The Academic Advisor - Education Law Insights, Issue 4, May 2025

Kevin Carr, Lisa Hawrot, Erin Jones Adams, Nicholas Muto, Shane Riley, Isaiah Robinson
Spilman Thomas & Battle, PLLC
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May 15, 2025

Welcome

Welcome to our fourth issue of The Academic Advisor for 2025.

In this edition, we cover the following topics of interest for schools, institutions of higher education, and other education-focused organizations:

  • How a settlement victory for Maine affects Title IX and state law protections on the basis of gender identity;
  • The restart of collections for student loans and related U.S. Department of Education directives to institutions of higher education;
  • The case before the U.S. Supreme Court regarding public school curriculum;
  • Enhancing data security amidst the growth of Generative AI;
  • The case before the U.S. Supreme Court that could allow the establishment of charter schools focused on religious studies using public funds;
  • The funding pause for student mental health in K-12 school systems; and
  • How an Executive Order on students-athletes’ name, image, and likeness could affect college athletics.

As always, thank you for reading.

Trump Administration Settles with Maine Over Funding Freeze After Dispute Over Trans Athletes

“In response, the state will drop its lawsuit that had been filed against the U.S. Department of Agriculture.”

Why this is important: For several months, Maine has been at the center of a Title IX dispute with the federal government and various agencies. By way of background, on February 21, 2025, the Office for Civil Rights (OCR) of the U.S. Department of Education (ED) initiated an investigation of the Maine Department of Education (MDOE) examining whether MDOE was in violation of Title IX by permitting or directing Maine school districts to (1) allow males to participate in female athletics (whether interscholastic, intercollegiate, club or intramural) and (2) deny female students (particularly student-athletes) access to intimate facilities on the basis of sex, such as female-only locker rooms and bathrooms. On March 19, 2025, OCR issued a Letter of Finding of Noncompliance (LFN) with Title IX by MDOE, which also asserted that public school districts throughout Maine receiving federal financial assistance and having comparable policies and procedures were similarly in violation of Title IX. When MDOE thereafter refused to enter into a resolution agreement with ED to adopt its requirements, OCR promptly referred the matter to the U.S. Department of Justice (DOJ) to initiate the process of limiting MDOE access to federal funding, and the DOJ filed suit against Maine on April 16, 2025.

However, ED has not been the only federal agency to tackle this topic in Maine. As this article and the underlying outcome highlight, Maine has also caught the attention and ire of the U.S. Department of Agriculture (USDA). In a letter to Maine Governor Janet Mills dated April 2, 2025, USDA Secretary Brooke Rollins said Maine “cannot openly violate federal law against discrimination in education and expect federal funding to continue unabated.” The letter went on to inform Governor Mills that the USDA was instituting a “freeze” on access to “federal funds for certain administration and technological functions in [Maine] schools” based on the disagreement between the federal and state governments as to whether Maine was compliant with Title IX. One day later, the MDOE Child Nutrition Program (CNP) was unable to access several sources of federal funds, resulting in the initiation of a lawsuit by Maine against the USDA on April 7, 2025.

In its pleading, Maine sought an emergency injunction requiring the USDA to reinstate federal funding of the CNP. Maine specifically alleged that the USDA had violated the federal Administrative Procedure Act, codified at 5 U.S.C. §§ 701-706, by withholding disbursement of federal funds allocated to Maine to feed schoolchildren based on its conclusion that Maine policies regarding transgender student athletes violate Title IX. In ruling on the emergency injunction, which the federal district court granted in favor of Maine, the court made clear that it was not weighing in on the merits of the underlying controversy regarding transgender athletes, but rather narrowly considering whether the USDA (1) must follow regulatory steps before it withholds funds appropriated to a state and (2) complied with those procedures in the case at hand. In the wake of this ruling, the Trump administration agreed to halt efforts to freeze federal funds for the CNP and Maine, in turn, agreed to dismiss its lawsuit. Nevertheless, a court-approved settlement of this particular litigation has not resolved the ongoing, underlying conflict.

At the heart of this debate is whether conforming with state laws that prohibit discrimination in education conflicts with Title IX as interpreted by ED. The Trump administration asserts that allowing transgender athletes to compete in girls’ sports and use female-designated facilities amounts to discrimination against women, meanwhile Maine contends that it is adhering to both Title IX and the Maine Human Rights Act, which provides a right to freedom from discrimination in education, including in all educational and extracurricular activities, on the basis of gender identity. As a result, the key question is whether states’ rights or federal powers influenced by executive orders will prevail. While the outcome remains undetermined for Maine (and similarly situated states), stakeholders should expect that the Trump administration will lean in to a plain reading of the Title IX regulations at 34 C.F.R. § 106.6(b), which state that the “obligation to comply with Title IX is not obviated or alleviated by any state or local law,” as ED emphasized in its LFN to Maine. Though much remains uncertain, one point is clear: states and school districts alike should expect a similar investigative and decision-making pace and outcome by ED concerning transgender student-athlete policies unless or until federal courts mandate otherwise. --- Erin Jones Adams

Student Loan Collections Restart for More than 5 Million Borrowers in Default

“More than 42 million Americans hold student loans, and collectively, outstanding federal education debt exceeds $1.6 trillion.”

Why this is important: The U.S. Department of Education (DOE) has resumed “involuntary collections” on defaulted student loans. Involuntary collections affect borrowers who have not paid on their student loans in more than 270 days. More than 42 million Americans have student loans. The number of borrowers in default currently sits at approximately five million. The Trump administration expects that number to increase to upwards of 10 million within a few months, since another four million are in “late-stage delinquency.”

Collection activity has been paused for around five years, as part of COVID-era policies designed to offer relief to borrowers. This marks a change from the Biden administration policies, which focused more on providing borrowers with options to get current on their loans. Those borrowers who are part of the SAVE Plan will have to switch to a different re-payment plan that will spike their monthly payment. The Trump administration also eliminated the forgiveness provisions from some repayment plans and terminated staff at the DOE, including many who assisted borrowers. This has caused, in some instances, hours of waiting on the phone for assistance.

The federal government has vast collection powers, including seizing tax refunds, issuing wage garnishments, and seizing Social Security retirement and disability benefits. There are an estimated 452,000 borrowers ages 62 and older with defaulted loans who are likely receiving Social Security. More than one in three Social Security recipients with student loans are reliant on Social Security payments. This means that forced collections could significantly impact their financial well-being and cause some borrowers to have to choose between seeing a doctor, obtaining prescription medication, or buying groceries. Currently, only $750 per month is protected from forced collections, which is $400 below the monthly poverty threshold. This suggests forced collections may interfere with the long-standing purpose of Social Security – protecting its beneficiaries from poverty and financial instability.

Additionally, according to VantageScore, borrowers may see their credit scores dropping immediately by as much as 129 points, while the Federal Reserve predicts scores could drop as much as 171 points. The decrease in scores appears to be higher for those with better scores. Thus, in addition to increased monthly payments, a reduction in credit scores could not only impact a borrower’s ability to obtain a home or auto loan at all, but the interest rate for which they qualify will also be higher. Even if a borrower is able to cure the default, it will continue to show on their credit reports for seven years.

Universities are also being impacted by these collection efforts. The U.S. Department of Education recently sent a “Dear Colleague” letter to universities "warning” them of their obligation to support student loan borrowers. Although borrowers have the primary responsibility for repayment, the letter threatens that schools with a high default rate among alumni could lose access to federal student aid. Blame is being placed on the institutions for increasing tuition rates without ensuring graduates are prepared to succeed in the labor market. Schools must reach out to former students to advise that any loans not in deferment or forbearance must begin repayment by June 30, 2025.

Implementing these sweeping changes is expected to have a negative impact on borrowers. Perhaps this could have been done as part of a roll-out process to minimize the overall effect. However, the bigger question remains what impact decreased credit scores and collection practices will have on the economy as a whole. --- Lisa M. Hawrot

Supreme Court Weighs Who should Decide Public School Curriculum: Judges or School Boards?

“At the center of the case is the school system in Montgomery County, Md., the most religiously diverse county in the United States, with 160,000 students of almost all faiths.”

Why this is important: Montgomery County, Maryland is the most religiously diverse county in the United States. The school board has the task of designing a curriculum and approving books for 160,000 students. However, what happens when a parent has a religious objection to a particular book or portion of the curriculum? Can they opt their child out of that portion of the class? Would the school board have to accommodate all religious objections by approving of students opting out of portions of the curriculum for their kids? On April 22, the U.S. Supreme Court heard oral arguments to answer these questions. Families in the Montgomery County school district wanted the option to have their kids “opt-out” of certain content containing references to the LGBTQ+ community. The school board initially allowed parents to opt out of a single class. However, the school board realized it was a logistical challenge when the topics of same-sex parents or individuals who identify as LGBTQ+ could be mentioned in any lesson.

The attorney for the parents, Eric Baxter with the Becket Fund for Religious Liberty, told NPR that other opt-outs exist for classes like biology so the opt-out for the LGBTQ+ content should remain. In their briefing, the school board argued that the parents have failed to establish that students are compelled or pressured to act or believe in anything contrary to their faith. At oral argument, when asked by Justice Sotomayor whether mere exposure to LGBTQ+ characters -- as opposed to conduct with a coercive effect to a religious belief -- was objectionable, the attorney for the parents argued that parents should be permitted to opt-out of the exposure. Multiple justices made statements or asked questions that indicated the school board was exhibiting hostility towards religious beliefs by removing the opt-out provisions. A decision will likely be issued later this summer. --- Isaiah C. Robinson

3 Tips for Improving Security Amid the Growth of Generative AI

“How can higher education institutions tackle growing concerns about the use of generative artificial intelligence for cyberattacks?”

Why this is important: Generative AI tools such as ChatGPT, Microsoft Copilot, and Google Gemini are increasingly being used across higher education institutions for everyday tasks like summarizing meeting notes and drafting emails. While these tools offer convenience and productivity benefits, there are mounting concerns about their potential misuse, especially in cyberattacks. As AI technology advances, so does the sophistication of phishing emails and deepfake content, raising alarm among cybersecurity experts.

Isaac Galvan, community program director for cybersecurity and privacy at EDUCAUSE, outlines three crucial areas for colleges and universities to focus on to enhance digital safety. First, institutions need to develop clear AI use policies to guide staff and students on appropriate and secure usage. He highlights the University of Michigan’s approach, which emphasizes privacy, security, accessibility, and equitable access as core principles in their AI implementation.

Second, ongoing education and training are essential to build a security-conscious campus culture. Galvan points to the increasing threat of phishing emails and recommends that institutions teach students and staff how to recognize and report suspicious messages. Cybersecurity awareness should also be incorporated into academic curricula and extend beyond campus to include personal technology use and social media behavior.

Finally, Galvan stresses the importance of improving identity and access management (IAM) to address the evolving threat landscape, which includes deepfake scams and AI-powered hacking tools. He advises investing in advanced IAM technologies that can distinguish real human users from malicious or automated activity, and encourages the verification of audio or video messages through trusted communication channels. As generative AI tools become more integrated into academic environments, strong oversight and proactive cybersecurity measures are essential. --- Shane P. Riley

Supreme Court could Allow Creation of Nation’s First Religious Public School

“Though the court’s conservative majority appeared open to such a school’s creation, liberal justices raised questions on curricula and discrimination.”

Why this is important: On April 30, 2025, the Supreme Court of the United States (SCOTUS) heard oral arguments in a case that will have a significant impact on the future of charter schools. Specifically, the issue before the court is whether a religious school contracting with the state’s charter school program violates the Establishment Clause of the First Amendment. St. Isidore of Seville Catholic Virtual School (St. Isidore) is a private, non-profit corporation operated by the Archdiocese of Oklahoma City and the Diocese of Oklahoma. St. Isidore applied to the Oklahoma Charter School Board to establish its own virtual charter school. After the application was approved, Oklahoma’s Attorney General sued directly to the Oklahoma Supreme Court, arguing that the establishment of St. Isidore violated the Establishment Clause. In a 6-2 decision, the Oklahoma Supreme Court held that St. Isidore’s establishment would have the effect of using public funds towards establishing religion due to St. Isidore’s requirements concerning religious instruction and activities. St. Isidore subsequently appealed the Oklahoma Supreme Court’s decision to SCOTUS.

Multiple issues were considered by SCOTUS. First, there is the matter of whether St. Isidore is a state actor/public entity. The Oklahoma Supreme Court agreed with the Oklahoma Attorney General that, as a state entity with children going to school tuition-free, St. Isidore could not institute its religious-based curriculum. Second, SCOTUS addressed whether religious schools can be excluded from the charter school system.

The justices were particularly split on whether Oklahoma was discriminating against St. Isidore because it is a religious entity. Justices Jackson, Kagan, and Sotomayor were skeptical of St. Isidore’s argument that they were treated as “second-class” because of their religious foundation. Primarily, this pushback stems from the justices likely seeing St. Isidore as a state public school that includes a religious curriculum with state funds. Justice Jackson noted that St. Isidore was not being denied a benefit that everyone can get; rather, St. Isidore would be receiving a benefit nobody else could get, namely the establishment of a religious public school. Other justices were skeptical of Oklahoma’s exclusion of St. Isidore. Justice Kavanaugh likened Oklahoma’s exclusion of religious schools to “rank discrimination against religion.”

The decision will have an impact on charter schools across the country. More than 40 states have passed legislation to permit the creation of charter schools. Nearly 8 percent of public-school students attended a charter school during the 2021-2022 school year. While each state has its own legislation on the creation of charter schools, the decision by SCOTUS could allow institutions to create charter schools centered around religious studies using public funds. --- Isaiah C. Robinson

Education Department Stops $1 Billion in Funding for School Mental Health

“The U.S. Department of Education is telling impacted districts that the Biden administration, in awarding the grants, violated ‘the letter or purpose of Federal civil rights law.’"

Why this is important: In 2022, a bill entitled the Bipartisan Safer Communities Act (BSCA) was passed by Congress. This bill was initially sponsored by then-Senator Marco Rubio of Florida and received support from both parties. Passage of this bill was accomplished in response to the aftermath of the school shooting in Uvalde, Texas, when 19 elementary school students and two adults were killed and an additional 17 students and adults were injured. The purpose of the bill was to aid states in implementing crisis intervention programs to reduce and protect communities from gun violence. A portion of the bill included federal funding for schools to address the rising concerns about student mental health crises. Schools were able to use the grants to enhance security and to hire counselors and social workers. The goal was to prepare and place 14,000 mental health professionals in schools. To date, more than $570 million in awards have gone to K-12 schools to bolster their mental health programs and personnel.

The Trump administration has recently committed to stop paying out $1 billion in federal grants supporting the BCSA. It claims that the Biden administration, in awarding the grants, violated “the letter or purpose of Federal civil rights law.” Additional claims have been made that the funding was used to “implement race-based actions like recruiting quotas….” even though the grant notices advised schools specifically that the services to be provided must be “evidence-based.”

The grants awarded were to be paid over a five-year period, ending in December 2027. Instead, the funding will stop in December 2025, two years early. It is anticipated that ending the funding early will cause many schools to lay off the professionals they hired, impacting the expanded mental health services that were being provided to students. In August 2024, a poll from the American Psychiatric Association found that “84% of Americans believe school staff play a crucial role in identifying signs of mental health issues in students.” It is estimated that about 260 school districts in nearly every state received five-year grants. As a result, schools will be forced to determine if and how they can possibly continue these services without the monies that were awarded. --- Lisa M. Hawrot

President Trump Considering Executive Order to Address Payments to College Athletes

“Trump’s review of the matter comes in the wake of a conversation he had with former Alabama football coach Nick Saban.”

Why this is important: The ongoing debate in college sports revolves around athlete compensation and the athletes’ ability to make money off their name, image, and likeness (NIL). Outspoken critics of NIL, such as former college football coach Nick Saban, argue that the lack of oversight and regulation creates competitive imbalances and ultimately harms college sports.

In a recent development to the NIL saga, President Trump is considering the issuance of an executive order that would address payments to college athletes. Saban contends that the unregulated ability for athletes to make money and the ability of the athletes to transfer to multiple schools hinders their “personal development.” The current structure does not limit how much money teams can spend on players enabling larger and well-resourced schools to have an advantage. As a result, many stakeholders in college sports have echoed Saban’s frustration that whoever pays the most will have the best chance to win.

The prospect of a presidential executive order regulating college sports has drawn criticism from politicians, attorneys, and athletes. According to this article, Senator Richard Blumenthal of Connecticut pushed back on the idea of an executive order arguing that the President has no power to attempt to rule by decree and he would be giving handouts to the NCAA. All of this is unfolding against the backdrop of ongoing settlement negotiations involving athletes, the NCAA, and the Power Five conferences. A lead attorney for the athletes says that such an order would limit the business deals to which athletes can agree.

The issue of college athlete compensation is complicated and one that will not be going away anytime soon. The recent situation involving a former University of Tennessee quarterback refusing to show up to spring practice and then transferring schools after Tennessee did not agree to his increased demands provoked strong reactions from those critical of the current college sports landscape. College sports are becoming more and more like the professional leagues, which causes many to point out that the previous differences between the two levels are what made college sports enjoyable. The issues involving NIL rights, the transfer portal, and federal regulation reflect a struggle to balance tradition and modernization. Allowing athletes to make money empowers them, but with that empowerment comes challenges that college sports and legislators have yet to resolve. --- Nicholas A. Muto

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations. Attorney Advertising.

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