Private schools nationwide have been grappling with a loaded question: Does a school’s non-profit status make it a recipient of federal financial assistance (FFA), thereby requiring compliance with Title IX and other federal laws?
Federal courts in Maryland and California ruled “yes” in 2022, citing that a private school’s tax-exempt status is financially benefiting the school, which means it’s considered FFA for those states’ private schools. This was a shocking decision as FFA was historically only considered to be certain federal grants or loans, according to legal experts.
Initially because of this ruling, 501(c)(3) private schools in Maryland and California would have to comply with at least Title IX of the Education Amendments of 1972 (Title IX) and likely other similar federal laws.
The Maryland case is being appealed, and the California case was settled out of court. So, the binding outcome for those states’ private schools is still unclear.
However, national legal experts reported that a federal court in Arizona ruled that a school’s 501(c)(3) status is not FFA just last month. This is a positive development for the western private school community, but also adds to the national confusion.
Though none of these cases directly impact Wisconsin private schools, WCRIS wanted to keep you apprised of these federal developments as some member schools have expressed concern. Additionally, we know your jurisdictions are also concerned. The WCRIS staff, with assistance from the Council for American Private Education (CAPE), is monitoring each case as they can have implications for elsewhere in the country.
There’s no action needed at this time besides continuing to be cautious of participating in certain federal grants and programs. Please always consult your oversight jurisdiction before participating in any government program. If you or your jurisdiction has concerns, please contact WCRIS.
Read a recap of the Maryland, California and Arizona cases here.
