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
Holding and Reasoning (Posner, J.)
What to do next…
Unlock this case brief with a free (no-commitment) trial membership of Quimbee.
You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 97,000 law students since 2011. Some law schools—such as Yale, Vanderbilt, Berkeley, and the University of Illinois—even subscribe directly to Quimbee for all their law students. Read our student testimonials.
Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.
Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students. Read more about Quimbee.
Here's why 170,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 13,800 briefs, keyed to 187 casebooks. Top-notch customer support.
- The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
- Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
- Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.