Understanding Title IX and Its Implications for Educational Institutions

What is Title IX?

Title IX provides that “No person in the United States shall, on the basis of sex, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any education program or activity receiving Federal financial assistance…” (20 U.S.C. §1681). This means that Title IX, with all of its requirements related to athletics and regulations about sexual harassment, does not apply to schools that do not receive any form of federal financial assistance.

Definition of “Federal Financial Assistance”

Direct Federal Assistance

When a university receives direct federal assistance through acceptance of Title IV funds (federal student loans), that qualifies as “federal financial assistance” (34 C.F.R. §106.2(g)).

Indirect Forms of Federal Assistance

But what about other, more indirect ways in which it could be supposed that the federal government assists educational institutions financially, for example, tax-exempt status?

Court Ruling on Tax-Exempt Status

Case Overview

The United States Court of Appeals for the Fourth Circuit recently answered that question in Buettner-Hartsoe v. Baltimore Lutheran High Sch. Ass’n, No. 23-1453, 2024 WL 1289592 (4th Cir. Mar. 27, 2024). Judge Thacker wrote for a unanimous panel of the Fourth Circuit and held that tax exemption does not qualify as “federal financial assistance.”

Legal Arguments and Court’s Decision

In this case, the plaintiffs had sued a private Lutheran preparatory school that did not receive any federal funding but was registered as a 501(c)(3) tax-exempt institution. The plaintiffs argued that because the government exempted the school from federal income tax, the amount of taxes the school would have paid was a “monetary benefit” from the government and was therefore some form of “federal financial assistance” (Id., at *5). The court disagreed, stating that “‘assistance’ means ‘aid, help, or support,’ which all connote financial grants. Tax exemption, however, is the withholding of a tax burden, rather than the affirmative grant of funds. Thus, tax exemption is not ‘Federal financial assistance’” (Id.).

Implications of the Ruling

For Private Schools in the Fourth Circuit

This holding means that for private schools in the Fourth Circuit (Maryland, Virginia, West Virginia, North Carolina, South Carolina) that do not receive federal funding, they will not be subject to the requirements of Title IX, absent a Supreme Court reversal of the now-controlling opinion on the matter.

Broader Impact on Other Circuits

This holding will also likely be instructive for other Circuits across the country. Sister Circuits may be hesitant to create a circuit split with the Fourth Circuit concerning an issue as fundamental as whether Title IX applies to the operations of a school or a category of schools.

Need a Title IX Lawyer?

If you have a novel appellate issue, or a statutory interpretation question, our experienced Title IX lawyers at Binnall Law Group can help. Please reach out today.