On June 24, the Supreme Court issued a landmark decision by ruling on Chevron deference, a 40-year old doctrine that guides how courts interact with federal agencies’ interpretation of ambiguous laws. The long-awaited ruling, decided by a 6-3 vote on ideological lines, will likely have significant implications across policymaking, including for higher education rulemaking. [Bloomberg, subscription model]

What is Chevron Deference? Chevron deference, a constitutional standard established through the 1984 case Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., mandated that courts defer to a federal agency’s interpretation of ambiguous laws as long as the interpretation is reasonable. For the past four decades, the influential legal precedent has given federal agencies broad latitude in how they implement and enforce regulations.

The ruling: The Supreme Court’s recent decision effectively curtails the extent of Chevron deference, meaning that courts will now have more authority to review and potentially overturn federal agencies’ interpretations of statutes. This shift moves the power of final interpretation from regulatory agencies to the judiciary.

Why it matters: The Supreme Court’s decision to limit Chevron deference represents a significant shift in the balance of power between federal agencies and the judiciary, and it will have potentially far-reaching implications for the U.S. Department of Education, which has historically used broad regulatory authority to set policy. Recent administrations have utilized negotiated rulemaking as a critical policy lever across a wide range of issues from student loans and accountability policies like Gainful Employment and Borrower Defense to Repayment to Title IX and policies governing international student visas.

Our take: Look for an increase in legal cases challenging the Department of Education’s authority to create and enforce new regulations beyond the existing powers established under the Higher Education Act, which—by the way—has not been updated since 2008 and President George W. Bush.

With the federal bench given an even more expansive role in interpreting statutes, current and future Education Department regulations could face heightened scrutiny and litigation. The Supreme Court’s decision to limit Chevron deference may embolden critics of a strong federal role in higher education policy, funding, and oversight—and crimp the Department’s ability to create or enforce policies across a broad spectrum of issues.