Opinion
Civil No. 09-cv-185-SM, Opinion No. 2009 DNH 189.
December 10, 2009
ORDER
The government brings this action against the defendant, Patricia Emanuel, for default on student loans guaranteed under Title IV-B, 20 U.S.C. § 1071 et seq., and Title IV-D, 20 U.S.C. § 1087aa et seq., of the Higher Education Act of 1965. In its complaint, the United States alleges that Emanuel executed and delivered three promissory notes with respect to guaranteed student loans, and later defaulted on her obligation to pay those notes. In her answer, Emanuel admits all pertinent factual allegations in the complaint. The Unites States now moves for judgment on the pleadings. Emanuel has not filed an objection or response to the motion. For the reasons set forth below, the motion is granted.
I. BACKGROUND
In Count I, the United States alleges that on August 9, 1983, and August 10, 1984, Emanuel executed and delivered two promissary notes payable to Country Bank for Savings ("Country Bank"), Palmer, Massachusetts, in the total principal amount of $4,972.00, bearing an interest rate of 9.00% per annum, and repayable in monthly installments. The notes secured repayment of student loans authorized by the Federal Family Education Loan Program ( 20 U.S.C. § 1071 et seq.); the United States guaranteed repayment of the notes to Country Bank. On November 28, 1985, Emanuel defaulted on her obligation to pay. Following Emanuel's default, Country Bank required the United States to pay the loans in accordance with its guarantee and assigned the notes to the United States on February 25, 1993.
In Count II, the United States alleges that On September 19, 1983, Emanuel executed and delivered a promissary note payable to Greenfield Community College ("GCC"), Greenfield, Massachusetts, in the total principal amount of $600.00, bearing an interest rate of 5.00% per annum and repayable in monthly installments. The note secured a Federal Perkins Loan ( 20 U.S.C. § 1087aa et seq.); the United States guaranteed repayment of the note to GCC. On July 30, 1985, Emanuel defaulted on her obligation to pay. Following Emanuel's default, GCC required the United States to pay the note in accordance with its guarantee and assigned the note to the United States on June 19, 1989.
The United States requests that this court enter judgment on Count I in the amount of $15,782.24, plus interest, and on Count II in the amount of $1,256.75, plus interest.
II. LEGAL STANDARD
III. DISCUSSION
12Pérez-Acevedo v. Rivero-Cubano520 F.3d 2629Id. Bell Atl. Corp. v. Twombly 550 U.S. 544555R.G. Fin. Corp. v. Vergara-Nuñez446 F.3d 178182Id. Guillermety v. Sec'y of Educ.341 F. Supp. 2d. 682688See See R.G. Fin. Corp.446 F.3d at 181
Emanuel asserts as a defense that she suffers from a number of psychological disorders which prevented her from engaging in gainful employment for the past twenty years, and, thus, paying the notes. Emanuel claims that she plans to seek an administrative discharge of her obligations on grounds of "total and permanent disability," pursuant to relevant regulations. See 34 C.F.R. § 682.402(c)(1) ("A borrower's loan is discharged if the borrower becomes totally and permanently disabled . . . and satisfies the additional eligibility requirements contained in this section."). Emanuel's defense, however, is not cognizable in this suit, as "[c]laims for relief under [the Higher Education Act] must be presented through the administrative process andcannot be asserted as defensive claims in civil collection litigation." Green v. United States, 163 F. Supp. 2d 593, 598 (W.D.N.C. 2000) (citation omitted).
Emanuel asks this court to hold this matter in abeyance until she can exhaust the available administrative discharge procedures. Holding this matter in abeyance is not necessary. As the court stated in Green, the administrative discharge provisions "make[] no distinction between loans that are in the process of being collected and those reduced to judgment." Id. at 599. Thus, Emanuel may still pursue an administrative discharge even if this court reduces her obligations to judgment. Id. at 598 (stating that reducing borrower's obligation to judgment would not interfere with his administrative remedy); see also Nash v. Ct. Student Loan Found. (In re Nash), 446 F.3d 188, 194 (1st Cir. 2006) (refusing to discharge student loan debt due to debtor's bipolar disorder but advising debtor of her right to pursue an administrative discharge due to disability). Moreover, as the United States points out, reducing Emanuel's debt to judgment "may work in [her] favor," as her loans are accruing interest at a rate of 9% and 5%, respectively, while the current judgment rate is less than 1%. See Green, 163 F. Supp. 2d at 599.
Although Emanuel claims that she planned to met with her psychiatrist in July of 2009 to begin preparing her discharge application, nothing in the record indicates she has done so.
Accordingly, the motion for judgment on the pleadings (document no. 7) is granted.