UpdateED

September 26, 2019September 26, 2019 by Katherine D. Brodie

Avoiding Land Mines: Do Your Homework on that New Campus or Instructional Location

Authors: Julie Mebane, Partner (Real Estate) and Katherine Brodie, Partner (Higher Education)

Nothing is more unwelcome than a big surprise after your institution has invested hours and dollars in a new instructional location. Up front due diligence is essential, and it needs to identify issues that may impair your ability to operate at a new location or expose the institution to significant liabilities. Be sure to consider the following and utilize counsel well versed in college and university property acquisitions and applicable regulations to examine any problems you may encounter:

What is the zoning of the property? Is there a zoning report that can be reviewed (if not, consider ordering one)? Does the property have the number of parking spaces required by law or local ordinances?
Are there any CC&Rs (covenants, conditions and restrictions) recorded against the property? Get and review copies to make sure they don’t prohibit any intended uses.
Is there a conditional use permit (CUP) or planned development permit affecting the property? If so, review this for any use restrictions.
What is the current condition of the property and the physical plant? Check for current building permits, and consider getting a professional inspection report on the building’s systems.
Does the current owner have a title policy covering the property? Important information about the location and its history can be gained from this document.
Does the owner have a Phase 1 environmental assessment regarding any hazardous materials at the location? Request and review this for possible issues, and keep it as a baseline in case of future problems.
Are there any litigation or condemnation actions that have been filed relating to the property? These can be red flags for any future owner or occupant.
Is the property in a designated flood zone, near an earthquake fault line, or otherwise located in an area exposed to natural disasters? Natural hazard disclosure reports can be obtained without much expense.
Was the property previously used by an institution participating in U.S. Department of Education Title IV federal student aid programs and did that institution close with unpaid liabilities owed to the Department? If so, moving into that space by lease or purchase could expose your institution to assumption of the unpaid liabilities of the previous owner.
Do you know your state, accreditor and Department of Education reporting obligations? These agencies must generally be notified of any change of location or any new space where more than 50% of an eduational program will be offered, or the institution risks liability for all Title IV funds disbursed to students at the new location and potentially other regulatory sanctions.

Most of these questions can be answered with the help of a forthcoming landlord when negotiating a new lease and with the assistance of experienced counsel. If the property is being purchased, the seller is likely required by law to make certain representations and warranties and to disclose property-related information and materials during the buyer’s due diligence period.

So don’t be surprised – get the information you need before you commit to a new campus or instructional location.

September 23, 2019September 23, 2019 by John M. Simpson

D.C. Circuit Revives False Claims Act Retaliation Case Against University

By John M. Simpson.

On September 20, 2019, the U.S. Court of Appeals for the District of Columbia Circuit reversed a district court judgment that had dismissed a retaliation case brought by a university veterinarian who was allegedly terminated for making internal and external complaints about the conditions in which laboratory animals were being maintained. Singletary v. Howard University, No. 18-7158 (D.C. Cir. Sept. 20, 2019). The appellate panel deciding the case split on the question of whether plaintiff was engaged in protected activity or was simply doing her job. Continue reading “D.C. Circuit Revives False Claims Act Retaliation Case Against University”

September 17, 2019 by Katherine D. Brodie

Gainful Employment- October 1 Data Reporting Deadline for 2018-2019

On July 1, 2019, the U.S. Department of Education published a final rule rescinding the Department’s gainful employment (GE) regulations (2014 Rule) in the Federal Register. Institutions were given the option to early implement the rescission of the GE rule. Institutions that did not early implement the rule are still required to comply with the 2014 rule until the rescission becomes effective on July 1, 2020, and are expected to report GE data for the 2018–19 Award Year to National Student Loan Data System (NSLDS) by October 1, 2019. Compliance with the GE rule would be monitored via annual Title IV compliance audits and Title IV program reviews.

Detailed information about the use of NSLDS for reporting GE data is provided in the NSLDS Gainful Employment User Guide, available on the NSLDS User Documentation page of the Information for Financial Aid Professionals (IFAP) website, as well as from the “Resources” section of the Gainful Employment Information Page.

August 30, 2019 by Kristina Gill

U.S. Department of Education Issues Final Borrowers Defense to Repayment Regulation

This afternoon the U.S. Department of Education posted the pre-publication notice of the Final Borrowers Defense to Repayment regulation which rewrites the regulations promulgated under the Borrower Defense to Repayment provision of the Higher Education Act (HEA). A summary of the rule can be found here. The official version will be published in the Federal Register. Continue reading “U.S. Department of Education Issues Final Borrowers Defense to Repayment Regulation”

August 26, 2019 by Duane Morris

Clery Act Compliance: October 1 Deadline for Colleges and Universities to Complete and Distribute Annual Security Report Is Fast Approaching

The Jeanne Clery Disclosure of Campus Security Policy and Campus Crime Statistics Act, or Clery Act, 20 U.S.C. § 1092(f) (34 C.F.R. § 668.46), requires all schools, colleges and universities that participate in federal student financial aid programs to:

Maintain and disclose to the public statistics, policies and programs about certain crimes occurring on and/or near a campus; and
Have in place and be able to demonstrate implementation of specific campus safety policies, including those related to crimes of sexual violence.

Educational institutions must provide and distribute this information in a Clery Act Annual Security Report (ASR) by October 1, 2019. The U.S. Department of Education guidance specifies that this is a firm deadline; there is no grace period and no exemptions exist.

View the full Alert on the Duane Morris LLP website.

August 14, 2019August 14, 2019 by Duane Morris

Webinar: How the CCPA Impacts the Higher Education Industry

The California Consumer Privacy Act of 2018 Webinar Series will be hosting its third installment, “How the CCPA Impacts the Higher Education Industry,” to be held on September 5, 2019. The webinar will be presented by Duane Morris attorneys Brandi A. Taylor and Michelle Hon Donovan.

Photo of attorney Michelle Hon Donovan — Michelle Hon Donovan

This session provides an overview of the new law and how it applies to schools and companies in the education sector. Nonprofit educational institutions are exempt from the new law. However, it will apply to any for-profit education institutions, service providers and technology companies that collect any information on California residents and meet any of the following criteria:

Have an annual gross revenue of $25 million or more;
Collect, sell or share for commercial purposes the personal information of at least 50,000 consumers, households or devices annually; or
Derive at least 50 percent of annual revenue from selling consumers’ personal information.

To register for this webinar, please visit the Duane Morris website.

August 5, 2019August 9, 2019 by Duane Morris

U.S. Department of Education Rejects California’s Student Complaint Process But Provides Path to Compliance

Late on Friday, August 2, 2019, the U.S. Department of Education sent a letter to the California Department of Consumer Affairs that rejected California’s proposed complaint process for Californians attending online programs offered by out-of-state public and nonprofit institutions, but provided a clear path to compliance and a promise not to disrupt federal student aid, assuming California takes the steps outlined in the letter. We previously summarized aspects of the 2016 State Authorization Rule in our July 23, 2019, and July 26, 2019, Alerts.

Here are four key takeaways from the Department’s letter.

1. Federal student aid to Californians will not be disrupted IF California takes the steps outlined in the letter to meet the 2016 State Authorization requirements.

The Department’s August 2letter “assumes” California will do three things: (1) modify its plan to refer student complaints to a California state agency for adjudication, (2) require a California state agency to oversee the investigation of the student complaints and resolve them, according to applicable California state law, and (3) receive complaints regarding issues starting from at least May 26, 2019, the date that the 2016 regulations went into effect.

To read the full text of this Alert, please visit the Duane Morris website.

July 26, 2019August 5, 2019 by Duane Morris

California-Based Institutions Exempt in Other States Could Also Be Impacted by U.S. Department of Education’s Rules for Online Programs

We reported earlier this week on the U.S. Department of Education’s July 22, 2019, announcement, which clarified that California students attending online programs offered by out-of-state nonprofit and public institutions are not currently eligible for Title IV Federal Student Aid because of lack of a student complaint process. This issue is not limited to California students and could similarly impact students in many states across the country attending online programs offered by all California colleges and universities, including nonprofit, public and for-profit schools. California-based colleges and universities offering online programs in other states must seek state-by-state authorization or exemption because California does not participate in SARA (State Authorization Reciprocity Agreement). Many of these states do not provide a complaint process for exempt institutions.

View the full Alert on the Duane Morris LLP website.

July 23, 2019August 5, 2019 by Duane Morris

Critical Compliance Areas for Online Schools as 2016 State Authorization Rule Takes Effect

The U.S. Department of Education on July 22, 2019, clarified that the 2016 State Authorization Rule, which applies to online educational programs offered across state borders, among other topics, is undoubtedly now in effect. As this Alert explains, there are significant and immediate consequences for schools deemed to be noncompliant, even if through no fault of their own.

Here are the top three things schools need to know…

View the full Alert on the Duane Morris LLP website.

July 3, 2019August 13, 2019 by Duane Morris

California Legislation Targeting For-Profits Progresses

A package of seven interrelated bills proposing tighter regulation of for-profit and private colleges in California moved closer to becoming law this week — but not fully intact.

One of the bills, a proposal to create the nation’s first state-level gainful-employment rule, was watered down to require only the collection and disclosure of data around employment outcomes of graduates at for-profit colleges.

To read the full text of this article quoting Duane Morris partner Anthony J. Guida Jr., please visit the Inside Higher Ed website.