Higher Education Institution and Student Relief in the CARES Act

The CARES Act appropriates $30.75 billion for an Education Stabilization Fund available through September 30, 2021, to assist governors and postsecondary institutions with preventing, preparing for and responding to COVID-19. The Act also includes important student relief and temporary regulatory flexibilities.

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

Department of Education Issues Guidance on Safeguarding Civil Rights During COVID-19 Pandemic

As with all crises, this pandemic is a rapidly evolving situation that is forcing schools to quickly implement new policies and practices, often operating on limited information and without the usual procedural safeguards and vetting. Such an environment creates a risk of the unintended consequences of those new policies/procedures resulting in potentially discriminatory effects to students.

Recognizing this risk, the Department of Education’s Office for Civil Rights published guidance on March 16, 2020, reminding schools that students’ civil rights must be safeguarded during responses to the COVID-19 pandemic. OCR’s guidance encourages schools to take measures to protect against COVID-19, but to do so in a manner that is free from discrimination and continues to accommodate people with disabilities.

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

California Attorney General’s Draft CCPA Regulations Continue to Evolve

On March 11, 2020, California’s Office of the Attorney General proposed a second set of revisions to the draft California Consumer Privacy Act (CCPA) regulations. These proposed regulations were first published on October 11, 2019, and summarized in our previous Alert. The most recent changes come on the heels of modifications to the regulations released on February 10, 2020, which were summarized in this Alert.

The deadline for providing comments to the second set of modified proposed regulations is March 27, 2020.

Overall, most of the changes were of a technical nature and not substantive.

To read the full text of this Duane Morris Alert, which highlights the notable changes, please visit the firm website.

U.S. Department of Education Issues COVID-19 Guidance to Schools

Due to the outbreak of coronavirus (COVID-19), the Centers for Disease Control and Prevention recommends that institutions of higher education consider postponing or canceling upcoming study abroad or foreign exchange programs. However, this advice has raised pressing questions about how this would affect Title IV, Higher Education Act (HEA) federal financial aid and a student’s ability to finish the term if a program is interrupted or canceled. In response, on March 5, 2020, the U.S. Department of Education’s office of Federal Student Aid (FSA) offered guidance permitting temporary flexibility and clarifying how higher education institutions can continue to comply with Title IV regulations for students whose activities are impacted by COVID-19.

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

U.S. Department of Education Issues COVID-19 Guidance

Due to the outbreak of coronavirus (COVID-19), the Centers for Disease Control and Prevention recommends that institutions of higher education consider postponing or canceling upcoming study abroad or foreign exchange programs. However, this advice has raised pressing questions about how this would affect Title IV, Higher Education Act (HEA) federal financial aid and a student’s ability to finish the term if a program is interrupted or canceled. In response, on March 5, 2020, the U.S. Department of Education’s office of Federal Student Aid (FSA) offered guidance permitting temporary flexibility and clarifying how higher education institutions can continue to comply with Title IV regulations for students whose activities are impacted by COVID-19.

View the full Alert on the Duane Morris LLP website.

Cybersecurity Update: Protecting Student Data Critical to Continued Participation in the Federal Student Aid Programs

On February 28, 2020, the U.S. Department of Education’s Office of Federal Student Aid (FSA) issued an electronic announcement regarding the enforcement of the Gramm-Leach-Bliley Act’s (GLBA) cybersecurity requirements for all institutions of higher education participating in the Title IV, Higher Education Act (HEA) federal student financial aid programs and their third-party servicers. The announcement states that auditors are expected to evaluate three GLBA information safeguard requirements in annual compliance audits of postsecondary institutions and third-party servicers. Any finding of noncompliance will be sent to both the Federal Trade Commission (FTC) and the FSA’s cybersecurity team for further investigation and potential adverse action. All Title IV participating institutions should consult with counsel about the very serious consequences and administrative actions that may be taken if they or their third-party servicers fail to meet the GLBA’s information security requirements.

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

California Attorney General Proposes Modified CCPA Regulations – Overview of Significant Proposed Changes

On February 10, 2020, California’s Office of the Attorney General proposed a modified version of the California Consumer Privacy Act (CCPA) regulations first published on October 11, 2019. The initial proposed regulations were summarized in our previous Alert.

The deadline for providing comments on the modified proposed regulations is February 25, 2020. This Alert summarizes some of the most significant proposed changes to the regulations. A more detailed summary, including new practical CCPA examples, can be found in our blog posts regarding changes to: (1) definitions and consumer notice requirements; (2) requirements for consumer requests and verification; and (3) requirements for service providers, authorized agents, minors, nondiscrimination and calculating the value of consumer data.

View the full Alert on the Duane Morris LLP website.

State Authorization: Disclosure Requirements that apply to both Online and On-Ground Programs

On November 1, 2019, the U.S. Department of Education published a final rule regarding state authorization. The regulation goes into effect on July 1, 2020 and places new disclosure requirements for professional licensure programs that apply to both online and on-ground programs.

Specifically, 34 C.F.R. § 668.43(a)(5)(v) (Institutional Information), requires institutions offering programs leading to occupational licensure (such as cosmetology, vocational nursing, etc.), to determine whether the program curriculum meets educational requirements for licensure or certification in each state. The institution must list (a) states for which the program curriculum meets educational requirements; (b) states for which the program curriculum does not meet education requirement; (c), and states for which the institution has not made a determination. Please note that the regulation applies to program curriculum,(not the ability to transfer a license to another state after the student obtains a license in the state the institution is located in.

Institutions should do the research to make affirmative or negative determinations as to whether the program curriculum meets educational requirements for licensure or certification. However, these determinations do not need to be fully completed by July 1, 2020. Until the institution is able to make the state-by-state determinations, the states that the institution does not operate in should be listed as a state for which the institution has not made a determination.

Lease Points Colleges and Universities Should Not Miss

DO NOT BE FOOLED BY “STANDARD FORM LEASES” and
BEWARE OF CHANGING RULE ON TREATMENT OF LEASES IN TITLE IV COMPOSITE SCORE

There is no such thing as a “standard lease,” even if the document has that title at the top.

Julie Mebane, Partner (Real Estate), Duane Morris LLP

If your institution is reviewing a lease form and you are considering signing it for the tenant, make sure that you don’t gloss over it in the belief that its terms cannot be negotiated.  Usually, many lease terms can be modified and the tenant’s position can be enhanced if you pay attention to its language, especially a few important provisions:

  • Consider starting out by having both landlord and tenant sign a term sheet with the key business points summarized.  This can avoid confusion and disagreements later when the lease is reduced to writing.
  • Pay close attention to the description of the leased premises.  Make sure that the location and the number of rentable square feet are included and accurate, and consider including a space plan as an exhibit.
  • Double-check the rent calculations in the lease.  With regard to periodic rent increases, you may want to include a chart that summarizes the timing and amount of rent increases, rather than just a description like “3% rent escalations per year.”
  • If the tenant will be paying operating expenses as part of its rent, consider negotiating a cap on the amount of annual increases that can be passed through to the tenant.
  • Ask the landlord to pre-approve and describe in the lease any up-front alterations or other work of improvements the tenant needs to do on the premises.
  • In the use clause, more general language benefits the tenant.  Try to include the right to conduct “office and other administrative uses” or possibly “all other lawful uses.”  You may enhance the tenant’s right to assign and sublet in the future by broadening the use clause.
  • With regard to the parties’ respective maintenance and repair obligations, be sure there is a complete description of the landlord’s duties.  Try to include structural maintenance and repairs, floors, ceilings, roofs, windows, HVAC and building systems, interior plumbing and wiring in the landlord’s list.
  • Get a representation from the landlord that the premises and the property are in compliance with applicable laws and in good operating condition and repair as of the commencement date.
  • Try to negotiate the surrender language so the tenant does not need to remove all of the tenant improvements, cabling and furniture, fixtures and equipment at the end of the term.
  • Beware of leased spaces formerly occupied by Title IV institutions. See our [date]  blog post on that subject.

These provisions of a lease, and many others, can usually be negotiated and improved for the tenant.  Don’t consider any lease, even a pre-printed form that says it’s “standard,” to be carved in stone.

New and Extended Lease Rules Are Changing for Title IV Composite Score Purposes

Katherine Brodie, Partner (Education), Duane Morris LLP

On September 23, 2019, the U.S. Department of Education published a Final Rule that applies to all higher education institutions that participate in the federal student financial aid programs under Title IV of the Higher Education Act (“Title IV programs”).

Specifically, the Final Rule amends the annual Title IV financial responsibility composite score to take into account the Financial Accounting Standards Board (FASB) Accounting Standard Update (ASU) 2016-2, which requires that leases be treated as both right-of-use assets and liabilities. Public entities must adopt 2016-2 for leases entered into after fiscal years starting on or after December 15, 2018. Private entities must adopt the new standard starting January 1, 2020. FASB, however, has proposed delaying the private entity implementation date to January 1, 2021.

The Department of Education’s Final Rule exempts all leases entered into before December 15, 2018 from application of 2016-2 for composite score purposes. For leases entered into on or after December 15, 2018 (which the Department states can include extensions or modifications of pre-December 15, 2018 leases), auditors must apply FASB ASU 2016-2 and, as a result, some institutions’ composite scores may be adversely impacted. Since FASB ASU 2016-2 does not subject private entities to the new standard until at least January 1, 2020, there is an argument that the Department should not have an institution’s official composite score calculation reflect the new lease accounting standards until such time as the new standard is required under GAAP, but the Department has not yet clarified its position on this point (despite several pending requests for clarity on that point). Bottom line, as institutions negotiate new leases or seek to extend or modify current leases, they should consult Title IV counsel and their auditors for guidance because certain lease terms may significantly impact the carrying value of a leased asset under the new FASB standard as applied by the Department of Education.

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The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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