skip tracing. Therefore, the Secretary's decision must be vacated and the matter remanded to the agency for further consideration of the Plaintiff's FY 1993 CDR loan servicing and collection appeal. The Plaintiff is to be restored to eligibility to participate in the FFEL program pursuant to 20 U.S.C. § 1085(a)(2)(A) until the Secretary makes his final determination.
II. Erroneous Data Appeal
As stated, the Plaintiff also argues that the Defendant improperly declined to exclude two additional loans from its FY 1993 CDR that were entered based on erroneous data. First, Plaintiff claims that "the Clifford Alexander loans" should have been excluded from Plaintiff's FY 1993 CDR because the lender improperly began collection efforts two months prior to the expiration of the applicable grace period on the loans. Next, Plaintiff claims that "the Carol Schreifels loans" should be excluded from Plaintiff's FY 1993 CDR because her loans should have been, and apparently have been, counted in Plaintiff's FY 1994 CDR.
With respect to the "Alexander loans," the Plaintiff's claim depends entirely upon Plaintiff's unsupported allegation that the computer was wrong and that Alexander actually ceased to be enrolled at Mildred Elley two months later than the computer records indicated. This argument is without merit. Even assuming Plaintiff's allegation to be true and supported by evidence, the loan would still have been counted in Plaintiff's FY 1993 CDR because the loan would have entered repayment in fiscal year 1993. Furthermore, to the extent Plaintiff argues that the default was caused by improper servicing or collection, such argument also lacks merit. Initiating collection efforts prior to the expiration of the applicable grace period is not one of the improper loan servicing or collection activities listed in 34 C.F.R. § 668.17(h)(3)(viii). Therefore, after carefully considering the matter, the Court finds that the Defendant did not act arbitrarily or capricious with respect to the "Alexander loans."
With respect to the "Schreifiels loans," Plaintiff argues that the loans should not have been included in the FY 1993 CDR because these loans did not enter repayment until 1994 due to a particular policy known as "linkage." Under this policy, two types of loans, Stafford and SLS loans, are deemed to enter repayment on the same date. Because the Stafford loan has a six month grace period, the Department deems the SLS to have also entered repayment after the six month grace period. Thus, if a student with an SLS and Stafford loan graduated in May of 1993, the repayment entered date for both loans would have been December of 1993, and because the fiscal year ends on September 30th, both the SLS and Stafford loans would actually enter repayment in FY 1994.
However, in this case the record reveals that the Secretary determined that this borrower had either paid off or began repaying her Stafford loan prior to September 30, 1993 (or before the grace period had run). Thus, under the applicable "linkage policy" the SLS loan would be linked and enter repayment in FY 1993 as well, and the loans should have been counted in Plaintiff's FY 1993 CDR. Therefore, the Court finds the Secretary's decision was not arbitrary or capricious with respect to the "Schreifiels loans."
III. Due Process
Finally, the Plaintiff argues that the Secretary's explanations for his rulings were inadequate and violated the Plaintiff's due process rights.
Plaintiff's eligibility to participate in the FFEL program is a property interest protected by the Constitution. See Continental Training v. Cavazos, 893 F.2d 877, 893 (7th Cir. 1990). What is fundamentally fair in terms of notice and a hearing necessarily depends on the circumstances of each case. Signet Constr. Corp. v. Borg, 775 F.2d 486, 490 (2d Cir. 1985). Rigid, inflexible formulas will not fit all situations. Id. However, as a general matter, where a nonjudicial decision maker is involved, due process requires that he or she "'state the reasons for his determination and indicate the evidence he relied on.'" Hameetman v. City of Chicago, 776 F.2d 636, 645 (7th Cir. 1985) (quoting Goldberg v. Kelly, 397 U.S. 254, 271, 25 L. Ed. 2d 287, 90 S. Ct. 1011 (1970)). Of course, this "duty to explain presupposes that the explanation is not obvious." Id.
In this case, the Plaintiff claims that the Secretary failed to articulate adequately the basis for his rulings regarding Plaintiff's loan servicing and erroneous data appeals. In the Department's letter informing Plaintiff of its ruling on Plaintiff's loan servicing appeal, the Department indicated that 102 loans were submitted for review and 100 were found to have been properly serviced. Attached to the letter were (1) an explanation of relevant amendments to the HEA, (2) the applicable regulations, and (3) a synopsis of the general interpretative guidance set forth by the Secretary in the Federal Register. The Department's letter regarding Plaintiff's erroneous data appeal simply states that the Department had determined that two loans were improperly included in Plaintiff's FY 1993 CDR, and that Plaintiff's CDR was modified accordingly.
While these letters do not specifically address the eight loans at issue in this action, to require such a detailed explanation from the Secretary in the hundreds of cohort default rate appeals filed each year would place an undue burden on the Department. The administrative record for these two appeals alone contains reams of information for the Secretary's review. Although a brief summary of the Department's conclusions regarding the Plaintiff's specific claims would certainly provide schools in the Plaintiff's circumstances with a better understanding of the basis of the Defendant's decisions, the Court does not find that the Due Process clause requires such a summary, and Plaintiff's due process claims must be dismissed.
Therefore, after carefully considering the papers submitted, the arguments of counsel, and the entire record in this case, it is hereby
ORDERED that the Plaintiff's motion for summary judgment in this matter is GRANTED, and that the Defendant's cross-motion for summary judgment is DENIED, and it is further
ORDERED that the Secretary of the Department of Education's decision with respect to the loan servicing and collection appeal is vacated and the matter remanded to the Agency for further consideration of all relevant evidence to the proper calculation of the Plaintiff's FY 1993 CDR, and it is further
ORDERED that the Plaintiff's eligibility to participate in the Federal Family Education Loan program be restored pending the Agency's final determination.
IT IS SO ORDERED.
Dated: August 22, 1997
Syracuse, New York
Frederick J. Scullin, Jr.
United States District Court Judge
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