Legal Updates: BDR Case Returns to District Court, GE in Limbo, Bare Minimum to be Re-Regulated

Borrower Defense to Repayment Lawsuit

After Congress passed the One Big Beautiful Bill Act (OBBBA), the Department of Justice notified the Supreme Court that new provisions in the law delayed the start date of the Biden Borrower Defense to Repayment (BDR) Rule until 2035. As a result, the U.S. Department of Education v. CCST case will not be reviewed by the Supreme Court, ending that phase of the proceedings. The case has now returned to the district court, where it can hopefully be resolved based on the principles outlined in the Fifth Circuit opinion. CECU continues to lead the strategy and fundraising in support of the lawsuit and settlement negotiations with the government are ongoing. We will provide additional updates as the case proceeds.

Gainful Employment Lawsuits

Several months ago, the parties filed their written arguments on summary judgment, asking the district court for a final ruling in the Gainful Employment (GE) lawsuits. The proposed dates offered by the parties for oral argument have come and gone without any response from the court. As a result, the parties recently filed a renewed request for oral argument with new proposed dates in September and November, but it is still unclear when the court will hear oral argument and decide the motion.

The judge in the case, Reed O’Connor, recently became the Chief Judge of the district court last month, which has increased his workload. Federal courts track long-pending motions through the Civil Justice Reform Act’s semiannual “six-month report,” but district judges otherwise set their own timelines. Judge O’Connor’s past reports show he usually rules before cases hit that list. However, he has until the end of March 2026 to resolve the motion without having it appear on the report.

In the meantime, the Department of Education specifically mentioned Gainful Employment/Financial Value Transparency as an issue they plan to address during the upcoming negotiated rulemaking as part of the Accountability in Higher Education and Access through Demand-driven Workforce Pell (AHEAD) Committee. The Committee’s rulemaking sessions are currently scheduled for December and January, which means no new final rules will be released before March 2026. It seems likely that the court will rule on the summary judgment motion in the GE lawsuits before an NPRM is even published.

Bare Minimum Rule Lawsuits

After the Department dismissed internal proceedings against Cortiva Institute because of its role as plaintiff in the lawsuit, the parties filed a joint report updating the district court on the status of the case. In the report, the Department of Education stated that it intends to re-regulate on the Bare Minimum Rule this year in a way that will resolve the lawsuit. This suggests that the issue will be part of the upcoming negotiated rulemaking process, probably also under the AHEAD Committee. In the meantime, the case remains paused in the district court with the preliminary injunction still in place, and the parallel lawsuit filed in the DC district court continues to be stayed for the same reasons.