Title IX Ruling Protects Homeschool from Federal Overreach

A federal court of appeals ruling last month protects nonprofits (including private schools and homeschools) from federal overreach in the context of Title IX regulations.

Schools that receive government money have to abide by Title IX, but the court found that having 501(c)(3) status is not enough to put a private school into that category. The ruling means private schools cannot be subject to Title IX solely because of their status with the IRS.

The ruling overturned a dangerous decision that could have affected homeschools that are considered private schools in some states, and HSLDA is pleased with the outcome. But we will continue to monitor other deeply concerning federal district court decisions regarding Title IX regulations and private schools.

Title IX is the landmark law passed by Congress in 1972 to ensure that women and girls had the same privileges as boys and men in sports. It applies to any educational institution that receives “federal financial assistance.” Over the years, Title IX has been significantly broadened by regulations and court decisions.

For example, the Biden administration recently issued a final regulation redefining “sex” in Title IX to include “gender identity.”

In July 2022, a federal district court in California held that a private Christian school that had received Paycheck Protection Program (PPP) loans during the COVID-19 pandemic, and was tax exempt, may also be subject to Title IX. You can read the district court’s decision here.

Later that same week, a federal district court in Maryland concluded that a private K–12 Christian school was subject to Title IX solely because a 501(c)(3) “tax exemption qualifies as federal financial assistance under Title IX.” You can read the district court’s decision here.

This was deeply concerning, and not just for 501(c)(3) institutions. Could another tax exemption (like 501(c)(7) social clubs) cause an entity to be subject to Title IX? What about education tax credits, property tax credits, or even a child tax credit?

Thankfully, the Fourth Circuit Court of Appeal’s unanimous decision set the record straight. In overturning the Maryland district court, the court of appeals first examined the history of tax exemptions in US law and found that “tax exemption for charitable institutions is deeply rooted in American history.”

The court then made this holding:

“Tax exemption is not ‘Federal financial assistance.’ This is not a novel concept. Indeed, since Title IX's inception over fifty years ago, it has never been applied to organizations based solely on their tax exempt status. And for good reason. Although tax exemption is a tax benefit, that does not mean it is ‘Federal financial assistance’ for Title IX purposes. As noted above, ‘assistance’ means ‘aid, help, or support,’ which all connotate financial grants. Tax exemption, however, is the withholding of a tax burden, rather than the affirmative grant of funds. Thus, tax exemption is not ‘Federal financial assistance.’”

With this straightforward decision based on the plain language of the law, we are optimistic that homeschool support groups, homeschool organizations, private schools, and other entities that have 501(c) status will continue to retain their autonomy from federal regulation and control.

The Fourth Circuit’s decision covers Maryland, Virginia, West Virginia, North Carolina, and South Carolina, so it does not overrule the court in California. However, it sets a strong foundational argument to protect the tax-exempt status of homeschool organizations across the country. And, importantly, the decision strengthens the argument that there is a distinction between a tax credit or tax deduction (either at the state or federal level) and a government program like a voucher or Education Savings Account (ESA).

HSLDA has long had concerns with ESAs for homeschooling families. We have always drawn a distinction between the two, and the Fourth Circuit’s decision affirms this idea.

In a nutshell, you keep your own hard-earned money with a tax deduction or tax credit. The government gives you a handout under a voucher or ESA or another program. There are worlds of legal difference between the two.

HSLDA remains committed to supporting and defending homeschool families and homeschool organizations. HSLDA Senior Counsel Darren Jones directs the HSLDA Group Services program, and he would be happy to discuss the details of this case with you.

And you can rest assured that HSLDA will keep this Fourth Circuit decision in our back pocket in case any nosey government agencies try to regulate homeschool groups simply because they are a 501(c) organization.