Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-99-05024/USCOURTS-caDC-99-05024-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 

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United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued October 25, 1999 Decided November 16, 1999

No. 99-5024

Renee M. Jordan,

Appellant

v.

Secretary of Education of the United States and

Nebraska Student Loan Program,

Appellees

Appeal from the United States District Court

for the District of Columbia

(No. 97cv00876)

Michael E. Tankersley argued the cause for appellant.

With him on the briefs was Alan B. Morrison.

Meredith Manning, Assistant U.S. Attorney, argued the

cause for appellees. With her on the brief were Wilma A.

Lewis, U.S. Attorney, and R. Craig Lawrence, Assistant U.S.

Attorney.

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David Ober was on the brief for appellee Nebraska Student

Loan Program.

Before: Silberman, Ginsburg, and Randolph, Circuit

Judges.

Opinon for the Court filed by Circuit Judge Silberman.

Silberman, Circuit Judge: Renee Jordan sought a discharge of her federally guaranteed student loan because the

vocational school she attended had falsely certified her ability

to benefit from its training. The holder of her loan refused,

and the Secretary of Education denied her appeal, on grounds

that she failed to satisfy a regulation that requires students

seeking a discharge to demonstrate an inability to find a job.

When Jordan sued the Secretary, the district court granted

summary judgment against her. We hold that the regulation

is inconsistent with the governing statute, and thus reverse.

I.

Under the Federal Family Education Loan Program, private lenders make loans for "eligible borrowers" to attend

"eligible" post-secondary institutions. See 20 U.S.C. s 1071

et seq.1 State and private guaranty agencies insure the loans,

and the Secretary of Education reinsures the agencies. Generally, eligible borrowers are those who have a high school

diploma or a GED. However, an individual without a diploma

or GED may qualify to attend a vocational school if the school

certifies that she has the "ability to benefit" from the training

it provides. Under s 1091(d), a student may demonstrate an

ability to benefit in one of three ways: (1) by earning a GED

before graduation from the program or by the end of the first

year of study; (2) by being counseled before admission and

completing a prescribed program of remedial education; or

(3) by passing "a nationally recognized, standardized or industry developed test" that measures "the applicant's aptitude to

complete successfully the program to which the applicant has

applied."

__________

1 We discuss the statute as it existed at the time of the events at

issue in this case. Congress has since made extensive changes to

the statutory scheme.

In 1992, in response to public concern about vocational

schools that defrauded students by falsely certifying their

ability to benefit and then providing them worthless training,

Congress provided that if a "student's eligibility to borrow

under this part was falsely certified by the eligible institution

... then the Secretary shall discharge the borrower's liability

on the loan." 20 U.S.C. s 1087(c)(1). The agency holding

the loan decides whether to grant a discharge, subject to

review by the Secretary. See 34 C.F.R. s 682.402(e). A

student must submit a written statement affirming that she

was admitted to a school on the basis of ability to benefit but

did not satisfy the ability to benefit requirements. If the

student completed the program, she also must state that she

"made a reasonable attempt to obtain employment in the

occupation for which the program was intended to provide

training, and--(1) Was not able to find employment in that

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occupation; or (2) Obtained employment in that occupation

only after receiving additional training that was not provided

by the school that certified the loan." Section

682.402(e)(3)(ii)(C).

Jordan completed a six-month course at the National Business School's Law Enforcement Academy (NBS) in the District of Columbia. When she was admitted to the school in

1987, she did not have a high school diploma or GED, and she

did not meet the requirements of s 1091(d). Nevertheless,

NBS arranged for Jordan to obtain a guaranteed student

loan. Jordan's experience was apparently not unique: an

investigation by the Department of Education's Inspector

General and the FBI revealed that the school admitted

unqualified students by improperly administering entrance

examinations, in some cases by giving students the answers.

After her graduation from NBS, Jordan sought employment as a security officer. She answered a newspaper advertisement for security officers, but she was told that she would

have to start at what she described as "an unacceptably low

salary" because she lacked a high school degree. The record

is not entirely clear on whether Jordan was denied a position

or was offered a position that she declined. In any event,

Jordan submitted a request for a discharge to the holder of

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her loan, the Nebraska Student Loan Program. That agency

denied her request, because she had been offered a job that

she declined. The holder also relied upon a policy statement

issued by the Deputy Assistant Secretary stating that, absent

"unusual circumstances," a guaranty agency could reasonably

"consider three separate attempts by the student to find a

job" persuasive evidence that the student had complied with

34 C.F.R. s 682.402(e)(3)(ii)(C). The Secretary denied Jordan's appeal on the ground that she had been able to find

employment but simply declined the job she was offered.

Jordan then brought this action claiming that the subsequent employment conditions in the regulation exceeded the

Secretary's authority under the statute. The district court

granted the Secretary's motion for summary judgment. See

Jordan v. Riley, 26 F. Supp. 2d 173 (D.D.C. 1998). The court

held that the regulation was a permissible interpretation of

the ambiguity created by the undefined term "falsely certified." For purposes of summary judgment, it assumed that

Jordan had been denied a job, but it held that the regulatory

requirement of "a reasonable attempt to obtain employment"

could not be satisfied by only one unsuccessful attempt to find

employment, because "[a] sample size of one is too small" for

a student to demonstrate an inability to get a job. Id. at 179.

Jordan appealed.

II.

Jordan contends that the regulation at issue is inconsistent

with the statute and therefore fails the first step of the

analysis in Chevron U.S.A. Inc. v. Natural Resources Defense

Council, Inc., 467 U.S. 837 (1984). The first part of the

regulation, it is argued, simply mirrors the statutory requirement that the student has been admitted to a school on the

basis of ability to benefit without actually satisfying the

ability to benefit test. The second part, however, demands

that the student have made an unsuccessful effort to find

employment. This condition, appellant argues, is found nowhere in the statute, and for the Secretary to impose it is to

violate the congressional command that he "shall discharge

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the borrower's liability" if statutory criteria are violated.

Jordan also argues that, even if the regulation were valid, the

district court erred in applying a three-attempt rule, because

that rule was found only in a policy statement, and, in any

event, the Secretary did not rely on it.

The Secretary justifies the regulation by pointing out that

the statute does not define the term "falsely certified." He

refers to the dictionary definition of "false" as "contrary to

truth or fact" and reasons that "one way to determine whether Ms. Jordan's ability to benefit from security guard training

was falsely certified in 1987 is to examine whether she in fact

had the ability to benefit from that training," as measured by

whether she subsequently found a job. On his view, under

Chevron the regulation is a reasonable interpretation of an

ambiguous statute.

Ambiguity, of course, "is a creature not of definitional

possibilities but of statutory context." Brown v. Gardner,

513 U.S. 115, 118 (1994). The Secretary ignores that context,

for he overlooks that "ability to benefit" is defined in specific

terms in the statute. A school does not certify a student's

general "ability" measured at the time of certification--still

less as to be determined in the future. Rather, it certifies

that the student meets the particular conditions of s 1091(d).

Because the school is never asked to certify (predict) that a

student will find a job, a student's post-training employment

experience is irrelevant to the truth or falsity of the certification. The Secretary appears to recognize as much, for another provision of the same regulation already provides a definition of "falsely certified," one that is based solely on whether

the student met the objective criteria for certification before

being admitted. See 34 C.F.R. s 682.402(e)(1)(i).

In other words, the statutory scheme is designed to place

obligations on schools, which must certify ability to benefit,

and on the government, which must police schools to ensure

that their certifications are accurate, or failing that must

compensate defrauded students. Under the regulation, a

burden is shifted to the student: she is obliged to seek a job

before she may claim the benefit of a discharge. Thus, the

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Secretary has done more than simply add an obligation that is

not in the statute; he has changed the nature of the statute.

It would be absurd, the Secretary argues, to allow students

to obtain discharges simply because of trivial technical defects

in the tests that were used to measure their ability to benefit.

So it would. That proposition is not in dispute: Jordan

concedes that the Secretary could issue a regulation defining

"falsely certified" in such a way as to exclude certifications

that were defective because, for example, the student wrongly

took a photocopied version of the test rather than the original. Indeed, the Secretary has already issued an interpretive

policy statement to that effect. The legality of a "harmless

error" rule cannot justify this regulation, which has a policy

objective far exceeding the statutory framework.

Ultimately, the Secretary relies on a policy argument: that

students who gain the benefit of the training should not get a

windfall by avoiding their loan obligations.2 He attempts to

tie that policy objective to the legislative history. He refers

to a committee report indicating that Congress was concerned

that students whose eligibility was falsely certified were "left

without the skills needed to obtain employment and consequently did not have the means to repay the loans." H.R.

Rep. No. 447, 102d Cong., 2d Sess. 52 (1992). From this he

infers that Congress intended to discharge the loans only of

students who were unable to find employment. We think

that is an inference too far. Be that as it may, the Secretary

confuses the subjective intentions of the members of Congress with the statute that Congress actually enacted. Cf.

Oncale v. Sundowner Offshore Servs., Inc., 523 U.S. 75, 79

(1998) ("[I]t is ultimately the provisions of our laws rather

than the principal concerns of our legislators by which we are

governed."). The Secretary may not rewrite the statute,

even if the enacting Congress might have approved of his

efforts.

__________

2 The Secretary's regulation has its own perverse consequence.

Even if a student received zero training--let us say the school was

a total sham--the student would be obliged to pay, if by dint of

drive and good fortune he or she happened to get a job.

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* * * *

The judgment of the district court is reversed, and the case

is remanded for further proceedings consistent with this

opinion.

So ordered.

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