claims are not preempted by nor are they just guys claims under the higher education that they are consistent with the act and therefore under this court's opinion and why god versus wells fargo which the district court nord must be allowed to go forward second the guarantee agency and defendant in this case usa funds had no authority to impose the collection costs it imposed on ms bible neither the master promissory note the higher education act it incorporates nor the rehabilitation agreement allowed for the imposition of the parts where a borrower timely agrees to rehabilitate as ms buyable did here third mr biden's claim under the racketeer influence corrupt organizations act rico stands apart from her breach of contract claim apart from the higher education act and constitutes a viable claim in its own right so let me begin with my first point which is that these claims are not preempted by the district court and us they fund would have it besides that any contract that incorporated a federal a law where that federal law did not itself have a private right of action could not be enforced in court and that is just not the way the law works contracts are enforced in court all the time even when they incorporate other documents and even when they incorporate federal law and the contract in this case the master promissory note explicitly contemplates that state law will give the borrower additional rights and remedies state law may provide for certain bar rights and remedies if this contract was preempted under the higher education now the not term would have no meaning so you have a district court that has come down with an opinion that's inconsistent with the document itself and inconsistent with binding law specifically this court's opinion in why god vs wells fargo the higher education act actually has some explicit preemption provisions doesn't it as do in the regulations to his world that's correct or on racism actual conflict right that's exactly right and the language is no regulation field preemption purity we think that's exactly right so we're not talking about field preemption we're not talking about express preemption we're talking about conflicts preemption and the the text of the regulation itself speaks in language related to conflict preemption saying that there's preemption a where there would be a conflict with enforcement of the higher education act and as this court explained in why god where federal law supplies the standard of care there can be no conflict and that's the situation we have here we have a  tracked and if i could direct report again to the appendix that page one twenty two under the heading late charges and collection costs the contract explicitly states that the lender may collect any other charges and fees that are permitted by the act meaning the higher education so the contract looks to federal law to supply the standard of care and because it does that there can be no indications here as to what collection costs were incurred or imposed specifically after the rehabilitation agreement was offered no that's not part of the record but the record does make clear that at the point collection costs were imposed all usa funds had done was stand a couple of letters a fax and have answered a few phone calls and the interesting part of that your honor is that the same act right so here us a fines imposed over four thousand dollars in collection cost on ms bible that's more than twenty percent of the balance of her alone and they'd only perform the functions that i explained earlier sending a few letters so the only way that they can justify that as reasonable is to look to the higher education act itself which permits the imposition of cost the calculation of costs rather on a percentage flat rate basis but if they're going to look to the higher education act to determine and justify the calculation of costs then they also need to look to the higher education act to determine whether those costs can be imposed in the first instance and here they can't the higher defendant could church collection fees when it has incurred collection costs in some situations yes because the higher education after regulation and this is what that barnes case was about talks about how collection costs are not imposed on all borrowers who do fault they are imposed on borrowers who reach a certain stage of delinquency and that stage occurs after the sixty days have passed and in enforce a contract that incorporates federal law and again this idea of a disguised claim was also addressed in why god and the court explains that just because congress does not create a private right of action under a federal law does not mean that it intended to foreclose state lawsuits and here congress didn't intend to foreclose state lawsuits if they did they would have directed the department of education not to create a regulation we contemplates state lawsuits cept when there is conflict preemption and this document itself would not make reference to the existence of other state law remedies his claims just are not preempted is that the amount of collection in and these will be kept they will be kept if they had been incurred in the sorry imposed in the first place and so what i think your honor be reduced and that's what you're talking about i believe with capping the amount of collection costs the rehabilitation agreement speaks in terms of reducing collection costs that have been added well the collection costs that have been added are zero it grants us a funds i would say yes but because this document is a form document and so for other borrowers it might not say that collection cost thirty zero or it might be that the borrower doesn't rehabilitate right away as ms bible did and in that case collection cost could start to a cruel and in that case there would be a need to reduce them down to this amount that's listed in the agreement and that would be the cap that you've mentioned but here from his bible per collection costs are  i think within three days of getting this agreement you just feel that the ten month rehabilitation yes it was a fifty dollars a month or so that's correct it's fifty dollars a month and i believe that she's been paying that since this agreement dollars i don't know the exact amount i don't think that's in the record because the total amount has gone up because of capitalization of interest so i believe her current balance is over twenty thousand dollars at this point and so they do the capitalization of the interest i don't know what all this involves for school action is this part of the process collection is that we're here now we're not no we're not here in any sort of capacity to example if she were to default now that's her look at your point but before you dig into the details of the regulations cope couple of just a couple quick factual questions because the regulations that apply have been shifting a little bit over the years here are the specific dates of her loan disbursements little role and you know who can prove it some point i hope today you'll explain to us your damages theory not part of this record on a motion to dismiss the additional collection costs that could have been paid and if that you know this case is right that the opinion is reversed and were allowed some discovery would be able to flush out damages a little bit more but the theory would be the the amounts excuse me that ms bible paid that were then allocated to these collection cost so your honor has mentioned the regulations and i'd like to talk about them because i think they're very important here because bibles contract incorporates the higher education apps the specifically with respect to when collection cost can be imposed there are two parts of the higher education act regulations that are relevant the first appears it's reprinted on page forty three of the appendix that that's helpful to look at its sections sixty two dot for ten b five t which explicitly states that the guarantee agency before it assesses collection costs needs to do the four things that are in the emirates and there and in a separate section that comes later which is sixty two fo b for the regulations state that one of those four things takes sixty days to complete specifically the opportunity for an administrator of review of the legal and for stability for the past two status of the law so all four things need to be completed before collection costs can be imposed and one of those things take sixty days to complete but that sixty day time is not just a time rehabilitate her loan within those sixty days as ms bible dead then collection costs cannot be imposed that's the position that the department of education who wrote these regulations talk in the barn's case and if you look at these opportunities that are listed on page forty three of the appendix that's the only reading of the regulation that makes sense if collection cost could be imposed no matter what at the end of the sixty days then there would be no reason to give the borrower these opportunities all of those opportunities including reviewing the guarantee agency's records challenging whether the loan is in fact past due or voluntarily agreeing to repay all of those opportunities that are aimed at challenging whether the loan is in fact past due to have these collection costs be imposed anyway or to voluntarily agree to repay if collection costs could be imposed no matter what and why give the borrower those opportunity if she is in default at this point and in a lot of other contexts are the lender would be perfectly entitled to begin collection proceeds right but i thought the idea here was that the department of education the congress want to provide this rehabilitation opportunity students recent students financial circumstances can change and basically everybody's better off with a voluntary agreement that restructures the agreement rather than fighting through a collection process that's exactly right so i'd like to reserve some time for  first this bible has a remedy elsewhere the second reason is that the regulations under the phelps do not say what miss libel wants them to and third miss bible was repeatedly informed that she was going to o election costs on her student loan upon to fall looking first at the remedy that ms bible has available the felt regulations provide a mechanism for ms bible to go to the department of education and not the court to have her issues addressed if supervised an individual remedy i'm sorry on to provide an individual remedy or just an action taken against the guarantee agency it would be for the department of education to pursue the guaranty agency to distinguish it on two grounds one was that there was no enforcement scheme point if in a reply brief or said yes there was going to the hand program and i'd be interested in the other grounds you might offer distinguishing certainly and there are a variety of ways that why god is different from the case before the court today and the first would be so certainly the issue of the enforcement scheme that we've been talking about not a specific statement by the court saying that the administrative horseman scheme was a deciding factor one way or another but it certainly has an impact on the preemption and malice is that the court made which was one essentially we have argued in two different ways first is that her breach of contract and rico claims are really a disguised higher education and skies versus and run right and look the contract note says repeatedly that the higher education act government's right here and including with respect to collection for us is it your view that the master promissory note allows you to impose collection costs beyond those that are authorized by the act of its regulations the master promissory note provides for collection costs in several particularly in light of the language that with respect to lead charges and collection costs authorizes any other charges and fees that are permitted by the act for the collection of my loans  we know if they're permitted by the actor ok that's correct and what is what the what usa fund is looking at here is collection costs that are permitted by the act this case is ok if you're not then contending you can charge collection are not authorized by the act that's not what this case is about that's a separate question but i want to make sure that we understand that the act does in fact govern this contract the act does cover this contract and that is one hamp program to modify that particular mortgage loan application and the court had that provision in front of it where the plaintiff was saying that this particular provision was violated and certainly they were looking to the underlying statute for which there was no private right of action to interpret that but here at the difference is that there is no provision in the master promissory note which we're looking at that gives ms buyable the relief that she is seeking well she can only go to t then you can't distinguish why god you can argue about the contents of the regulations but i don't see how you distinguish waica that the distinction would be found that be the regulation is the only place that she could get that information whereas that was slightly different in the why i got case here however looking at that the conflicts like differen well the the difference is that it is a reason for the court to look at it differently here and in that case the court looked at the end run theory as running contrary to the conflicts preemption and alice's that if the two were not compatible here that's not the case here the court has certainly the information in front of it that there is certainly no private right of action to the higher education act but but that alone  doesn't doesn't resolve the issue when you have conflict preemption working together because certainly here we have sort of a hand in glove process the you know why i got the court noted there was no finding that the contract principles would require conduct inconsistent with the hamper acquirements or that enforcing state law would stand as an obstacle to him here we have a situation that is similar to what the ninth circuit had in shade distinguish precisely this situation the problem in which a decision was that the plaintiffs were trying to argue for standards different from the federal statute in regulations right yes right and that's what we have here but that's what it's like that depends on your debate with your opposing counsel about the content of the regulations not about whether the regulations are part of the without any rights under the contract without rights within those areas where you have a signal of those critical terms well where there is a conflict where there could be a conflict in the uniform enforcement of the felt regulations and here we have a situation where the felt regulations missed by i was trying to to meld to the two different regulations together to get the result that she's looking for she's looking at be the payment that is described in the loan rehabilitation regulation that sixty two point four zero five where the payment is described as what is reasonable and affordable that's the regulatory language and that could be it's dependent upon a formula that that the regulations set out could be as low as five dollars now the other regulation that she is looking at that six eighty two section point four ten put it into a much clearer perspective and  repayment agreement by terms satisfactory to the guarantor and she is trying to read those two regulations together to get the outcome that she wants what she wants is for the the rehabilitation payment fifty dollars a month in her case to be a satisfactory payment to the guarantor which the regulation reserves that discretion to the guarantor because it it takes away their ability to assess collection costs on an already defaulted student loan she wants to put those terms together and so the result of that would be that that a court or another entity could determine what is satisfactory to the guarantor and looking at paragraph twenty four of her first amended complaint that effort is put into very stark terms where she said as citing that administrative regulation for ten giving the delinquent borrower an additional incentive to rehabilitate but that regulation isn't talking about rehabilitation the says is that the guarantor must offer them an opportunity to enter into an arrangement that is satisfactory to the guarantor now certainly do you read this as saying it's not satisfactory to us in less we get to impose later collection costs that have already been incurred that we weren't allowed to assess before i don't i don't know that that that would be the case although certainly it isn't well that we have your client sent out the notice that said collection costs  zero and the in principle in the amount due was about eighteen thousand dollars right right that that the current collection charges for zero right then you're not allowed to assess collection costs until after you've provided this opportunity that's so did you encourage the additional collection goes well i think in the record and it demonstrates that at least some additional collection costs were incurred in attorney's fees there's there's no indication of a collection agency yes the referral to a collection agency exhibits three and four of the first a medic complaint demonstrate that usa funds in fact had to engage g r c a collection agency to communicate issue was is it constitutional to assess collection costs on these defaulted student loans on a percentage basis and there was a significant amount of briefing certainly an argument about that but that the court ultimately determined that that was acceptable and it was  so that is one of the benefits of the loan rehabilitation process along with clearing your credit along with removing to follow is that you had your collection costs reduced to the eighteen point five percent so the amount you actually assessed was about twenty five percent right and it was there are some default or some not payment or whatever there will be notices collection costs and other tricks to get there and process is that and it's and what the remit would do is limit it any cost or whatever to keep this these payments coming or whatever it takes i guess you call those question because that would be limited to say eighty percent of the outstanding loan at that time right and that's correct and that and so it would be limited at that point to eighteen point five percent even if even if there was a significantly more you know greater need for communication from the debt collector whoever was retained for that purpose those those costs would stay at that level that was entered into at the completion of the loan rehabilitation is more than the parties here obviously have a pretty substantial disagreement over the way these regulations work has anybody invited the d offer its views in this case no your honor can you point us to any place other than the barnes briefs where this question has been addressed actually  in the in the czech case the ninth circuit and have the benefit of the united states department of education weighing in on that conflicts preemption issue right and then looked at those points for actually trying to get a conflict right so the in that case the that the court certainly looked at there not take on whether or not preemption would apply and specifically the united states department of education's view on uniformity in the application of the felt which applies in this case particularly with the miss bible's attempts to look at these two regulations together because essentially what she's asking is for the court to tell the parents or what is a satisfactory payment arrangement wrong but courts interpret we interpret federal regulations every week in this court and that is usually not thought to pose a great threat to the uniformity of federal law certainly with with the particular regulation assessing civil penalties terminating a guarantor of participation in the in the process that is designed to address that and so you don't have in the danger of you know the federal courts or fifty states indicating that collection costs are appropriate in one sense and not another which would lead to the inconsistency in the same problem arise if down the road let's say the plaintiffs defaults again your agency your your client sues to collect and she offers as a defense these collection costs are not authorized by the department of education or by the contract state court would have to decide to the extent that that that issue was raised as a defense and the issue would still be one that could be presented to the department of education so a state court could not hear that defense  position seems to be that whatever critical rights most of us think one part of the contract would have can't be enforced in court but only by going to the department of education saying please go after or please stand up for me as opposed to standing up for herself in that case certainly if if an entity is using that as a defense then they could in you know invite the department of education to be part of that process  to to look at those issues and certainly weigh in because that is that is the the way that the phelps regulations are put together if looking at both the section four zero five and four ten it's talking about the obligations that either to the department of education or the guarantor have with one another and so that's that's the the structure that those regulations have which you think prevents courts from interpretive because of the threat to uniformity to the extent that that claims like miss bibles are brought where she is the soley seeking relief from the guarantor here us a father would be ok to hear that as a defen again the issue could be raised to the department of education the court could it be raised in court it could be raised in court but not as seeking affirmative relief which is what she's doing here which is a with respect to the remedy that she is seeking the department of education is the only one who can give her the remedy that she is seeking to pending on what what that might be in another case but it's the department based on the regulations that we have  that is is providing that remedy and certainly looking at the remedial game and resolving these cases that a motion to dismiss stage is particularly important for preserving the integrity of that scheme seeing arguments that i know your time has expired but that last comment is a bit of a mystery to me it's important that these be dismissed to the pleading stage to protect the integrity of the program thank you so i just want to clarify one thing ms martin answered a question earlier about whether the department of education has been invited to participate appellant invited the department of education whose response was that they didn't think they would be able to move quick enough to file an amicus brief and this isn't part of the record but they have indicated that they intend to issue a policy letter reiterating their position  department of education is not here is important for a few reasons one is that the idea that there is some kind of remedial scheme or ability to rely on the department of education to enforce these types of claims just rings hollow because this isn't an agency that has the same types of procedures for example as the e e o c where you file a charge and then a complaint issues ms bible would be left to right the department of education a letter and i hope that they took some kind of action and they just might not this contract allows her to bring her claims and court and so that's what she's done for what it's worth either city gets hundreds of thousands of charges is are these expenses that you're referring to that should be there already incurred that you broke the forty five hundred dollars or were reduced no but the problem here is that those costs could not be uncaused because ms bible started this rehabilitation process in a timely manner she's not immune to some further breaches she is not immune to suit certainly if she doesn't fulfill her end of the bargain but she did fulfill her end of garcon and so the also by the terms of the contract couldn't be imposed even if they had been incurred because the contract does not allow for costs to be imposed where a borrower agrees to timely rehabilitate as his bible d forty five hundred dollars but also they couldn't be imposed in the first instance because the contract does not allow the imposition of costs for a borrower timely agrees to rehabilitate them the payments that she's been making ha situation where the they they were combined and i think the fifty dollars mark went to that they went to fifty dollars a month was paid in ms bibles feel according to the terms of this contract to pay down  principal not an authorized collection cause the problem here is that us they funds took that money and applied it to the collection costs and if i may just say one word about this idea of a re not meaning the same thing as a repayment agreement usa funds are offered this agreement to ms bible it has to be a repayment agreement that's satisfactory to the agency it was their idea to begin with but more importantly the southern district of indiana in the barn's case in talking about repayment the idea of repayment that avoids collection costs when it's entered into in a timely manner specifically use the term rehabilitation and explain that those