home

New Cases and Developments

NACUA's Legal Resources staff summarizes current higher education cases and developments and provides the full text of selected cases to members. New cases and developments are archived here for up to 12 months.  Cases provided by Fastcase, Inc.

Selected Topics: Students Financial Aid
Dates
New Search
Financial Aid; Students; Foreign Students

Barrett v. Regents of the University of California (Cal. App. May 15, 2018)

Unpublished Opinion affirming Defendant’s Motion to Dismiss. Plaintiff, a student at the University of California (UC) Berkeley School of Law, alleged that UC breached its employment contract with Plaintiff by failing to award her tuition remission for work that she performed as a reader in the Academic Student Employee (ASE) program. Preliminarily, the court affirmed dismissal since public employment in California is governed by statute, and not contract.  Moreover, Plaintiff could not proceed on an alternative theory of liability because UC Berkeley’s policies expressly specified that graduate students in “self-supporting” programs, such as the LL.M program in which the Plaintiff was enrolled, were ineligible for tuition remission.  

5/17/2018
read
Financial Aid; Bankruptcy & Student Debt; Students

Novak v. Univ. of Miami (Bankr. Conn. Feb. 27, 2018)

Memorandum of Decision granting Defendant’s Motion to Dismiss. Plaintiff, a U.S. Bankruptcy Code Chapter 7 Trustee, initiated an adverse proceeding against the University of Miami to recover tuition payments (totaling $66, 616) made by Debtor, the parent of a University of Miami student, pursuant to a Federal Direct Parent PLUS loan. Plaintiff argued that the payments were constructive fraud transfers because they constituted “an interest of the debtor in property,” under the Bankruptcy Code and similar provisions of the Connecticut Uniform Fraudulent Transfer Act (CUFTA). Looking to the federal and statutory framework of Parent PLUS loans, as well as the holdings of Eisenberg v. Pennsylvania State University and Shapiro v. Gideon, the court found that the Debtor never had an “interest” in the Parent PLUS loans since she lacked possession or control of the funds. Further, the court found that the loan proceeds “could not have been available in any circumstance to pay [the debtor’s creditors],” thereby concluding that such a finding comported with the “spirit and purpose of fraudulent transfer provisions in the Bankruptcy Code and CUFTA.”

3/2/2018
read
Students; Bankruptcy & Student Debt; Financial Aid

Boscarino v. Ithaca College (Bankr. Conn. Feb. 27, 2018)

Memorandum of Decision granting the Defendant’s Motion for Summary Judgment. Plaintiff, a U.S. Bankruptcy Code Chapter 7 Trustee, initiated an adverse proceeding against Ithaca College to recover tuition payments made pursuant to a Federal Direct Parent PLUS loan. Finding Eisenberg v. Pennsylvania State University and Novak v. Univ. of Miami dispositive on the matter, the court held that the Parent PLUS loan payments were not part of the Debtor’s estate, either “prior to the filing of her bankruptcy petition” nor would they “have been available for distribution to her creditors at that time,” and therefore were not fraudulent transfers to Ithaca College.

3/2/2018
read
Financial Aid; Students; Government Relations; Authorizations & Regulations

Request for Information by the Department of Education on Evaluating Undue Hardship Claims in Bankruptcy Proceedings (Feb. 21, 2018)

Request for Information issued by the Department of Education’s Office of Postsecondary Education on factors and tests to be considered in evaluating “undue hardship” claims asserted by student loan borrowers in bankruptcy court. The U.S. Bankruptcy Code provides that student loans can be discharged if repayment would impose an undue hardship on the borrower, but the standard for determining an undue hardship has previously been left to federal courts, which devised two tests for this analysis: the Brunner test and the Totality of the Circumstances test. The factors under both tests look to the debtor’s payment history, work history, medical history, future employment prospects, willingness to participate in repayment plans, and necessary expenses that are unique to the debtor, among other considerations. The Department invites the public and interested parties to provide comment and information on: 1) factors to be considered in evaluating undue hardship claims; 2) the weight to be given to each factor; 3) whether the differences between the two tests currently used by federal courts result in inequities among borrowers; 4) circumstances in which loan holders should concede an undue hardship claim by borrowers; and 5) whether the 2015 Dear Colleague Letter, which provides guidance to guarantors and educational institutions in defending bankruptcy proceedings, should be amended. Responses must be received by May 22, 2018. 

2/22/2018
read
Financial Aid; Authorizations & Regulations; Students

Notice by the U.S. Department of Education Federal Student Aid of 2018-2019 Award Year Deadline Dates for Campus-Based Programs (Jan. 3, 2018)

For the 2018-2019 award year, the Secretary announced deadlines by which postsecondary institutions must submit requests and documents to various divisions of the Department of Education, so as to ensure their institution’s funding or waiver in the Federal Perkins Loan program, Federal Work-Study program, and Federal Supplemental Education Opportunity Grant programs. The deadlines for each program are available in the Deadline Dates section of the notice and on the Information for Financial Aid Professions website

1/5/2018
read
Financial Aid; Students; Government Relations; Authorizations & Regulations

Notice of Proposed Rulemaking by the U.S. Department of Education to Delay Final Regulations Affecting Student Loan Programs (Oct. 24, 2017)

Notice of Proposed Rulemaking by the Department of Education to delay until July 1, 2019, the effective date of selected provisions of final regulations under the Student Assistance General Provisions, Federal Perkins Loan Program, Federal Family Education Loan Program, William D. Ford Federal Direct Loan Program, and Teacher Education Assistance for College and Higher Education Grant Program. The Department will continue to process borrower defense claims under existing regulations during the delay and borrowers may continue to apply for the discharge of their loans under these programs. Interested parties are invited to comment on or before November 24, 2017.

10/25/2017
read
Financial Aid; Students; Government Relations; Authorizations & Regulations

Interim Final Rule by the U.S. Department of Education Delaying Selected Provisions of Final Regulations Affecting Student Loan Programs (Oct. 24, 2017)

Interim Final Rule published by the U.S. Department of Education delaying the effective date of final regulations of various student loan programs to July 1, 2018. The selected regulations originally had an effective date of July 1, 2017, and concern the Department’s standard and process for adjudicating borrower defense claims, requirements relating to financial responsibility standards, provisions that require institutions to provide warnings about their students’ loan repayment rates, and prohibitions against institutions’ use of arbitration or class action waivers in their agreements with students. The Department cited the pending litigation, California Association of Private Postsecondary Schools v. DeVos, among other reasons, for delaying the effective date of the selected regulations. The Department invites interested parties to comment on or before November 24, 2017.

10/25/2017
read
Financial Aid; Students; Government Relations; Authorizations & Regulations

Federal Student Aid Dear Colleague Letter on the Wind-down of the Federal Perkins Loan Program (Oct. 6, 2017)

Dear Colleague Letter issued by the U.S. Department of Education’s Office of Postsecondary Education providing additional information on the wind-down process outlined in the Perkins Loan Program Extension Act of 2015. The Letter discusses the expiration of authority for making new Federal Perkins Loans for graduate and undergraduate students, the process by which participating institutions are to either return or distribute the assets of institutions’ Federal Perkins Loan Revolving Fund, and the option of assigning both non-defaulted and defaulted Perkins Loans to the U.S. Department of Education. Individuals with questions about the Letter should contact the department by email, or contact (877) 801-7168 for campus-based questions. 

10/24/2017
read
12