United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued October 25, 1999 Decided November 16, 1999
No. 99-5024
Renee M. Jordan,
Appellant
v.
Secretary of Education of the United States and
Nebraska Student Loan Program,
Appellees
Appeal from the United States District Court
for the District of Columbia
(No. 97cv00876)
Michael E. Tankersley argued the cause for appellant.
With him on the briefs was Alan B. Morrison.
Meredith Manning, Assistant U.S. Attorney, argued the
cause for appellees. With her on the brief were Wilma A.
Lewis, U.S. Attorney, and R. Craig Lawrence, Assistant U.S.
Attorney.
David Ober was on the brief for appellee Nebraska Student
Loan Program.
Before: Silberman, Ginsburg, and Randolph, Circuit
Judges.
Opinon for the Court filed by Circuit Judge Silberman.
Silberman, Circuit Judge: Renee Jordan sought a dis-
charge of her federally guaranteed student loan because the
vocational school she attended had falsely certified her ability
to benefit from its training. The holder of her loan refused,
and the Secretary of Education denied her appeal, on grounds
that she failed to satisfy a regulation that requires students
seeking a discharge to demonstrate an inability to find a job.
When Jordan sued the Secretary, the district court granted
summary judgment against her. We hold that the regulation
is inconsistent with the governing statute, and thus reverse.
I.
Under the Federal Family Education Loan Program, pri-
vate lenders make loans for "eligible borrowers" to attend
"eligible" post-secondary institutions. See 20 U.S.C. s 1071
et seq.1 State and private guaranty agencies insure the loans,
and the Secretary of Education reinsures the agencies. Gen-
erally, eligible borrowers are those who have a high school
diploma or a GED. However, an individual without a diploma
or GED may qualify to attend a vocational school if the school
certifies that she has the "ability to benefit" from the training
it provides. Under s 1091(d), a student may demonstrate an
ability to benefit in one of three ways: (1) by earning a GED
before graduation from the program or by the end of the first
year of study; (2) by being counseled before admission and
completing a prescribed program of remedial education; or
(3) by passing "a nationally recognized, standardized or indus-
try developed test" that measures "the applicant's aptitude to
complete successfully the program to which the applicant has
applied."
__________
1 We discuss the statute as it existed at the time of the events at
issue in this case. Congress has since made extensive changes to
the statutory scheme.
In 1992, in response to public concern about vocational
schools that defrauded students by falsely certifying their
ability to benefit and then providing them worthless training,
Congress provided that if a "student's eligibility to borrow
under this part was falsely certified by the eligible institution
... then the Secretary shall discharge the borrower's liability
on the loan." 20 U.S.C. s 1087(c)(1). The agency holding
the loan decides whether to grant a discharge, subject to
review by the Secretary. See 34 C.F.R. s 682.402(e). A
student must submit a written statement affirming that she
was admitted to a school on the basis of ability to benefit but
did not satisfy the ability to benefit requirements. If the
student completed the program, she also must state that she
"made a reasonable attempt to obtain employment in the
occupation for which the program was intended to provide
training, and--(1) Was not able to find employment in that
occupation; or (2) Obtained employment in that occupation
only after receiving additional training that was not provided
by the school that certified the loan." Section
682.402(e)(3)(ii)(C).
Jordan completed a six-month course at the National Busi-
ness School's Law Enforcement Academy (NBS) in the Dis-
trict of Columbia. When she was admitted to the school in
1987, she did not have a high school diploma or GED, and she
did not meet the requirements of s 1091(d). Nevertheless,
NBS arranged for Jordan to obtain a guaranteed student
loan. Jordan's experience was apparently not unique: an
investigation by the Department of Education's Inspector
General and the FBI revealed that the school admitted
unqualified students by improperly administering entrance
examinations, in some cases by giving students the answers.
After her graduation from NBS, Jordan sought employ-
ment as a security officer. She answered a newspaper adver-
tisement for security officers, but she was told that she would
have to start at what she described as "an unacceptably low
salary" because she lacked a high school degree. The record
is not entirely clear on whether Jordan was denied a position
or was offered a position that she declined. In any event,
Jordan submitted a request for a discharge to the holder of
her loan, the Nebraska Student Loan Program. That agency
denied her request, because she had been offered a job that
she declined. The holder also relied upon a policy statement
issued by the Deputy Assistant Secretary stating that, absent
"unusual circumstances," a guaranty agency could reasonably
"consider three separate attempts by the student to find a
job" persuasive evidence that the student had complied with
34 C.F.R. s 682.402(e)(3)(ii)(C). The Secretary denied Jor-
dan's appeal on the ground that she had been able to find
employment but simply declined the job she was offered.
Jordan then brought this action claiming that the subse-
quent employment conditions in the regulation exceeded the
Secretary's authority under the statute. The district court
granted the Secretary's motion for summary judgment. See
Jordan v. Riley, 26 F. Supp. 2d 173 (D.D.C. 1998). The court
held that the regulation was a permissible interpretation of
the ambiguity created by the undefined term "falsely certi-
fied." For purposes of summary judgment, it assumed that
Jordan had been denied a job, but it held that the regulatory
requirement of "a reasonable attempt to obtain employment"
could not be satisfied by only one unsuccessful attempt to find
employment, because "[a] sample size of one is too small" for
a student to demonstrate an inability to get a job. Id. at 179.
Jordan appealed.
II.
Jordan contends that the regulation at issue is inconsistent
with the statute and therefore fails the first step of the
analysis in Chevron U.S.A. Inc. v. Natural Resources Defense
Council, Inc., 467 U.S. 837 (1984). The first part of the
regulation, it is argued, simply mirrors the statutory require-
ment that the student has been admitted to a school on the
basis of ability to benefit without actually satisfying the
ability to benefit test. The second part, however, demands
that the student have made an unsuccessful effort to find
employment. This condition, appellant argues, is found no-
where in the statute, and for the Secretary to impose it is to
violate the congressional command that he "shall discharge
the borrower's liability" if statutory criteria are violated.
Jordan also argues that, even if the regulation were valid, the
district court erred in applying a three-attempt rule, because
that rule was found only in a policy statement, and, in any
event, the Secretary did not rely on it.
The Secretary justifies the regulation by pointing out that
the statute does not define the term "falsely certified." He
refers to the dictionary definition of "false" as "contrary to
truth or fact" and reasons that "one way to determine wheth-
er Ms. Jordan's ability to benefit from security guard training
was falsely certified in 1987 is to examine whether she in fact
had the ability to benefit from that training," as measured by
whether she subsequently found a job. On his view, under
Chevron the regulation is a reasonable interpretation of an
ambiguous statute.
Ambiguity, of course, "is a creature not of definitional
possibilities but of statutory context." Brown v. Gardner,
513 U.S. 115, 118 (1994). The Secretary ignores that context,
for he overlooks that "ability to benefit" is defined in specific
terms in the statute. A school does not certify a student's
general "ability" measured at the time of certification--still
less as to be determined in the future. Rather, it certifies
that the student meets the particular conditions of s 1091(d).
Because the school is never asked to certify (predict) that a
student will find a job, a student's post-training employment
experience is irrelevant to the truth or falsity of the certifica-
tion. The Secretary appears to recognize as much, for anoth-
er provision of the same regulation already provides a defini-
tion of "falsely certified," one that is based solely on whether
the student met the objective criteria for certification before
being admitted. See 34 C.F.R. s 682.402(e)(1)(i).
In other words, the statutory scheme is designed to place
obligations on schools, which must certify ability to benefit,
and on the government, which must police schools to ensure
that their certifications are accurate, or failing that must
compensate defrauded students. Under the regulation, a
burden is shifted to the student: she is obliged to seek a job
before she may claim the benefit of a discharge. Thus, the
Secretary has done more than simply add an obligation that is
not in the statute; he has changed the nature of the statute.
It would be absurd, the Secretary argues, to allow students
to obtain discharges simply because of trivial technical defects
in the tests that were used to measure their ability to benefit.
So it would. That proposition is not in dispute: Jordan
concedes that the Secretary could issue a regulation defining
"falsely certified" in such a way as to exclude certifications
that were defective because, for example, the student wrongly
took a photocopied version of the test rather than the origi-
nal. Indeed, the Secretary has already issued an interpretive
policy statement to that effect. The legality of a "harmless
error" rule cannot justify this regulation, which has a policy
objective far exceeding the statutory framework.
Ultimately, the Secretary relies on a policy argument: that
students who gain the benefit of the training should not get a
windfall by avoiding their loan obligations.2 He attempts to
tie that policy objective to the legislative history. He refers
to a committee report indicating that Congress was concerned
that students whose eligibility was falsely certified were "left
without the skills needed to obtain employment and conse-
quently did not have the means to repay the loans." H.R.
Rep. No. 447, 102d Cong., 2d Sess. 52 (1992). From this he
infers that Congress intended to discharge the loans only of
students who were unable to find employment. We think
that is an inference too far. Be that as it may, the Secretary
confuses the subjective intentions of the members of Con-
gress with the statute that Congress actually enacted. Cf.
Oncale v. Sundowner Offshore Servs., Inc., 523 U.S. 75, 79
(1998) ("[I]t is ultimately the provisions of our laws rather
than the principal concerns of our legislators by which we are
governed."). The Secretary may not rewrite the statute,
even if the enacting Congress might have approved of his
efforts.
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2 The Secretary's regulation has its own perverse consequence.
Even if a student received zero training--let us say the school was
a total sham--the student would be obliged to pay, if by dint of
drive and good fortune he or she happened to get a job.
* * * *
The judgment of the district court is reversed, and the case
is remanded for further proceedings consistent with this
opinion.
So ordered.