Opinion ID: 2635400
Heading Depth: 3
Heading Rank: 3

Heading: Are ACPE's Actions Consistent with Its Statutory Authority?

Text: Rubey makes two intertwined arguments that ACPE is acting outside the scope of its statutory authority by denying medical cancellation of his loans. Citing Jerrel v. State, Department of Natural Resources, [15] Rubey argues that the decision to stop placing provisions for medical cancellation in promissory notes was a policy change requiring Administrative Procedures Act rulemaking. Rubey also argues that 20 AAC 15.920 is not a valid regulation because it arbitrarily makes medical cancellation available only to students who have a permissive term in their promissory notes. [16] ACPE contends that making medical cancellations available for some loans was an exercise of ACPE's discretion and, conversely, that limiting medical cancellations likewise was an exercise of its discretion. ACPE defends its limitation of medical cancellations as necessary to ensure a solvent loan program for education loans at the lowest possible interest rates. ACPE further contends that AS 14.42.030(e)(1) [17] authorizes ACPE to promulgate regulations to carry out the purposes of its education loan programs and that 20 AAC 15.920 is consistent with and reasonably necessary to those purposes. We agree with ACPE. As we have already concluded, there is no statutory directive that ACPE provide for medical cancellations of education loans. ACPE has broad discretion to exercise its business judgment in managing its funds and education loan programs. The decision to include medical cancellation provisions in some promissory notes prior to 1996, and the decision to eliminate such provisions in all promissory notes beginning in 1996, both fall within the scope of ACPE's discretionary business judgment [18] and cannot fairly be considered policies requiring compliance with formal rulemaking procedures. [19] 20 AAC 15.920 is a properly promulgated regulation providing the mechanics for holders of education loans containing medical cancellation provisions to apply for medical cancellations. Because ACPE may extend loans with or without medical cancellation provisions, there is nothing arbitrary or capricious in limiting the scope of 20 AAC 15.920's application to loans with medical cancellation provisions. We accept 20 AAC 15.920 as a valid exercise of ACPE's statutory authority.