On July 24, the US Department of Education (ED) published a final rule in the Federal Register eliminating disparate-impact liability from its Title VI regulations at 34 CFR Part 100. The rule took effect immediately, though it is likely to face legal challenge, particularly because ED issued it without prior notice and comment.
In practical terms, ED’s Office for Civil Rights (OCR) will no longer investigate or take enforcement action against colleges and universities based solely on the discriminatory effects of facially neutral policies. From now on, OCR will enforce Title VI only against intentional discrimination and discriminatory harassment. For institutions with pending matters that include disparate-impact allegations, OCR may issue additional guidance regarding their status. However, based on recent federal enforcement trends, OCR may narrow, dismiss, or decline to pursue allegations that rest solely on disparate-impact theories. The rule does not eliminate civil rights risk for higher education institutions. Intentional-discrimination claims remain fully actionable; Title VII disparate-impact claims remain available in employment litigation; state civil rights laws may continue to impose effects-based obligations; and institutions must still maintain compliance data under 34 CFR §100.6(b).
This alert updates our June 17 alert on federal DEI enforcement expansions, which tracked the federal government’s shift away from disparate-impact theories. The administration’s April 2025 executive order directed federal agencies to curtail reliance on disparate-impact liability theories and extend scrutiny of DEI policies beyond admissions into hiring, research funding, academic programs, athletics, accreditation, and student life. The final rule is another piece of a coordinated federal realignment.
Background: Disparate impact under Title VI
Title VI of the Civil Rights Act of 1964 (42 USC §2000d) prohibits discrimination on the basis of race, color, or national origin in any program or activity receiving federal financial assistance. Since the 1970s, ED regulations have supplemented that statutory prohibition with disparate-impact provisions: rules that prohibited recipient institutions from using facially neutral criteria or methods of administration that had the effect of subjecting individuals to discrimination, even without discriminatory intent.
Under this framework, OCR could investigate whether a policy disproportionately affected students of a particular race or national origin. If it did, the institution bore the burden of justifying the policy as necessary and showing that no less discriminatory alternative was available.
The legal landscape shifted significantly in 2001 when the Supreme Court held in Alexander v. Sandoval that private plaintiffs have no right of action to enforce disparate-impact regulations under Title VI. After Sandoval, disparate-impact enforcement under Title VI was limited to government agency action, but ED’s regulations remained on the books, and OCR continued to apply them in compliance reviews and complaint investigations.
The final rule does not amend Title VI itself; rather, it removes ED’s regulatory basis for enforcing disparate-impact theories under Title VI.
Practical implications for colleges and universities
What Has Changed
OCR investigation scope: OCR’s Title VI enforcement under ED’s regulations will now focus on intentional discrimination and discriminatory harassment, rather than disparate-impact theories. As a result, Title VI complaints that rely solely on a disparate-impact theory will no longer be within OCR’s scope. If a complaint does not allege intentional discrimination, OCR now lacks a regulatory basis to pursue it under Title VI.
Similarly, under the prior framework, if OCR found that a policy disproportionately affected students of a particular race or national origin, that alone could trigger an investigation and corrective action demand. That federal lever is now gone.
Regulatory affirmative-steps mandate: The removal of 34 CFR §100.3(b)(6) means institutions of higher education are no longer subject to that federal regulatory requirement to take affirmative steps to overcome the effects of prior discrimination.
Federal Title VI effects liability for employment practices: The removal of §100.3(c)(3) eliminates a layer of ED Title VI oversight that extended disparate-impact principles to hiring and personnel decisions at institutions receiving federal funding. Employment practices remain subject to other legal regimes, including Title VII.
What Has Not Changed
Intentional discrimination claims remain fully actionable: ED (and the Department of Justice) will continue to investigate complaints and conduct compliance reviews for disparate treatment—policies or practices motivated by discriminatory intent. A facially neutral policy adopted for the purpose of disadvantaging a racial group remains a Title VI violation.
State civil rights laws with disparate-impact protections: Many states maintain their own civil rights statutes or administrative frameworks that may impose effects-based liability. Institutions in California, New York, Illinois, Massachusetts, Rhode Island, and others face continuing obligations, which this federal rule does not disturb. Future litigation may address the interplay between federal regulatory requirements and states’ civil rights laws.
Title VII disparate impact in employment: For employment decisions, Title VII’s disparate-impact framework remains viable in federal court, even though the US Equal Employment Opportunity Commission (EEOC) has deprioritized its own enforcement. Private plaintiffs can still bring disparate-impact employment claims under Title VII.
Other federal funding streams may require separate analysis: The rule amends ED’s Title VI regulations; institutions should separately evaluate obligations tied to non-ED federal funding streams.
Institutional mission and stakeholder considerations: Institutional missions and commitments to creating equitable work and educational spaces do not depend on a federal regulatory mandate. Boards, faculty, students, alumni, and community stakeholders may have strong feelings about these matters, and balancing their perspectives with any changes to institutional policies or actions remains critical.
Data collection and retention: In addition to state law compliance factors, which may, in certain circumstances, require the collection of data, 34 CFR 100.6(b) still requires recipients to maintain compliance data and provide it to ED on request. This provision was not touched by the final rule. Moreover, data can be essential to defending against intentional discrimination claims. If the data shows consistent application of neutral criteria, this can be an institution’s best evidence of nondiscriminatory intent. Institutions should also ensure that demographic and compliance data are collected, stored, accessed, and analyzed pursuant to appropriate privacy, records-retention, and privilege protocols.
Litigation watch
This rule will likely be challenged in court. Notably, ED issued this final rule without prior public notice and comment, a significant procedural choice that will undoubtedly be a focal point for legal challenges.
In order to do so, ED invoked 5 USC §553(a)(2), which exempts from notice-and-comment requirements rules “relating to agency management or personnel or to public property, loans, grants, benefits, or contracts.” ED’s reasoning: Title VI regulations are conditioned on the receipt of federal financial assistance (grants, loans, and contracts) and, therefore, fall squarely within §553(a)(2)’s enumerated categories.
Because §553(a)(2) exempts section 553 as a whole—not just the notice-and-comment provisions—ED also dispensed with the 30-day delayed effective date ordinarily required by §553(d)(1).
Challengers may argue that the rule is substantive, that ED’s reliance on §553(a)(2) is improper or inconsistent with agency practice, or that the rule is arbitrary and capricious given decades of prior disparate-impact enforcement under Title VI regulations. Because the rule took effect immediately, litigation may also include requests for temporary restraining orders, preliminary injunctions, or stays. Institutions should, therefore, avoid assuming that the current enforcement posture is settled.