By John Worthington, Esq., Coordinator of Special Education Law, Foundation for Educational Administration
Among the procedural protections afforded parents of students with disabilities by the Individuals with Disabilities Education Act (IDEA), the right to a due process hearing to contest, among other issues, the appropriate programming and placement for their child, has the greatest legal, emotional, economic, and educational impact on the participants and the child. While all procedural protections are essential to protect the rights of families to meaningful participation in the special education process, due process hearings have the greatest impact on the program, placement and services provided a student with disabilities. In a typical request for mediation and a due process hearing, the matter is settled at some point in the process, as only a small portion of the 1,700 plus cases filed go to hearing and receive a final decision.
Significant changes were recently made to how these proceedings are conducted and, most importantly, how they may be settled beginning with cases filed on or after January 1, 2026. Guidance from the New Jersey Department of Education from December 3 and 10, 2025 is below:
NJDOE’s December 3, 2025 Broadcast Memorandum
“In New Jersey, special education due process hearings are conducted by Administrative Law Judges (ALJs) within the Office of Administrative Law (OAL). Under the Individuals with Disabilities Education Act (IDEA) and its implementing regulations, a final decision in a special education due process hearing must be issued after the hearing in accordance with [applicable regulations.] As a result of the Differentiated Monitoring and Support (DMS) activities conducted by the U.S. Department of Education (USED), Office of Special Education Programs (OSEP) in March 2024, New Jersey’s designation of a settlement agreement reached through a settlement conference as final decision made in a hearing under 34 C.F.R. § 300.514 was found to be inconsistent with the requirements under 34 C.F.R. § 300.514, 34 C.F.R. §§ 300.507 through 300.513, and 300.530 through 300.534. Accordingly, the OSE will discontinue the practice of ALJs signing settlement agreements as a “Final Decision Approving Settlement” through the OAL for all due process cases filed after January 1, 2026. To ensure full compliance with the IDEA, all future settlement agreements must be executed privately, outside of the OAL process.
. . . If a settlement agreement resolves a due process complaint, the ALJ will issue a formal dismissal order, confirming the case is closed due to a legally binding private agreement. Therefore, the OAL shall no longer issue a final decision approving settlement under any circumstances. As part of a due process hearing, ALJs may approve settlement agreements for placement in accredited nonpublic schools that are not specifically approved for the education of students with disabilities under N.J.A.C. 6A:14-6.5. Such settlement agreements shall address only the student’s placement in the nonpublic school and will not be designated as final decisions issued by the OAL. Additionally, . . . prehearing conferences will now be audio-recorded automatically for all pro se parents and guardians. For represented parties, the OAL will record prehearing conferences upon counsel’s request, and copies of recordings will be provided upon request. This update to the due process system will also take effect on January 1, 2026. These policy changes are necessary to align State practice with federal requirements and to uphold the Office of Special Education’s (OSE) obligation to guarantee FAPE for all students with disabilities.” [Emphasis supplied].
NJDOE’s December 10, 2025 Broadcast Memorandum
“. . . . This broadcast memo serves as a reminder of the role of the mediator and clarifies what may be included in a mediation agreement, whether facilitated by a mediator or an ALJ, in accordance with N.J.A.C. 6A:14-2.6. Pursuant to these provisions, IDEA mediators’ responsibilities are to:
1. Facilitate communication between the parties in an impartial manner.
2. Chair the meeting.
3. Assist the parties in reaching an agreement and, if an agreement is reached, the mediator shall prepare the document setting forth the agreement of the parties at the mediation conference.
4. Assure that the agreement prepared by the mediator complies with Federal and State law and regulation.
5. When appropriate, adjourn the mediation to a date certain that is not more than 45 days from the date of the request for a mediation conference, at the request of the parties to obtain additional information or explore options.
6. Terminate mediation if, in the mediator’s judgment, the parties are not making progress toward resolving the issue(s) in dispute.
7. Ensure mediation agreements do not address special education or related services for more than one school year.
As part of its general supervision and monitoring responsibilities under IDEA, the OSE reviews every mediation agreement developed by IDEA mediators to ensure compliance with state and federal special education regulations and to safeguard the rights of students with disabilities to receive a Free Appropriate Public Education (FAPE) in the Least Restrictive Environment (LRE). Examples of mediation agreement provisions that would likely be found contrary to federal and state requirements include, but are not limited to: waiving a student’s right to a FAPE; preventing a parent from filing future due process complaints or state complaints; requiring a parent to disenroll the child from the district; limiting parent communication or participation; waiving the requirement for an annual review of a student’s Individualized Education Program (IEP); and waiving the district’s responsibility to monitor a student’s progress. If the OSE determines that any provision of a mediation agreement does not comply with federal or state law or regulations, the OSE will notify all parties that the noncompliant provisions cannot be enforced. In addition, the OSE will also implement appropriate corrective action when necessary to ensure district practices align with federal and state requirements.” [Emphasis supplied].
These memoranda provide significant changes to the special education mediation and due process systems in New Jersey. The most significant change may be the determination that ALJ’s will no longer issue decisions ordering that settlements be implemented, and instead, decisions will be issued noting that the case was settled with a private agreement and dismissing the case. This change will impact both enforcement and, more importantly, requests for attorney fees. Pursuant to IDEA, if a parent prevails in a due process hearing, they are entitled to have their fees paid by the school district. By no longer having ALJs issue a final decision and ordering that settlements be implemented, parent’s ability to obtain reimbursement of attorney fees will be significantly impacted, as there will be no final decision to point to as evidence that they are the prevailing party. As such, it is likely that a key part of future settlement discussions will center on payment of attorney fees. While fees have always been an item of discussion overarching settlement discussions, it will likely move to the forefront in future settlement discussions. Only time will tell how this new dynamic will impact settlement discussions, but there is the potential for more full due process hearings occurring if fees cannot be agreed upon, which will result in potential added costs in staff time and attorney fees for school districts.
Also, as private agreements, settlements will likely no longer be subject to enforcement actions by the NJDOE on behalf of parents when school districts fail to adhere to such settlement agreements, as they no longer fall within the scope of what is enforceable by the NJDOE in N.J.A.C. 6A:14-2.7(t). This might impact parents more than school districts, but the lack of a free settlement mechanism could mean more enforcement actions will be filed in court, which will cost school districts time and attorney fees to defend such actions.
The change to permissible terms in settlement agreements in both mediation and due process hearings will also have a significant impact on school districts. Past settlements between school districts and parents in special education litigation have often included provisions such as cost sharing, multiyear placements, FAPE waivers and waivers of a district’s responsibility to annually review a student’s program and placement. Based on the new guidance, such settlements likely will result in enforcement actions against school districts for entering into agreements that conflict with applicable state and federal laws. Thus, districts will have to carefully engage in settlement discussions and ensure that agreements comply with IDEA and state law and regulations. Failure to do so could result in determinations of noncompliance and corrective actions being directed against districts.
Moving Forward
School districts must prepare to address both the impact of dismissals of settled special education due process cases by ALJs on fee applications, and the legality of proposed settlement terms in mediation and due process proceedings on NJDOE oversight and enforcement actions against them when determining whether, and pursuant to what terms, settlement agreements should be executed. Such assessments will require careful review of the impact of attorney fees on such discussions. It will also require districts to ensure that what is being proposed adheres to IDEA and state law and regulations, including applicable guidance by the NJDOE with respect to what is permissible, before determining how to settle these cases. More than ever, working with the board attorney, even in situations where the attorney does not attend a mediation conference, is essential to limiting fiscal and compliance impacts on school districts.