### In the



# United States Court of Appeals

For the Seventh Circuit

____________________

No. 18

‐ 1531

N ICOLE D. N ELSON

, Plaintiff

‐ Appellant

,

v.

G REAT L AKES E DUCATIONAL L OAN

S ERVICES

, I NC

., et al.,

Defendants

‐ Appellees

.

____________________

Appeal from the United States District Court for the

Southern District of Illinois.

No. 3:17

‐ CV

‐ 183

— Nancy J. Rosenstengel

, Chief Judge

.

____________________

A RGUED O CTOBER 23, 2018

— D ECIDED J UNE 27, 2019

____________________

Before K ANNE

, H AMILTON

, and S T

. E VE

, Circuit Judges

.

H AMILTON

, Circuit Judge

. Like many students, plainti ff Ni

‐

cole Nelson borrowed money to pay for her education. De

‐

fendant Great Lakes Educational Loan Services, Inc. services

repayment of her federally insured loans. On its website,

Great Lakes o ff ered to provide guidance to borrowers strug

‐ gling to make their loan payments. It told borrowers: “Our

trained experts work on your behalf,” and “You don’t have to2 No. 18

‐ 1531

pay for student loan services or advice,” because “Our expert

representatives have access to your latest student loan infor

‐

mation and understand all of your options.” Nelson alleges

that despite these representations, when she and other mem

‐

bers of the putative class struggled to make payments, Great

Lakes did not work on their behalf. Instead, Nelson contends,

Great Lakes steered borrowers into repayment plans that

were to Great Lakes’ advantage and to borrowers’ detriment.

Nelson alleges that defendant’s conduct violated the Illi

‐

nois Consumer Fraud and Deceptive Business Practices Act

and constituted constructive fraud and negligent misrepre

‐

sentation under Illinois common law. The district court

granted Great Lakes’ motion to dismiss, holding that all of

Nelson’s claims were expressly preempted by this provision

of the federal Higher Education Act: “Loans made, insured,

or guaranteed pursuant to a program authorized by title IV of

the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.) shall

not be subject to any disclosure requirements of any State

Law.” 20 U.S.C. § 1098g. The district court reasoned that Nel

‐

son’s claims are expressly preempted because they all allege

in substance only that Great Lakes failed to disclose certain

information.

The district court’s ruling was overly broad. When a loan

servicer holds itself out to a borrower as having experts who

work for her, tells her that she does not need to look elsewhere

for advice, and tells her that its experts know what options are

in her best interest, those statements, when untrue, cannot be

treated by courts as mere failures to disclose information.

Those are a ffi rmative misrepresentations, not failures to dis

‐

close. Great Lakes chose to make them. A borrower who rea

‐ sonably relied on them to her detriment is not barred byNo. 18

‐ 1531 3

§ 1098g from bringing state

‐ law consumer protection and tort

claims against the loan servicer. Tort law has long recognized

the di ff erence between mere failures to disclose information

and a ffi rmative deceptions. And as we explain below, the

Ninth Circuit decision the district court relied upon, Chae v.

SLM Corp.

, 593 F.3d 936 (9th Cir. 2010), does not apply to

claims of a ffi rmative misrepresentations in counseling bor

‐

rowers in distress.

Accordingly, Nelson’s claims are not expressly preempted

to the extent she is alleging that Great Lakes made false or

misleading a ffi rmative representations to her in the counsel

‐ ing process. Also, neither con fl ict preemption nor fi eld

preemption applies to her claims. We vacate the judgment of

the district court and remand for further proceedings con

‐

sistent with this opinion.

I. Factual & Procedural Background

The district court granted defendant’s Rule 12(b)(6) mo

‐

tion to dismiss on preemption grounds, a legal determination

that we review de novo

. Guilbeau v. P fi zer Inc.

, 880 F.3d 304, 310

(7th Cir. 2018), citing Toney v. L’Oreal USA, Inc.

, 406 F.3d 905,

907–08 (7th Cir. 2005). We accept as true all well

‐ pleaded fac

‐

tual allegations in the amended complaint and draw all per

‐

missible inferences in Nelson’s favor. E.g., Fortres Grand Corp.

v. Warner Bros. Entertainment Inc.

, 763 F.3d 696, 700 (7th Cir.

2014).

A. Loans Under the Higher Education Act

The Higher Education Act (“HEA”) was enacted “to keep

the college door open to all students of ability, regardless of

socioeconomic background.” Rowe v. Educational Credit Man

‐

agement Corp.

, 559 F.3d 1028, 1030 (9th Cir. 2009) (citation and4 No. 18

‐ 1531

internal quotation marks omi tt ed); see also 20 U.S.C.

§ 1071(a)(1) (identifying purposes of statute). The HEA estab

‐

lished the Federal Family Education Loan Program

(“FFELP”), a system of loan guarantees administered by the

U.S. Secretary of Education that were “meant to encourage

lenders to loan money to students and their parents on favor

‐

able terms.” Chae v. SLM Corp.

, 593 F.3d at 938–39 (footnote

omi tt ed).

The FFELP regulated three parts of student loan transac

‐

tions: (1) between lenders and borrowers, (2) between bor

‐

rowers and guaranty agencies, and (3) between guaranty

agencies and the Department of Education. Bible v. United Stu

‐

dent Aid Funds, Inc.

, 799 F.3d 633, 640 (7th Cir. 2015), citing

Chae

, 593 F.3d at 939. Under the program, lenders used their

own funds to make loans to students a tt ending postsecondary

institutions. These loans were guaranteed by guaranty agen

‐

cies and reinsured by the federal government. See 20 U.S.C.

§ 1078(a)–(c). Thus, the federal government served (and still

serves) as the ultimate guarantor on FFELP loans. Bible

, 799

F.3d at 640. Lenders assigned the loans to loan servicers like

Great Lakes to manage the repayment process with the bor

‐

rowers.

In 2010, Congress ordered a halt in new FFELP loans and

transitioned to a “Direct Loan” program, in which the United

States serves as the lender and contracts with non

‐ governmental entities to service loans issued by the

Department. 20 U.S.C. § 1071(d); see also Health Care and

Education Reconciliation Act of 2010, Pub. L. No. 111

‐ 152,

§ 2201 et seq

. , 124 Stat. 1029, 1074. Federal Direct Loans “have

the same terms, conditions, and bene fi ts” as those issued

under the FFELP. 20 U.S.C. § 1087e(a)(1).No. 18

‐ 1531 5

Central to the preemption issue here, the HEA requires

lenders and loan servicers to make certain “disclosures” be

‐

fore disbursement of loans, before repayment of loans, and

during repayment of loans. See 20 U.S.C. § 1083. Required dis

‐

closures include the core terms of the loan at origination, as

well as before and during repayment. § 1083(a), (b), & (e). But

when a borrower is having di ffi culty making payments, as

Nelson was, § 1083(e)(2)(A) requires loan servicers to provide:

“A description of the repayment plans available to the bor

‐

rower, including how the borrower should request a change

in repayment plan.” Loan servicers must also provide to dis

‐

tressed borrowers descriptions of forbearance and other op

‐

tions to avoid default and expected costs or fees associated

with those options. § 1083(e)(2)(B) & (2)(C).

The HEA includes several express preemption provisions,

including the one dealing with “disclosures,” which is the fo

‐

cus of this appeal. Entitled “Exemption from State disclosure

requirements,” again it provides: “Loans made, insured, or

guaranteed pursuant to a program authorized by title IV of

the Higher Education Act of 1965 (20 U.S.C. 1070 et seq.) shall

not be subject to any disclosure requirements of any State

law.” 20 U.S.C. § 1098g. Both Federal Direct Loan Program

and FFELP loans are so authorized, so lenders and loan ser

‐

vicers are not subject to “disclosure requirements” imposed

by state law.

B. Nelson’s Loans and Claims

Nicole Nelson fi nanced her education with federal student

loans. Great Lakes, Nelson’s loan servicer, manages borrow

‐

ers’ accounts, processes payments, assists borrowers with al

‐

ternative repayment plans, and communicates with borrow

‐

ers about the repayment of their loans. Great Lakes services6 No. 18

‐ 1531

many billions of dollars in federal student loans for millions

of borrowers.

Nelson began repaying her loans in December 2009. In

September 2013, she changed jobs and her income dropped.

She contacted Great Lakes, and its representative led Nelson

to believe that “forbearance” was the best option for her

personal fi nancial situation. A few months later, Nelson lost

her new job. She contacted Great Lakes again in March 2014.

Great Lakes’ representative again did not inform her of

income

‐ driven repayment plans and instead steered her into

“deferment.” Nelson alleges that Great Lakes’ representatives

were working o ff of a script provided to them by Great Lakes

when they made these recommendations to her. Nelson

alleges that she relied on the information provided by Great

Lakes.

Forbearance is “the temporary cessation of payments, al

‐ lowing an extension of time for making payments, or tempo

‐ rarily accepting smaller payments than previously were

scheduled.” 34 C.F.R. § 682.211(a)(1). Nelson argues that for

‐

bearance is not appropriate for borrowers experiencing long

‐

term fi nancial di ffi culty. Under forbearance, unpaid interest

is capitalized (i.e., added to the loan principal), which can

substantially increase monthly payments after the forbear

‐

ance period ends.

Federal law requires lenders and loan servicers to o ff er

income

‐ driven repayment plans, which set monthly loan

payments as a percentage of a borrower’s discretionary

income. See 20 U.S.C. § 1098e(b); 34 C.F.R. §§ 682.215

& 685.208. Nelson argues that these plans are more

appropriate in situations of longer

‐ term fi nancial hardship.

These plans can o ff er borrowers extended payment relief andNo. 18

‐ 1531 7

reduced monthly payments that can still count toward

various loan forgiveness programs. Despite the availability of

these plans, Nelson alleges, Great Lakes steered borrowers

away from income

‐ driven repayment plans that are less

lucrative to lenders and toward more burdensome options,

especially forbearance. Am. Cplt. ¶ 6. Nelson asserts that

enrolling borrowers in income

‐ driven repayment plans is

“time

‐ consuming” and requires “lengthy and detailed

conversations” with the borrowers about their fi nancial

situations. She argues that Great Lakes thus “failed to

perform its core duties in the servicing of student loans.”

To help focus on the factor we view as decisive here—the

di ff erence between a ffi rmative misrepresentation and failure

to disclose information—we lay out next some of the details

of Nelson’s allegations.

Count I of Nelson’s Amended Complaint asserts viola

‐

tions of the Illinois Consumer Fraud and Deceptive Business

Practices Act, 815 Ill. Comp. Stat. 505/1 et seq. She highlights

seven unfair acts and practices in servicing loans:

(a) Holding themselves out to be experts in stu

‐

dent loan servicing issues or o ff ering “expert”

help;

(b) Holding themselves out as working on

Plainti ff ’s and Class Members’ behalves, when

they worked for the bene fi t of Defendants;

(c) Holding themselves out as understanding all

student loan options, and o ff ering those options

to student loan borrowers, including Plainti ff

and Class Members;8 No. 18

‐ 1531

(d) O ff ering forbearance as a recommended or

best option to struggling student loan borrow

‐

ers who could have enrolled in a much be tt er re

‐

payment plan;

(e) Failing to provide struggling student loan

borrowers all of their options, or discussing in

‐

come driven repayment plans prior to enrolling

student loan borrowers in forbearance;

(f) Failing to follow up with student loan bor

‐

rowers after a fi rst forbearance and explaining

or alerting student loan borrowers to other,

more advantageous repayment options; and

(g) Systematically steering struggling student

loan borrowers, including Plainti ff and Class

Members into forbearance without explaining,

or even identifying other, be tt er repayment

options, based in part of Defendants’ failure to

adequately sta ff its operations

, providing scripts

that call center employees had to follow, reviewing

call center employees on call duration and how many

times a student loan borrower was cut o ff mid

‐

sentence, or by providing other incentives for

quick call times.

Am. Cplt. ¶ 130 (emphasis in original). These allegations com

‐

bine both a ffi rmative misrepresentations by Great Lakes, such

as recommending forbearance as the best option for a partic

‐

ular borrower, and failures to disclose information.No. 18

‐ 1531 9

Count II alleges constructive fraud under Illinois common

law, saying in part:

154. Defendants accomplish this breach of a

con fi dential or fi duciary relationship by misrep

‐ resenting, concealing, or omi tt ing the detri

‐

mental e ff ects of entering or continuing in for

‐

bearance, omi tt ing other alternative repayment

options, including income driven repayment

options that would allow $0.00 monthly pay

‐

ments holding themselves out as “experts,”

holding themselves out as having all student

loan borrowers information, and holding them

‐

selves out as working in the best interest of stu

‐

dent loan borrowers, including Plainti ff and the

Illinois Constructive Fraud Class Members.

... .

158. Defendants held themselves out to all stu

‐

dent loan borrowers as “experts,” held them

‐

selves out as knowledgeable regarding student

loan borrowers situations, and held themselves

out as working on behalf and to the bene fi t of

student loan borrowers.

Am. Cplt. ¶¶ 154 & 158. These allegations also combine af

‐

fi rmative misrepresentations and failures to disclose.

Count III alleges negligent misrepresentation under Illi

‐

nois common law. Nelson asserts that, to increase its pro fi ts,

Great Lakes “supplied false information or omi tt ed material

information for the guidance of student loan borrowers.” Am.

Cplt. ¶ 170. Great Lakes is alleged to have accomplished this

by “misrepresenting their ‘expert’ status, misrepresenting10 No. 18

‐ 1531

that they work for the bene fi t of student loan borrowers, and

misrepresenting or omi tt ing material information, including

alternative or income driven student loan repayment options

which may have o ff ered a $0.00 monthly repayment amount.”

Am. Cplt. ¶ 171. Nelson includes a list that alleges both mis

‐ representations and omissions of information similar to her

list in Count I:

(a) Defendants claim to be “experts” regarding

student loan;

(b) Defendants work for the bene fi t of student

loan borrowers;

(c) Forbearance or deferment are the only op

‐

tions for struggling student loan borrowers; and

(d) Failure to discuss or counsel student loan

borrowers on alternative and income driven re

‐

payment plans.

(e) O ff ering forbearance as a recommended or

best option to struggling student loan borrow

‐

ers who could have enrolled in a much be tt er re

‐

payment plan;

(f) Failing to provide struggling student loan

borrowers all of their options, or discussing in

‐

come driven repayment plans prior to enrolling

student loan borrowers in forbearance;

(g) Systematically steering struggling student

loan borrowers, including Plainti ff and Class

Members into forbearance without explaining,

or even identifying other, be tt er repayment op

‐

tions, based in part of Defendants’ failure toNo. 18

‐ 1531 11

adequately sta ff its operations or by providing

other incentives for quick call times.

Am. Cplt. ¶ 172. 1

The district court agreed with Great Lakes that all of Nel

‐

son’s allegations pertain to information Great Lakes suppos

‐ edly failed to disclose. The court dismissed all of Nelson’s

claims, holding that they are expressly preempted by

20 U.S.C. § 1098g. Nelson v. Great Lakes Educ. Loan Servs., Inc.

,

No. 3:17

‐ CV

‐ 183, 2017 WL 6501919, at *5–6 (S.D. Ill. Dec. 19,

2017). The court did not determine whether Nelson’s claims

were preempted under the con fl ict

‐ or fi eld

‐ preemption

1 Nelson’s allegations echo the findings of an Inspector General’s re

‐

port on loan servicers’ compliance with federal law generally and advice

about repayment options in particular. See U.S. Department of Education

Office of Inspector General, ED

‐ OIG/A05Q0008, Federal Student Aid: Ad

‐

ditional Actions Needed to Mitigate the Risk of Servicer Noncompliance

with Requirements for Servicing Federally Held Student Loans (Feb. 12,

2019), available at: https://www2.ed.gov/about/ offices/list/oig/audit

‐ reports/fy2019/a05q0008.pdf. According to the report, the Department’s

“oversight activities regularly identified instances of servicers’ not servic

‐ ing federally held student loans in accordance with Federal require

‐

ments,” yet the Department “rarely used available contract accountability

provisions to hold servicers accountable for instances of noncompliance”

and “did not provide servicers with an incentive to take actions to mitigate

the risk of continued servicer noncompliance that could harm students.”

Id. at 2. The Inspector General found that these failures can result in “in

‐

creased interest or repayment costs incurred by borrowers, the missed op

‐ portunity for more borrowers to take advantage of certain repayment pro

‐

grams, negative effects on borrowers’ credit ratings, and an increased like

‐

lihood of delinquency or even default.” Id. at 19. Particularly relevant to

this case is a section entitled “Servicer Representatives Not Sufficiently In

‐ forming Borrowers of Available Repayment Options.” Id. at 10–13.12 No. 18

‐ 1531

doctrines or whether, in the absence of preemption, Nelson

otherwise stated viable claims.

II. Analysis

The Supremacy Clause of the United States Constitution

“invalidates state laws that ‘interfere with, or are contrary to,’

federal law.” Hillsborough County v. Automated Medical Labs.,

Inc.

, 471 U.S. 707, 712–13 (1985), quoting Gibbons v. Ogden

, 22

U.S. 1, 211 (1824). The Clause provides:

This Constitution, and the Laws of the United

States which shall be made in Pursuance

thereof; and all Treaties made, or which shall be

made, under the Authority of the United States,

shall be the supreme Law of the Land; and the

Judges in every State shall be bound thereby,

any Thing in the Constitution or Laws of any

State to the Contrary notwithstanding.

U.S. Const. art. VI, cl. 2. “Since state law may not contradict

federal law, sometimes the la tt er will render the former unen

‐

forceable.” Int’l Ass’n of Machinists Dist. Ten v. Allen

, 904 F.3d

490, 509 (7th Cir. 2018).

Preemption can occur in three di ff erent ways: express,

con fl ict, and fi eld. Express preemption applies when Con

‐

gress clearly declares its intention to preempt state law. Mason

v. SmithKline Beecham Corp.

, 596 F.3d 387, 390 (7th Cir. 2010).

Con fl ict preemption applies when there is an actual con fl ict

between state and federal law such that it is impossible for a

person to obey both, or when state law stands as an obstacle

to fully accomplishing the objectives of Congress. Mason

, 596

F.3d at 390; see also Patriotic Veterans, Inc. v. Indiana

, 736 F.3d

1041, 1049 (7th Cir. 2013). Field preemption, which applies toNo. 18

‐ 1531 13

only a few fi elds of law, occurs when “federal law so thor

‐ oughly occupies a legislative fi eld as to make it reasonable to

infer that Congress left no room for the states to act.” Aux Sable

Liquid Products v. Murphy

, 526 F.3d 1028, 1033 (7th Cir. 2008)

(citation and internal quotation marks omi tt ed). We fi rst ex

‐ plain why some of Nelson’s claims are not expressly

preempted. We then explain why those claims are not

preempted by either con fl ict or fi eld preemption.

A. Express Preemption

1. Statutory Language

Express preemption presents a question of statutory inter

‐ pretation, so we start with the preemptive language: “Loans

made, insured, or guaranteed pursuant to a program author

‐

ized by title IV of the Higher Education Act of 1965 (20 U.S.C.

1070 et seq.) shall not be subject to any disclosure require

‐

ments of any State Law.” 20 U.S.C. § 1098g. The intent to

preempt some state laws is evident, but Congress did not de

‐

fi ne the term “disclosure requirements” in the HEA itself. The

central question here is whether and how the phrase “disclo

‐

sure requirements” in § 1098g applies to state

‐ law remedies

for misleading business practices. Section § 1098g preempts a

state law declaring, for example, that student loan servicers

must a ffi rmatively disclose X and Y in a speci fi c format and at

a speci fi c time. But Congress did not use language that

preempts all state

‐ law consumer protections for student loan

borrowers when they are communicating with their loan ser

‐

vicers.

While § 1098g indicates that Congress “intended the

[HEA] to pre

‐ empt at least some state law, we must nonethe

‐

less ‘identify the domain expressly pre

‐ empted’ by that14 No. 18

‐ 1531

language.” See Medtronic, Inc. v. Lohr

, 518 U.S. 470, 484 (1996),

quoting Cipollone v. Ligge tt Group, Inc.

, 505 U.S. 504, 517 (1992).

As the Supreme Court often reminds us, it is a “fundamental

canon of statutory construction that the words of a statute

must be read in their context and with a view to their place in

the overall statutory scheme.” Home Depot U.S.A., Inc. v. Jack

‐

son

, 139 S. Ct. 1743, 1748 (2019), quoting Davis v. Michigan

Dep’t of Treasury

, 489 U. S. 803, 809 (1989). The statutory con

‐

text and scheme here provide helpful guidance for the ques

‐

tion we face here.

In general, disclosure requirements are familiar regulatory

tools applied to consumer borrowing and other fi nancial

transactions. Rather than regulating the substance of the

transaction terms (such as usury laws do by limiting interest

rates), disclosure requirements are intended to ensure that

consumer

‐ borrowers have accurate, relevant information and

can make their own informed choices about their fi nancial af

‐

fairs. Such disclosure requirements are familiar under many

regulatory regimes, including, for example, the Truth in

Lending Act and federal securities regulation, including

FINRA rules for broker

‐ dealers. See, e.g., 15 U.S.C. § 1601 et

seq.; 17 C.F.R. § 240.15c2

‐ 5; FINRA Rule 2264 (2011).

The language of § 1098g itself provides no speci fi c guid

‐

ance about the scope of “disclosure requirements.” Other

HEA provisions, however, impose explicit disclosure require

‐

ments on lenders and loan servicers, particularly in

20 U.S.C. § 1083. It makes sense to understand “disclosure re

‐ quirements” in § 1098g against the backdrop of those federal

disclosure requirements in § 1083. The HEA also includes, in

addition to § 1098g, several other fairly speci fi c preemption

provisions: 20 U.S.C. § 1078(d) (usury laws), § 1091a(a)(2)No. 18

‐ 1531 15

(statutes of limitations), § 1091a(b) (collection costs/infancy

defenses), and § 1095a(a) (garnishment requirements). These

other provisions in the HEA help guide our interpretation of

§ 1098g.

First, the several speci fi c preemption provisions in the

HEA weigh against a tt ributing to Congress a desire to

preempt state law broadly. The speci fi c preemption provi

‐

sions show that Congress considered the issue of preemption

and decided to preempt on particular topics. It most certainly

did not enact language imposing broad preemption on any

state laws, or even any state consumer

‐ protection or tort laws,

that might apply to student loans and their servicing.

At the same time, the express disclosure requirements in

the HEA lead us to disagree with Nelson’s argument that

“disclosure requirements”—and the associated preemption

intended by Congress—pertain solely to “standardized, pre

‐

scribed provision of the terms and conditions and facts of a

student lending transaction,” and not to counseling borrow

‐

ers in fi nancial di ffi culty. In particular, 20 U.S.C. § 1083 spells

out disclosures that are required before disbursement of

loans, before repayment of loans, and during repayment of loans

. Under the subsection entitled “Required disclosures during

repayment,” a paragraph entitled “Information provided to a

borrower having di ffi culty making payments” provides:

Each eligible lender shall provide to a borrower

who has noti fi ed the lender that the borrower is

having di ffi culty making payments on a loan

made, insured, or guaranteed under this part

with the following information in simple and

understandable terms:16 No. 18

‐ 1531

(A) A description of the repayment plans

available to the borrower, including how

the borrower should request a change in

repayment plan.

(B) A description of the requirements for

obtaining forbearance on a loan, includ

‐ ing expected costs associated with for

‐

bearance.

(C) A description of the options available

to the borrower to avoid defaulting on

the loan, and any relevant fees or costs

associated with such options.

20 U.S.C. § 1083(e)(2).

In the context of these express disclosure requirements in

§ 1083, the phrase “disclosure requirements” in § 1098g ap

‐ plies to information that must be given to borrowers who are

struggling to repay their loans. Listed as a “required disclo

‐

sure” to borrowers struggling during repayment is a “de

‐ scription of the repayment plans available to the borrower, in

‐ cluding how the borrower should request a change in repay

‐

ment plan.” § 1083(e)(2)(A). This sort of communication be

‐

tween a lender and a borrower is exactly what is at issue in

the present case. Nelson alleges that when she informed Great

Lakes that she was struggling with repayment, it did not ap

‐ propriately inform her of her repayment plan options. We

therefore disagree with Nelson’s e ff ort to distinguish between

disclosures on standardized origination and billing forms and

communications with struggling borrowers about their re

‐

payment options.No. 18

‐ 1531 17

That being said, we agree with Nelson that the HEA’s

preemption of state

‐ law “disclosure requirements” does not

bar entirely her a tt empt to use Illinois consumer

‐ protection

and tort law. Nelson complains of false and misleading state

‐

ments that Great Lakes made voluntarily, not required by fed

‐

eral law. Imposing liability for those voluntary but deceptive

statements does not impose additional “disclosure require

‐

ments” on Great Lakes.

Many of Nelson’s speci fi c claims allege that Great Lakes

misled her and other class members by making a ffi rmative

misrepresentations—about its expertise and its devotion to

borrowers’ best interests, and in recommending forbearance

as the best option for borrowers in fi nancial trouble. The dis

‐

trict court found these claims were preempted by recasting

them as omissions, such that state law would implicitly im

‐

pose on Great Lakes some disclosure requirements in addi

‐

tion to those imposed by federal law. Nelson

, 2017 WL

6501919, at *5.

We respectfully disagree with that reasoning. At least

some of Nelson’s claims of a ffi rmative deception do not nec

‐ essarily imply any additional disclosure requirements at all.

She is complaining about at least some deceptive statements

that Great Lakes chose to make voluntarily, not because fed

‐

eral law required them. Great Lakes could have avoided these

claims by remaining silent. State law could impose liability on

these a ffi rmative misrepresentations without imposing addi

‐

tional disclosure requirements on Great Lakes, and thus avoid

preemption under § 1098g. See Altria Group, Inc. v. Good

, 555

U.S. 70, 79–82 (2008) (state

‐ law fraud claims for false a ffi rma

‐

tive representations in cigare tt e advertising were not

preempted by federal law).18 No. 18

‐ 1531

One foundation of the law of fraud and negligent misrep

‐

resentation is the di ff erence between an a ffi rmative misrepre

‐

sentation and a failure to disclose. The common law tort of

fraud ordinarily requires a deliberately false statement of ma

‐

terial fact. E.g., Davis v. G.N. Mortgage Corp

., 396 F.3d 869, 881–

82 (7th Cir. 2005); Connick v. Suzuki Motor Co

., 675 N.E.2d 584,

591 (Ill. 1996); Siegel v. Levy Organization Development Co.

, 607

N.E.2d 194, 198 (Ill. 1992). An omission or failure to disclose,

on the other hand, will not support a common law fraud claim

but may be actionable as constructive fraud or fraudulent con

‐

cealment if the defendant was under a particular duty to

speak, which may stem from a fi duciary duty or a similar re

‐ lationship of trust and con fi dence. See Joyce v. Morgan Stanley

& Co

., 538 F.3d 797, 800 (7th Cir. 2008) (Illinois law); Connick

,

675 N.E.2d at 593; Restatement (Second) of Torts § 551 (1977).

When a plainti ff alleges a defendant’s actionable failure to

disclose, it is easy to understand how that claim implies a

“disclosure requirement,” to use the language of § 1098g. But

when a plainti ff alleges a defendant’s false a ffi rmative mis

‐ representation, recasting the claim as imposing a “disclosure

requirement” is not necessary and may not even be appropri

‐

ate. If the claim is that the defendant said something false that

it was not required to say in the fi rst place, the claim does not

necessarily imply a disclosure requirement. The defendant

could have complied with its legal obligations, under the

plainti ff ’s theory, by merely refraining from making the false

a ffi rmative misrepresentation about its expertise, its work in

borrowers’ best interests, and its recommendation of forbear

‐

ance to most distressed borrowers.

In this case, the district court relied upon a broad reading

of the Ninth Circuit’s opinion in Chae v. SLM Corp.

, 593 F.3dNo. 18

‐ 1531 19

936 (9th Cir. 2010), to treat Nelson’s complaints about a ffi rm

‐

ative misrepresentations as implying some additional disclo

‐

sure requirements. While Chae may apply to some of Nelson’s

claims, it was a mistake to read Chae so broadly. The plainti ff s

in Chae complained about the supposed failures to disclose

key information in speci fi c ways, such as loan terms and re

‐

payment requirements. Since the defendant was required to

disclose that information by federal law and had disclosed it

in ways permi tt ed by federal law, the Ninth Circuit found that

the plainti ff s were implicitly seeking to impose additional dis

‐

closure requirements under state law. We do not disagree

with the Ninth Circuit’s reasoning, but Chae itself made clear

that § 1098g would not extend to other sorts of disclosures to

borrowers. Chae limited the reach of some of its broader lan

‐

guage by holding that other state

‐ law claims, focusing on the

“use of fraudulent and deceptive practices apart from the bill

‐ ing statements ,” are not preempted by § 1098g. 593 F.3d at 943

(emphasis added).

That limitation applies to this case, or at least to parts of it.

The broad language in Chae simply does not extend to Nel

‐

son’s claims about Great Lakes’ a ffi rmative misrepresenta

‐

tions in counseling, where Great Lakes could have avoided

liability under state law by remaining silent (or telling the

truth) on certain topics. On this theory, plainti ff may proceed

on her claims based on a ffi rmative misrepresentations, as dis

‐

tinct from those that require proof that defendant failed to dis

‐

close information.

We recognize that it would be possible to apply state con

‐

sumer protection laws to impose additional disclosure re

‐ quirements on loan servicers of federally insured student

loans. Such applications would be preempted under § 1098g,20 No. 18

‐ 1531

as the Ninth Circuit made clear in Chae

. 593 F.3d at 942–43.

But that result is not necessary or inherent in Nelson’s claims,

at least to the extent she alleges a ffi rmative misrepresenta

‐

tions. We cannot say on the pleadings that all of Nelson’s

claims are preempted by § 1098g. On remand, the district

court may need to use jury instructions and other tools to al

‐

low Nelson to proceed on her claims of a ffi rmative misrepre

‐

sentations while ensuring that the case does not become a ve

‐

hicle for state law to impose new disclosure requirements.

B. Con fl ict and Field Preemption

Great Lakes has argued in the alternative for con fl ict and

fi eld preemption. The district court did not reach those issues,

but we should. They present questions of law that we can ad

‐

dress at the pleading stage. To show con fl ict preemption,

Great Lakes must show either that it would be “impossible”

for Great Lakes to comply with both state and federal law or

that state law (as Nelson seeks to apply it) constitutes an “ob

‐

stacle” to satisfying the purposes and objectives of Congress.

See Patriotic Veterans, Inc. v. Indiana

, 736 F.3d 1041, 1049 (7th

Cir. 2013). Great Lakes does not identify any impossible con

‐

fl ict, but it argues that application of state law here would be

an obstacle to the operation of federal student loan programs.

Con fl ict preemption does not bar Nelson’s claims. Recall

that there are several express preemption provisions in the

HEA: 20 U.S.C. § 1078(d) (usury laws), 1091a(a)(2) (statutes of

limitations), 1091a(b)(collections costs and infancy defenses),

1095a(a) (garnishment requirements), as well as § 1098g (dis

‐

closure requirements). The number of those provisions and

their speci fi city show that Congress considered preemption

issues and made its decisions. Courts should enforce those

provisions, but we should not add to them on the theory thatNo. 18

‐ 1531 21

more sweeping preemption seems like a be tt er policy. E.g.,

Virginia Uranium, Inc. v. Warren

, 139 S. Ct. 1894, 1901 (2019)

(plurality opinion) (“Invoking some brooding federal interest

or appealing to a judicial policy preference should never be

enough to win preemption of a state law

Y .”). Properly un

‐

derstood, state law and federal law can exist in harmony

here. 2

The Ninth Circuit in Chae used broad language on con fl ict

preemption and the value of uniformity in the federal loan

program: “Congress intended uniformity within the [FFELP].

The statutory design, its detailed provisions for the FFELP’s

operation, and its focus on the relationship between borrow

‐

ers and lenders persuade us that Congress intended to subject

FFELP participants to uniform federal law and regulations.”

593 F.3d at 947. That broad language, however, focused on

di ff erent sorts of claims, where the value of uniformity would

be more compelling than it is here. Chae focused on uni

‐ formity in the method of se tt ing late fees, repayment start

2 We do not give special deference to the U.S. Department of Educa

‐

tion’s 2018 informal guidance, entitled “Federal Preemption and State

Regulation of the Department of Education ʹ s Federal Student Loan Pro

‐

grams and Federal Student Loan Servicers.” 83 Fed. Reg. 10619 (Mar. 12,

2018). The Department expressed its view that the HEA preempts all state

regulations that “impact” FFELP loan servicing. We agree with the district

court’s thorough analysis of this issue in Student Loan Servicing Alliance v.

District of Columbia

, 351 F. Supp. 3d 26, 48–49 (D.D.C. 2018), that Skidmore

v. Swift & Co.

, 323 U.S. 134 (1944), provides the appropriate test for defer

‐

ence here. We also agree that the Preemption Notice is not persuasive be

‐

cause it is not particularly thorough and it “represents a stark, unex

‐ plained change” in the Department’s position

. Student Loan Servicing Alli

‐

ance

, 351 F. Supp. 3d at 50; see Skidmore

, 323 U.S. at 138. That is not to say

we disagree with every particular in the Department’s informal guidance,

but we give the document itself little weight.22 No. 18

‐ 1531

dates, and interest calculations. See id

. at 944–47. We assume

the need for nationwide consistency on those sorts of admin

‐

istrative mechanics is substantial. That need does not extend

to the claims Nelson asserts based on a ffi rmative misrepre

‐

sentations—not required by federal law—to borrowers hav

‐ ing trouble making their payments. 3

Finally, fi eld preemption does not apply here. Field

preemption is rare. It applies “when federal law occupies a

‘ fi eld’ of regulation ‘so comprehensively that it has left no

3 The Department’s Preemption Notice also cited Boyle v. United Tech

‐ nologies Corp.

, 487 U.S. 500 (1988), to argue that the servicing of student

loans “is an area ‘involving uniquely Federal interests’ that must be ‘gov

‐

erned exclusively by Federal law.’” See 83 Fed. Reg at 10619, citing Boyle

,

487 U.S. at 504. The Department explained that “there is no question that

the ‘imposition of liability on Government contractors will directly affect

the terms of Government contracts,’ at the very least by raising the price

of such contracts, and ‘the interests of the United States will be directly

affected.’” Id. at 10621, quoting Boyle

, 487 U.S. at 507. It is true that the

federal government has an interest in protecting the rights and obligations

established in its contracts, and that this interest extends to “liability to

third persons.” Boyle

, 487 U.S. at 505. At the same time, Illinois has a com

‐ pelling interest in protecting its consumers by providing oversight of fed

‐

eral student loan servicers. See Student Loan Servicing Alliance

, 351 F. Supp.

3d at 59. Boyle itself noted that just because an area involves a “uniquely

federal interest,” that “does not, however, end the inquiry. That merely

establishes a necessary, not a sufficient, condition for the displacement of

state law. Displacement will occur only where

Y a significant conflict ex

‐

ists between an identifiable federal policy or interest and the [operation]

of state law, or the application of state law would frustrate specific objec

‐

tives of federal legislation.” 487 U.S. at 507 (internal citations, quotation

marks, and footnote omitted). While Boyle explained that the conflict in

such a situation “need not be as sharp” as it generally would to find

preemption, “conflict there must be.” Id. at 507–08. We see no such conflict

posed by Nelson’s claims here, at least to the extent those claims are con

‐

fined to affirmative misrepresentations.No. 18

‐ 1531 23

room for supplementary state legislation.’” Int’l Ass’n of Ma

‐

chinists Dist. Ten v. Allen

, 904 F.3d 490, 498 (7th Cir. 2018),

quoting R.J. Reynolds Tobacco Co. v. Durham County

, 479 U.S.

130, 140 (1986). “Federal statutes that preempt a fi eld ‘re fl ect[

] a congressional decision to foreclose any state regulation in

the area, even if it is parallel to federal standards.’” Int’l Ass’n

of Machinists

, 904 F.3d at 498, quoting Murphy v. Nat’l Colle

‐ giate Athletic Ass’n

, 138 S. Ct. 1461, 1481 (2018).

On this point we agree with Chae

. See 593 F.3d at 941–42

(“we have previously held that fi eld preemption does not ap

‐ ply to the HEA”), citing Keams v. Tempe Technical Inst., Inc.

, 39

F.3d 222, 225–26 (9th Cir. 1994) (holding that fi eld preemption

did not apply under HEA to preempt state tort claim by stu

‐

dents against accrediting agency: “It is apparent

... that Con

‐

gress expected state law to operate in much of the fi eld in

which it was legislating.”); accord, Armstrong v. Accrediting

Council for Continuing Educ. and Training, Inc.

, 168 F.3d 1362,

1369 (D.C. Cir. 1999) (a ffi rming prior holding that “federal ed

‐

ucation policy regarding [private lending to students] is not

so extensive as to occupy the fi eld”). In the HEA, Congress

chose to displace state law only in certain speci fi ed, express

preemption provisions. Those provisions indicate that Con

‐

gress has not sought to displace all state regulation of student

loans. And the absence of language indicating an intent to oc

‐

cupy the fi eld weighs heavily, of course, “in favor of holding

that it was the intent of Congress not to occupy the fi eld.”

Frank Bros. v. Wisconsin Dep’t of Transp.

, 409 F.3d 880, 891 (7th

Cir. 2005), citing Hillsborough County v. Automated Medical

Labs., Inc.

, 471 U.S. 707, 718 (1985).

Field preemption is con fi ned to only a few areas of the law,

such as the National Labor Relations Act, Int’l Ass’n of24 No. 18

‐ 1531

Machinists

, 904 F.3d at 497–98, and the Employee Retirement

Income Security Act, Trustees of AFTRA Health Fund v. Biondi

,

303 F.3d 765, 776–79 (7th Cir. 2002). Courts consistently apply

fi eld preemption in cases dealing with those federal statutes.

The opposite is true here. Courts have consistently held that

fi eld preemption does not apply to the HEA, and we do as

well.

Conclusion

Nelson has alleged claims under state law that are not nec

‐ essarily preempted by federal law. The judgment of the dis

‐

trict court is VACATED and the case is REMANDED for fur

‐

ther proceedings consistent with this opinion.