Opinion ID: 1668648
Heading Depth: 1
Heading Rank: 3

Heading: Higher Education Act.

Text: The fighting issue on appeal is whether UNIPAC's denial of Fischer's request for a second year of internship deferment on two student loans violated federal law governing educational opportunity grants at postsecondary institutions. See 20 U.S.C. § 1077(a)(2)(C)(vii); 34 C.F.R. § 682.210(a)(7) (1993). Fischer claims the record clearly establishes that defendants knew or should have known he was eligible for the extended deferment. The district court concluded Fischer was not entitled to the second year deferment because the relevant statutory amendment became effective eleven days after he requested the deferment. The Higher Education Act of 1965 (HEA) sets forth terms and conditions for student borrowers of federally insured educational loans. See generally 20 U.S.C. §§ 1070-1099. Section 1077(a)(2)(C) of the HEA provides for deferral of repayment obligations on such loans under certain circumstances. Fischer relies on the internship or residency provision which provides for a deferral period not in excess of 2 years during which the borrower is serving an internship, the successful completion of which is required in order to receive professional recognition required to begin professional practice or service ..., or serving in an internship or residency program leading to a degree or certificate awarded by an institution of higher education, a hospital, or a health care facility that offers postgraduate training. Id. § 1077(a)(2)(C)(vii) (emphasis added). While Fischer concedes that on July 7 the degree or certificate provision did not apply to loans taken out before July 1, 1987, he argues that his attorney made additional requests for deferment after the July 18 amendment. See Higher Education Technical Amendments Act of 1987, Pub.L. No. 100-50, § 27, 101 Stat. 335, 363 (1987). Further, he points out that under applicable federal regulations [a] lender may not deny a borrower a deferment to which the borrower is entitled, even though the borrower may be delinquent, but not in default, in making the required installment payments. 34 C.F.R. § 682.210(a)(7). In response, UNIPAC contends Fischer failed to properly document his entitlement to an additional deferral. On the deferment form Fischer checked the only internship box provided, certifying that he was serving in an internship/residency, the completion of which is required to receive professional recognition. A hospital official also signed the form and added the dates of Fischer's internal medicine residency along with the name and address of the hospital. At no time after July 7 did Fischer ever request a new deferment form; nor did UNIPAC ever provide an updated form. Attorney Carr first contacted UNIPAC on Fischer's behalf on September 19. In his letter Carr told UNIPAC that your records fail to take into account the request for deferment and he continues to receive notices from your office concerning an alleged delinquency. Carr requested that the loans be deferred until Fischer completed his education in June of 1989. On October 31 Carr wrote to UNIPAC explaining that Fischer continues to be a student and he had previously provided the necessary deferment papers to your office by certified mail. In a letter dated December 12 UNIPAC reiterated that according to the Board, only one year of Postgraduate Medical Training is required. Therefore, Mr. Fischer's request for an extended deferment was denied. Carr responded to that letter on December 23: The period of time with respect to internship deferments has been extended by federal law and regulation to be two years. Any financial institution or credit organization knows of, or should know of this change of law. I suggest that you check with your legal counsel as to the accuracy of this change of regulation. He again urged UNIPAC to process Fischer's deferment request. On February 7, 1989, after the final demand notice and declaration of default, Carr wrote another letter to UNIPAC. He stated: Dr. Fischer has previously submitted the deferment forms, forms which are allowed under Federal regulation with respect to two years of deferment for interns. All banks and the Iowa College Aid Commission are aware of this regulation. If you are to be in the collection business with respect to this type of collection, I trust you do know or should learn the Federal regulations. Again, in a May 12 letter Carr insisted Dr. Fischer has been and continues to be under the second year of a residency program in Des Moines, Iowa, and that therefore, repayment of his Iowa Guaranteed Student Loan... should have been deferred. Finally, a year later Carr again demanded that UNIPAC correct the default status because Fischer clearly qualifies for deferment under current law and regulations. We turn now to the regulations governing deferment of repayment obligations on federally insured student loans. The Code of Federal Regulations provides that [a]s a condition for receiving a deferment, the borrower shall request the deferment, and provide the lender with all information and documents required to establish eligibility for a specific type of deferment. 34 C.F.R. § 682.210(a)(4). Subsection 682.210(n)(1) sets forth the documentation necessary to establish entitlement to deferral under the degree or certificate provision: To qualify for an internship or residency deferment ..., the borrower shall provide the lender with a statement from an authorized official of the organization with which the borrower is undertaking the internship or residency program certifying (i) That the internship or residency program is a supervised training program that requires the borrower to hold at least a baccalaureate degree prior to acceptance into the program; (ii) That ... the internship or residency program leads to a degree or certificate awarded by an institution of higher education, a hospital, or a health care facility that offers postgraduate training; (iii) That the borrower has been accepted into the internship or residency program; and (iv) The anticipated dates on which the borrower will begin and complete the internship or residency program.... Id. § 682.210(n)(1). This case presents a classic example of miscommunication. Although we find it regrettable the parties could not uncross their wires during ten months of written and oral communications, we conclude Fischer simply failed to establish that he was entitled to the additional year of deferment. During his deposition Fischer testified that he understood UNIPAC's position with respect to the denial of his request. When asked what evidence he submitted to support his eligibility under the degree or certificate provision, Fischer mentioned the July 7 deferment form and also stated he had Don Carr correspond with them and tell them. Fischer added that the December, February, and May letters to UNIPAC clearly referenced the two-year internship provision and even pointed out that federal regulations had changed. Even assuming the correspondence on Fischer's behalf adequately identified the specific type of deferment Fischer sought, we find no evidence that Fischer provided UNIPAC with the requisite statement from an authorized hospital official certifying that he was serving in a qualifying program leading to a degree or certificate in family practice. See 34 C.F.R. § 682.210(n)(1). The only documents UNIPAC possessed to support Fischer's claim related to the provision which was the basis for his first-year deferral. Further, the correspondence merely contained general assertions that Fischer was entitled to a second year of deferment because he remained in an internship program. We find it clear under the regulations that the borrower bears the burden of establishing eligibility for a specific type of deferment. Id. § 682.210(a)(4). It was Fischer's responsibility to provide UNIPAC with the proper documents to establish his eligibility for deferment. Consequently, UNIPAC's denial of an extended deferment on Fischer's loans did not violate the HEA. We conclude the court properly entered summary judgment for defendants on this count.