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Jordan v. Riley

Topic(s): Arbitration
Citation: 26 F. Supp. 2d 173 (D DC 1998), rev. 194 F.3
Docket: 99-5024



This case concerned the Department of Education's implementation of a statute, 20 U.S.C. § 1087(c) (1994), mandating that the Secretary of Education discharge the loans of student borrowers whose eligibility was falsely certified by the schools that they attended. If a borrower qualifies for discharge, the government is obligated to cancel the borrower's loan, restore the borrower’s eligibility for federal assistance, and refund any money collected from the borrower. The Secretary, however, had attempted to reduce the number of loans that he was obligated to discharge by adopting regulations requiring that borrowers who were falsely certified must also show that they were rejected for employment in the vocation for which they were trained. These extra requirements had the anomalous effect of denying relief to many borrowers who were falsely certified unless they made futile applications for employment in the very vocations for which they were improperly recruited by schools.

The district court upheld the Secretary's regulations requiring proof of unsuccessful efforts to obtain employment to qualify for discharge, and we appealed. Agreeing with us that the regulation was inconsistent with the governing statute, the D.C. Circuit reversed.

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