchange Visitor Program (SEVP), which gives them the ability to sponsor F and J visas for international students. DHS's announcement claimed Harvard had failed to comply with an April 16 demand for records on international students, including disciplinary, legal, and academic information.
On May 23, 2025, Harvard filed a lawsuit against DHS, and several other executive branch agencies, and moved for a temporary restraining order to enjoin the revocation of Harvard's certification under the SEVP. The complaint argues that DHS's action is violation of the First Amendment, the Due Process Clause, and the Administrative Procedure Act, among other arguments.
The same day, the court granted Harvard's motion for a temporary restraining order, allowing the University to continue enrolling international students and scholars as the case proceeds. A hearing was held on May 29 and the Court directed the parties to negotiate the terms of a preliminary injunction.
Then on June 4, 2025, President Trump issued a Proclamation titled "Enhancing National Security by Addressing Risks at Harvard University," which suspends entry to the United States for any international student studying at Harvard University on an F or J visa. The next day, Harvard amended its Complaint and moved for a temporary restraining order ("TRO") as to the June 4 proclamation. On June 5, the court granted Harvard's motion for a TRO, holding that both the TRO related to SEVP certification and the proclamation were necessary to preserve the status quo until a hearing could be held. Both TROs are in effect until June 20, 2025, "or such earlier time as a preliminary injunction order can be issued."
Legality of Nationwide Injunctions
Numerous federal district courts have entered "universal" or "nationwide" injunction orders that enjoin the President's executive orders. This is a bipartisan issue of which the Obama and Biden administrations also complained. The Supreme Court will decide the issue of whether such nationwide injunctions are permissible in Trump v. CASA, No. 24A884 (U.S.), a case in which a federal district court enjoined nationwide the President's birthright citizenship executive order. The Supreme Court held oral argument in this case on May 15, 2025. A ruling is expected this month or in early July. This ruling could impact numerous nationwide injunctions upon which institutions which are not parties to the case are relying.
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