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Student Loan Guarantor Takes Agency Dispute to SCOTUS

From: The National Law Journal

“The country’s largest student loan guarantor has asked the U.S. Supreme Court to consider a case that began as a seemingly routine debt dispute but now grapples with a question at the heart of administrative law: How much deference should judges give to agencies’ interpretations of federal regulations?

“In a petition filed this week, United Student Aid Funds Inc. urged the high court to grant review of its case against a woman who sued the company for charging her $4,500 in collection costs after she defaulted on her student loans and agreed to a debt-rehabilitation program, according to the National Law Journal today.

“The woman, Bryana Bible, has argued that she cannot be charged for collection costs because she accepted a rehabilitation agreement within 60 days and successfully completed it by making nine on-time payments of $50. USA Funds contends that, under the Higher Education Action, guarantors like itself are required to assess such costs. Bible, it argues, has conflated the terms of a rehabilitation agreement with those of a repayment agreement — a separate option that the Department of Education lists on its website for bringing student loans out of default.

“A federal judge in an Indiana federal court dismissed the case. When Bible appealed, a three-judge panel of the U.S. Court of Appeals for the Seventh Circuit invited the Department of Education to file an amicus brief clarifying whether guarantors can assess collection costs against a first-time defaulted borrower who quickly agreed to a rehabilitation agreement and met its requirements.”

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