Logourl black

USA Group Loan Services, Inc. v. Riley

United States Court of Appeals for the Seventh Circuit
82 F.3d 708 (7th Cir. 1996)


In 1992, Congress amended Title IV of the Higher Education Act (Act) to authorize the Secretary of Education to establish regulations for the management and accountability of student loan servicers. The Secretary of Education established, among other things, regulations to make loan servicers jointly and severally liable with their customers for violations of statutes, regulations or contracts governing the student loan program. Before promulgating the regulations, the Secretary submitted draft regulations to the process of negotiated rulemaking, as required by the amendment to the Act. The negotiated rulemaking was to be conducted in accordance with the Negotiated Rulemaking Act. An official of the Department of Education promised the servicers that the Department would abide by any consensus reached during the negotiation. The Secretary proposed in the negotiation to cap of servicers’ liability at the amount of fees servicers received from their customers. The servicers pressed for no liability. However, the Secretary abandoned the cap on liability when the regulation was put forth for notice-and-comment rulemaking. Several servicers (plaintiffs) brought suit to invalidate the regulations on the basis that the Secretary negotiated in bad faith. The district court rejected the servicers’ claims and the servicers appealed.

Rule of Law

The rule of law is the black letter law upon which the court rested its decision. To access this section, start your 7-day free trial of Quimbee for Law Students.


The issue section includes the dispositive legal issue in the case phrased as a question. To access this section, start your 7-day free trial of Quimbee for Law Students.

Holding and Reasoning (Posner, J.)

The holding and reasoning section includes:

  • A “yes” or “no” answer to the question framed in the issue section;
  • A summary of the majority or plurality opinion, using the CREAC method; and
  • The procedural disposition (e.g. reversed and remanded, affirmed, etc.).

To access this section, start your 7-day free trial of Quimbee for Law Students.

Here's why 90,000 law students rely on our case briefs:

  • Reliable - written by law professors and practitioners not other law students.
  • The right length and amount of information - includes the facts, issue, rule of law, holding and reasoning, and any concurrences and dissents.
  • Access in your class - works on your mobile and tablet.
  • 12,195 briefs - keyed to 164 casebooks.
  • Uniform format for every case brief.
  • Written in plain English - not in legalese and not just repeating the court's language.
  • Massive library of related video lessons - and practice questions.
  • Ability to tag case briefs in an outlining tool.
  • Top-notch customer support.
Start Your Free Trial Now