Moody's Investors Service has downgraded the credit rating of Laureate Education, a for-profit chain with a large global footprint. The credit ratings agency also downgraded Laureate last year. In both cases it cited the company's expansion, which has contributed to debt levels. Laureate now enrolls more than one million students at 80 campus-based and online institutions.
"Laureate's aggressive growth has created persistently high leverage and has strained the company's liquidity," said David Berge, a Moody's analyst, in a written statement.
After reading Obergefell I think the concerns of these colleges are unjustified for a number of reasons. But I also think that this case has given us an opportunity to open a dialogue about a plurality of viewpoints in our culture. The onus for such a conversation is on my own community, the evangelicals who have been criticizing Obergefell. At the same time, conservative Christians who are worried about Obergefell get even more stubborn when the public labels them bigots for refusing to support something they truly believe to be harmful. It’s time for all of us to listen to each other and talk to each other more carefully.
The Cause of the Worry
Some Christian universities are worried that they will lose their tax-exempt status and have to close if they are not willing to change their beliefs about homosexuality. This concern was first voiced during the Obergefell oral arguments when Justice Alito said this: “In the  Bob Jones [University] case, the court held that a college was not entitled to tax-exempt status if it opposed interracial marriage or interracial dating. So would the same apply to a university or a college if it opposed same-sex marriage?”
Solicitor General Donald Verrilli Jr., arguing for same-sex marriage, responded that without more specifics he couldn’t be certain but that it would definitely “be an issue.”
This exchange caused the chancellor of Patrick Henry College in Virginia to write in USA Today that churches and faith-based educational institutions would have to decide what was more important, their religious convictions or their tax exemption. He said religious schools and colleges should get prepared for the fallout of a decision in favor of same-sex marriage because the “bullying” would be immediate.
The concern that Justice Alito expressed emerges from a 1983 Supreme Court case, Bob Jones v. U.S., involving a conservative Christian university that discriminated on the basis of race.For decades Bob Jones University denied admittance to black students, but by the early 1970s it changed that policy. It decided to admit black students but it kept its policy that said students would be expelled if they engaged in interracial dating. This student behavior rule was based on an interpretation of the Bible that suggested God intended the races to be separate.
The Internal Revenue Service in 1971 barred tax exemptions to colleges that discriminated on the basis of race, and determined that Bob Jones University did so.
When the university brought a lawsuit against the IRS, the Supreme Court affirmed that proper interpretation of the IRS statute meant institutions seeking tax-exempt status must serve a “public purpose and not be contrary to established public policy.” Racial discrimination did not serve a public purpose; furthermore, it violated public policy. Today, some faith-based institutions worry that an interpretation of their scriptures forbidding homosexuality will be found to be a violation of public policy just like racism.
Is their worry valid? For reasons embedded in the cases themselves, the answer is no.
An Unwarranted Concern
There are two reasons that faith-based colleges will be allowed to continue to act on their beliefs against homosexuality without losing tax-exempt status.
First, the Supreme Court in Bob Jones based its decision on the fact that every branch of government and an unbroken line of Supreme Court cases had repeatedly and explicitly denounced racial segregation. That reasoning focused on a legislative and jurisprudential history that had developed over 100 years. The Equal Protection Clause of the 14th Amendment targeting racial discrimination was ratified in 1868. Brown v. Board of Education, the Supreme Court case that interpreted the Constitution to disallow segregation in education, was handed down in 1954. And while some legislation exempted religious institutions from the nondiscrimination law, religious institutions themselves changed their own thinking about segregation and discrimination. By the time the Bob Jones decision was handed down, Christian universities that argued for a biblical interpretation in favor of racial segregation were a tiny minority of the Christian voice in higher education.
None of this legislative or jurisprudential history exists for LGBT claims.
Moreover, in the 30 years since Bob Jones, we have not seen the IRS make a similar move against religious universities in any area. There is no reason to believe that the IRS would suddenly decide to deny tax-exempt status to religious universities that argue as part of their foundational beliefs that homosexuality violates God’s law.
Second, if the IRS were to make such a move now or in the future, it would not be successful. The Obergefell majority specifically said that it was not willing to limit religious freedom. Justice Kennedy, who wrote the majority opinion, focused on the concern of religious institutions. After stating that Obergefell relates only to a situation in which no harm occurs to others, Kennedy explicitly addressed religious organizations. He said that the First Amendment ensures that they are given “proper protection as they seek to teach the principles that are so fulfilling and so central to their lives and faiths, and to their own deep aspirations to continue the family structure they have long revered.”
What did Justice Kennedy mean? Why do his words hold such significance, particularly since the dissent in Obergefell said religious institutions ought to be worried? The answer lies in the tests used in constitutional jurisprudence that highlight the relationship between the Bob Jones and Obergefell decisions.
The Bob Jones court applied the strict scrutiny test, concluding that even though the First Amendment protects religious liberty, religious freedom is not absolute. In this case, where the government wanted to elevate the protection of racial groups over the protection of religious groups, the government had to show two things. It had to show that it had a compelling interest and it had to show that it had taken a very restrictive, narrow path to achieve its compelling interest. This is a high bar, and the Supreme Court uses it to review only certain discrimination claims -- like those based on race.
In Bob Jones the Supreme Court said this: “The government's fundamental, overriding interest in eradicating racial discrimination in education substantially outweighs whatever burden denial of tax benefits places on petitioners' exercise of their religious beliefs.”
That language is important because the strict scrutiny test is the gold standard when courts look at legislation that limits the rights of people or groups. Every group that wants protection wants the strict scrutiny test to be used, LGBT groups included. But we have not had any ruling that LGBT claims should receive strict scrutiny despite decades of litigation asking for it. Even gender discrimination doesn’t receive a test that high after a century of debate.
Furthermore, in Obergefell the Supreme Court was careful to avoid any language that could be used to further develop LGBT claims when they bump up against religious freedom claims. The Obergefell Supreme Court used no tests and no levels of scrutiny. This was frustrating for those of us looking for guidance about how LGBT claims should be handled in the future but with respect to religion it showed a clear preference to elevate religious freedom protection. One has to look back only as far as last year’s Hobby Lobby case to see how eager this Supreme Court is to protect the religious freedom of churches, educational institutions and even for-profit businesses.
This isn’t, however, the end of the story. There is a lot more litigation to come. Most of the litigation will be about employment rights for LGBT people outside of religious institutions, and some of it will be about protecting the rights of LGBT consumers from businesses that want to refuse service to them. These are not cases that involve universities. The cases that do involve universities will likely start with outside accreditors for professional programs at Christian institutions. Without better political discussion, I think the litigation is going to get nastier before it solves tensions between groups. That will hurt us all.
I teach at an evangelical institution. I believe in both legal protection for LGBT claims and protection for religious freedom. I recognize that there can be a tension between these two and I know that many religious institutions are working hard to figure out how they should handle these matters with justice and care for all voices. It isn’t easy.
And it isn’t just faith-based universities that have to consider this balance. State colleges and universities want to accommodate the rights of LGBT students and employees, and they have to accommodate rights of conservative Christians -- it’s required by the First Amendment. We all have to figure this out together and it is going to take compromise by everyone.
I think litigation is a bad way to balance the rights of groups of people. In these cases we have two small groups, each believing it has been misunderstood and discriminated against at different times in American history. Litigation will hurt them; political compromise between them provides at least some room for them to control the conversation. These groups need to talk to each other, listen to each other and help the nation figure out a way to accommodate both their interests.
By the year 2000, Bob Jones University eliminated its racially discriminatory policies, and by 2008 it had issued a formal apology for the damage it had done to people of other races. Conservative religious groups need to recognize that religious freedom does not mean they exist in a vacuum and can do whatever they want to. They need to learn from others in society, and they have a responsibility to people who differ from themselves. At a minimum conservative groups should refrain from criticizing Christian institutions that have carefully considered this matter and have decided to end policies that discriminate against gay Christian employees. Furthermore, because I have been writing in this area for so long, I know of many closeted gay employees at many conservative Christian universities. These employees are beloved by their communities but they are afraid to be open about who they are. Christian institutions need to create a safe place for their own employees and invite them to teach the rest of us what life has been like for them.
And LGBT advocates cannot forget that their own desire to live according to who they are as humans is exactly the same as what conservative Christians want. Majority rule without concern for small voices has hurt the LGBT population for centuries. The LGBT folks I talk to realize this and are quite loath to condemn others who differ from them. They believe in compromise and often are willing to talk with conservative Christians when they have a safe space where both sides come together to try to get to know each other.
The only way to address these challenges is in careful discussion. We have to get to know each other, to listen to each other. Both groups would benefit from conversation about what it means to be a small voice in a pluralistic, democratic nation. And then my bet is that they would have something to teach the rest of us about compromise and tolerance.
What better place to have these conversations than an educational setting?
Julia K. Stronks is the Edward B. Lindaman Chair and a professor of political science at Whitworth University. She has written several books and articles on the relationship between faith and public policy including Law, Religion and Public Policy: A Commentary on First Amendment Jurisprudence (2002).
The primary trade group for the for-profit sector, the Association of Private Sector Colleges and Universities (APSCU), said last week that it will appeal a federal court ruling over the Obama administration-led gainful employment rules, which went into effect this month.
A federal court in 2012 largely invalidated a previous version of the regulations. But last month a federal judge rejected a legal challenge by the for-profit group to the new rules, which require vocational programs at for-profits (and nondegree programs at community colleges) to meet minimum thresholds with the debt-to-income rates of graduates. A different federal court also upheld the rules in response to a legal challenge by a for-profit association in New York.
APSCU said it would appeal, arguing that gainful employment “needlessly complicates the efforts of new traditional students to achieve a career-focused education that helps them get jobs, and we will continue to fight to keep opportunities open for students who are often struggling to juggle family, work and school.”
The Chicago Tribune had to sue to get records of the expenses of Robert Breuder, who is currently on leave as president of the College of DuPage, a community college outside Chicago. The documents that were released show considerable spending that theoretically was about building relationships with donors, but frequently didn't involve donors so much as senior administrators, trustees and vendors.
For example, for one outing to a private fish and game reserve with three others, including the college lawyer and a vendor, Breuder spent $1,292 in college foundation funds -- on two bottles of red wine purchased in advance, a lunch, gun rental and ammunition. Thirty pheasants were shot. Other uses of foundation funds include $1,450 for four days of dining in California wine country, and $683 for a "unique" wine pairings event at a liquor store.
Foundation officials have defended spending as necessary to build relationships and cultivate donors. Breuder was unavailable for comment.
John Wiley & Sons, a publisher, this week announced a partnership with InsideTrack, a student coaching company, that will bring career coaching directly to students. InsideTrack also recently partnered up with Chegg, an online textbook rental company, to offer a similar service. They will get free, introductory career-related videos. Paid subscribers will get access to InsideTrack's web and mobile-enabled platform. InsideTrack's career coaches will work with students to assess their career readiness, to develop their skills and to help them plan their job search.