De La Mota v. United States Department Of Education

412 F.3d 71 (2nd Cir. 2005)

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Nature of the Case

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Facts

Ps are public service attorneys employed by New York City's Administration for Children's Services (ACS). ACS defines its mission as 'to ensure the safety and well-being of all the children of New York' and to employ 'all available means to be certain that children do not live in danger of abuse and neglect.' Title IV of the HEA directs D to implement various federal student financial aid programs. The Perkins Loan Program is designed to assist institutions of higher education in financing low-interest loans to financially needy students. Congress delegated D the authority to implement Perkins Loans, including the authority to promulgate regulations governing the program. D provides federal monies to participating institutions. The institution makes matching capital contributions and the funds are the source of loans to eligible students. Once the student graduates or leaves the school, the loan is to be repaid. The institution's fund is revolving and repaid loans are deposited into the fund and then supplemented by new federal and institutional funds. The schools independently determine eligibility, advance funds, collect payments and make decisions concerning loan forgiveness. In 1985, Congress amended the statute to encourage graduates to work in various areas of public service, such as teaching and the Peace Corps. This encouragement took the form of partial or total Perkins Loan cancellation. Subsequent amendments expanded the categories of public service that qualify for loan cancellation to include law enforcement, nursing, and additional types of childcare. The 1992 Amendment provides that 'loans shall be canceled . . . for service': '(I) as a full-time employee of a public or private nonprofit child or family service agency who is providing, or supervising the provision of, services to high-risk children who are from low-income communities and the families of such children.' The lending school bears the responsibility of determining the applicant's eligibility for loan cancellation. In 1995, D enacted a regulation that states: An institution must cancel up to 100 percent of the outstanding balance on a borrower's Federal Perkins or NDSL made on or after July 23, 1992, for service as a full-time employee in a public or private nonprofit child or family service agency who is providing, or supervising the provision of, services to high-risk children who are from low-income communities and the families of these children. Each year the Federal Student Aid Office of D issues a Student Financial Aid Handbook to participating institutions to assist them in responding to loan cancellation requests. The Handbooks introduced a new qualification for loan cancellation based on child or family service not found in the statute, requiring that the services be extended 'only' to high-risk children. Ps applied for loan cancellation. D advised the schools not to cancel the loans because the services provided to children were neither 'direct' nor 'only to high-risk children.' The word 'only' originated in the Handbooks, not the HEA statute or the D regulation. The requirement of 'direct' services is not contained in the HEA statute, the D regulation, or the Handbooks. It first appeared in an April 12, 2001, informal e-mail from a D Program Specialist. Ps sued Ds. Ps claimed that D had not properly promulgated the rules. D moved for summary judgment. The court held that D was entitled to 'some degree of deference' in its interpretation of its own regulations and eligibility determinations pursuant to 20 U.S.C. § 1087ee(a)(2)(I). Summary judgment was granted to D and Ps appealed.