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JORDAN v. RILEY

November 12, 1998

RENEE M. JORDAN, JACQUELINE BLACK, Plaintiffs,
v.
RICHARD RILEY, as Secretary of Education of the United States, et al., Defendants.



The opinion of the court was delivered by: KENNEDY

MEMORANDUM OPINION

 The Secretary of Education has been directed by Congress to discharge a borrower's liability on a Federal Family Education Loan if the borrower's loan eligibility "was falsely certified by the eligible institution." 20 U.S.C. § 1087(c)(1). At issue in this case is the Secretary's implementation of this statute. 34 C.F.R. § 682.402(e). The remaining plaintiff, *fn1" Renee M. Jordan, argues that the Secretary's regulation is unlawful because it plainly contradicts the language of the statute by adding a requirement for a borrower to obtain relief. She seeks declaratory and injunctive relief.

 Presently before the court are the parties' cross-motions for summary judgment on a complaint for declaratory and injunctive relief. Upon consideration of the motions, the responses thereto, and the entire record of this case, the court concludes that the defendants are entitled to summary judgment.

 I. BACKGROUND

 The Higher Education Act of 1965, 20 U.S.C. §§ 1070-89, established the Guaranteed Student Loan Program, now the Federal Family Education Loan ("FFEL"). Under this education loan program, "eligible borrowers" can receive loans from private lenders to attend eligible post-secondary institutions. State and private guaranty agencies insure the loans, and the Secretary of Education (the "Secretary") insures the guaranty agencies. The Secretary is authorized to issue regulations to carry out the purposes of the corresponding statute. 20 U.S.C. § 1082(a)(1).

 Typically, "eligible students" are students with high school diplomas or General Education Development certificates (GEDs). A student failing to meet this requirement may nonetheless qualify to receive an education loan to attend an eligible vocational institution if that institution certifies that the student has the "ability to benefit" from the school's training. 20 U.S.C. §§ 1085(c) (1990) & 1091(d) (1997). In 1987, when Jordan received her education loan, institutions determined "ability to benefit" based on the student's performance on a test. Institutions could also certify a student's ability to benefit if the student received her GED or successfully completed a remedial education program provided by the institution. 34 C.F.R. §§ 682.402(e)(13)(i) & (ii)(C).

 In the late 1980s, Congress investigated widespread allegations of fraud among vocational institutions in certifying students as eligible for education loans. Congress heard testimony that some vocational institutions would improperly administer "ability to benefit" tests, allowing the institutions to then certify to the Department of Education that students who had not demonstrated an "ability to benefit" were eligible for guaranteed student loans. As a result, many students graduated in debt while lacking the skills needed to obtain employment.

 Congress responded to this problem in the 1992 reauthorization of the Higher Education Act. The 1992 amendments mandated that the Secretary of Education discharge liability on a guaranteed education loan received on or after January 1, 1986 if the "student's eligibility to borrow. . . was falsely certified by the eligible institution." 20 U.S.C. § 1087(c)(1) (emphasis added). *fn2"

 The Secretary promulgated regulations to implement these amendments. These regulations allow a student to apply for a loan discharge based on the school's defective testing of the student's ability to benefit. 34 C.F.R. § 682.402(e)(3)(ii). The student, however, must make two showings: first, that she was admitted to the school "on the basis of ability to benefit from its training and did not meet the applicable requirements for admission," and second, that she had made reasonable yet unsuccessful attempts to find employment upon completion of the training program. Id.

 II. FACTS

 On September 30, 1987, Renee Jordan enrolled in a program in the National Business School's Law Enforcement Academy (the "Academy"). Compl. P 14. She completed the program and received a diploma on April 8, 1988. Pl. Ex. 6. Despite the fact that Jordan neither possessed a high school diploma nor a GED and had not passed an "ability to benefit" test, the Academy certified her eligibility to receive a guaranteed student loan. Jordan Decl. P 4. Jordan signed a loan for $ 2625, of which she has repaid $ 900. Jordan has requested a discharge of this loan from the Secretary and from the Nebraska Student Loan Program, the agency which guaranteed her loan, pursuant to 20 U.S.C. § 1087(c). Jordan's request was denied pending a demonstration that she " made three separate attempts to secure employment in her field of study." Pl. Ex. 7 (emphasis in original). *fn3" Because Jordan could present evidence of only one attempt to find employment, *fn4" her request for a discharge was denied. Jordan requests declaratory and injunctive relief invalidating the "reasonable attempt to find employment" provisions of 34 C.F.R. § 682.402(e)(3)(ii)(C) under the Administrative Procedure Act, 5 U.S.C. § 706.

 III. STANDARD OF REVIEW

 A motion for summary judgment should be granted if and only if it is shown "that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). The moving party's "initial responsibility" consists of "informing the [trial] court of the basis for its motion, and identifying those portions of the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, which it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 91 L. Ed. 2d 265, 106 S. Ct. 2548 (1986) (internal quotation marks omitted).

 If the moving party meets its burden, the burden then shifts to the non-moving party to establish that a genuine issue as to any material fact actually does exist. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 89 L. Ed. 2d 538, 106 S. Ct. 1348 (1986). The non-moving party is "required to provide evidence that would permit a reasonable jury to find" in its favor. Laningham v. Navy, 259 U.S. App. D.C. 115, 813 F.2d 1236, 1242 (D.C. Cir. 1987). Such evidence must consist of more than mere unsupported allegations or denials and must set forth specific facts showing that there is a genuine issue for trial. Fed. R. Civ. P. 56(e); Celotex, 477 U.S. at 322 n.3. If the evidence is ...


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