Green v. Kentucky Higher Educ. Assistance Auth.

• Decision Date: 23 February 1999
• Docket Number: No. 97-1022-RV-C.,97-1022-RV-C.
• Citation: 78 F.Supp.2d 1259
• Parties: Bernadette GREEN, Plaintiff, v. KENTUCKY HIGHER EDUCATION ASSISTANCE AUTHORITY and State of Alabama, Defendants.
• Court: U.S. District Court — Southern District of Alabama

78 F.Supp.2d 1259

Bernadette GREEN, Plaintiff, v. KENTUCKY HIGHER EDUCATION ASSISTANCE AUTHORITY and State of Alabama, Defendants.

No. 97-1022-RV-C.

United States District Court, S.D. Alabama, Southern Division.

February 23, 1999.

Christopher Knight, Federal Public Defender, Southern District of Alabama, Mobile, AL, Nancy Bunin, Legal Services

Corp. of Alabama, Mobile, AL, for Plaintiff.

Lawrence B. Voit, Mobile, AL, Kristy M. Green, Asst. Gen. Counsel, Kentucky Higher Education Assistance Authority, Frankfort, KY, A. Lee Miller, III and Lewis E. Bell, Jr., Alabama Dept. of Finance, Montgomery, AL, for Defendant.

VOLLMER, District Judge.

This matter is before the court on the following documents:

1. "Motion for Summary Judgment," (doc. 23), filed by plaintiff Bernadette Green, together with a supporting brief, (doc. 24), and proposed findings of fact and conclusions of law;

2. "Motion for Summary Judgment," (doc. 30), filed by defendant Kentucky Higher Education Assistance Authority (KHEAA), together with proposed findings of fact and conclusions of law;

3. The parties' joint preliminary pre-trial document. (doc. 28).

Having considered the briefs, the proposed facts and conclusions of law filed pursuant to Local Rule 7.2, and the agreed facts, and having considered the pleadings and other relevant material in the record, the court finds that no genuine issue of material fact exists and that plaintiff is entitled to judgment as a matter of law on her claims pursuant to Federal Rule of Civil Procedure 56. Accordingly, it is

ORDERED that the motion for summary judgment is GRANTED. The court finds that the following material facts are undisputed and, based on those facts, makes the following conclusions of law.

UNDISPUTED FACTS

1. Plaintiff Bernadette Green brought this civil action seeking declaratory and injunctive relief with respect to an administrative wage garnishment imposed by defendant Kentucky Higher Education Assistance Authority (KHEAA) pursuant to 20 U.S.C. § 1095a.

2. Ms. Green was an employee of the defendant State of Alabama (Department of Mental Health) until November 13, 1997, when she resigned her position for reasons unrelated to this litigation.

3. At some point in time, plaintiff incurred two (2) separate debts under the federally-insured student loan program, one to USA Funds, Inc. and one to KHEAA. At all material times, plaintiff has been in default of both loans.

4. The Higher Education Act of 1965, as amended in 1991 by 20 U.S.C. § 1095a, provides that a federal guaranty agency can garnish a student loan debtor's disposable wages up to ten percent (unless the debtor agrees in writing to a greater amount). The Act and accompanying federal regulations promulgated by the Secretary of Education create an administrative garnishment procedure, alleviating the requirement on the guarantor to file a lawsuit, obtain a judgment, and the pursue collection by way of judicial garnishment.

5. The parties do not dispute that both USA Funds and KHEAA are federal guaranty agencies as defined under the Act and that those agencies were authorized to invoke the administrative garnishment procedures under the Act.

6. On April 23, 1996, USA Funds served an administrative garnishment on plaintiff's employer, defendant State of Alabama, to collect an outstanding defaulted student loan balance of $ 3,809.20 The State began withholding pursuant to this garnishment on July 3, 1996, and continued to withhold the sum of $ 41.95 per pay period, approximately ten (10%) of plaintiff's pay, until her last pay period, November 21, 1997.

7. On August 26, 1997, KHEAA served an administrative garnishment on plaintiff's employer, the State, to collect a second outstanding defaulted student loan balance of $ 815.62. The State began withholding pursuant to this garnishment on October 10, 1997, and it withheld $ 43.77 per day period, approximately ten percent (10%) of plaintiff's pay, for the pay periods ending October 10, 1997, October 24, 1997, and November 7, 1997. The total withheld pursuant to the KHEAA garnishment was $ 131.31, and the State has remitted those funds to KHEAA.

8. The State currently holds no funds that it withheld from plaintiff's pay under either administrative garnishment.¹

9. The three withholdings made pursuant to the KHEAA garnishment were made concurrently with three withholdings pursuant to the USA Funds, Inc.'s garnishment. Thus, for at least three pay periods, plaintiff's wages were garnished pursuant to two administrative garnishments, one each by two different guaranty agencies, for a total garnishment of twenty percent (20%) of her pay.

CONCLUSIONS OF LAW

Jurisdiction and Venue

1. The court has subject matter jurisdiction pursuant to 28 U.S.C. § 1331. Venue is proper pursuant to 28 U.S.C. § 1391(b).

Summary Judgment Standard

2. As the Court of Appeals for the Eleventh Circuit cogently explained:

Summary judgment is proper in cases in which there is no genuine issue of material fact. Fed.R.Civ.P. 56(c).... [The court] must view all of the evidence in the light most favorable to the non-moving party. Samples ex. rel. Samples v. Atlanta, 846 F.2d 1328, 1330 (11th Cir.1988). The movant bears the initial burden of presenting evidence sufficient to demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2552-53, 91 L.Ed.2d 265 (1986). When the movant has met its burden, the non-movant must then designate, by affidavits, depositions, admissions, and answer to interrogatories, specific facts showing the existence of a genuine issue for trial. Jeffery v. Sarasota White Sox, Inc., 64 F.3d 590, 593-94 (11th Cir.1995).

Southern Solvents, Inc. v. New Hampshire Ins. Co., 91 F.3d 102, 104 (11th Cir.1996). Further,

An issue of fact is "genuine" if the record as a whole could lead a rational trier of fact to find for the non-moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). An issue is "material" if it might affect the outcome of the case under the governing law. Id.

Bennett v. United States, 102 F.3d 486, 488 (11th Cir.1996).

The parties agree that there are no genuine issues of material fact and that summary judgment is appropriate in this case.

Plaintiff's Claims Based on 20 U.S.C. § 1095a

3. Plaintiff contends that 20 U.S.C. § 1095a does not allow more than 10% of her wages to be garnished administratively and, therefore, that the second administrative garnishment (the one issued by KHEAA) unlawfully subjected 20% of her wages to garnishment. Specifically, she contends that 20 U.S.C. § 1095a provides for an election by the debtor, who can prevent more than 10% of her wages from being garnished by a federal guaranty agency under 20 U.S.C. § 1095a. Plaintiff also contends that the regulation promulgated by the Secretary of Education at 34 C.F.R. § 682.410(b)(10)(i)(A) provides that the employer shall deduct an amount from the debtor's wages which does not exceed the lesser of 10% of the disposable pay for each pay period or the amount provided by 15 U.S.C. § 1673(a), unless the borrower provides the agency with written consent to deduct a greater amount.

4. Defendant KHEAA contends that the Higher Education Act of 1965, as amended at 20 U.S.C. § 1095a, permits garnishment of student loan indebtedness by student loan guaranty agencies of up to 10% of the debtor's disposable pay by each guaranty agency to which the borrower is indebted. According to this argument, the HEA does not restrict or prevent multiple garnishments provided that each individual garnishment does not itself exceed 10% of the borrower's disposable pay as defined by that statute. More specifically, KHEAA contends that the Act itself does not set a cap on the aggregate amount to be garnished for student loan obligations; rather, it argues, the aggregate amount of garnishments provided by law is established by the Consumer Credit Protection Act, 15 U.S.C. § 1673(a)(1). The CCPA permits aggregate garnishments up to a maximum of 25% of an individual's disposable pay and permits in excess of 25% of disposable earnings in situations not applicable here.

Interplay between 20 U.S.C. § 1095a and 15 U.S.C. § 1673(a)

5. The Higher Education Act of 1965, as amended by 20 U.S.C. § 1095a, permits the Secretary of Education or a federal guaranty agency to administratively garnish up to 10% of a borrower's disposable pay in order to collect defaulted student loans. This amendment to the Higher Education Act of 1965 was enacted by Congress in 1991. The pertinent language of the statute provides:

(a) Garnishment Requirements. Notwithstanding any provision of State law, a guaranty agency ... may garnish the disposable pay of an individual to collect the amount owed by the individual, if he or she is not currently making required repayment under a repayment agreement with the Secretary, or, in the case of a loan guaranteed under part B of this subchapter on which the guaranty agency received reimbursement from the Secretary under section 1078(c) of this title, with the guaranty agency holding the loan, as appropriate, provided that —

(1) the amount deducted for any pay period may not exceed 10 percent of disposable pay, except that a greater percentage may be deducted with the written consent of the individual involved.

20 U.S.C. § 1095a(a)(1).

Disposable pay is defined at 20 U.S.C. § 1095a(d) as "that part of the compensation of any individual from an employer remaining after the deduction of any amounts required by law to be withheld."

Title 20, U.S.C § 1095a contains numerous procedural requirements, including that the debtor be given notice of the garnishment, an opportunity to inspect records related to the debt, to enter a repayment agreement, and to request a hearing on the existence of or the amount of the debt. However, the HEA provides that if an untimely request for a hearing is...