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The Honorable George Howard, Jr., United States District

Judge for the Eastern District of Arkansas.

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No. 95-2936

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Steven C. Labickas, *

 *

Appellant, *

 *

v. *

 * Appeal from the United States

Arkansas State University; Rita * District Court for the

Toland, in her official and * Eastern District of Arkansas.

individual capacity as * [UNPUBLISHED]

Financial Aid Administrator for *

the Beebe Campus, *

 *

Appellees. *

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 Submitted: January 31, 1996

 Filed: February 5, 1996 ___________

Before McMILLIAN, WOLLMAN, and MURPHY, Circuit Judges. ___________

PER CURIAM.

Steven C. Labickas appeals from the district court's1

dismissal of his complaint seeking damages from Arkansas State

University and Rita Toland for violations of Title IV of the Higher

Education Act (HEA) (20 U.S.C. §§ 1070-1099) and state common law.

Labickas, a full-time student at Arkansas State University

(ASU), alleged that when he applied through ASU for a federallysubsidized Stafford loan, Toland, an ASU financial aid

administrator, informed Labickas that as part of the application

process, he would have to authorize ASU to review his credit.

Labickas refused to grant ASU that permission, insisting that his
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credit record is private. ASU refused to certify his Stafford loan

application. Labickas argued that ASU's policy of requiring credit

checks of Stafford loan applicants is not authorized by the HEA.

Labickas also asserted pendent state law claims of breach of

fiduciary duty, outrageous conduct, and breach of contract.

On defendants' motion, the district court dismissed Labickas's

complaint with prejudice, concluding that the HEA does not create

a private cause of action for student borrowers. In a footnote,

the district court held that Labickas's pendent state law claims

"must also fail."

We review de novo the district court's dismissal for failure

to state a claim. Allen v. Purkett, 5 F.3d 1151, 1153 (8th Cir.

1993) (per curiam), cert denied, 115 S. Ct. 100 (1994).

In determining whether a private remedy exists under the HEA,

this court must look to four factors: (1) is the plaintiff a

member of the class for whose especial benefit the statute was

passed; (2) was there a legislative intent to create or deny a

private remedy; (3) is an implied remedy consistent with the

purpose of the legislative scheme; and (4) is the cause asserted

one that is traditionally relegated to state law. See Cort v. Ash,

422 U.S. 66, 78 (1975). The critical inquiry, however, is whether

Congress intended to create a private cause of action.

Transamerica Mortgage Advisors, Inc. v. Lewis, 444 U.S. 11, 24

(1979). Thus, the second and third Cort factors carry more weight

in the analysis than do the other factors. Massachusetts Mut. Life

Ins. Co. v. Russell, 473 U.S. 134, 145 (1985).

We conclude that no private right of action is implied under

the HEA for student borrowers. The HEA specifies that the

Secretary of Education has the power to carry out the Act's

purposes; the Secretary has promulgated numerous and comprehensive

regulations that regulate educational institutions' compliance with
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the HEA; and the statute and legislative history do not otherwise

suggest congressional intent to create a private remedy. See 20

U.S.C. §§ 1070(b), 1082(a)(2), 1082(h); Parks Sch. of Business,

Inc. v. Symington, 51 F.3d 1480, 1485 (9th Cir. 1995); L'ggrke v.

Benkula, 966 F.2d 1346, 1347-48 (10th Cir. 1992). As Labickas has

no claim under the HEA, it is irrelevant that the caption on the

district court's order identified Toland as a defendant only in her

official capacity.

Although it was within the district court's discretion to

dismiss Labickas's state law claims, see McLaurin v. Prater, 30

F.3d 982, 985 (8th Cir. 1994), they should have been dismissed

without prejudice. Cf. Stokes v. Lokken, 644 F.2d 779, 785 (8th

Cir. 1981) (construing order dismissing state law claims following

summary judgment on federal claims as dismissal without prejudice

because such procedure is the "normal practice"). 

Accordingly, we affirm the dismissal with prejudice of

Labickas's HEA claim and modify the dismissal of his state law

claims to be without prejudice.

A true copy.

Attest:

CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.