Proposed Regulations Would Ease Access to Public Funds for Faith-Based Colleges

The White House recently announced two initiatives aimed at addressing perceived discrimination in education against students and institutions based on religion. We address the first of those initiatives, relating to prayer in K-12 public schools, in a separate Franczek alert. In the second, the U.S. Department of Education proposed regulations addressing the eligibility of religious higher education institutions for direct grants or subgrants from a state-administered formula grant program. The proposed regulations remove and amend regulations that the administration found imposed burdens on faith-based organizations, provided special benefits to faith-based organizations, or treated faith-based organizations and religious individuals differently than others. The effect of the rule changes would be to make it easier for religious schools to obtain federal grant funds and to lessen oversight on how those funds are spent.

For example, Part 1 of the rule would:

• Remove requirements only applicable to faith-based grant applicants and not secular candidates, such as requirements to provide assurances or notices that non-faith-based organizations are not required to provide;
• Provide a method by which religious organizations that are not eligible for tax exemptions can nonetheless be eligible for grants. The Department’s current regulations do not require registration as a tax-exempt entity to demonstrate an applicant is a nonprofit organization, but the rule would “clarify” that fact;
• Provide a non-exhaustive list of criteria for educational institutions that claim exemption from the application of Title IX of the Education Amendments of 1972, which prohibits discrimination on the basis of sex in educational institutions. The rule currently in effect allows an exemption for institutions “controlled by” religious organizations but does not provide guidance on how to determine who controls an institution;
• Revise language that prohibits use of funds for otherwise allowable activities simply because the activities relate to “religious worship” and “theological subjects” to provide more narrow definitions of the limitations.

Part 2 of the proposed rules would require public institutions to comply with the First Amendment and would require private institutions to comply with internal policies on freedom of speech, including academic freedom, as a material condition for receiving federal grants. The stated goal of these changes is to “encourage institutions to foster environments that promote open, intellectually engaging, and diverse debate,” including on religious topics. The second part of the rule also prohibits colleges from denying student groups rights, benefits, or privileges based on their status as faith-based.

The due date for comments to the proposed rulemaking was February 18, 2020, and so the administration should release a final rule shortly. For more information about the proposed rules or other religious issues in schools, contact the authors of this article or any other Franczek attorney.