Appendix — Hillsdale College v. Department of Education

Office - rr

RO-TERR vILen™

No. MAR 16 1983

— — ft ACEXANDER L STEVAS,

CLERK

IN THE —

Supreme Court of the United States

OCTOBER TERM, 1982

HILLSDALE COLLEGE,

Petitioner,

Ve

DEPARTMENT OF EDUCATION, et ai.,

Respondents.

APPENDIX TO

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

ROBERT W. BARKER

Counsel of Record

Luisa L. LANCETTI

WILKINSON, BARKER, KNAUER

& QUINN

1735 New York Avenue, N.W.

Washington, D.C. 20006

(202) 783-4141

Attorneys for Petitioner

= ==

WILSON - EPES PRINTING Co.. INC. - 789-0096 - WASHINGTON. DC. 20001

TABLE OF APPENDICES

Page

Opinion of the United States Court of Appeals for

the Sixth Circuit, December 16, 1982 ............. la

Judgment of the Court oo... ccccccccccccscssescccceccoceeeeese. 42a

Final Decision of the Reviewing Authority, Civil

Rights, October 25, 1979 .........ccccccccccccsscsoosescecesceees.. 48a

Initial Decision, Department of Health, Education,

& Welfare Administrative Proceeding, August 23,

ype EE RS oe ee SES ME eee 55a

Education Amendments of 1972, Title IX:

20 U.S.C. § 1681 .......... AA A DIE NEE et 2 OCOD TEED 80a

as AF MIE ncsstccsonsaccsssesecka.cc. wee

RR eee oes ee er ed .. 85a

BE CrP. Part 206 (1GGR) ooncccccccescescesescs.... Grey. 86a

HEW Form 639A, Assurance of Compliance with

Title 1X of the Education Amendments of 1972

and the Regulation Issued by the Department of

Health, Education, & Welfare in Implementation

IE cnet enin ae re ee a 125a

Letter from Assistant Attorney General Wm.

Bradford Reynolds to Clarence M. Pendleton, Jr.,

Chairman of the U.S. Commission on Civil Rights,

dated September 16, 1982 oo ccccceeeee. 13la

la

APPENDIX A

[OPINION OF THE UNITED STATES

COURT OF APPEALS FOR THE SIXTH CIRCUIT)

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

No. 80-3207

HILLSDALE COLLEGE,

‘ Petitioner,

DEPARTMENT OF HEALTH, EDUCATION,

AND WELFARE, ET AL.,

Respondents.

ON REVIEW FROM THE DEPARTMENT OF

HEALTH, EDUCATION, AND WELFARE

Decided and Filed December 16, 1982

Before: Epwarps, Chief Circuit Judge; CEcIL* and

BROWN ®**, Senior Circuit Judges.

Brown, Senior Circuit Judge, delivered the opinion of

the Court, in which CEcIL, Senior Circuit Judge, joined.

Epwarps, Chief Judge, (pp. 25-38) filed a separate dis-

senting opinion.

* Judge Cecil concurred in this opinion prior to his death on

November 26, 1982.

** Circuit Judge Brown retired from regular active service under

the provisions of 28 U.S.C. § 371(b) on June 16, 1982, and became

a Senior Circuit Judge.

2a

BAILEY Brown, Senior Circuit Judge. This appeal

arises out of a compliance proceeding initiated against

Hillsdale College by the General Counsel of the Depart-

ment of Health, Education, and Welfare (“HEW”) ' in

December, 1977, pursuant to the provisions of Section 902

of Title IX of the Education Amendments of 1972, 20

U.S.C, §§ 1681-1686 (1976) (“Title IX”), and the regu-

lations promulgated thereunder? HEW sought an order

terminating the financial assistance Hillsdale College

students receive through various federal student loan and

grant programs because of Hillsdale’s refusal to file HEW

Form 639A (“Assurance of Compliance with Title IX

Regulations”) as required by 34 C.F.R. § 106.4 (1981).°

Hillsdale’s refusal to execute the Assurance of Compli-

ance is the only basis for the HEW enforcement action;

no allegations of actual sex discrimination on the part of

the college have been made or are before this court. For

the reasons stated herein, we hold that Hillsdale College

is not required to execute the Assurance of Compliance as

a condition of its students’ continued receipt of federal

financial assistance and hereby reverse the Order issued

below to that effect.

‘ HEW’s functions under Title IX were transferred in 1979 to

the Department of Education. See North Haven Bd. of Educ. v.

Bell, 456 U.S. ——, 102 S.Ct. 1912, 72 L.Ed.2d 299 (1982). Both

agencies shall hereinafter be referred to as HEW.

* The regulations promulgated by HEW originally appeared at 45

C.F.R. Part 86, but were recodified in connection with the estab-

lishment of the Department of Education. 45 Fed.Reg. 30802

(1980). See note 1 supra. The regulations are now found at 34

C.F.R. Part 106 (1981).

*34 C.F.R. § 106.4 (1981) reads in pertinent part as follows:

(a) General. Every application for Federal financial assist-

ance for any education program or activity shall as condition

of its approval contain or be accompanied by an assurance

from the applicant or recipient, satisfactory to the Assistant

Secretary, that each education program or activity operated

by the applicant or recipient and to which this part applies

will be operated in compliance with this part.

3a

In an administrative proceeding before the HEW Civil

Rights Reviewing Authority it was held that Hillsdale

may be required to execute the Assurance of Compliance

as a condition of its students’ continued receipt of fed-

eral financial assistance. This appeal followed. 20 U.S.C.

§ 1683 (1976).

I. Introduction

Hillsdale College is a private, nonsectarian, coeduca-

tional college located in Hillsdale, Michigan with an enroll-

ment of approximately 1,000 students. Since its founding

in 1844, Hillsdale College has refused to accept any fed-

eral or state aid. Certain of its students, however, indi-

vidually secure loans or grants to pay the costs of their

education under four federal programs: the National Di-

rect Student Loan (“NDSL”) Program,‘ the Basic Edu-

cational Opportunity Grant (“BEOG’) Program,° the

Supplementary Educational Opportunity (“SEOG”) Pro-

gram,° and the Guaranteed Student Loan ("“GSL”) Pro-

*20 U.S.C. §§ 1087aa-1087ff (1976). Under the NDSL Program,

loans are made by Hillsdale to its students on the basis of need.

The funds are used by the students to pay the costs of education,

either by direct payment to Hillsdale (e.g., tuition) or to private

vendors (¢.g., books, rent for off<ampus housing, etc.). In the

year ending June 30, 1978, approximately 107 students at Hillsdale

College secured approximately $104,000 in such loans. See Joint

Stipulation of Facts, No. 4.

*20 U.S.C. § 1070a (1976). Under the BEOG Program, students

secure grant funds directly from the United States to defray educa-

tional costs. In the year ending June 30, 1978, 54 Hillsdale students

secured approximately $54,000 in such grants. See Joint Stipule-

tion of Facts, No. 5.

*20 U.S.C. §§ 1070b-1070b-3 (1976). Under the SEOG Program,

funds allocated by HEW to Hillsdale are awarded by Hillsdale to

needy students to defray educational expenses. In the year ending

June 30, 1978, approximately 53 students attending Hillsdale Col-

lege were awarded $37,400. See Jv int Stipulation of Facts, No. 7.

4a

gram.’ In the year ending June 30, 1978, approximately

one-fourth of Hillsdale’s student body received aid under

these loan and grant programs.

Title IX, enacted into law on June 23, 1972, is designed

to prevent sex discrimination in federally assisted educa-

tion programs and activities. Section 90l(a) of Title IX

provides as follows:

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. §168l(a) (1976). Section 902 of Title IX,

which provides for the enforcement of Section 901, au-

thorizes HEW to issue regulations to implement Section

901 and to enforce such regulations by administrative

enforcement proceedings.* The ultimate sanction for non-

720 U.S.C. §§ 1071-1087-4 (1976). Under the GSL Program,

students apply, to private lending institutions for loans guaranteed

in whole or in part by the United States. The funds are used to

defray educational expenses. In the year ending June 30, 1978, 51

Hillsdale students secured approximately $123,806 in GSL loans.

See Joint Stipulation of Facts, No. 6.

* Section 902 of Title IX, 20 U.S.C. § 1682 (1976), reads in part

as follows:

Each Federal department and agency which is empowered

to extend Federal financial assistance to any education program

or activity, by way of grant, loan, or contract other than a

contract of insurance or guaranty, is authorized and directed

to effectuate the provisions of section 1681 of this title with

respect to such program or activity by issuing rules, regula-

tions, or orders of general applicability which shall be con-

sistent with achievement of the objectives of the statute au-

thorizing the financia] assistance in connection with which the

action is taken. No such rule, regulation, or order shall become

effective unless and until approved by the President. Com-

pliance with any requirement adopted pursuant to this section

may be effected (1) by the termination of or refusal to grant

5a

compliance is the termination of federal assistance to

any program in which noncompliance is found. Section

903, 20 U.S.C. § 1683 (1976), provides for judicial re-

view of any department or agency action taken pursuant

to Section 902. These sections of Title IX were derived

from the virtually identical language of Title VI of the

Civil Rights Act of 1964, which prohibits race discrimina-

tion in federally assisted programs.”

On June 4, 1975, HEW issued final regulations to “ef-

fectuate Title IX of the Education Amendments of 1972.

.” 34 C.F.R. § 106.1 (1981). The portions of the

regulations at issue in this case dea] with the definitions

of “recipient” and “federal! financial assistance.” Section

106.2(g) (1) (ii) defines “federal financial assistance” to

include:

Scholarships, loans, grants, wages or other funds

extended to any entity for payment to or on behalf

of students admitted to that entity, or extended di-

rectly to such students for payment to that entity.

The term “recipient” is defined in the regulations to

mean:

or to continue assistance under such program or activity to

any recipient as to whom there has been an express finding on

the record, after upportunity for hearing, of a failure to com-

ply with such requirement, but such termination or refusal

shall be limited to the particular political entity, or part there-

of, or other recipient as to whom such a finding has been made,

and shal! be limited in its effect to the particular program, or

part thereof, in which such non-compliance has been so found,

or (2) by any other means authorized by law. ...

9 42 U.S.C, § 2000d (1976). Sections 602 and 603 of Title VI are

absolutely identical to sections 902 and 903 of Title IX; section

601 is almost identical except that it prohibits discrimination based

on “race, color or national origin” whereas section 901 prohibits dis-

crimination based on sex, and section 901 is limited to “any educa-

tion program or activity” whereas section 601 covers “any program

or activity” (emphasis added).

6a

[A]ny State or political subdivision thereof, or any

instrumentality of a State or politica] subdivision

thereof, any public or private agency, institution, or

organization, or other entity, or any person, to whom

Federa! financia] assistance is extended directly or

through another recipient and which operates an edu-

cation program or activity which receives or benefits

from such assistance, including any subunit, succes-

sor, assignee, or transferee thereof.

34 C.F.R. § 106.2(h) (1981) (emphasis added). An ex-

ception to this definition is found in 34 C.F.R. § 106.2(g)

(5) (1981) which, in accordance with Section 902 of Title

IX, exempts financial assistance in the form of contracts

of insurance or guaranty from the enforcement authority

of HEW.

The regulations, under Section 1064(a), further pro-

vide that each “recipient” of “federa? financial assist-

ance,”’ as defined above, must submit to HEW an “As-

surance of Compliance” with Title IX, stating that each

education program or activity operated by the institution

to which the regulations apply will be conducted in com-

pliance with Title IX and the regulations."”

Because Hillsdale College refused to execute such an

Assurance of Compliance, HEW instituted these proceed-

ings. Hillsdale’s basic arguments as to why the order

cutting off funds is invalid are as follows. First, it ar-

gues that, because it does not operate any “education

program or activity receiving Federal financial assist-

1° See note 3 supra. The Assurance of Compliance, HEW asserts,

is critical to its effective enforcement of Title IX insofar as it pro-

vides a means of monitoring the threshold compliance with the

statute by the large number of universities, colleges, schools, and

other institutions covered by Title IX. A similar regulatory scheme

is employed by the various agencies in charge of enforcing Title

VI. See, e.g., 38 C.F.R. § 18.4 (1981) (assurance of compliance

required as a condition of receipt of federal financial assistance

from the Veterans Administration).

7a

ance,” 20 U.S.C. § 1681(a) (1976), it is not a “recipent”

of such assistance within the meaning of Title IX and

therefore, contrary to the regulations, is not covered by

Title IX at all. Stated slightly differently, Hillsdale con-

tends that the receipt by its students of federal financial

assistance does not make it, the institution, a “recipient”

under Title IX. Second, Hillsdale argues that the federal

loans and grants cannot be terminated because of its fail-

ure to sign an Assurance of Compliance with Title IX

regulations since enforcement under Title IX is “program-

specific’ and it can be required to assure compliance only

as to programs actully receiving federal assistance. Im-

plicit in this argument is the proposition that it is, at the

most, subject to regulation under Title IX only as to its

administration of the student loan and grant programs.

While recognizing that under the Assurance the recipient

agrees only to comply with the regulations to the extent

applicable to it, Hillsdale points out that it is HEW’s

very theory that the entire institution is subject to such

regulation.’' Third, Hillsdale argues that termination of

federa] assistance, under the statute, cannot in any event

be done unless there has been a showing of actual sex

discrimination in the program receiving federal as-

sistance.

A. The ALJ Decision

The matter was referred to an Administrative Law

Judge (“ALJ”) upon a joint stipulation of facts and, on

August 23, 1978, the ALJ issued his Initial Decision deny-

ing HEW’s request for an order terminating federal fi-

nancial assistance to Hillsdale’s students.

The ALJ initially found that, under the definitions set

forth in the regulations, the payments by HEW to the

‘! Hillsdale also contends that if Title IX is construed to apply

to it to the extent urged by HEW, the statute would be unconsti-

tutional. In view of our disposition, we need not consider this

contention. Lynch Vv. Overholser, 369 U.S. 705 (1967).

8a

students under the NDSL, SEOG, and BEOG programs

constituted federal financial assistance received by

Hillsdale:

The financial assistance helps students pay for their

education at Hillsdale by defraying their costs of

tuition, books, room and board and other expenses in-

curred in attending Hillsdale. Since funds are pro-

vided which Hillsdale would otherwise have to sup-

ply from its own resources, the total funds available

to Hillsdale to carry on its education programs will

also allow students to attend Hillsdale who would

otherwise not have the financial means to do so, and

so enlarge the population on which Hillside can draw

for students.

This finding by the ALJ that Hillsdale was a recipient

of federa) financial assistance under the regulations and

Title IX was held to be “persuasively supported” by the

case of Bob Jones University v. Johnson, 306 F.Supp. 597

(D.S.C. 1974), aff'd without opinion, 529 F.2d 514 (4th

Cir. 1975. Bob Jones arose under Title VI of the Civil

Rights Act of 1964 and involved the payment of veter-

ans’ benefits to veterans attending Bob Jones University

in Greenville, South Carolina. The University, which had

a policy of denying admission to unmarried nonwhite stu-

dents for religious reasons, refused to sign an Assurance

of Compliance with Title VI. As a result, all VA assist-

ance to the University was terminated.

The district court in Bob Jones upheld the termina-

tion, finding the veterans’ benefits to be federal financial

assistance “received” by the University. 396 F.Supp. at

601-602. In addition, the court held that the veterans’

payments were “specifically tied to the beneficiary’s par-

ticipation in an educational program or activity,” equat-

ing the statutory phrase “program or activity” with the

entire institution. Jd. at 602. Relying on such language,

the ALJ found that, insofar as the federal grant and

loan monies “received” by Hillsdale were not earmarked

9a

for specific programs but were utilized for general educa-

tional purposes, the institution as a whole was being fi-

nancially supported through the payment made by the

students under the federal programs. Consequently, the

ALJ concluded, “it is the entire entity, Hillsdale College,

which must vouch that each education program of activity

operated by it will be operated in compliance with Title

i.”

Although the ALJ found Hillsdale, as an institution,

to be a recipient of federa] financial assistance by virtue

of the student aid programs, the College was not required

by the ALJ to sign the Assurance of Compliance. The

ALJ noted that the Assurance of Compliance imposed a

contractual duty on Hillsdale to comply with Title IX and

Title IX regulations. Because several courts, including

this court, had held that the regulations found at 34

C.F.R. $§ 106.51-106.61 (1981), relating to the prohibi-

tion of sex discrimination in employment, were invalid,

the ALJ held that under such circumstances, it would be

an abu-e of discretion and arbitrary and capricious to

grant the relief requested by HEW."*

12 See Seattle University v. HEW, 621 F.2d 992 (9th Cir. 1980),

vacated sub nom. United States Dept. of Educ. v. Seattle Univ., 456

U.S. ——, 102 S.Ct. 2264 (1982); Dougherty Cty. School System v.

Harris, 622 F.2d 735 (5th Cir. 1980), vacated sub. nom. Bell v.

Dougherty Cty. School System, 456 U.S. ——, 102 S.Ct. 2264

(1982); Romeo Community Schools v. HEW, 600 F.2d 581 (6th

Cir.), cert. denied, 444 U.S. 972 (1979); Junior College Dist. v.

Califano, 597 F.2d 119 (8th Cir.), cert. denied, 444 U.S. 972

(1979) ; Isleboro School Comm. V. Califano, 593 F.2d 424 (1st Cir.),

cert. denied, 444 U.S. 972 (1979). These decisions have been over-

turned by the Supreme Court in North Haven Bd. of Educ. v. Bell,

456 U.S. ——, 102 S.Ct. 1912, 72 L.Ed.2d 299 (1982). See notes

15-16 infra and accompanying text.

18 In addition, the ALJ held that the GSL Program, insofar as

it involves the guarantee of loans made by private financial institu-

tions, falls within the Section 902 exemption for contracts of in-

surance or guaranty.

10a

B. The Reviewing Authority Decision

HEW and Hillsdale both filed exceptions to the ALJ’s

Initial Decision with the HEW Reviewing Authority, Civil

Rights. On October 25, 1979 the Reviewing Authority

denied Hillsdale’s exceptions and granted HEW’s excep-

tions in part, upholding the ruling of the ALJ that the

Title IX regulations deeming Hillsdale to be a recipient

of federa] financial assistance are not in excess of the

statutory authority granted HEW by Congress. The Re-

viewing Authority, however, rejected the ALJ’s holding

that Hillsdale cannot be required to sign the Assurance

of Compliance in light of the fact that several courts had

found part of the Title IX regulations to be invalid. By

executing the Assurance of Compliance, the Reviewing

Authority held, Hillsdale would bind itself to comply only

with lawful regulations."*

C. North Haven Bd. of Educ. v. Bell

The Supreme Court, subsequent to the decisions of the

ALJ and the Reviewing Authority, held in North Haven

Bd. of Educ. v. Bell, 456 U.S. ——, 102 S.Ct. 1912, 72

L.Ed.2d 299, 305 n.4 (1982), that the employment prac-

tices of educational institutions are subject to Title IX

regulation provided the other statutory requirements are

met."* North Haven thus removes the underlying basis

* The Reviewing Authority also reversed the ALJ's determina-

tion that the GSL Program does not constitute federal financial

assistance. The Program, insofar as the interest payments there-

under are direct and immediate disbursements of federal funds

aiding the college in the same manned as the funds disbursed

under the NDSL Program, was held to go beyond the terms of the

contract of insurance or guaranty exemption found in section 902.

%* The Court concluded, after an examination of the legislative

and post-enactment history of Title IX, that Section 901(a)’s

directive that “[n)o person ... shall, on the basis of sex, be ex-

cluded from participation in, be denied the benefits of, or be sub-

jected to discrimination under any education program or activity

receiving federal financial assistance,” while not expressly referring

lla

for the ALJ’s determination that Hillsdale cannot be re-

quired to execute the Assurance of Compliance, which was

that signing the Assurance would compel the College to

abide by the unlawful employment regulations.

In the course of upholding the validity of the em-

ployment regulations, however, the Court stressed the

“program-specific’ nature of Title IX, holding that “an

agency's authority under Title IX both to promulgate reg-

ulations and to terminate funds is subject to the program-

specific limitation of $$ 901 and 902.” Jd. at ——, 72

L.Ed.2d at 317-318.’ The Court, nevertheless, expressly

declined to define the term “program.” Jd. at ——, 72

L.Ed.2d at 319.

II. Issues on Appeal

As previously stated, Hillsdale College is presently be-

fore this court seeking review of the Order of the HEW

Reviewing Authority requiring it to execute the Assurance

of Compliance in order to remain eligible for federal fi-

nancial] assistance to its students. Under the facts pre-

sented, two major issues are before this court: (1)

whether the regulations, by deeming Hillsdale College to

be a “recipient” of federal financial assistance subject to

Title IX by virtue of the receipt of its students of federal

grants and loans, exceed the statutory authority granted

HEW by Congress, and (2) whether HEW in any event

can insist on the excution of the Assurance of Compliance

to employees, does encompass employees as well as students of edu-

cational institutions. 72 ..Ed.2d at 307-318.

1® The Court held that the employment regulations were not in-

consistent with Title IX’s program-specific character because, al-

though they spoke in general terms of the employment practices of

educational institutions, they were limited by 34 C.F.R. § 106.1

(1981), which states that the purpose of the regulations is “to

effectuate Title IX ... [,] which is designed to eliminate (with

certain exceptions) discrimination on the basis of sex in any educa-

tion program or activity receiving Federal financial assistance... .”

(emphasis added). North Haven, 72 L.Ed.2d at 318-319.

12a

as a condition precedent for the continuation of federal

student assistance programs at Hillsdale College.’’ We

determine that Hillsdale is a “recipient” within the mean-

ing of Title IX but that the regulations are invalid to the

extent that they purport to subject Hillsdale College as an

institution to the strictures of Title IX. Specifically, we

conclude that the regulations, as applied in this instance,

contravene the program-specific nature of Title IX by

equating the statutory phrase “education program and ac-

tivity” with the educational institution itself. We reach

this conclusion after examining the statutory language of

Title IX, its legislative history, and the relevant case law.

III. Statutory Language of Title IX

The two core provisions of Title IX, Section 901 and

902, both contain express references to the program-

specific focus on the statute. As noted by the Supreme

Court in North Haven, Section 901 sets forth the stat-

ute’s program-specific prohibition of gender discrimina-

tion, while Section 902 relates to enforcement, providing

for termination of federal funds or denial of future

grants as the ultimate sanction for noncompliance so

long as the termination or refusal “is limited in its effect

to the particular program, or part thereof, in which non-

compliance has been so found... .” 20 U.S.C. $ 1682

(1976). See North Haven, 72 L.Ed.2d at 304. The Court

in North Haven relied on the existence of program-specific

language in both the funding termination provision of

Section 902 and the portion of Section 902 authorizing

the issuance of implementing regulations * to reject the

implicit view of the lower court that HEW’s authority

to issue regulations is broader than its enforcement au-

17 A third issue before this court is whether or not the GSL

Program falls within the exemption found in Section 902 for con-

tracts of insurance or guaranty. The holding of this case, however,

makes it unnecessary to reach this issue.

18 See note 8 supra.

18a

thority, noting that “it makes little sense to interpret the

statute ... to authorize an agency to promulgate rules

it cannot enforce.” Jd. at ——, 72 L.Ed.2d at 318.

Although stressing the requirement that Title IX reg-

ulations conform to the program-specific nature of the

statute, the Supreme Court in North Haven, as pre-

viously stated, expressly declined to define the term “pro-

gram.” It is the position of HEW that, when an educa-

tional institution “receives” federal financial assistance by

virtue of the receipt by its students of federal grants and

loans, the entire educational institution constitutes a

single “education program or activity.” 20 U.S.C. § 1681

(a) (1976). Specifically, HEW asserts that since “sig-

nificant” portions of the loan and grant monies provided

to the students at Hillsdale are used to pay tuition, which

generally supports the College as a whole, the College it-

self is the relevant “education program and activity”

receiving federal financial assistance and thus the entire

College may be regulated under Title IX consistently with

the statute’s program-specific mandate.

An examination of the statutory language of Title IX

does not bear out HEW’s proposed expansive reading of

the phrase “education program or activity.” Initially, it

should be pointed out that neither the term “educational

institution” nor any equivalent term appears in Title

IX’s general prohibition, implementation, or enforcement

provisions. Instead, in each instance, the phrase “educa-

tion program or activity” is used. The term “educational

institution” does however appear throughout the statutory

exceptions to the general prohibition against sex discrimi-

nation set out in Section 901,’ and is defined at Section

901(c) as follows:

'* The exceptions to the general prohibition against discrimina-

tion set forth at Section 901(a) (1-9), 20 U.S.C. § 1681(a) (1-9)

(1976), include, inter alia, educational institutions of religious

organizations with contrary religious tenets, educational institu-

tions training individuals for military services or the merchant

l4a

(ce) For purposes of this chapter an educational

institution means any public or private preschool,

elementary, or secondary school, or any institution

of vocational, professional, or higher education, ex-

cept that in the case of an educational institution

composed of more than one school, college, or depart-

ment which are administratively separate units, such

term means each such school, college, or department.

20 U.S.C. $1681(c) (1976). In Rice v. President and

Fellows of Harvard College, 663 F.2d 336 (1st Cir.

1981), cert. denied, 50 U.S.L.W. 3838 (U.S. April 20,

1982), the First Circuit held that “[t)he precision with

which Congress defined educational institution strongly

indicates that it did not equate education program with

educational institution.” 663 F.2d at 338. The appellant

in Rice, a female law student at Harvard Law School,

had brought suit under, inter alia, Title IX claiming sex

discrimination in the awarding of grades at Harvard

Law School. Because she had not specified any federally

funded program in which she suffered discrimination on

the basis of sex, the appellant argued that Harvard Law

School should be deemed the relevant “education pro-

gram” by virtue of its status as a recipient of federal

funds for its work study program. No allegation of dis-

crimination, however, was made concerning the School’s

handling of the work study program.

The court held that the appellant failed to bring her-

self within the protection of Title IX. Finding that Con-

gress had “obviously recognized that an educational in-

stitution offers a number of education programs and ac-

tivities,” the court concluded that “the only meaningful

marine, public educational institutions with traditional and con-

tinuing admissions policies, father-son or mother-daughter activi-

ties at educational institutions, scholarships awarded in “beauty”

pageants by institutions of higher education, and, with regard to

admissions, certain specified educational institutions and institu-

tions commencing planned changes in admissions policies.

l5a

interpretation of {20 U.S.C.] §1681(a) is that it pro-

hibits sex discrimination in a federally funded education

program offered by an educational institution.” 663 F.2d

at 338.

IV. Legislative History

The First Circuit’s conclusion in Rice that Congress.

in passing Title IX, did not equate “education program”

with “educational institution” is supported by an examin-

ation of the statute’s legislative history. The legislative

history of Title IX and Title VI, upon which Title IX

is based,*’ supports the position taken by Hillsdale that

Congress adopted a programmatic as opposed to an in-

stitutional approach to the problem of sex discrimination

in education.

Title IX originated in a floor amendment to S. 6F9,

92d CoNG., 1st SEss. (1971) (Education Amendments of

1971) sponsored by Senator Bayh. As originally intro-

duced, Senator Bayh’s amendment read as follows:

No person in the United States shall, on the ground

of sex, be excluded from participation in, be denied

the benefits of or be subject to discrimination under

any program or activity conducted by a public in-

stitution of higher education, or any school or de-

partment of graduate education, which is a recipient

of Federal financial assistance for any education pro-

gram or activity. ...

117 Conc. Rec. 30156 (1971). This amendment em-

bodied an institutional aproach as it would regulate all

operations of an educational institution which received

federal assistance for any of its programs or activities.

The amendment, however, was ruled to be nongermane to

the bill under consideration and defeated. 117 Conc. REc.

30415 (1971).

* See note 9 supra and accompanying text.

l6a

In February 1972, the provision ultimately enacted as

Title IX was introduced in the Senate by Senator Bayh

during debate on the Education Amendments of 1972.

118 Conc. REc. 5803 (1972). The institutional approach

of the original proposal was replaced by the program-

specific language presently contained in Sections 901 and

902. No explanation or discussion was given for the

change of approach.*' The Senate adopted the amendment

and, on June 8, 1972, Congress passed the provisions as

Title IX of the Education Amendments of 1972. The

measure was signed into law by the President on June

23, 1972.

The legislative history of Title IX is sparse. Because

the statute is a result of a floor amendment, there are

no committee reports discussing its provisions.*? The Su-

*1In Haffer v. Temple University, 524 F.Supp. 531 (E.D.Pa.

1981), appeal docketed, No. 82-1049 (3rd Cir. Nov. 13, 1981), the

court cited the lack of explanation or discussion of the wording

change between amendments in support of its view that the “history

of the bill through enactment . . . is ambiguous.” /d. at 534.

*2 The Supreme Court in North Haven noted that, because of the

lack of committee reports discussing the provisions of Title IX, the

remarks of Senator Bayh, as sponsor of the language ultimately

enacted, are the “only authoritative indications of congressional

intent regarding the scope of §§901 and 902." North Haven, 72

L.Ed.2d at 311. Unfortunately, Senator Bayh did not specifically

address the issue at hand during the course of the Congressional

proceedings. The issue was presented to Senator Bayh, however,

during the hearings held to determine if the proposed regulations

“as they are written are consistent with the law, or whether they

should be returned to [HEW] for redrafting until they are con-

sistent with the law from which they must draw their authority.”

Hearings on Title IX Before the Subcommittee on Postsecondary

Education of the House Committee on Education and Labor, 94th

CONG., lst Sess. 97 (1975) (remarks of Rep. O’Hara). Senator

Bayh’s remarks at the hearing are in pertinent part as follows:

REP. QUIE: I am talking about whether the Department of

Health, Education, and Welfare has overstepped its bounds in

claiming that an institution is conducting a program or activity

17a

preme Court in North Haven, however, found the shift

in approach from the 1971 amendment to the 1972

amendment to be significant:

Title IX’s legislative history corroborates its gen-

eral program-specificity. Congress failed to adopt

proposals that would have prohibited a// discrimina-

tory practices of an institution that receives federal

funds. See 117 Cong. Rec. 30155-30157, 30408

(1971) (Sen. Bayh’s 1971 amendment) ....

North Haven, 72 L.Ed.2d at 318 ‘emphasis in the

original).

It thus appears clear that Title IX as enacted adopts

the programmatic as opposed to institutional approach to

discrimination on the basis of sex in education. This con-

clusion, however, is not dispositive of the issue of whether

the regulations are inconsistent with the program-specific

nature of Title IX to the extent they deem Hillsdale Col-

lege to be a recipient of federal financial assistance by

virtue of the federal aid provided its students. Although

conceding that the effect of its assertion that Hillsdale

College itself is the relevant “education program or ac-

tivity” is to subject the entire College to regulation, HEW

contends that such a position is not institutional, since

it does not attempt to regulate programs not receiving

federal funds, as the original version of Title IX at-

tempted, but instead is programmatic, with the entire

financed by the Federal Government if a student-is_receiving

Federal aid to attend that program or those programs.

SEN. BAYH: You know, I just don’t know. I would have to

look that up if you like; perhaps you know. That is not gen-

erally the kind of penalties that are meted out, as I am sure

you realize.

REP. QUIE: But I have heard it claimed that that is one of

the reasons why they have jurisdiction.

SEN. BAYH: I have not.

Id. at 181.

18a

College constituting the relevant “education program.”

Hence it is necessary to determine whether Congress in-

tended entire educational institutions to be regulated un-

der the phrase “education program or activity.”

As previously noted, there is no explicit language in

Title IX which supports HEW’s position that an entire

institution can constitute an “education program or ac-

tivity.” See Rice v. President and Fellows of Harvard

College, supra. As noted by one commentator, the term

“program” was used in the Congressional debates pre-

ceding passage of Title IX “to refer not to the total pro-

gram of an educational institution but to smaller-scale

activities within the institution.” ** In Board of Public

Instruction V. Finch, 414 F.2d 1068 (5th Cir. 1969), the

Fifth Circuit similarly relied on the legislative history

of Title VI to reject HEW’s assertion that the term “pro-

gram” in Section 601 of Title VI, 42 U.S.C. § 2000d

(1976), referred to general categories such as “school

programs.” The Court in Finch instead equated “pro-

gram” with “federal grant statute,” relying on the man-

ner in which the term “program” was used during the

debates on Title VI.**

23 Comment, HEW's Regulation Under Title 1X of the Education

Amendments of 1972: Ultra Vires Challenges, 1976 B.Y.U.L.Rev.

133, 181 (citing 117 Cong.Rec. 39256 (1971) (Representative

Steiger); id. (Representative Waggonner); id. at 30406 (Senator

Dominick) ).

24 Comment, note 22 supra, at 181-182. The court cited the re-

peated references to particular federal programs in support of its

conclusion:

An even more substantial objection to HEW’s interpretation

of the term “program” is provided by the use of that term

during Congressional debates on the statute and by HEW’s

own use of the term in the administrative regulations issued

thereunder. In the Senate where the program limitation was

initiated, reference was frequently made to the school lunch

program, 110 Cong.Rec. 7101 (1964), to the agricultural exten-

sion program for home economics teachers, 110 Cong.Rec. 13126

19a

In short, we find that the legislative histories of Title

VI and Title IX reveal no indication that Congress con-

templated that an entire educational institution could

constitute a single “program or activity.” We further

find that the position asserted by HEW is inconsistent

with the program-specific nature of Title IX insofar as

its practical effect would be to circumvent the program-

matic focus of the statute and adopt the institutional

approach.

V. Case Law

The inconsistency between equating “educational in-

stitution” with “education program or activity” and the

program-specific nature of Title IX was discussed in

Bennett v. West Texas State University, 525 F.Supp. 77

(1964), to the farm-to-market road program, 110 Cong.Rec.

13331 (1964), to aid for vocational agriculture teaching, 110

Cong.Rec. 13126 (1964), and to aid to impacted school dis-

tricts, 110 Cong.Rec. 7100 and 13126 (1964). Senator Eastland

went so far as to introduce in the Congressional Record a long

list of the federal programs to which the cutoff provision was

applicable, 110 Cong.Rec. 8359-8361 (1964), as did Congress-

men Poff and Cramer in the House. 1964 U.S. Code Cong. &

Adm. News, pp. 2470-2473. HEW in issuing regulations to

implement the cutoff provision has followed a similar pro-

cedure. See 45 C.F.R. § 80.2 and 45 C.F.R. § 80.13, Appendix

A. All of these lists refer to particular grant statutes such as

those before us, not to a collective concept known as a school

program or a road program. Taken together they clearly con-

tradict the notion that Congress intended the collectivization

of all school subventions under the single rubric: “program or

part thereof.”

414 F.2d at 1077 (emphasis added). In Romeo Community Schools

v. United States Dept. of Health, Education, and Welfare, 438

F.Supp. 1021 (E.D.Mich. 1977), aff'd, 600 F.2d 581 (6th Cir.),

cert. denied, 444 U.S. 972 (1979), the district court relied on Finch

to reject HEW’s contention that the term “program or activity”

as used in Section 901 refers to the entire operation of the educa-

tional institution. 438 F.Supp. at 1033-1034 n. 18. The court

characterized the position of HEW as a “novel and protean inter-

pretation of a well-established statutory term... .” /d.

20a

(N.D. Tex. 1981), appeal docketed, No. 81-1398 (5th

Cir. Aug. 28, 1981). Bennett involved allegations by fe-

male students of West Texas State University that var-

ious policies and practices of the University discriminated

against women on the basis of sex by denying women

equal opportunities in the University’s intercollegiate

athletic program in violation of Title IX. The University

contended, and the district court held, that the regula-

tions exceeded the statutory authority granted under Title

IX to the extent they purported to apply to the Univer-

sity’s intercollegiate athletic program irrespective of the

absence of direct federal financial assistance to that spe-

cific program. 525 F.Supp. at 78-80.% In addition, the

district court held in Bennett that the University’s ath-

letic program did not receive direct federal financial as-

sistance by virtue of the fact that University students

received veterans’ benefits, BEOG grants, work study

money, and other federal financial aid. The plaintiffs’ ar-

gument, identical to the argument raised by HEW in

the instant case, was that the University’s athletic pro-

gram received federal financial assistance because the

University received tuition from students that was sup-

plied as grants or loans under the federal programs. The

court’s rationale for rejecting this argument is equally

applicable to the case at hand:

Plaintiffs’ argument that such aid constitutes a

direct benefit to the athletics programs is not well-

taken. Al] types of federal aid enumerated by the

25 See also Othen Vv. Ann Arbor School Bd., 507 F.Supp. 1376

(E.D. Mich. 1981), appeal docketed, No. 81-1259 (6th Cir. April 22,

1981) (Title IX applies only to the specific class of educational

program or activities which receive direct federal financial assist-

ance); cf. Haffer v. Temple University, 524 F.Supp. 531 (E.D.Pa.

1981), appeal docketed, No. 82-1049 (3rd Cir. Nov. 13, 1981)

(university’s intercollegiate athletic program, although not receiv-

ing federal funds directly, is subject to Title IX because the federal

funds received elsewhere in the institution indirectly assist the

athletic program).

2la

Plaintiffs are general and nonspecific, and such aid is

indirect by nature. The type of assistance relied on

by Plaintiffs results in some benefit, however remote

and indirect, to every program at West Texas State

University. Were the Court to adopt Plaintiffs’ argu-

ment, the programmatic construction of Title IX

would be rendered nugatory, because every program

or activity at the university would be subject to Title

1X. The Act itself compels a different conclusion.

Id. at 80-81 (emphasis added) .*° Under the position taken

by the plaintiffs in Bennett and HEW in the instant case,

every program or activity of an educational institution

that accepts students who receive federal financial as-

sistance would be subjected to regulation under Title IX.

If discrimination is found in a particular program or

activity of the institution, such as the athletic program

or the math department, the remedy, as sought in this

instance by HEW, would be to terminate all student fed-

eral financial assistance. For the reasons stated herein,

we find HEW’s position to be inconsistent with the

prograni-specific language of Sections 901 and 902 of Title

IX. We further find that, to the extent the regulations

adopt and effectuate HEW’s position, they are in excess of

statutory authority.

HEW and the Reviewing Authority rely primarily on

the case of Bob Jones University v. Johnson, 390 F.Supp.

597 (D.S.C. 1974), aff'd without opinion, 529 F.2d 514

(4th Cir. 1975) in support of their position.” The court

“6 The district court in Haffer, supra, reached the opposite con-

clusion, holding as an alternative basis for its decision that the

University’s athletic program received direct federal financial as-

sistance by virtue of (1) work study funds provided to students and

employees working in the athletic program, (2) BEOG, SEOG,

NDSL, GSL, and work study funds received by University inter-

collegiate athletes, and (3) federal funds provided to finance build-

ings used by the athletic program. 524 F.Supp. at 540.

27 HEW Secretary Weinberger indicated during the hearings on

the proposed regulations that the agency was “bound” by Bob Jones

22a

in Bob Jones, as previously noted, equated the statutory

phrase “program or activity” found in Title VI with the

entire University in holding that the veterans’ benefits re-

ceived by students at the University were “specifically tied

to the beneficiary’s participation in an educational pro-

gram or activity.” 396 F.Supp. at 602. As a result, the

order of the Veterans Administration terminating the

right of eligible veterans seeking education at Bob Jones

University to receive veterans’ benefits was affirmed.

We decline to follow the language in Bob Jones that an

entire institution may be deemed the relevant “program

or activity” to the extent that the language would pur-

port to cover the circumstances of the case at hand. Two

peculiar features of Bob Jones make it distinguishable

from the instant case.

One factual disténction of Bob Jones is that it involved

an admittedly discriminatory admission policy which

served to deny entrance to the University to unmarried

nonwhites. In Othen v. Ann Arbor School Bd., 507

F.Supp. 13876 (E.D. Mich. 1981), appeal docketed, No.

81-1259 (6th Cir. April 22, 1981), the district court found

that the court in Bob Jones did not have to decide which

University programs or activities were racially dis-

criminatory because the University’s admissions policy

“tainted” all programs:

Racial discrimination respecting acceptance or ad-

mission into educational institutions permeates all

programs and activities within those institutions.

Once racially discriminatory admission policies have

been found to exist, the taint of racial discrimination

affects all programs and activities within the par-

ticular institution. Therefore, the courts which have

decided suits brought under Title VI did not have to

and its interpertation that student assistance constitutes federal

financial assistance to the programs of an institution. Hearings on

Title 1X, note 22 supra, at 481-482.

23a

carefully focus upon the institutional /programmatic

conflict which is now squarely before this court.

507 F.Supp. at 1387.°* In contrast, HEW argues here

that the programs and activities of Hillsdale College may

be subjected to Title IX because student federal financial

assistance is to pay tuition, which in turn flows to all op-

erations of the College. There is no allegation that the

admissions policy at Hillsdale discriminates on the basis

of sex; in fact, there is no allegation that Hillsdale has

discriminated on the basis of.sex in any manner.

A second feature of Bob Jones which distinguishes it

from the present case concerns the constitutional di-

mension of the decision. The court, after noting that

“lelach time the VA approves an application for bene-

fits to be used at Bob Jones, it extends a benefit to whites

which it cannot grant to some blacks,” held that “the fed-

eral government cannot, consistent with the Due Process

Clause of the Fifth Amendment, provide direct grants-

in-aid to public or private entities which discriminate on

the basis of race... .’’ 396 F.Supp. at 608 (emphasis in

original). Hence the decision in Bob Jones may fairly be

read to have a constitutional underpinning above and be-

yond its statutory basis. See Othen, supra, at 13889. The

position of HEW in the present case, in contrast, must

rest on the statutory language of Title IX.

In Grove City College v. Bell, F.2d —— (No. 80-

2383, 3rd Cir., August 12, 1982), which raised the same

issue as that presented here, the majority of the panel

held that under Title IX the entire college is a “program”

and that, by virtue of the receipt by students of federal

loans and grants which benefits the college, the college

may properly be required to execute an Assurance of

Compliance. This opinion relies in substantial measure on

28Cf. Haffer, supra, at 539 (disagrees with Othen that Title VI

discriminatory admissions cases did not have the institutional/

programmatic dichotomy squarely at issue).

24a

post-enactment legislative history. We disagree with the

holding in Grove City for the reasons heretofore indicated.

On the contrary, we are of the view that the “program,”

within the meaning of Title IX, is the federal] loan and

grant program for students. The reasoning of the ma-

jority in Grove City would equally apply if the federal

government subsidized the athletic program at a college

allowing the college to use gate receipts to, for example,

supplement faculty salaries and to create scholarships.

We do not believe that Congress intended, in enacting

Title IX, to authorize HEW pervasively to regulate entire

colleges and universities because federa] money benefits

the entire institution.” Under the majority opinion in

Grove City, the “program-specific” limitation set out by

the Supreme Court in North Haven loses all of its practical

meaning.

The concurring judge (Judge Becker) in Grove City

thought that the majority opinion was too broadly based,

contending that the only issue vresented was whether the

college could be required to execute the Assurance of Com-

pliance. Judge Becker then asserts that the Assurance is

itself program-specific, as is required by North Haven,

because it applies, by its terms, only to an education pro-

gram or activity for which the applicant receives or

benefits from federa] financial assistance. (Slip op. at

45). Thus Judge Becker concludes that the regulation

7 The regulations specify, in part, the high schools where Hills-

dale may recruit students for admission (34 C.F.R. § 106.23), the

literature that Hillsdale may provide to the students about the

college (34 C.F.R. § 106.9), the tests which Hillsdale may require

the students to take as a condition of admission (34 C.F.R. § 106.21

(2)), how Hillsdale may use its own funds to aid the students (34

C.F.R. § 106.37), the students’ access to course offerings (34 C.F.R.

§ 106.34), the manner in which the student is housed, whether on

or off campus (34 C.F.R. § 106.82), the health services provided to

students (34 C.F.R. § 106.39), the students’ extracurricular activi-

ties (34 C.F.R. § 106.31(a)) and student athletic participation (34

C.F.R. § 106.41).

25a

requiring the Assurance is valid because the Assurance

is limited to programs receiving benefits from the fed-

eral government. The difficulty with Judge Becker’s view

is that it is HEW’s very position that the entire college is

a program and that by executing the Assurance, the col-

lege agrees to comply with regulations as they apply to

the entire institution. Simply stated, it appears to us that

it would be anomalous to hold that the college may be

required to execute the Assurance because it is so limited

by its terms when HEW construes the Assurance and its

regulations to apply to the college as an institution, a

position that is, in our view, not supportable under Title

IX.

VI. CONCLUSION

We agree with Hillsdale in part and HEW in part.

1. We agree with HEW that funds may be cut off

without a finding that a college is actually discriminating

on the basis of sex. Section 902 authorizes HEW to issue

regulations to effectuate section 901 and further provides

that compliance with the regulations may be enforced by

cutting off of federal funds. The statute does not provide

that funds may be cut off only upon a finding of actual

discrimination.

2. We further agree with HEW that Hillsdale isa “re-

cipient” within the meaning of section 901 and that, pro-

vided that the “program-specific” limitation in Title IX is

met, it is subject to regulation. ~

8. We agree with Hillsdale’s alternative contention

that the entire college, as an institution, is not a “pro-

gram” within the meaning of Title IX and that the “pro-

gram” involved here is the student loan and grant pro-

gram. Thus we agree that only the student loan and grant

program is subject to Title IX regulation.

4. We agree with Hillsdale that the regulation re-

quiring it to execute the Assurance of Compliance as a

26a

condition for its students receiving loans and grants is,

as it is applied here, an invalid regulation. This is true

because the regulation and the Assurance, as interpreted

and applied by HEW, cover the entire college and are

not limited to the student loan and grant program.

For reasons stated herein it is ORDERED that the

reviewing authority’s order be and the same is hereby

Reversed.

27a

Epwarps, Chief Circuit Judge. Respectfuly, I dissent.

This case involves interpretation of one of two principal

pieces of legislation' which Congress has yet adopted in

order to grant equal riglis to women. I would not give

it the very narrow interpretation which is to be found in

the majority opinion.

There is, of course, no doubt that reluctance (or worse)

in interpretation of both constitution and law has greeted

efforts to achieve equa! rights for women throughout the

history of this nation. Yet in this statute, Congress clearly

intended to turn its back on that discreditable past.

And in two important cases, the Supreme Court (by

breadth of interpretation of Title IX) and the Third Cir-

cuit (in a decision directly on point) have done likewise.

North Haven Bd. of Educ. v. Bell, 456 U.S. 102 S.Ct.

1912, 72 L.Ed. 299 (1982); Grove City College v. Bell,

687 F.2d 689 (3rd Cir, 1982). I regret that my colleagues

elect not to follow these cases.

Equality of all “citizens” or “persons” before the law

is one of the main themes of the Constitution of the

United States. It has, however, taken a long time in the

history of this country for women to be recognized as

either “persons” or “citizens” in a constitutional and legal

sense, And indeed that recognition is still not as com-

plete in Supreme Court case law as it is in the case of

black males.

Prior to the adoption of the Constitution, Abigail

Adams in 1777 wrote to her husband John:

In the new code of laws which I suppose it will be

necessary for you to make, I desire you would re-

member the ladies and be more generous and favor-

able to them than your ancestors. Do not put such

1 Directly involved is Title IX, 20 U.S.C. § 1681-86 (1978). The

other Act is Title VII, Equal Employment Opportunity Act, 42

U.S.C. §§ 2000(e) et seq. (1981). See also the Equal Pay Act of

1963, 29 U.S.C. § 206(d) (1978).

28a

unlimited power into the hands of the husbands.

Remember, all men would be tyrants if they could.

If particular care and attention is not paid to the

ladies, we are determined to foment a rebellion, and

will not hold ourselves bound by any laws in which

we have no voice or representation.

E. Flexner, Century of Struggle 15 (1974) quoting

Adams, Familiar Letters, 149050. In the original Con-

stitution, adopted at Philadelphia and ratified in 1787,

Article IV, § 2, Clause 1 reads “the citizens of each state

shall be entitled to all the privileges and immunities of

citizens in the several states.” Despite Abigail’s en-

treaties, however, the “ladies” went unremembered. Just

as blacks of that day whether freed or slave were not

considered citizens for purpose of that grant of equality,

so too, by common understanding, were women excluded,

albeit, not by any specific constitutional language. When

_ four years later the new country enacted Amendment V

of the Bill of Rights, it decreed as to all persons in the

nation “no person shal] be deprived of life, liberty or

property without the due process of law.” While the

rights of women to due process of law in matters involv-

ing charges of crime or cases involving disputes over

property were gradually established (largely as a result

of the common laws’ impact on the laws of the various

states) they were still not considered “persons” or “‘citi-

zens” in a full constitutional sense.

Women were called “persons” and “citizens” by the

Court, but they were still not afforded full constitutional

rights, particularly political rights, belonging to male

persons or male citizens. For example the Dred Scott

decision described the woman as “citizen” and referred

to her as a person but treated her as a political eunuch.

In the words of that Court, “Undoubtedly, a person may

be a citizen, that is a member of the community who

form the sovereignty although he exercises no share of the

political power, and is incapacitated from holding par-

29a

ticular offices. Women and minors, who form a part of

the political family cannot vote... yet they are citizens.”

Dred Scott v. Sandford, 60 U.S. (19 How.) 393, 422

(1856).

In 1868, after the dreadful conflict of the Civil War

and after the abolition of slavery, the fourteenth amend-

ment was adopted and ratified. It read:

All persons born or naturalized in the United States

and subject to the jurisdiction thereof are citizens of

the United States and of the state wherein they re-

side. No state shall make or enforce any law which

shall abridge the privileges and immunities of any

citizen of the United States nor shall any state de

prive any person of life, liberty or property without

due process of law, nor deny to any person within

its jurisdiction, the egual protection of the laws.”

U.S. Constitution, Amendment XIV, §1 (Emphasis

added).

On the face of this amendment, it would seem logical

that women born or naturalized in the United States,

were by virtue of the fourteenth amendment, citizens of

the United States and of the states wherein they reside

and consequently, that they could not be denied the equal

protection of the laws.

Perhaps the most fundamental of the laws, however,

were those which gave citizens the right to vote, yet the

Supreme Court in 1874 had no trouble saying that no por-

tion of the fourteenth amendment served to extend voting

rights to women since they had never before had them.

Minor Vv. Happersett, 88 U.S. (21 Wall.) 162 (1874). Of

course the fourteenth amendment could likewise have been

regarded as a grant of voting rights to the freed slaves.

But that proposition seems to have been so far from public

consciousness that in 1870 the fifteenth amendment was

drafted and ratified in order specifically to accomplish

that objective as to black males. The fifteenth amend-

30a

ment reads: “The right of citizens of the United States

to vote shall not be denied or abridged by the United

States or by any state on account of race, color or pre

vious condition of servitude.” Efforts to add “sex” as a

forbidden basis for exclusion from the right to vote were

brushed aside, and the fifteenth amendment made no

reference to any rights that women, black or white, might

have.

In fact women were denied the right to vote in both

local, state and national election until the great women’s

suffrage movement secured another constitutional amend-

ment.? It was adopted and ratified in 1920. The nine-

teenth amendment reads: “The right of citizens of the

United States to vote shall not be denied or abridged by

the United States or by any State on account of sex.”

The Constitutional Convention and the Congresses in-

volved in these enactments were, of course, markedly

male. So, too, was the Supreme Court until] 1981 when

Justice Sandra Day O’Connor was sworn in. As stated

earlier although Supreme Court theory recognized women

as “persons” and “citizens” its early decisions did not

give that recognition much effect.

In Bradwell v. Illinois, 83 U.S. (16 Wall.) 130 (1873),

the Supreme Court held that Illinois could deny Bradwell

the right to practice law solely because she was a woman.

In Minor v. Happersett, 88 U.S. (21 Wall.) 162 (1874),

the Supreme Court held that the states could deny women

the right to vote. In Goessart v. Cleary, 335 U.S. 464,

the Supreme Court held Michigan could prohibit employ-

ment of women as bartenders. In Hoyt v. Florida, 368

U.S. 57 (1961), the Supreme Court held that Florida

could exclude women from jury service unless (unlike

men}, they voluntarily registered their availability.

In recent years a trend in the direction of equal rights

for women has been recorded. Congress in 1964 adopted

2 E. FLEXNER, CENTURY OF STRUGGLE (1974).

3la

Title VII designed to give women equal employment op-

portunities. In 1972 it adopted the statute currently be-

fore us designed to give women equal educational oppor-

tunities.

In recent years also the Supreme Court’s attitude

toward women’s rights to equality before the law has al-

tered. In Reed v. Reed, 404 U.S. 71 (1971), the Supreme

Court held that state laws could not prefer males over

equally qualified females for the position of administrator

of a decedent’s estate. In Frontiero v. Richardson, 411

U.S. 677 (1973), the Court * held that a female member

of the military could not be denied the fringe benefits of

housing alowance and medical benefits for her spouse

given to male soldiers. In Cleveland Bd of Educ. V.

LaFleur, 414 U.S. 632 (1974), the Court * held that preg-

nant public school teachers could not be forced out of

work at a fixed stage of pregnancy well in advance of

terns, nor be forced to wait to return to the jobs until a

fixed period had elapsed. In Taylor v. Louisiana, 419 US.

552 (1975), the Court held that laws which exclude

women from jury service were invalid. In Orr v. Orr, 440

U.S. 268 (1979), the Court held that a statutory scheme

providing husbands but not wives may be required to pay

alimony was unconstitutionally discriminatory. These ex-

amples of recent cases seem to make it clear that govern-

mental authority may no longer be used to accord women

the inferior status they held under common law and past

constitutional interpretation.*

2In the Frontiero decision the four-vote plurality opinion de-

clared that gender based classifig@sions were “inherently suspect”

and therefore subject to “strict judicial scrutiny.” 411 U.S. at 682.

This standard of review, however, has not yet received the fifth

vote.

4 Justice Stewart’s opinion for the Court granted relief not on

an equal protection basis but rather on due process grounds.

5In a series of articles Ruth Rader Ginsberg has succinctly de-

lineated the constitutional evolution of the equality principle as

82a

This thumbnail sketch of women’s battle for equality be-

fore the law of this country from Abigail Adams to

Sandra O’Connor is designed to point out that women’s

rights to equal treatment under the Constitution of the

United States are long overdue. When a heavily male

dominated Congress finally came around to adopting two

important pieces of legislation obviously designed to give

women equal rights in education and employment, one of

which is before this Court in this case, it ill-behooves the

courts to approach such overdue remedial legislation with

hostility.

Turning directly to this case, the key sentence of Title

IX of the Education Amendments of 1972, 20 U.S.C.

§ 1681-86 is: “No person in the United States shall, on

the basis of sex, be excluded from participation in, denied

the benefits of, or be subjected to discrimination under

any education program or activity receiving federal finan-

cial assistance... .”

It should be noted at the outset that no charge that

Hillsdale has actually discriminated against women is

involved in this case. Hillsdale has simply refused to state

that it will follow the law set forth above.

Since I agree with two of Judge Brown’s conclusions for

the reasons stated in his opinion, I can shorten this dis-

sent. My concurrence runs to the following declaration of

the majority:

1. We agree with HEW that funds may be cut off

without a finding that a college is actually discrimi-

nating on the basis of sex. Section 902 authorizes

HEW to issue regulations to effectuate section 901

applied to women while commenting upon gender protectionism.

Sez Equality Under the Fourteenth Amendment and the Equal

Rights Amendment, 1979 Wash. U.L.Q. 161 (1979); Sex Equality

and the Constitution, 52 Tul. L. Rev. 451 (1978); Benign Classifi-

cation in the Contert of Sex Discrimination, 10 Conn. L. Rev. 813

(1978) ; Gender and the Constitution, 44 Cin. L. Rev. 1 (1975).

33a

and further provides that compliance with the reg-

ulations may be enforced by cutting off federal funds.

The statute does not provide that funds may be cut

off only upon a finding of actual discrimination.

2. We further agree with HEW that Hillsdale is

a “recipient” within the meaning of section 901 and

that .. it is subject to regulation.

As to the following conclusions of Judge Brown, I am

in disagreement:

3. We agree with Hillsdale’s alternative conten-

tion that the entire college, as an institution, is not a

“nrogram” within the meaning of Title IX and that

the “program” involved here is the student loan and

grant program. Thus, we agree that only the stu-

dent loan and grant program is subject to Title IX

regulation.

4. We agree with Hillsdale that the regulation re-

quiring it to execute the Assurance of Compliance as

a condition for its students receiving loans and

grants is, as it is applied here, an invalid regulation.

This is true because the regulation and the Assur-

ance, as interpreted and applied by HEW, cover the

entire college and are not limited to the student loan

and grant program.

Educational! Activities as a Title IX “Program”

Federa] funding which is involved in this appeal con-

sists of the receipt by Hillsdale of funds for the operation

of the college from student fees paid as a result of four

separate federal grant programs. These are the National

Direct Student Loan Program, hereinafter to be referred

to as NDSL, 20 U.S.C. § 1087aa et seq.; the basic Educa-

tional Opportunity Grant Program, hereinafter BEOG,

20 U.S.C. $1070; the Supplemental Educational] Oppor-

tunity Grant Program, hereinafter SEOG; 20 U.S.C.

1070(b) and the Guaranteed Student Loan Program, here-

1

4

84a

inafter GSL; 20 U.S.C. § 1071 et seg. Under two of these

programs, NDSL and SEOG, the Department provides

funds directly to Hillsdale College. The College then dis-

tributes the funds in the form of scholarships to qualified

students. Portions of or all of such scholarship funds are

then paid to the College by the students as tuition, room

and board, ete. Under the BEOG Program, HEW funds

are provided directly to eligible students and are sub-

sequently paid to Hillsdale for tuition, room and board,

etc. The GSL Program is distinct from the other three.

Under it, students apply for low-interest loans from pri-

vate lending institutions. The loans are guaranteed in

whole or in part by the United States Government which

pays interest on the loans throughout the student’s edu-

cation.*

All of the programs referred to above require that Hills-

dale certify that the student who is the ultimate recipient

is enrolled in college. Under two of the programs, NDSL

and SEOG, HEW pays the funds directly to Hillsdale

which then distributes the federal subsidies to qualified

students. Under BEOG, HEW funds are provided directly

to eligible students who in turn use them to defray their

college expenses. HEW advises that in the year ending

June 30, 1978 approximately one-fourth of the Hillsdale

student body received aid under these various programs.

It seems clear to me that each of these programs pro-

vides funds which when paid to the college are used for

the general support of the educational program of the

college as a whole.

Section 168l(a) of Title IX provides as follows: “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 educational

*Since § 1685 of the statute exempts from remedy programs

affected by “contract of insurance” or “guaranty,” this opinion does

not rely upon the GSL funding in affirming the Secretary.

35a

program or activity receiving Federal financial assistance

. .’ Under the circumstances outlined above, it seems

obvious to me that Congress intended for its prohibition on

sex discrimination to apply to a college like Hillsdale when

it was “receiving Federal financial assistance” in the

fashion Hillsdale is receiving such.

In the recent decision by the Supreme Court in North

Haven Bd. of Educ. v. Bell, supra, the Supreme Court of

the United States held that discrimination against female

employees of a school receiving federal funds was barred.

The critical language of Justice Blackmun’s opinion for

a total of six justices of the Supreme Court bears quota-

tion at this point:

Our starting point in determining the scope of

Title IX is, of course, the statutory language. See

Greyhound Corp. v. Mt. Hodo Stages, 437 US 322,

330, 57 L.Ed 2d 239, 98 S.Ct. 2370 (1978). Section

901(a)’s broad directive that “‘no person” may be dis-

criminated against on the basis of gender appears on

its face to include employees as well as students.

Under that provision, employees, like other “persons,”

may not be “excluded from participation in,” “de-

nied the benefits of,” or “subjected to discrimination

under” education programs receiving federal finan-

cial support.

Employees who directly participate in federal pro-

grams or who directly benefit from federal grants,

loans, or contracts clearly fall within the first two

protective categories described in §901l(a). See

Isleboro School Comm. v. Califano, 593 F. 2d 424, 426

(CA1), cert. denied, 444 U.S. 972 (1979). In addi-

tion, a female employee who works in a federally

funded education program is “subjected to discrimi-

nation under” that program if she is paid a lower sal-

ary for like work, given less opportunity for promo-

tion, or forced to work under more adverse conditions

than are her male colleagues. See Dougherty Cty.

36a

School System v. Harris, 622 F. 2d 735, 737-738

(CA 5 1980), cert. pending sub nom. Bell v. Dough-

erty Cty. School System, No. 80-1023.

There is no doubt that “if we are to give [Title

IX] the scope that its origins dictate, we must ac-

cord it a sweep as broad as its language.” United

States v. Price, 383 U.S. 787, 801 (1966); see also

Griffin v. Breckenridge, 403 U.S. 88, 97 (1971);

Daniel v. Paul, 395 U.S. 298, 307-308 (1969); Jones

v. Alfred H. Mayer Co., 392 U.S. 409, 437 (1968) ;

Piedmont & Norther Ry. v. ICC, 286 U.S. 299, 311-

312 (1932). Because § 901(a) neither expressly nor

impliedly excludes employees from its reach, we

should interpret the provision as covering and pro-

tecting these “persons” unless other considerations

counsel to the contrary. After all, Congress easily

could have substituted “student” or “beneficiary” for

the word “person” if it had wished to restrict the

scope of § 901(a). (Emphasis added).

North Haven Bd. of Educ. v. Bell, 102 S.Ct. 1912, 1917-

18 (1982).

It seems obvious to me that the Supreme Court’s opin-

ion quoted above directly rejects Judge Brown’s conclu-

sion in this ease that the prohibition of sex discrimination

in the statute is 1) solely directed at the financial grant

programs and 2) cannot properly be applied to prohibit

sex discrimination in the entire educational institution.

Clearly the court’s application of the sex discrimination

tan to all employees of the school (including those not di-

rectly involved in the educationa] process) * was a much

* Before terminating this discussion of the impact of North

Haven upon our instant case, I would point out (as did the dissenter

in that case) that the majority opinion swept broadly enough to

include within those employees of the college as to whom discrimi-

nation on the basis of geuder was prohibited, not only teachers and

administrators who were immediate participants in the educational

process but also employes like secretaries and janitors who were

37a

wider interpretation of the statute than HEW has fol-

lowed in our instant case.

The majority opinion continued to find in the broad

language of the sponsors of Title IX support for includ-

ing employee discrimination within Title IX’s prohibition

of sex discrimination in educational activities. Without

repeating the Court’s legislative history or its postenact-

ment history, I incorporate Sections B and C of the ma-

jority opinion by reference and rely upon the majority’s

obvious inclination to give the statute its full intended

effect.

I now turn to the Third Circuit’s treatment of the

identical problem which we face in our instant case.

There, as here, the educational] institution concerned ob-

jected vigorously to any “generalized nonprogrammatic,

or institutional basis’ for Title IX application. Judge

Garth’s opinion, with which I am in complete agreement,

dealt with the “program-specific’” argument which my col-

leagues emphasize by adopting the -response filed by the

American Association of University Women: _

However the Supreme Court ultimately defines

“program”, it cannot conclude that the more general

the scope and purpose of the funding, the more re-

strictive the coverage of this remedial civil] rights

statute will be. That result would be logically incon-

sistent. Yet Grove City asks this court to decide that

an institution whose entire purpose is educational is

exempt from coverage when it is financed with fed-

eral funds that can be used for virtually any educa-

tional purpose instead of a clearly limited function.

The absurd result if this approach is followed to its

logical conclusion is that general] higher education aid

would never bring the college under Title IX cover-

age because no specific program within the College

neither direct participants in the educational process nor recipients

thereof. 102 S.Ct. at 1928 (Powell, J., dissenting).

38a

would be earmarked to benefit from the federal

funding.

Grove City College v. Bell, 687 F.2d 684, 698 (3d Cir.

1982).

* In addition Judge Garth quoted another commentator to

support his result:

[I]f two programs, one receiving federal aid di-

rectly and one not, are both administered by the same

local agency for the education of essentially the same

group of students, and if the funding of the former

facilitates the latter by freeing funds for its use, or

if discrimination in the latter affects the former by

inhibiting or prohibiting a student’s participation in

that program, then both will be considered part of the

same program for purposes of bringing the latter

within the reach of Title IX.

Grove City College v. Bell, 687 F.2d 684, 698-99 (1982),

quoting Todd, Title 1X of the 1972 Education Amend-

ments: Preventing Sex Discrimination in Public Schools,

55 Texas L.Rev. 103, 112 (1974).

Judge Garth concluded his discussion of the ‘program

specific” issue in the following manner:

Where the federal government furnishes indirect or

non-earmarked aid to an institution, it is apparent to

us that the institution itself must be the “program.”

Were it otherwise, and if it had to be demonstrated

that each individual component of an integrated edu-

cational institution had in fact received the particu-

lar monies for a particular purpose, no termination

sanction could ever effectively be imposed.

We conclude that the remedy to be ordered for

failure to comply with Title IX is as extensive as

the program benefited by the federa] funds involved.

Because the federal grants made to Grove’s students

necessarily inure to the benefit of the entire College,

89a

the “program” here must be defined as the entire in-

stitution of Grove City College. Thus, Grove is incor-

rect in claiming that the program-specific provisions

of the statute preclude Title IX coverage when in-

direct aid is involved.

Grove City College v. Bell, 687 F.2d 684, 700-01 (3d Cir.

1982).

There is no reason why the government of the United

States should grant money to colleges which refuse to cer-

tify that they intend in using those funds to obey the

laws of this country prohibiting discrimination against

females. Hillsdale College, has, of course, a right to re-

fuse to sign such a certificate. But equally clearly Hills-

dale should have no right to relief in the federal courts to

secure federal financing of its general educational pro-

gram where it refuses to indicate, as required, that it

will comply with federa] Title IX mandates.

Title IX and Title VII are closely related statutes de-

signed to give broad equal protection rights which a long

history of discrimination has denied to women and mi-

norities. The enactment of Title IX in 1972 forbidding

discrimination against women in education was patterned

after Title VI of the Civil Rights Act of 1964 which pro-

scribed discrimination in any federally assisted program

on the basis of race, color, or national origin; both stat-

utes have parallel prohibitions and identical enforcement

mechanisms similarly described.* In fact, “the drafters of

Title IX explicitly assumed that it would be interpreted

and applied as Title VI has been during the preceding

eight years.” Cannon v. University of Chicago, 441 U.S.

677, 696 (1979). Moreover the goals to which the stat-

utes aspire are indeed similar. “Title IX, like its model

Title VI, sought to accomplish two related, but neverthe-

*Compare 20 U.S.C. $$ 1681-82 (Title IX) with 42 U.S.C.

§§ 2000(d)-(d) (1). (Title VI).

40a

less somewhat different objectives. First, Congress wanted

to avoid the use of federal resources to support discrimi-

natory practices; second, it wanted to provide individual

citizens effective protection against those practices.” Jd.

at 704. Thus, as a final argument for an interpretation

of the important statute before us that would not annul

its broad nondiscriminatory purposes, the words of Sen-

ator Humphrey, one of the Senate sponsors of Title VI,

as quoted by the Supreme Court, are apposite, substituting

only the word sex for the word race.

Simple justice requires that public funds, to which all

taxpayers of [both sexes] contribute, not be spent in

any fashion which encourages, entrenches, subsi-

dizes or results in [sex] discrimination.

Lau Vv. Nichols, 414 U.S. 563, 569 (1974).

Simple justice, recognition of Title IX’s basic and

broad remedial purpose and the other foregoing reasons

dictate that I dissent from my colleagues’ disturbingly

narrow interpretation of this remedial statute. I would

affirm the constitutionality of Title IX as applied in this

case and the legality of the regulations issued by HEW

which are in dispute.

If I were writing for the majority of this court, I

would also remand to the agency for careful considera-

tion of the timing of its order cutting off funds. Accord-

ingly I suggest fund termination that will not affect stu-

dents presently enrolled but only those who may enter in

the future. At issue in this regard could be severe im-

pact upon the education of students who are in any way

responsible for this controversy. Additionally it may well

be that the college itself will see fit to comply with the

agency’s regulation at the beginning of the school year

after the regulation’s legality and constitutionality are

completely established.

This less harsh prospective remedy appears to be con-

sistent with the Title IX statutory scheme. Indeed, the

4la

remedies portion of the Act, Section 902, 20 U.S.C. § 1684

(1976), provides that compliance with the statute “may

be effected” by termination of funding or “by any other

means authorized by law.” (emphasis added). Agency

adoption of the suggested equitable remedy would be one

which is “authorized by law” and would fall within the

permissive grant of authority to fashion remedies. This

conclusion is buttressed by the Supreme Court’s observa-

tion in Cannon v. University of Chicago, 441 U.S. 677,

704-05 n.n. 38 & 39 (1979), that Congress intended the

use of measures less severe than total fund cutoff where

the statutory objectives of Title IX could be furthered by

less heroic means.

42a

[JUDGMENT OF THE UNITED STATES COURT OF

APPEALS FOR THE SIXTH CIRCUIT)

UNITED STATES COURT OF APPEALS

FOR THE SIXTH CIRCUIT

No. 80-3207

[Filed Dec. 16, 1982]

HILLSDALE COLLEGE,

wo. Petitioner,

THE DEPARTMENT OF EDUCATION:

SHIRLEY M. HUFSTEDLER, SECRETARY,

Respondents.

Before: Epwarps, Chief Circuit Judge; CECIL and

Brown, Senior Circuit Judges.

JUDGMENT

ON PETITION TO REVIEW a decision of the De

partment of Education.

THIS CAUSE came on to be heard on the transcript of

record from the said Agency and was argued by counsel.

ON CONSIDERATION WHEREOF, It is now here

ordered and adjudged by this court that the decision of

the said Agency in this cause be and the same is hereby

reversed.

Each party to bear its own costs on this appeal.

ENTERED BY ORDER OF THE COURT

JOHN P. HEHMAN

Clerk

/s/ John P. Hehman

Clerk

43a

APPENDIX B

ADMINISTRATIVE PROCEEDING

IN THE

DEPARTMENT OF HEALTH,

EDUCATION, AND WELFARE

Docket No. A-7 <i

IN THE MATTER OF HILLSDALE COLLEGE

and

STATE OF MICHIGAN

FINAL DECISION OF THE

REViE WING AUTHORITY

(CIVIL RIGHTS)

|Dated: October 25, 1979]

STATEMENT OF THE CASE

This administrative enforcement proceeding was insti-

tuted by the United States Department of Health, Educa-

tion, and Welfare ‘hereinafter referred to as the Depart-

ment) against Hillsdale College pursuant to Title IX of

the Education Amendments of 1972, 20 U.S.C. §§ 1681

et seq., and the regulations issued thereunder, 45 C.F.R.

§ 86.1 et seq.

The proceeding was initiated on December 2, 1977, by

serving a Notice of Opportunity for Hearing on Hillsdale

College (hereinafter referred to as the Respondent), a

private, nonsectarian, coeducational college, and the State

of Michigan. The Notice of Opportunity for Hearing al-

leged that the Respondent was not in compliance with

44a

Title IX and its implementing regulation, 45 C.F.R.

$ 86.4, which requires applicants for federal] financial as-

sistance to submit to the Department an Assurance of

Compliance.' The Respondent filed an answer admitting

its refusal to sign an Assurance of Compliance, but deny-

ing that the Department has the authority to require it

to execute such Assurance.

Hillsdale College has an enrollment of approximately

1,000 students. A number of these students have obtained

funds to pay some of their educational costs at Hillsdale

College under one or more of the four following federally-

funded programs: The National Direct Student Loan

Program ‘NDSL), 20 U.S.C. §§ 1087aa et seg.; the Basic

Educational Opportunity Grant (BEOG) and Supple-

mental Educational Opportunity Grant (SEOG) Pro

grams, 20 U.S.C. §1070a and b; and the Guaranteed

Student Loan Program (GSL), 20 U.S.C. § 1071 et seg.

Under the NDSL Program, loans are made by the Re-

spondent to students on the basis of need as determined

by the requirements specified in the statute and regula-

tions. NDSL funds are loaned to students to pay for the

costs of their education at Hillsdale by direct payment

either to the Respondent or to private vendors for books,

housing, ete. Under the BEOG Program, students receive

grants directly from the federa] government for use in

defraying educational costs by direct payment to the Re-

spondent or to private vendors. Under the SEOG Pro-

gram, federal funds are allocated to the Respondent by

the Department which in turn are administered by the

Respondent and awarded on the basis of need as deter-

mined by the requirements specified in the statute and

regulations. These grants are then used by the students

to defray the costs of their education by direct payment

to the Respondent or to private vendors. Under the GSL

Program, students apply to a private lending institution

?HEW Form 639A.

45a

for funds which then makes personal loans from its own

assets or resources to be used by students to defray their

educational costs by payments to the Respondent or to

private vendors. These loans are guaranteed by the

United States and a portion of the interest is paid by the

government while the students are in college.

Neither Hillsdale College nor its students participate

in other programs or activities which are funded, in

whole or in part, by the federal government.

Section 86.4 of the regulations implementing Title IX

requires every application for federal financial assistance

to be accompanied by an Assurance of Compliance with

Title IX and its regulations. On several occasions in 1977

the Director of the Office for Civil Rights requested in

writing that Hillsdale College submit an executed Assur-

ance of Compliance form. The Respondent has refused to

file this Assurance ‘(HEW Form 639 A) and has indi-

cated that it has no intention of doing so in the future.

Pending a final order of termination in the instant pro-

ceeding, students are able to secure loans from funds in

the Respondent’s NDSL Program, grants under the

BEOG Program, and loans from private lenders under the

GSL Program to defray the costs of their education at the

College.

The Genera] Counsel for the Department brought this

compliance proceeding, seeking an order pursuant to 45

C.F.R. § 80.10 which would terminate, refuse to grant or

to continue, and find the Respondent ineligible to receive

federa] financial assistance which is administered by the

Department to the Respondent.*

On August 23, 1978, the Administrative Law Judge

(hereinafter referred to as Judge! issued his Initial De-

cision denying the relief requested by the General Coun-

2 Notice of Hearing at 6-7, Jn the Matter of Hillsdale College

Docket No. A-7 (Filed December 2, 1977).

46a

sel and dismissing the Notice of Hearing. The Judge con-

cluded that although the Respondent was a recipient of

federal financial assistance within the meaning of Title

IX, the Department’s requirement that the Respondent

sign the Assurance of Compliance as a condition of the

continued receipt of federal financial assistance was a

demand that the Respondent comply with a portion of the

regulations—i.e., those prohibiting sex discrimination in

employment—which were declared invalid in whole or in

part by several courts. Thus the Judge refused to termi-

nate federal financial assistance on the ground that to do

so would be arbitrary, capricious, and an abuse of dis-

cretion, in view of the doubt cast on the Department’s au-

thority under Title IX to require compliance with those

regulations dealing with employment.

Both the General Counsel for the Department of Health,

Education, and Welfare and the Respondent have filed

Exceptions to the Administrative Law Judge’s Initial

Decision.

Respondent’s Exceptions

I.

Hillsdale excepts to the ruling by the Administrative

Law Judge that the Title IX regulations which deem

Hillsdale College a recipient of federal financial assistance

*45 C.F.R. §§ 86.51-86.61. The cases cited by the Administrative

Law Judge were Board of Education of the Bowling Green City

School District v. United States Department of Health, Education

and Welfare, No. C-78-177 (N.D. Ohio, May 5, 1978) (preliminary

injunction against enforcement issued); Brunswick School Board

v. Califano, 449 F.Supp. 866 (D.Me. 1978); Seattle University r.

HEW, No. C-77-6315 (W.D. Wash., January 20, 1978); Romeo

Community Schools v. United States Department of Health, Educa-

tion and Welfare, 438 F.Supp. 1021 (E.D. Mich. 1977), appeal

docketed. These cases all hold that the regulation is invalid because

the statute from which it is derived, the Education Amendments

of 1972, §§ 901 et seq. is limited to a prohibition of sex discrimina-

tion against students and other direct beneficiaries of federal aid

and does not cover discriminatory employment practices.

47a

are not in excess of the statutory authority granted HEW

by Congress.

The Exception is denied.

The Respondent argued that it is not subject to Title

IX because it is not a recipient of federal financial as-

sistance. However, as the Judge correctly noted, the Re-

spondent participates both as the initial and final re-

cipient of federal funds through its involvement in sev-

eral student financial aid programs funded, in whole or

in part, by the Department. This financial aid enables

students to pay for the education they receive at Hills-

dale College by defraying their costs of tuition, books,

room and board, and other expenses. Since these funds

would otherwise have to be provided by the Respondent

itself, the federal funds in the form of loans or grants

release the Respondent’s funds for other educational pur-

poses. Moreover, the pool of applicants from which the

Respondent can select its students is broadened to the

extent that the federal grant and loan programs enable

students, who would not otherwise have the financial

means to do so, to attend Hillsdale College.

Payments under these student grant and loan programs

are clearly federal financial assistance to the Respond-

ent under the regulations promulgated pursuant to Title

IX,* and the Respondent is a “recipient” of such assist-

ance.’ This construction of the statute, incorporated by

the Department in its regulations, is supported by Bob

Jones University v. Johnson, 306 F.Supp. 596 (D.S.C.

1974), affd per curiam, 529 F.2d 514 (4th Cir. 1975).

In that case, the District Court held that an educational

institution which enrolled students who received cash pay-

ments under federal] assistance programs for veterans

was a recipient of federal financial assistance within the

s

*45 C.F.R. § 86.2(g)(1)(ii) and § 86.2(g) (5).

°45 C.F.R. § 86.2(h).

48a

meaning of Title VI.* The cash payments were used by

veterans to defray the costs of the university’s educa-

tional program, releasing institutional funds for other

uses which, in the absence of federal funds, would have

been spent on these students. Moreover, as here, the

university was benefited by enlarging its pool of quali-

fied applicants. 396 F.Supp. at 601-03. Cf. Norwood v.

Harrison, 413 U.S. 455 (1973) (state program of lend-

ing textbooks to private school students is “a form of

financial assistance inuring to the benefit of the private

schools themselves’): Committee for Public Education

and Religious Liberty v. Nyquist, 413 U.S. 756 (1973).

(The effect of tuition reimbursement payments to parents

is to provide financial support for the institutions. )

We do not deem it a significant distinction that the

Bob Jones case involved a discriminatory admissions

policy. The admissions policy was not the federal funded

program in Bob Jones; rather, the veterans benefits paid

to students attending Bob Jones were sufficient to render

that school a “recipient” of federal assistance such that

each program operated by Bob Jones, including the ad-

missions program, must be operated in compliance with

Title VI. Analogously, in the case at bar, the federal

financial assistance given to students attending Hillsdale

College renders that institution a “recipient”, requiring

that each of its programs comport with Title IX. We are

not holding here that the entire operation of the Respond-

ent is the “program or activity receiving federal financial

assistance” for purposes of terminating funds when a

violation of Title VI or Title IX has been found in one

aspect of the Respondent’s operations. The “pinpoint

provision” for terminating federal financial assistance ap-

plies to the sanction to be imposed when discriminatory

*The wording of Tifle IX, 20 U.S.C. § 1681(a), is virtually

identical to that of Title VI, 42 U.S.C. § 2000d, and both parties

agree that decisions construing Title VI are pertinent to the con-

struction of Title IX. initial Decision p. 19.

49a

conduct has been found—i.e., which funds may appropri-

ately be terminated once discrimination has been proven.

This is not the question before us. The question, rather,

is whether federal funds made available through student

grant and loan programs are financial assistance to the

Respondent such as to constitute it a “recipient” of fed-

eral assistance within the meaning of Title IX, thereby

requiring it to execute an assurance that it will not dis-

criminate in those programs to which Title IX applies.

We think it worth noting that an amendment to Title

IX specifically introduced to address the question raised

in the Bob Jones case, that an institution which received

no federal funds other than through student assistance

would be exempt from Title IX, was rejected by the Sen-

ate in 1976. 122 Conc. Rec. S$14760-14764 (daily ed.

August 27, 1976).

Respondent also argues that the Judge erred in disre-

garding Hillsdale’s argument that, if Title IX is con-

strued so as to authorize HEW’s regu’ ‘ion of all of Hills-

dale’s activities and programs, then constitutional issues

are necessarily entailed. The Respondent urges: “Hills-

dale’s construction of Title IX should therefore be ac-

cepted since it is, of course, a well recognized principle

that an Act of Congress should, if possible, be construed

in a manner which avoids questions of its constitution-

ality.” Respondent’s Exceptions p. 9.

Both parties and the Judge agree that an Administra-

tive Law Judge cannot rule a statute unconstitutional.

We likewise are without authority to review Respondent’s

constitutional claims. However, Respondent urges us to

adopt a narrow construction of Title IX “to avoid ques-

tions of its constitutionality”. We know of no “recog-

nized principle” that suggests that whenever one party

intends to raise constitutional issues, the statute in ques-

tion should be narrowed in its favor so as to avoid the

constitutional challenges. Respondent, it seems, would

have us assume the correctness of its constitutional chal-

50a

lenges, and narrow the statute to “save it” in order to

avoid constitutional questions that all agree we have no

authority to pass on. This invitation we respectfully

decline.

The Judge’s holding that Hillsdale College is a recipient

of federal financial assistance for purposes of Title IX

enforcement is affirmed and the exceptions to the contrary

denied.

II.

Hillsdale excepts to the determination by the Judge

that the regulations promulgated by the Department are

not, as a matter of law, in excess of the statutory au-

thority granted the Department by Congress under Title

IX.

The Exception is denied.

The only regulation properly before the Reviewing Au-

thority is 45 C.F.R. § 86.4 which requires that all applica-

tions for federal financial assistance be accompanied by

an executed Assurance of Compliance. Respondent does

not challenge the validity of this regulation as a legiti-

mate and lawful means of enforcing Title IX. Respond-

ent asks that we rule invalid those regulations pertaining

to student recruitment, dormitory regulations, pregnant

students, to name a few. The Judge refused to do so,

indicating that a determination of the validity of any

particular Title IX regulation must await a factual

framework within which a discriminatory practice has

been alleged. We likewise decline to pass on the validity

of any regulation that has not been allegedly violated.

Suffice it to say that an Assurance of Compliance commits

an institution to abide only by those regulations which

are valid. Any regulations judicially determined to be

unconstitutional or beyond the scope of statutory author-

ity can not be deemed binding upon an institution.

5la

Department’s Exceptions

I.

The Department excepts to the Initial Decision on the

ground that the Judge exceeded his authority by not en-

forcing the regulations implementing Title IX of the Ed-

ucation Amendments of 1972, in particular, 45 C.F.R.

§ 86.4.

The Exception is granted in part.

We agree with the Department that the Judge, by vir-

tue of his designation by the Reviewing Authority, was

empowered to apply the regulations implementing Title

IX, 45 C.F.R. Part 86. Section 86.4 provides in relevant

part:

Every application for Federal financial assistance for

any educational program or activity shall as condi-

tion of its approval contain or be accompanied by an

assurance from the applicant or recipient, satisfac-

tory to the Director, that each education program or

activity operated by the applicant or recipient and to

which this part applies will be operated in compliance

with this part.

The Judge in his Findings of Fact determined that Re-

spondent Institution, in refusing to execute the specified

form (HEW Form 639 A) as the Assurance of Compli-

ance with Title IX regulations, has refused to comply

with 45 C.F.R. § 86.4."

Neither party has challenged the validity of § 86.4 * and

in our view it is a legitimate and lawful means of en-

forcing Title IX. As a condition of receiving federal

funds, surely the federal government may require a state-

ment from the recipient that it will abide by the Civil

Rights laws in the use of that money. This statement puts

T Init. Dec. at 10 (Finding of Fact 17).

* Init. Dec. at 23.

52a

the recipient on notice that in taking these funds there is

an obligation not to discriminate and gives the govern-

ment some assurance that the recipient understands these

obligations and intends to abide by them. The Respondent

was clearly and deliberately in violation of this valid reg-

ulation, and further efforts at obtaining voluntary com-

pliance are futile. Hence the Respondent, having failed

to execute the Assurance which is the condition precedent

to receipt of federal funds, should not receive such funds.

We therefore hold that, as a condition of receiving fed-

eral funds, the applicant institution must execute an ac-

ceptable Assurance of Compliance, binding it to comply

with all lawful regulations.

The Department also claims that the Judge “rendered

the effect of the regulations implementing Title IX null

and void.” We do not reach the question of whether other

portions of Part 86, in particular those regulations per-

taining to employment practices, are invalid as exceeding

the scope of statutory authority. As we noted supra, none

of these regulations are properly challenged here. The

only violation charged in this proceeding is Respondent’s

refusal to sign an Assurance of Compliance.

We do not ignore the fact that executing an Assurance

of Compliance would impose a contractual] duty on the

Respondent to comply with Title IX and its regulations

where applicable. However, as we have earlier noted,

should the Title IX regulations, in whole or in part, sub-

sequently be judicially found to be in excess of statutory

authorization, the Respondent and other similarly situated

institutions would clearly not be bound by such invalid

regulations. By executing an Assurance of Compliance,

Hillsdale College is bound to comply only with lawful

regulations.

II.

The Department excepts to the Judge’s finding that

loans secured by students under the Guaranteed Loan

53a

Program do not constitute federal] financial assistance for

the purpose of enforcing Title IX.

The Exception is granted.

The Judge concluded that the Guaranteed Student Loan

Program (GSL) was exempt from Title IX coverage by

virtue of § 902 of Title IX, 20 U.S.C. § 1682, which de-

fines federal financial assistance as any grant, loan, or

contract “other than a contract of insurance or guar-

anty.” Under the GSL Program, students apply to private

lending institutions for loans to defray their educational

costs. The loans are guaranteed in whole or in part by

the federal government. U.S.C. § 1071 et seg.; 45 C.F.R.

$§ 177.31, 177.41-.43. The Government’s guaranty to a

lender against default by a student borrower, by itself,

seems to come within the exemption in § 902. However,

under the GSL Program, the Government also pays in-

terest to the lender on behalf of student borrowers while

they are attending college. 45 C.F.R. §§ 177.2, 177.4.

This is in effect a subsidy of federal funds from which

the Respondent benefits. We agree with Judge Feldman’s

conclusions in his Initial Decision in Grove City College,

Docket No. A-22 (Sept. 15, 1978):

[T)he Government not only guarantees the payment

of the student loans, but also the Government under-

takes and pays interest on the loans to the lender

while the student is in school. This would seem to re-

move this contract from being a contract of insurance

or guaranty. The obligation of the Government is

more that of a principal than that of an insurer or

guarantor.

In other words, while a contract of insurance or guaranty

alone does not involve an expenditure of federal funds un-

less and until the borrower defaults—i.e., it is a condi-

tional contract—the interest payments under the GSL

Program are direct and immediate disbursements of fed-

54a

eral funds aiding the Respondent in the same way as the

funds disbursed under the NDSL Program.

We therefore conclude that the GSL Program, in its

operation, goes beyond the terms of the contract of in-

surance or guaranty exclusion and falls within the pur-

view of Title IX. The Judge’s holding that loans secured

under the GSL Program do not constitute federal financial

assistance for Title IX purposes is therefore over-

ruled.

Order

In view of what has been said in response to the Ex-

ceptions of the Department and Respondent, we hereby re-

verse the part of the Judge’s decision which is incon-

sistent with our rulings herein, and hold the Respondent,

Hillsdale College, to be in noncompliance with Part 86.4

of the regulations implementing Title IX of the Education

Amendments of 1972. We further hold that in order to be

eligible for federal financial assistance, Respondent must

comply with Part 86.4 by executing an approved Assur-

ance of Compliance form. All Exceptions to the contrary

are denied.

JAMES BIERMAN

Betsy LEVIN

OLIVER MORSE

55a

APPENDIX €

ADMINISTRATIVE PROCEEDING

IN THE DEPARTMENT OF

HEALTH, EDUCATION, AND WELFARE

Docket No. A-7

IN THE MATTER OF

HILLSDALE COLLEGE and

STATE OF MICHIGAN

INITIAL DECISION

[Dated: August 23, 1978]

Preliminary Statement

This is a proceeding under Title IX of the Education

Amendments of 1972 (20 U.S.C. 1681 et seg.) and the

regulations of the Department of Health, Education, and

Welfare (45 CFR 86.1 et seg.) instituted by a Notice of

Hearing, dated December 2, 1977, filed by the General

Counsel, Department of Health, Education, and Welfare

alleging, in part, that Hillsdale College, Respondent Insti-

tution, receives, has applied for, or is eligible to apply

for, Federal] financial assistance for its program of post-

secondary education from the State of Michigan, Respond-

ent State Agency, and directly from the Department of

Health, Education, and Welfare, under one or more acts

of Congress administered by the Department of Health,

Education, and Welfare; and that Hillsdale has not sub-

mitted to DHEW an adequate Assurance of Compliance

with Title IX and its implementing regulation, as re-

quired by such regulation, although it has received timely

56a

notice that its failure to do so is violative of such regula-

tion and despite the attempt by the Office of Civil Rights,

DHEW, to obtain its compliance by voluntary means. The

Notice of Hearing further alleges that as long as Re-

spondent continues to fail to submit an adequate Assur-

ance of Compliance it is in violation of Title IX and is not

eligible to receive the Federal financial assistance de-

scribed in the notice.

The General Counsel prays for, in part, an order

“Terminating, refusing to grart or to continue, and find-

ing Respondent Institution ineligible to receive, Federal

financia] assistance which is administered by DHEW di-

rectly to the Respondent Institution or through the Re-

spondent State Agency”. which shall remain in force until

Hillsdale College satisfies the Director of the Office of

Civil Rights that it has complied with the requirements

of Title IX of the Education Amendments of 1972 and

that it has provided assurance that it will comply in the

future with such requirements.

The Notice of Hearing merely alleges with respect to

the State of Michigan that it exercises genera] supervision

over the institution of higher education of the State, in-

cluding Respondent Institution, and that it is “responsible

for receiving, administering, and disbursing specified

funds granted to the State by the Federal government for

educational purposes under various acts of Congress ad-

ministered by DHEW, and its duties in this connection

normally extend to and include the distribution of a por-

tion of such funds to Respondent Institution.” The State

of Michigan filed an answer dated January 5, 1978. It

is alleged therein, in part, that “the State Board of Edu-

cation receives, administers and disburses funds granted

to the state by the federal government for educational

purposes under various acts of Congress administered by

DHEW, but no funds are distributed to Respondent

Institution.”

57a

Hillsdale College filed an answer to the Notice of Hear-

ing January 4, 1978 in which it, in part, admits that it

has not submitted an Assurance of Compliance but de-

nies that the Genera] Counsel is authorized by Title IX

to bring this action, that the Secretary of Health, Educa-

tion, and Welfare has authority to require it to execute

such assurance or that it is eligible as, or is, a recipiént

of Federal financial assistance. In its answer, Hillsdale

College alleges several affirmative defenses to the effect

that while its students have and do receive Federal funds

to finance their education, it does not receive Federal fi-

nancial assistance “which is paid directly to the college to

use as the college sees fit or paid to the college to fund

any specific program or activity which Hillsdale College

maintains for the benefit of its students,” that the regu-

lations purportedly promulgated pursuant to Title IX are

in excess of statutory authority and violative of the Con-

stitution of the United States, that this proceeding to, in

effect, terminate and refuse to continue Federal financial

assistance to the students of Hillsdale College is illegal

and that the regulations involved are violative of the Con-

stitution of the United States if within the scope of stat-

utory authority.

Administrative Law Judge, Herbert L. Perlman, En-

vironmental Protection Agency, was designated on Jan-

uary 20, 1978 as the Administrative Law Judge to preside

in this proceeding and to issue an Initial Decision here

in. The Administrative Law Judge held a prehearing con-

ference February 2, 1978 in Washington, D.C. The Gen-

eral Counsel was represented by Harriet Kuryk and

Bonnie Milstein, Attorneys at Law, Washington, D.C., and

Respondent Institution was represented by Gordon C.

Coffman and John Michael] Facciola, Attorneys at Law,

Washington, D.C. The Respondent State Agency, which

was excused from further proceedings in this matter by

order dated January 26, 1978 upon agreement of the

parties as, in part, “the allegations in the notice of hear-

58a

ing herein contain no averments of unlawful conduct

against the Respondent State Agency”, was not repre

sented at the conference.

As a result of such conference, as set forth in a re-

port thereof dated February 3, 1978, the hearing in this

proceeding was vacated and a joint stipulation of facts

and accompanying exhibits filed by the parties, as

amended by the Report of Prehearing Conference, consti-

tute the record of this proceeding. Subsequently, the

parties filed statements of position and opening and reply

briefs.

Findings of Fact

1. Respondent Institution, Hillsdale College, is a pri-

vate, nonsectarian, coeducational college located in Hills-

dale, Michigan. Its present enrollment is approximately

1,000 students. The college awards three undergraduate

degrees, Bachelor of Arts, Bachelor of Science, and Bach-

elor of Liberal Studies.

2. The State of Michigan is the Respondent State

Agency in this proceeding. The State of Michigan Board

of Education, through the head of the Department of Ed-

ucation, only exercises genera] supervision over private

institutions of higher education, including Respondent In-

stitution, within the limits of the lawful authority con-

ferred upon the State Board of Education under Michigan

law. The State Board of Education receives, administers

and disburses funds granted to the State of Michigan by

the Federal government for educational purposes under

various acts of Congress administered by the Department

of Health, Education, and Welfare, but no funds are

presently distributed to Respondent Institution.

3. In the year ending June 30, 1978, as in previous

years, a number of students attending Hillsdale College

secured funds to pay their tuition to Hillsdale College

and other educational costs by virtue of moneys appro-

priated by Congress and allocated by the Department of

Health, Education and Welfare pursuant to the National

59a

Direct Student Loan Program, 20 U.S.C. 1087aa et seq.,

and the Basic Educationa] Opportunity Grant Program

and Supplemental Educational Opportunity Grant Pro-

gram, 20 U.S.C. 1070a and b. Additionally, a number of

students secured loans from private institutions to defray

educational expenses at Hillsdale, which loans are guaran-

teed, in whole or in part, by the United States under the

Guaranteed Student Loan Program, 20 U.S.C. 1071 et

seq.

4. In the year ending June 30, 1978, certain students

of Hillsdale College who are veterans secured funds di-

rectly from the United States pursuant to the Veterans

Education Benefits Act, 38 U.S.C. chapters 31, 34, 35 and

36. Said funds are administered by the Veterans Admin-

istration, not the Department of Health. Education and

Welfare, and are not now the subject of these proceedings.

5. Under the National Direct Student Loan Program

(NDSL) as it exists at Hillsdale College, loans are made

by Hillsdale to its students on the basis of their need in

compliance with the applicable requirements specified in

the statute creating the NDSL program and the appro-

priate HEW regulations. 45 CFR 144.1 et seg. (1976).

All funds from said NDSL fund at Hillsdale are paid to

students who, in turn, use said funds to pay the costs of

their education at Hillsdale either by direct payment to

Hillsdale (e.g., tuition) or to private vendors (e.g.,

books, rent for off-campus housing, etc.). In the year end-

ing June 30, 1977, the Department of Health, Education

and Welfare allocated $40,548 as the federal capital con-

tribution to this loan fund. In the year ending June 30,

1978, Hilisdale College did not receive a federal contribu-

tion to this fund because the cash on hand has been suf-

ficient for its needs. In the year ending June 30, 1978, _

approximately 107 students at Hillsdale College have

secured approximately $104,000 in such loans.

6. Under the Basic Educational Opportunity Grant

Program (BEOG), students who attend Hillsdale College

60a

secure federal funds, appropriated by Congress for use in

the program, directly from the United States. Upon re-

ceipt the student uses his or her grant to defray educa-

tional costs by direct payment to Hillsdale (e.g., tuition)

or by payment to private vendors (e.g., books, rent for off-

campus housing, etc.). In the year ending June 30,

1978, 54 students who attend Hillsdale College have se-

cured approximately $54,000 in such grants.

7. Under the Guaranteed Student Loan Program

(GSL), as it exists at Hillsdale College, a student de-

sirous of securing a loan guaranteed in whole or in part

by the United States applies to a private lending institu-

tion which, from its own capital, makes a loan to the

student who, in turn, uses the funds to defray educational

costs by payment to Hillsdale College (e.g., tuition) or by

payment to private vendors (e.g., books, rent for off-

campus housing, etc.). In the year ending June 30,

51 Hillsdale students have secured aproximately $123,306

in these loans.

8. Under the Supplemental Educational Opportunity

Grant Program (SEOG), funds, appropriated by Con-

gress and allocated to Hillsdale by DHEW, are awe.rded

by Hillsdale to needy students in compliance with the ap-

plicable requirements specified in the statute creating; the

SEOG program and the appropriate HEW regulations.

45 CFR 176.1 et seg. (1976). The students then utilize

the grants to defray the costs of their education by di-

rect payment to Hillsdale (e.g., tuition) or by paymert

to private vendors (e.g., books, rent for off-campus hous-

ing, ete.) In the year ending June 30, 1978, approximately

53 students attending Hillsdale College have been awarded

the $37,400 allocated to Hillsdale by DHEW.

9. Besides the funds appropriated and allocated under

the programs enumerated in Findings of Fact 3-§ above,

neither Hillsdale College nor its students partic pate in

any other programs or activities which are funded, in

6la

whole or in part, by the United States. Hillsdale College

did participate in the College Work Study program, cre-

ated pursuant to the statutory authority of 42 U.S.C. 2751

et seq., in the year ending June 30, 1977. Although funds

in the amount of $17,325 were allocated to Hillsdale Col-

lege under said program for use in the year ending June

30, 1978, Hillsdale College decided not to continue such a

program and neither requested nor accepted the funds

allocated to it for this program from the United States.

10. Hillsdale College has been deemed eligible by

DHEW to participate in the programs specified in Find-

ings of Fact 3-9 above under the applicable program

regulations.

11. Regulations implementing Title IX of the Educa-

tion Amendments of 1972, U.S.C. 1681 et seqg., at 45 CFR

Part 86, became effective on July 25, 1975, and were pub-

lished for genera] notice. 40 F.R. 24128.

12. Section 86.4 of said regulations requires every ap-

plication for Federal financial assistance to be accom-

panied by an Assurance of Compliance with said regula-

tions.

13. Section 86.2(g) (ii) defines Federal financial as-

sistance to include, inter alia:

“Scholarships, lowns rants, wages, or other funds

extended to any enuty for payment to or on behalf

of students admitted to that entity, or extended di-

rectly to such students for payment to that entity.”

14. The Director of the Office of Civil Rights, DHEW,

has specified HEW Form 639A as the Assurance of Com-

pliance with the Title IX regulations which is acceptable

to him.

15. On several occasions in 1977, the Director of the

Office of Civil Rights has requested, in writing, that Hill-

dale College submit an executed HEW Form 639A and

Hillsdale College has not done so.

{

62a ~:

16. Ina letter dated December 3, 1977, the Director of

the Office of Civi] Rights advised Hillsdale College that

if HEW Form 639A was not completed and returned

within ten days of receipt of said letter, enforcement ac-

tion would be initiated against Hillsdale College to secure

its compliance with 45 CFR 86.4 (1976).

17. Hillsdale College has not requested assistance from

the Office of Civil Rights, DHEW, to aid it in complying

with 45 CFR 86.4. Continued voluntary efforts by DHEW

to secure its execution of HEW Form 639A will be futile.

Hillsdale College has refused to file and has no intention

to file an executed HEW Form 639A.

. 18. On or about October 16, 1977, Hillsdale College sub-

mitted a certain DHEW form applying to DHEW for the

allocation of $34,557 to the SEOG program it participates

in and for authorization to maintain a level of lending of

$103,671 in its NDSL program.

19. On or about December 3, 1977, the Director of the

Office of Civil Rights advised Hillsdale College by letter

that he was imposing a deferral, commencing January 3,

1978, on “final approval of applications for Federal finan-

cial assistance filed on behalf of your institution for new

programs and for increases in the funding of continuing

programs” until the conclusion of this proceeding. Sub-

sequent thereto, the consequence of the deferral has been

explained to mean that in the fall semester of 1978 Re-

spondent Institution may loan the $103,671 in its Na-

tional Direct Student Loan Program to its students and

that “In the absence of a final order of termination [in

this proceeding] signed by the Secretary and the passage

of 30 days after transmittal to the appropriate committees

of Congress, students who intend to attend Respondent

Institution in the fall semester of 1978, and who otherwise

qualify, will be able to secure Basic Educational Oppor-

tunity Grants to defray the costs of their education at

Hillsdale” and “will be able to secure loans from private

lenders under Guaranteed Student Loan Program to

63a

defray the costs of their education at Hillsdale.” Hills-

dale’s application for the Supplemental Education Oppor-

tunity Grant Program remains deferred pursuant to the

December 3, deferral of the Director of the Office of

Civil Rights.

Conclusions

I

In this proceeding under Title IX of the Education

Amendments of 1972 (20 U.S.C. 1681 et seg.) and the

regulations.of the Department of Health, Education, and

Welfare (45 CFR 36.1 et seqg.), the General Counsel seeks

an order terminating what is alleged to be Federal finan-

cial assistance Hillsdale College is now receiving and which

it might be eligible to apply for and receive in the future

on the ground that it has failed to submit an Assurance

of Compliance as required by section 86.4 of the applicable

regulations (45 CFR &6.4).' The General Counsel also

seeks an order which will prohibit the State of Michigan

from disbursing Federal financial assistance to Respondent

Institution in the future by reason of such failure (See

also 45 CFR 80.8). Hillsdale College contends that it

does not operate any “education program or activity re-

ceiving Federal financial] assistance”, that it is not there-

fore a “recipient” of such assistance within the meaning

of Title IX and that it is not subject to regulation by the

Department of Health, Education, and Welfare.

Title IX of the Education Amendments of 1972, en-

acted into law on June 23, 1972, was designed to prevent

1 Section 86.4 reads, in part, as follows:

(a) General. Every application for Federal financial assistance

for any education program or activity shall as condition of its

approval contain or be accompanied by an assurance from the

applicant or recipient, satisfactory to the Director, that each

education program or activity operated by the applicant or re-

cipient and to which this part applies will be operated in com-

pliance with this part...”

64a

sex discrimination in federally assisted\education pro-

grams. Section 901, 20 U.S.C. Section 1681, provides, in

pertinent part, as follows:

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... .

Sectior 902 directed the promulgation of regulations to

effectuate the provisions of Section 901.2 DHEW pub-

2? Section 902 provides as follows:

Each Federal department and agency which is empowered to

extend Federal financial assistance to any education program

or activity, by way of grant. loan, or contract other than a

contract of insurance or gua. .nty, is authorized and directed

to effectuate the provisions of section 901 with respect to such

program or activity by issuing rules, regulations, or orders

of general applicability which shall be consistent with achieve-

ment of the objectives of the statute authorizing the financial

assistance in connection with which the action is taken. No

such rule, regulation, «.* order shall become effective unless and

until approved by the President. Compliance with any require-

ment pursuant to this section may be effected (1) by the

termination of or refusal to grant or to continue assistance

under such program or activity to any recipient as to whom

there has been an express finding on the record, after op-

portunity for hearing, of a failure to comply with such re-

quirement, but such termination or refusa! shall be limited to

the particular political entity, or part thereof, or other re-

cipient as to whom such a finding has been made, and shal! be

limited in its effect to the particular program, or part thereof,

in which such noncompliance has been so found, or (2) by any

other means authorized by law: Provided, however, That no

such action shall be taken until the department or agency con-

cerned has advised the appropriate person or persons of the

failure to comply with the requirement and has determined

that compliancé cannot be secured by voluntary means. In the

case of any action terminating, or refusing to grant or con-

tinue, assistance because of failure to comply with a require-

ment imposed pursuant to this section, the head of the Fed-

eral department or agency shall file with the committees of the

65a

lished final regulations to effectuate Title IX on June 4,

1975. Section 86.2(g) of such regulations (45 CFR 86.2

(g)) defines “Federal financial assistance” to mean, in

part, “any of the following, when authorized or extended

under a law administered by” the Department of Health,

Education, and Welfare:

“(1) A grant or loan of Federal financial assist-

ance, including funds made available for:

CEh vee

(ii) Scholarships, loans, grants, wages or other

funds extended to any entity for payment to or

on behalf of students admitted to that entity, or

extended directly to such students for payment

to that entity ....

(5) Any other contract, agreement, or arrange-

ment which has as one of its purposes the provision

of assistance to any education program or activity,

except a contract of insurance or guaranty.”

Such regulations, in sections 86.2(h) and (i) thereof, de-

fine “Recipient” and “Application”, respectively, to in-

clude therein an institution “to whom Federal financial

assistance is extended directly or through another re-

cipient and which operates an education program or ac-

tivity which receives or benefits from such assistance

..” (45 CFR 86.2(h)) and “one who submits an ap-

plication, request, or plan required to be approved by”

an official of the Department of Health, Education, and

Welfare, “or by a recipient, as a condition to becoming

a recipient.” (45 CFR 86.2(i)).

Hillsdale College participates directly as the initial and

final recipient of Federa] funds and indirectly as the final

House and Senate having legislative jurisdiction over the

program or activity involved a full written report of the cir-

cumstances and the grounds for such action. No such action

shall become effective until thirty days have elapsed after the

filing of such report.

66a

recipient of Federal funds in several] student financial

aid programs funded, in whole or in part, by the Depart-

ment of Health, Education, and Welfare. These pro-

grams are the National Direct Student Loan Program

(hereinafter sometimes referred to as “NDSL”), 20

U.S.C. 1087aa et seg., 45 CFR 144.1 et seg., the Basic

Educational Opportunity Grant Program (hereinafter re-

ferred to as “BEOG”), 20 U.S.C. 1070a, 45 CFR 190.1

et seg., and the Supplemental Educational Opportunity

Grant Program (‘sometimes hereinafter referred to as

“SEOG”), 20 U.S. 1070b, 45 CFR 176.1 et seg. Hills-

dale also participates in the Guaranteed Student Loan

Program (sometimes hereinafter referred to as “GSL’’),

20 U.S.C. 1071 et seg., 45 CFR 177.1 et seqg., but the

funds are provided directly to the student from private

lenders.*

Funds under the NDSL program are allocated to stu-

dents through a student loan fund which is established

and maintained by the participating educational institu-

tion. The program operates through a fund at the insti-

tution which consists primarily of federal capital contri-

butions and also of contributions thereto by the institu-

tion. Loans therefrom are repaid directly to the institu-

tion and are used to make new loans to other needy stu-

dents. The funds are administered by the participating

institution and administrative expenses incurred in the

operation of the program are authorized to be paid out of

the fund to such institution. The SEOG program, a grant

and not a loan program, is similarly administered by the

educational institution. Under both the NDSL and SEOG

programs, the college applies for and plays an active role

in distributing federal funds to needy students. Direct

grants to students by DHEW are made under the BEOG

*The Department of Health, Education, and Welfare also allo-

cated funds to Hillsdale College under the College Work Study

Program, 42 U.S.C. 2751 et seq., 45 CFR 175.1 et seq., but the col-

lege has not availed itself of such funds.

67a

program, but grants are conditioned upon the enrollment

of the student at an approved institution of higher educa-

tion. The student receives a low-interest rate loan from

a private lending institution under the GSL program for

the purpose of defraying the costs of attending an ap-

rroved educational institution. Such loan is guaranteed in

whole or in part by the Federal government and, more

specifically, by DHEW.*

The Genera] Counsel contends that signing an Assur-

ance of Compliance is a prerequisite to the continuation of

Federal financial assistance provided under these pro-

grams and requests that the Federal payments be termi-

nated until Respondent Institution does file an Assurance

of Compliance.* Hillsdale defends its refusal] to sign the

assurance on the grounds that Federa] funds provided for

student financial aid are not Federal financial assistance

to an education program or activity within the meaning

of Title IX, and that the regulations making such student

aid programs subject to Title IX exceed DHEW’s au-

thority under the Act.*

* Section 902 of Title IX exempts “contract of insurance or guar-

anty” from its coverage. However, one of the purposes of the GSL

program is to provide for the payment of a portion of the interest.

on loans to qualified students and such payments are made by the

Department of Health, Education, and Welfare (See 20 U.S.C. 1071

and 45 CFR 177.2 and 177.4).

5 This apparently means the termination of funds paid directly

to Hillsdale under the NDSL and the SEOG programs, the termi-

nation of funds paid directly to Hillsdale students under the BEOG

program, and the termination of interest payments to the lending

institution under the GSL program. The termination of these loans,

grants and payments would presumably apply to financial aid ex-

tended to students of both sexes. DHEW also requests that funds

under the College Work Study program be terminated, but Hillsdale

has decided not to continue this program. It would appear, accord-

ingly, that the issue with respect to this program is moot.

* Hillsdale also argues that Title IX as construed and enforced

by the regulations is unconstitutional. As Hillsdale itself recog-

nizes, Administrative Law Judges do not have authority to rule a

.-

68a

II

Payments by DHEW under the NDSL, SEOG and

BEOG programs are clearly Federal] financial assistance

received by Hillsdale under the regulations. (See 45

CFR 86.2(g) (1) (ii) and 86.2(g)(5)). They are grants

or loans of Federal funds either extended to Hillsdale for

payment to or on behalf of students admitted to Hills-

dale or extended directly to students for payment to Hills-

dale. Hillsdale is a “recipient” of such Federal financial

assistance. (See 45 CFR 86.2(h)). The financial assist-

ance program helps students pay for the education at

Hillsdale by defraying their costs of tuition, books, room

and board and other expenses incurred in attending Hills-

dale. Since funds are provided which Hillsdale would

otherwise have to supply from its own resources, the total

funds available to Hillsdale to carry on its education pro-

grams and activities are increased. (See also Exhibit J).

The Federal programs also allow students to attend Hills-

dale who would otherwise not have the financial means to

do so, and so enlarge the population on which Hillsdale

can draw for students.

The GSL program, on the other hand, involves the guar-

antee of loans made by private lending institutions to stu-

dents attending Hillsdale, and the payment of interest by

the Government in some cases to those lenders. For the

reasons stated below, it is concluded that the GSL pro-

gram falls within the exemption in Section 902 of Title

IX, 20 U.S.C. Section 1682, for a contract of insurance

or guaranty. ¢

A regulation promulgated under a general authoriza-

tion provision is within the agency’s authority so long as

it is reasonably related to the purposes of the enabling

legislation. See, e.g., Mourning v. Family Publications

statute unconstitutional. See Weinberger v. salfi, 422 U.S. 749,

765 (1975). Consequently, the constitutional objections will not be

considered in this decision.

69a

Service, Inc., 411 U.S. 356, 369 (1973.’ Hillsdale con-

tends that the inclusion of financial aid extended directly

to students goes beyond the purposes of Title IX, since it

is the student who is the “recipient’”’ of such financial as-

sistance and not Hillsdale. It further contends that Title

IX was intended to apply only to specific education pro-

grams and activities which directly receive Federal aid.

The construction of the statute incorporated by DHEW

in its regulations, that is, with respect, in effect, to the

“recipient” of Federal financial assistance and the defi-

nition of “Federal financial assistance” itself is author-

ized and persuasively supported by the case of Bob Jones

University v. Johnson, 306 F.Supp. 597 (D.S.C. 1974),

affd per curiam, 529 F.2d 514 (4th Cir. 1975), a case

arising under Title VI of the Civil Rights Act of 1964

(42 U.S.C. 2000d et seg.). The wording of Section 901(a)

of Title IX, 20 U.S.C. Section 1681(a), is virtually iden-

tical to Section 601 of Title VI, and the parties agree

that decisions construing Title VI are pertinent to the con-

struction of Title IX.*

7 The General Counsel argues that I have no authority to rule

on the validity of duly promulgated regulations, although it does

concede that I may interpret statutory authority. An agency, how-

ever, does have authority to determine whether a regulation or the

manner in which it is applied is within the scope of its statutory

authority. Cf., Atlantic & Gulf Stevedores, Inc. v. OSHRC, 534

F.2d 541 (3d Cir. 1976); Presque Isle TV Co. v. United States, 387

F.2d 502, 505 (1st Cir. 1967). The Administrative Law Judge,

pursuant to his authority under 5 U.S.C. 557(c) to consider all

material questions of fact, law or discretion, has authority to de-

cide if agency action, regardless of whether it is the regulation it-

self or its application, is outside the scope of the agency's statutory

authority.

* Section 601 of Title VI (42 U.S.C. 2000d) reads as follows:

No person in the United States shall, on the ground of race,

color, or national origin, be excluded from participation in, be

denied the benefits of, or be subjected to discrimination under

any program or activity receiving Federal financial assistance.

70a

Bob Jones involved the payment of veterans’ benefits to

veterans attending Bob Jones University. The University

had a policy of denying admission to unmarried nonwhite

students and providing for expulsion of students who

dated members of any race other than their own. Admin-

istrative proceedings were instituted against Bob Jones

University after it refused to sign an assurance of com-

pliance with Title VI. Following an evidentiary hearing,

all VA assistance to Bob Jones University was terminated

and the right of veterans assistance was denied to veter-

ans who applied to attend Bob Jones University in the

future. 396 F.Supp. at 599-600.

The court held that a university which enrolled students

who received direct cash payments under Federal as-

sistance programs for veterans conditioned upon the

veteran’s pursuit of an approved course of study at an

approved educational institution, was a recipient of Fed-

eral financial assistance within the meaning of Title VI.

The cash payments received by the veterans in Bob Jones

were like the student aid extended herein in that they

were utilized to meet education expenses including tui-

tion, books, subsistence and equipment costs. The court,

in rejecting the claim that direct payments to students

were not covered by Title VI, stated, 396 F.Supp. at 601-

602:

Plaintiffs argue that because the federal cash pay-

ments go directly to the veteran, it is the veteran who

is the beneficiary of the VA programs, not Bob Jones.

The method of payment does not determine the result;

the literal language of Section 601 requires only

federal assistance—not payment—to a program or

activity for Title VI to attach. The appropriate

questions are (1) whether the federally subsidized

veteran participates in a “program or activity” and,

if so, (2) whether that program or activity is “re-

ceiving federal financial assistance”. The facts in

this case project an affirmative answer as to both

questions.

Tla

The court found that the payments were not unrestricted

grants but were tied directly to the veteran’s participa-

tion in an approved education activity and therefore Bob

Jones was conducting a program or activity subject to

Title VI. 396 F. Supp. at 602. The court further found

that the Federal cash payments did render financial as-

sistance to Bob Jones’ education program. The federal

payments to veterans released institutional funds which

would, in the absence of this Federal assistance, have been

spent on students. The fact that veterans could enter

educational programs because of the availability of Fed-

eral funds was also viewed as benefitting Bob Jones by

enlarging its pool of qualified applicants. 396 F. Supp.

at 602-603. The court finally noted that the broad lan-

guage of Title VI should be interpreted in the remedial

context in which it was presented to Congress. Thus, nar-

row readings of Title VI coverage were found inappro-

priate. Jd. at 604.

Hillsdale argues that Bob Jones is distinguishable be-

cause of the court’s perception that to allow continuation

of the Federa] funds would have put the United States in

the position of aiding racial discrimination in violation of

its constitutional responsibilities under the Fifth Amend-

ment.®° Whether or not Federal aid of practices diserimi-

nating on the basis of sex would be constitutionally im-

permissible is a question I do not have to reach.” Title IX

does manifest a public policy against sex discrimination.

As a remedial statute it is to be liberally construed. See

* Title VI was intended to prohibit Federal funds from being

used to support practices of segregation or discrimination which

are inconsistent with the standards imposed upon state and Federal

actions by the Fourteenth and Fifth Amendments. Regents of the

University of California v. Bz *ke, —— U.S. ——, 46 U.S.L.W. 4897,

4900-01 (1978).

10It would appear, however, that there are constitutional limi-

tations upon discrimination by sex. See Califano v. Webster, 430

U.S. 313, 317 (1977). (Classifications by gender are protected by

the Equal Protection Clause of the Fifth Amendment.)

72a

e.g., Tcherepnin Vv. Knight, 389 U.S. 332, 336 (1967). The

fact that a policy has a statutory rather than a consti-

tutional basis is not a justification for applying it more

restrictively. In addition, the alleged mental processes of

the court do not detract from its holding and do not form

a basis for a distinction from the facts of this proceeding.

Hillsdale would also find significant the fact that pay-

ment of benefits under the G.I. Bill was first made directly

to the institution and then changed so as to be made to

the student, while the student aid programs in which

Hillsdale participates have always involved payments di-

rectly to the student. In fact, this distinction was con-

sidered irrelevant by the court which stated the following,

396 F.Supp. at 603-604:

Whether the cash payments are made to a university

and thereafter distributed to eligible veterans rather

than the present mode of transmittal is irrelevant,

since the payments ultimately reach the same bene

ficiaries and the benefit to a university would be the

same in either event. To argue otherwise would be to

suggest that the applicability of Title VI turns on the

role of a university as an exchange. It would hold,

for example, that the reach of Title VI extends to the

VA administered Vocational Rehabilitation Act, 29

U.S.C. Sec. 31, since federal tuition payments are

made directly to the schools under that Act, but not

to the other VA educational benefits statutes because

payments under those statutes flow to a university

through the veterans. No rational distinction with

respect to Title VI coverage can be made on this

basis. |

In another context, the validity of tuition grants and

other aid to students attending private racially segregated

schools under the Equal Protection Clause of the Consti-

tution, the courts have not adopted the restrictive construc-

tion of governmental financial assistance advanced by Re

73a

spondent Institution. Cf, e.g., Brown v. South Carolina

State Board of Education, 296 F.Supp. 199 (D.S.C.

1968), aff'd per curiam 393 U.S. 222 (1968); Poindexter

v. Louisiana Financial Assistance Commission, 275 F.

Supp. 833 (E.D. La. 1967), aff'd per curiam 389 U.S. 571

(1968); Lee v. Macon County Board of Education, 267

F.Supp. 458 (E.D. Ala. 1967), aff'd sub nom. Wallace v.

United States, 389 U.S. 215 (1967); Griffin v. State

Board of Education, 239 F.Supp. 560 (E.D. Va. 1965). In

Norwood v. Harrison, 418 U.S. 455, 463-464 (1973), a

case involving the validity of a state program of lending

textbooks to children attending racially segregated pri-

vate schools, the court stated:

Free textbooks, like tuition grants directed to private

school students, are a form of financial assistance

inuring to the benefit of the private schools them-

selves (cases omitted). An inescapable educational

cost for students in both public and private schools

is the expense of providing all necessary learning ma-

terials. When, as here, that necessary expense is

‘borne by the State, the economic consequence is to

give aid to the enterprise; if the schoo] engages in

discriminatory practices the State by tangible aid in

the form of textbooks thereby gives support to such

discrimination.

See also, Committee for Public Education and Religious

Liberty v. Nyquist, 413 U.S. 756, 784 (1973), where it

was held that “the effect of the aid is unmistakably to pro-

vide desired financial support for non-public sectarian in-

stitutions” when New York State made tuition reimburse-

ment payments to parents, rather than to the schools

directly.

There is, of course, one significant difference between

Bob Jones and the present case. In Bob Jones discrimina-

tion was found in the admission policy of the school which

precluded some blacks from ever attending the institution.

74a

Thus, all programs and activities of the institution were

affected by the discrimination and the termination of

tuition payments to the institution was not inconsistent

with the provision in Title VI, 42 U.S.C, 2000d-1, similar

to Section 902, of Title IX, 20 U.S.C. 1682, that termina-

tion shall be limited in effect to the particular programm in

which noncompliance has been found.

Here, since Hillsdale is coeducational, the question of

discrimination, if there is discrimination at all, is more

likely to turn on its presence or absence in specific ac-

tivities carried on by Hillsdale.'' The termination of

student aid payments, however, could affect all of Hills-

dale’s programs and activities, and not just the specific

programs in which discrimination exists. But, we are

dealing in abstractions and surmise in this regard as

termination need not be the remedy pursued. Hillsdale

argues that the pervasive effect of terminating student

aid demonstrates that such payments are not the type of

payments intended to be included as Federal financial as-

sistance under Title IX, for their termination would

be inconsistent with the statute’s mandate that sanctioi..s

are to be imposed only with respect to specific programs

in which discrimination has been found.

Hillsdale’s argument really turns on the question of what

is the “education program or activity” to which Federal

assistance has been extended. The term is not defined

either in Title IX or in the regulations. Such words could

be read narrowly to mean only the specific programs

directly receiving Federal payments, which in this case

would be the NDSL, SEOG, and BEOG programs and

Hillsdale could be subject to Title IX only in the manner

in which it administers these programs,

But, as the court in Bob Jones University noted in con-

struing Title VI, “the literal language . . . requires only

1! Admissions to private undergraduate institutions also appear

to be excluded from Title IX, by Section 901(a)(1), 20 U.S.C.

1681 (a) (1).

75a

federal assistance—not payment—to a program or ac-

tivity ....” 896 F.Supp. at 602. It seems to us, by vir-

ture of payments and assistance involved herein that, as

stated by the General Counsel, “the entire institution is

financially supported through payments made by students

to Hillsdale under the BEOG, SEOG, NDSL.. . pro

grams. Thus, it is the entire entity, Hillsdale College,

which must vouch that each education program or ac-

tivity operated by it will be operated in compliance with

Title IX.” Unlike the situation presented in the cases

cited by Respondent Institution, which cases are distin-

guishable by reason thereof, the monies ultimately re-

ceived by Hillsdale are not earmarked for a specific pro-

gram but are utilized for general educational purposes

or activities. Respondent Institution would substitute

form for substance. It would be unrealistic not to look

at the school’s education programs and activities gen-

erally, to the support of which the Federal payments con-

tribute. If there is discrimination on the basis of sex in

these activities, then the Federal payments may well be

employed in aiding that discrimination. In addition, the

court in Board of Public Instruction of Taylor County,

Florida vy. Finch, 414 F.2d 1068, 1079 (5th Cir. 1969),

recognized that particular programs could be so infected

by discriminatory practices elsewhere as to become dis-

criminatory.

In addition, as the General Counsel points out, the

“pinpoint provision” for terminating assistance empha-

sized by Respondent Institution, applies to the sanction

to be imposed when a discrimination is found. It is rele-

vant, accordingly, in determining whether the termination

of funds should be ordered. It is noted again, in this con-

nection, that a similar “pinpoint provision” was involved

in the Bob Jones case. The question of whether the Fed-

eral monies made available through student aid programs

are financial assistance to Hillsdale, however, is a differ-

ent question, and it cannot be said as a matter of law

that they are not.

76a

Finally, it is concluded that the GSL program comes

within the exception for a contract of insurance or guar-

anty in Section 902. These loans are obtained from pri-

vate lenders and are available to students in eligible edu-

cational institutions. An eligible educational institution is

generally a public or non-profit institution of higher edu-

cation (i.e., beyond secondary education), or a vocational

school legally authorized by the State to provide a pro-

gram of education and accredited by a recognized ac-

crediting agency. 45 CFR 177.11. Where the proper show-

ing of financial need is made, the Government in addition

to guaranteeing the loan will also pay the interest on the

loan during the time the borrower attends school and also

during the period that the borrower serves in the armed

forces or is unemployed or is attending a graduate or

fellowship program. 45 CFR 177.21(b). The General

Counsel argues that these interest payments make the

program more than a contract of guaranty and bring

the entire loan within the purview of Title IX. The pay-

ments of interest, however, are not made to the student

for payment to Hillsdale, nor are they made to Hills-

dale. They are made to the lender. The only payment

made to the student is the loan which is excluded from

Title IX. The loan itself is disbursed from funds pro-

vided by the lender and not, as in the case of the other

programs, by the Government. The interest payment ap-

pears to be a part of the contract of guaranty with the

lender, and to come within the exclusion provided for such

loans.

Ill

We turn now to the consequences of Respondent In-

stitution’s refusal to sign the Assurance of Compliance.

Hillsdale does not contest the authority of DHEW to

require such an assurance in its regulations issued pur-

suant to Section 902. Such section further provides, in

part, that “Compliance with any requirement adopted pur-

suant to this section may be effected (1) by the termina-

77a

tion of or refusal to grant or to continue assistance un-

der such program or activity to any recipient as to

whom there has been an express finding on the record,

after opportunity for hearing, of a failure to comply

with such requirement...”

The General Counsel concedes that there is neither an

allegation or finding of discrimination herein and con-

tends that the only matter at issue is one of threshold

compliance. The only violation charged in this proceed-

ing is Hillsdale’s refusal to sign an Assurance of Com-

pliance as required by 45 CFR 86.4." It is provided in

45 CFR 80.8(b), which is incorporated in the regulations

under Title IX by 45 CFR 86.71, that Federal financial

assistance may be refused if an applicant refuses to fur-

nish an Assurance of Compliance. The termination of

funds for refusal to file an Assurance of Compliance is

made discretionary and not mandatory by the regulation.

If the Assurance of Compliance were simply a com-

mitment by Hillsdale that it will use its best efforts to

comply with Title IX and the regulations lawfully issued

thereunder, (cf., Gardner v. State of Alabama Dept. of

Pensions and Security, 385 F.2d 804, 815 (5th Cir. 1967),

cert. denied, 389 U.S. 1046 (1968)), there would be less

justification for Hillsdale’s refusal to sign it. The as-

surance, however, is described in the explanation accom-

panying it as a “legally enforceable agreement to comply

with Title IX and all the requirements of [the regula-

tions]”. and the General Counsel argues that the assur-

ance would impose a contractual duty on Hillsdale to

comply with Title IX and its regulations, citing Lau v.

Nichols, 414 U.S. 563 (1974).

Of great significance to the issue of the consequences

of Hillsdale’s refusal to sign the assurance is the fact

‘2 The assurance is a standard form which, in part, requires

Hillsdale to agree to comply, to the extent applicable to it, with

Title XI and all applicable requirements imposed by the regula-

tions issued pursuant thereto.

78a

that DHEW, in reality, is requiring or demanding that

Respondent Institution agree to comply as a condition of

the continued receipt of Federal financial assistance, with

a portion of the pertinent regulations which has been

declared invalid. That part of the regulations involved

relating to the prohibition of sex discrimination in em-

ployment (45 CFR 86.51 - 86.61) has been held invalid in

whole or in part by several courts. Romeo Community

Schools v. United States Department of Health, Educa-

tion, and Welfare, 438 F.Supp. 1021 (E.D. Mich. 1977),

appeal docketed: Brunswick School Board v. Califano, 449

F.Supp. 866 (D.Me. 1978); Seattle University v. HEW,

No. C-77-6315 (W.D. Wash., January 20, 1978). See also

Board of Education of the Bowling Green City School

District v. United States Department of Health, Educa-

tion and Welfare, No. C 78-177 (N.D. Ohio May 5, 1978).

The General Counsel does not address the question of

whether the regulations dealing with employment are in-

valid, other than to question generally the authority of

the Administrative Law Judge to rule on the validity of

the regulations in this proceeding (But see footnote 7).

Nor does the General Counsel indicate whether sections

86.51-86.61 of the regulations are not to be included, in

effect, within the regulations to be covered by the Assur-

ance of Compliance. Apparently, they are to be so

included.

It seems to us that DHEW may not have power to re-

quire compliance with the regulations dealing with em-

ployment as a condition precedent to Hillsdale’s continued

receipt of the funds involved as such regulations have been

declared to be and may well be beyond the scope of its

authority under the Act. It would be an abuse of discre-

tion and arbitrary and capricious to terminate the per-

tinent programs listed above by reason of Respondent

Institution’s failure and refusal to sign the Assurance of

Compliance under these circumstances.

79a

The remaining regulations challenged by Hillsdale Col-

lege, such as those dealing with recruiting students, the

status of unmarried women students who become preg-

nant, classes in certain subjects composed of students of

one sex, or differentiation between sexes in dormitory reg-

ulations, are not, in reality, ripe for review at this stage.

The applicability and meaning of such regulations will de-

pend on how DHEW construes its regulations in relation

to actual policies and practices of Respondent Institution.

Cf. Toilet Goods Ass’n. V. Gardner, 387 U.S. 158 (1967).

We cannot rule in the abstract. Respondent Institution

claims that it does not discriminate and that may well be

the case. It seems to us that a factual framework is es-

sential within which to judge such regulations in the con-

text of performance by Hillsdale College thereunder. In

the briefs presented herein, the parties take extremely

different views as to the meaning or scope of the regula-

tions and until a specific alleged violation by Hillsdale of

a particular regulation is charged, a meaningful determi-

nation cannot be made. We do not find at this time, how-

ever, that such regulations, in the abstract, are beyond

the scope of authority conferred upon DHEW by the Act

as a matter of law.

All contentions of the parties presented for the record

have been considered and whether or not specifically men-

tioned herein, any suggestions, requests, etc., inconsistent

with this Initial Decision are denied.

Order

By reason of the foregoing, the relief requested by the

General Counsel is denied and the Notice of Hearing is

hereby dismissed.

/s/ Herbert L. Perlman

HERBERT L. PERLMAN

Administrative Law Judge

August 23, 1978

80a

APPENDIX D

[EDUCATION AMENDMENTS OF 1972, TITLE IX

20 U.S.C. §§ 1681 ET SEQ.)

§ 1681. Sex

(a) Prohibition against discrimination; exceptions

No person in the United States shall, on the basis of

sex, be excluded from participating in, be denied the ben-

efits of, or be subjected to discrimination under any edu-

cation program or activity receiving Federal] financial] as-

sistance, except that:

(1) Classes of educational institutions subject to

prohibition

in regard to admissions to educational institutions,

this section shall apply only to institutions of voca-

tional education, professional education, and graduate

higher education, and the public institutions of un-

dergraduate higher education;

(2) Educational institutions commencing planned

change in admissions

in regard to admissions to educational institutions,

this section shall not apply (A) for one year from

June 23, 1972, nor for six years after June 23, 1972,

in the case of an educational institution which has

begun the process of changing from being an institu-

tion which admits only students of one sex to being

an institution which admits students of both sexes,

but only if it is carrying out a plan for such a

change which is approved by the Commissioner of

Education or (B) for seven years from the date an

educational institution begins the process of changing

from being an institution which admits only students

of only one sex to being an institution which admits

students of both sexes, but only if it is carrying out a

plan for such a change which is approved by the

Commissioner of Education, whichever is the later;

8la

(3) Educational institutions of religious organiza-

tions with contrary religious tenets

this section shall not apply to an educational insti-

tution which is controlled by a religious organization

if the application of this subsection would not be

consistent with the religious tenets of such organiza-

tion;

(4) Educational institutions training individuals for

military services or merchant marine

this section shall not apply to an educational insti-

tution whose primary purpose is the training of in-

dividuals for the military services of the United

States, or the merchant marine;

(5) Public educational institutions with traditional

and continuing admissions policy

in regard to admissions this section shall not

apply to any public institution of undergraduate

higher education which is an institution that tradi-

tionally and continually from its establishment has

had a policy of admitting only students of one sex;

(6) Social fraternities or sororities; voluntary youth

service organizations

this section shall not apply to membership prac-

tices—

(A) of a social fraternity or social sorority

which is exempt from taxation under section

501(a) of title 26, the active membership of

which consists primarily of students in attend-

ance at an institution of higher education, or

(B) of the Young Men’s Christian Associa-

tion, Young Women’s Christian Association, Girl

Scouts, Boy Scouts, Camp Fire Girls, and volun-

tary youth service organizations which are so

exempt, the membership of which has tradition-

ally been limited to persons of one sex and prin-

82a

cipally to persons of less than nineteen years of

age;

(7) Boy or Girl conferences

this section shall not apply to—

(A) any program or activity of the Ameri-

can Legion undertaken in connection with the

organization or operation of any Boys State

conference, Boys Nation conference, Girls State

conference, or Girls Nation conference; or

(B) any program or activity of any second-

ary school or educational institution specifically

for—

(i) the promotion of any Boys State con-

ference, Boys Nation conference, Girls State

conference, or Girls Nation conference; or

(ii) the selection of students to attend

any such conference;

(8) Father-son or mother-daughter activities at ed-

ucational institutions

this section shall not preclude father-son or mother-

daughter activities at an educational institution, but

if such activities are provided for students of one

sex, opportunities for reasonably comparable activi-

ties shall be provided for students of the other sex;

and

(9) Institution of higher education scholarship

awards in “beauty” pageants

this section shall not apply with respect to any

scholarship or other financial assistance awarded by

an institution of higher education to any individual

because such individual has received such award in

any pageant in which the attainment of such award

is based upon a combination of factors related to the

personal appearance, poise, and talent of such indi-

83a

vidual and in which participation is limited to in-

dividuals of one sex only, so long as such pageant is

in compliance with other nondiscrimination provi-

sions of Federal law.

(b) Preferential or disparate treatment because of

imbalance in participation or receipt of Federal

benefits; statistical evidence of imbalance

Nothing contained in subsection (a) of this section

shall be interpreted to require any educational institution

to grant preferential or disparate treatment to the mem-

bers of one sex on account of an imbalance which may

exist with respect to the total number or percentage of

persons of that sex participating in or receiving the bene-

fits of any federally supported program or activity, in

comparison with the total number or percentage of per-

sons of that sex in any community, State, section, or other

area: Provided, That this subsection shal] not be con-

strued to prevent the consideration in any hearing or

proceeding under this chapter of statistical evidence tend-

ing to show that such an imbalance exists with respect to

the participation in, or receipt of the benefits of, any such

program or activity by the members of one sex.

(c) Educational institution defined

For purposes of this chapter an educational institution

means any public or private preschool, elementary, or

secondary school, or any institution of vocational, pro-

fessional, or higher education, except that in the case of

an educational institution composed of more than one

school, college, or department which are administratively

separate units, such term means each such school, col-

lege, or department.

(Pub. L. 92-318, title IX, § 901, June 23, 1972, 86 Stat.

373; Pub. L. 93-568, § 3(a), Dec. 31, 1974, 88 Stat. 1862;

Pub. L. 94-482, title IV, § 412(a), Oct. 12, 1976, 90 Stat.

2234.)

84a

§ 1682. Federal administrative enforcement; report to

congressional committees

Each Federal department and agency which is empow-

ered to extend Federal] financial assistance to any educa-

tion program or activity, by way of grant, loan, or con-

tract other than a contract of insurance or guaranty, is

authorized and directed to effectuate the provisions of

section 1681 of this title with respect to such program

or activity by issuing rules, regulations, or orders of gen-

eral applicability which shall be consistent with achieve-

ment of the objectives of the statute authorizing the

financial] assistance in connection with which the action is

taken. No such rule, regulation, or order shall become

effective unless and until approved by the President.

Compliance with any requirement adopted pursuant to

this section may be effected (1) by the termination of or

refusal to grant or to continue assistance under such pro-

gram or activity to any recipient as to who

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