Opinion ID: 2635400
Heading Depth: 3
Heading Rank: 1

Heading: Does AS 14.43.120(u) Provide a Right to Medical Cancellation of Student Loans?

Text: Rubey argues that AS 14.43.120(u), authorizing ACPE to charge origination fees on education loans, gives him a right to medical cancellation of his loan obligations. Rubey suggests that the phrase losses incurred as a result of . . . [the borrower's] disability [8] must refer to losses in the form of medical cancellations, making medical cancellation an implied statutory right. [9] ACPE argues that AS 14.43.120(u) simply creates an account, funded by loan origination fees, to offset ACPE's loan losses: AS 14.43.120(u) recognizes that [ACPE] may as a practical matter incur losses due to borrowers' deaths, disabilities, bankruptcies, or defaults due to other reasons, and that the statute has no effect on the legal obligations of borrowers to repay their loans. ACPE maintains that providing a fund to offset losses does not  and should not be read to  imply that ACPE must suffer those losses or that borrowers have been given a statutory right to cause those losses. We start by noting that the legislature has never expressly provided for medical cancellation of student loans. [10] In contrast the legislature has expressly allowed forgiveness of student loans in other circumstances. [11] The lack of an explicit right to medical cancellation here, when the legislature has provided for cancellation in other contexts, undercuts Rubey's argument that this right exists. [12] The legislation implementing loan guarantee fees does not contain a specific statement of legislative intent. [13] Amended AS 14.43.120(h) states that [s]ecurity may not be required for a loan; however, a loan guarantee fee, as specified in (u) of this section, shall be charged at the time that the loan is awarded.  [14] (Amended language emphasized.) This implies that AS 14.43.120(u) was designed to compensate for the fact that security could not be required on ACPE loans  and thus to compensate for the losses ACPE anticipated. ACPE's interpretation is consistent with that purpose. As the superior court noted, It simply does not follow from the legislature's creation of a fund to offset losses that it therefore intends to forgive a certain class of debts. Accordingly we are persuaded that ACPE's interpretation not only is reasonable, but also is closer to the plain meaning of the statute, more consistent with the purpose of the statute, and more likely the intent of the legislature. We therefore agree with the superior court and affirm ACPE's interpretation of AS 14.43.120(u) as not providing a right to medical cancellation of student loans.