ASSOCIATION OF PRIVATE COLLEGES AND UNIVERSITIES, Plaintiff, v. Arne DUNCAN, in his official capacity as Secretary of the Department of Education, and United States Department of Education, Defendants.
Civil Action No. 11-1314 (RC).
United States District Court, District of Columbia.
June 30, 2012.
870 F. Supp. 2d 133
RUDOLPH CONTRERAS, District Judge.
Douglas R. Cox, Derek S. Lyons, Nikesh Jindal, Veronica S. Root, Gibson, Dunn & Crutcher, L.L.P., Washington, DC, Timothy John Hatch, Gibson, Dunn & Crutcher, Los Angeles, CA, for Plaintiff. Marcia Berman, Gregory Peter Dwor-kowitz, Michelle Renee Bennett, U.S. Department of Justice, Washington, DC, for Defendants.
Marcia Berman, Gregory Peter Dworkowitz, Michelle Renee Bennett, U.S. Department of Justice, Washington, DC, for Defendants.
MEMORANDUM OPINION
RUDOLPH CONTRERAS, District Judge.
To be eligible to accept federal funds under Title IV of the Higher Education Act, some institutions of higher education must “prepare students for gainful employment in a recognized occupation.”
I. BACKGROUND
A. Title IV of the Higher Education Act
Every year, Congress provides billions of dollars through loan and grant programs to help students pay tuition for their postsecondary education. The Department of Education ... administers these programs, which were established under Title IV of the Higher Education Act of 1965.... Students must repay their federal loans; the costs of unpaid loans are borne by taxpayers.
To participate in Title IV programs—i.e., to be able to accept federal funds—a postsecondary institution ... must satisfy several statutory requirements.
Ass‘n of Private Sector Colls. & Univs. v. Duncan, 681 F.3d 427, 433-34 (D.C. Cir. 2012); see also id. at 435 (“[S]chools receive the benefit of accepting tuition payments from students receiving federal financial aid, regardless of whether those students are ultimately able to repay their loans. Therefore, Congress codified statutory requirements in the HEA to ensure against abuse by schools.“). The statutory requirement at issue in this case makes that intent explicit, requiring that certain institutions “prepare students for gainful employment in a recognized occupation.”
B. Statutory History
Over three weeks in 1965, Congress enacted the National Vocational Student Loan Insurance Act, Pub.L. No. 89-287, 79 Stat. 1037 (codified at
The House subcommittee considering the National Vocational Student Loan Insurance Act “devoted the majority of its attention to the ‘eligible institution’ definition....” H.R.Rep. No. 89-308, at 9 (1965). “It was the determined intent [of both the House and Senate subcommittees] that the ‘fly-by-night’ institutions of the post-World War II era be explicitly eliminated from eligibility.” Id.; S.Rep. No. 89-758, at 12 (1965), 1965 U.S.C.C.A.N. 3742, 3753. Both subcommittees heard testimony from Dr. Kenneth B. Hoyt, a professor of education at the University of Iowa who ran “a national research program aimed at studying students who attend a trade, technical, or business school at the post-high-school level.” H.R.Rep. No. 89-308, at 3 (1965). They placed considerable weight on Dr. Hoyt‘s testimony, reprinting his comments at length in otherwise brief reports and emphasizing their influence. Id. (“Dr. Hoyt soon dispelled any doubts the subcommittee may have had about the need for such legislation and about the caliber of student attending a vocational institution.“); S.Rep. No. 89-758, at 3 (1965), 1965 U.S.C.C.A.N. 3742, 3744 (“Dr. Hoyt‘s statement confirmed the committee‘s estimate of the need for such legislation and of the high caliber of students attending vocational institutions.“).
Dr. Hoyt began his discussion of the experiences of students after completing their vocational training by posing two questions: “If loans were made to these kinds of students, is it likely they could repay them following training? Would loan funds pay dividends in terms of benefits accruing from the training students received?” H.R.Rep. No. 89-308, at 4 (1965); S.Rep. No. 89-758, at 7 (1965), 1965 U.S.C.C.A.N. 3742, 3748. He noted that “most of these students do complete their training” but nonetheless “included both those who completed and those who failed to complete training” in his “analyses of posttraining vocational experiences.” H.R.Rep. No. 89-308, at 4 (1965); S.Rep. No. 89-758, at 7 (1965), 1965 U.S.C.C.A.N. 3742, 3748. Those analyses indicated that “over 95 percent of those who sought employment found it,” and a substantial majority found employment related to their training. H.R.Rep. No. 89-308, at 4-5 (1965); S.Rep. No. 89-758, at 7 (1965), 1965 U.S.C.C.A.N. 3742, 3748. As Dr. Hoyt concluded:
It seems evident that, in terms of this sample of students, sufficient numbers were working for sufficient wages so as to make the concept of student loan [repayment] to be rapid following graduation a reasonable approach to take.... [A]ll data presented here support the reasonableness of making loan funds available to students attending trade, technical, and business schools. I have found no reason to believe that such funds ... would represent a poor financial risk.
H.R.Rep. No. 89-308, at 5-6 (1965); S.Rep. No. 89-758, at 8 (1965), 1965 U.S.C.C.A.N. 3742, 3749 (first alteration in House version). Each subcommittee also emphasized other testimony suggesting that vocational students would be able to
Congress merged the two student loan insurance programs in 1968, but retained their separate definitions of eligibility. Higher Education Amendments of 1968, Pub.L. No. 90-575, § 116(a), 82 Stat. 1014. Any school that had been an “eligible institution” under the Higher Education Act became an “institution of higher education,”
In 1992, Congress revised and reorganized the definitions, replacing “vocational school” with two new terms—“proprietary institution of higher education” and “postsecondary vocational institution.” Higher Education Amendments of 1992, § 481, Pub.L. No. 102-325, 106 Stat. 448 (codified at
C. Challenged Regulations
The Secretary enjoys broad authority “to make, promulgate, issue, rescind, and amend rules and regulations governing the manner of operation of, and governing the applicable programs administered by, the Department.”
The Department explained that the proposed debt-to-income ratios, which “provide[] a measure of program completers’ ability to repay their loans, ... were set based upon industry practices and expert recommendations.” Id. Under the proposed debt-to-income tests, “programs whose completers typically have annual debt service payments that are 8 percent or less of average annual earnings or 20 percent or less of discretionary income would continue to qualify, without restrictions, for title IV, HEA program funds,” while “[p]rograms whose completers typically face annual debt service payments that exceed 12 percent of annual average earnings and 30 percent of discretionary income may become ineligible.” Id. The discretionary income portion of the debt-to-income test was “modeled on the Income-Based Repayment (IBR) plan,” which “assumes that borrowers with incomes below 150 percent of the poverty guideline are unable to make any payment, while those with incomes above that level can devote 15 percent of each added dollar of earnings ... to loan payments.” Id. at 43,620. That formula, in turn, was “based on research conducted by economists Sandy Baum and Saul Schwartz, who recommended 20 percent of discretionary income as the outer boundary of manageable student loan debt” and was also “recommended by others, including Mark Kantrowitz, publisher of Finaid.org.” Id. To rely solely on the discretionary income test portion of the debt-to-income test, however, would mean that “any program would fail the debt measure if the average earnings of those completing the program were below 150 percent of the poverty guideline,
The debt repayment test, in turn, would “measure ... whether program enrollees are repaying their loans, regardless of whether they completed the program.” Id. at 43,618. A gainful employment program would pass the proposed debt repayment test if “students who attended the program (and are not in a military or in-school deferment status) repay their Federal loans at an aggregate rate of at least 45 percent.... A loan would be counted as being repaid if the borrower (1) made loan payments during the most recent fiscal year that reduced the outstanding principal balance, (2) made qualifying payments on the loan under the Public Service Loan Forgiveness Program, as provided in
A gainful employment program that failed to satisfy the proposed debt measures would face several consequences. If the program‘s loan repayment rate fell below forty-five percent and it failed to
After a period of public comment, the Department published three final regulations: the reporting and disclosure rule, Program Integrity Issues, 75 Fed.Reg. 66,832, 66,835-44, 66,948-49 (Oct. 29, 2010) (promulgating
The program approval rule provided that a school “must notify the Secretary at least 90 days before the first day of class when it intends to add an educational program that prepares students for gainful employment in a recognized occupation.”
The final debt measure rule altered both the thresholds for the various debt measures and the consequences for failing them. The Department “replac[ed] the proposed two-tiered approach ... with a single set of minimum standards. Under this simplified approach, the Department establish[ed] a minimum standard of 35 percent for the loan repayment rate, and a maximum standard of 30 percent of discretionary income and 12 percent of annual earnings for the debt-to-earnings ratios.” Debt Measure Rule, 76 Fed.Reg. at 34,395 (describing
II. LEGAL STANDARD
“[W]hen a party seeks review of agency action under the
III. ANALYSIS
The Association challenges the debt measure rule, the reporting and disclosure
A. The Debt Measure Rule
i. Statutory Authority
The Association first argues that the debt measure rule is “in excess of statutory authority.”
The Association argues that “gainful employment” unambiguously means “a job that pays,” and that the Department‘s attempt to define the phrase in terms of debt and income therefore exceeds its statutory authority. The Association points to contemporary dictionaries, which define “gainful” as “productive of gain” or “providing an income.” See, e.g., WEBSTER‘S THIRD NEW INTERNATIONAL DICTIONARY 768 (3d ed.1964). It also notes that the phrase “gainful employment” is used many times in
The Department replies that Congress did not provide a precise definition of what it means to “prepare students for gainful employment in a recognized occupation.”
The court agrees. There is no unambiguous meaning of what makes employment “gainful“: the phrase need not mean “any job that pays.” “Gainful employment” does not unambiguously encompass work for minimal gain, nor does it necessarily describe the gross profits from a given activity rather than the net gains derived therefrom. Moreover—and more importantly—the relevant statutory command is that a given program “prepare students for gainful employment in a recognized occupation.” The Department‘s regulations are an attempt to assess whether certain programs in fact provide such preparation. See, e.g., Debt Measure Rule, 76 Fed. Reg. at 34,395 (“The Department [established the debt measures] with the goal of identifying programs that are failing to prepare students for gainful employment in a recognized occupation....“). The real question, then, is not how much gain is enough but rather how much preparation is enough. The Department has attempted to answer that question by reference to the economic success of a program‘s former students. The statute does not “unambiguously foreclose[] the agency‘s interpretation,” Nat‘l Cable, 567 F.3d at 663, because it does not tell the Department how to determine which programs actually prepare their students and which programs do not. “The power of an administrative agency to administer a congressionally created ... program necessarily requires the formulation of policy and the making of rules to fill any gap left, implicitly or explicitly, by Congress.” Chevron, 467 U.S. at 843 (quoting Morton v. Ruiz, 415 U.S. 199, 231 (1974)) (ellipses in original). The means of determining whether a program “prepare[s] students for gainful employment in a recognized occupation” is a considerable gap, which the Department has promulgated rules to fill. The court therefore turns to the question of whether the Department has done so reasonably.
The Association musters many arguments that the Department has adopted an unreasonable interpretation. First, the Association argues that the gainful employment regulations transform the statutory requirement that certain programs “prepare students for gainful employment” into a requirement that preparation in fact “lead to gainful employment.”
Although the Association rightly notes that the Higher Education Act only requires that certain programs prepare students for gainful employment and not that they guarantee it, the adequacy of a program‘s preparation is difficult to measure—and it is reasonable to consider students’ success in the job market as an indication of whether those students were, in fact, adequately prepared. If “a program of training to prepare students for gainful employment,”
Nor is the Department‘s interpretation unreasonable in light of the statutory cohort default rule. The D.C. Circuit has held that the Department‘s authority to establish “reasonable standards of financial responsibility and appropriate institutional capability,”
The debt measures are a significant regulatory intervention, but they do not
Neither the elephant nor the mousehole is present here. Although the Department‘s regulation is significant, it does not approach the scale of the elephantine interventions described above. Nor is the statutory language the Department invokes especially broad or obscure. Concerned about inadequate programs and unscrupulous institutions, the Department has gone looking for rats in ratholes—as the statute empowers it to do.
Finally, the court is unpersuaded by the Association‘s argument that the gainful employment regulation frustrates Congress‘s intention by favoring programs that prepare students for “high-paying jobs.” Program Integrity: Gainful Employment, 75 Fed.Reg. at 43,667. Although the Department printed those words in its notice of proposed rulemaking, the final regulation only sets minimal earning and debt repayment standards. And the Association‘s argument that the regulation may produce absurd results in certain circumstances is better suited to an as-applied challenge arising out of such
The gainful employment regulations are a reasonable interpretation of an ambiguous statutory command: that the Department provide Title IV funding only to schools that “prepare students for gainful employment in a recognized occupation.” The court turns to the Association‘s arguments that those regulations were promulgated in an arbitrary and capricious manner.
ii. Reasoned Decisionmaking
“To satisfy the APA‘s ‘arbitrary and capricious’ standard, an agency must ‘articulate a satisfactory explanation for its action including a “rational connection between the facts found and the choice made.““” Owner-Operator Independent Drivers Ass‘n, Inc. v. Federal Motor Carrier Safety Admin., 494 F.3d 188, 203 (D.C. Cir. 2007) (quoting Motor Vehicle Mfrs. Ass‘n v. State Farm Mut. Ins. Co., 463 U.S. 29, 43 (1983) (quoting Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168 (1962))). “The ‘agency must cogently explain why it has exercised its discretion in a given manner,’ and that explanation must be ‘sufficient to enable [a court] to conclude that the [agency‘s action] was the product of reasoned decisionmaking.” Owner-Operator, 494 F.3d at 203 (quoting State Farm, 463 U.S. at 48, 52).
The Association puts forward many arguments that the debt measure rule is arbitrary and capricious. First, it argues that the rule departs from agency precedent without explanation. Next, the Association contends that the debt measures are arbitrary because they do not actually assess whether a program prepares its students for gainful employment in a recognized occupation and moreover are based on bad data. It further contends that the debt measures are arbitrarily or unconstitutionally retroactive. The Association argues that the rule is arbitrary in light of the statutory “90/10 rule” and the Department‘s inability to set a program‘s tuition. It contends that the debt repayment test arbitrarily treats loans in deferment or forbearance and students who have not completed their program, while the debt-to-earnings tests consider an arbitrarily short window of time. Finally, the Association argues that both the debt repayment test and the debt-to-earnings tests lack a reasoned basis.
Judicial “review under the APA is highly deferential, but agency action is arbitrary and capricious if it departs from agency precedent without explanation.” Ramaprakash v. FAA, 346 F.3d 1121, 1124 (D.C. Cir. 2003). The Association argues that the Department has done just that, locating the agency‘s precedent in an administrative adjudication from 1994, see In re Acad. for Jewish Educ., 1994 WL 1026087 (Dep‘t of Educ. Mar. 23, 1994), and a regulation requiring institutions to “determine the number of students who obtained gainful employment in the recognized occupation for which they were trained or in a related comparable recognized occupation.”
The Association next argues that the debt measures are arbitrary because they do not actually assess whether a program prepares its students for gainful employment in a recognized occupation. Instead, the Association argues, the debt measures merely reflect the underlying demographics of a program‘s student population, or the professional choices that students make after leaving the program, or the economic conditions in which they make those choices. The Department considered similar comments when it promulgated the debt measure rule. In response to commenters’ suggestions that institutions that enrolled more minorities or more students receiving Pell Grants (a barometer of economic need) would more often fail the debt measures, the Department performed a series of multivariate regression analyses. It concluded that “there is only a modest relationship between repayment rates and an institution‘s student demographics” because “the percentage of students receiving Pell Grants explains 23 percent of the total variance in repayment rates.” Debt Measure Rule, 76 Fed.Reg. at 34,462. The percentage of students that are members of a minority group explained twenty percent of the total variance in repayment rates. Decl. of Eduardo Ochoa, Ex. A (Dec. 13, 2011).5 The Department determined that although “the percentage of students receiving Pell Grants explains 23 percent of the total variance in repayment rates,” the “relationship between repayment rates and an institution‘s student demographics”
The Department further found “a wide variation in performance on the debt-to-earnings ratio among programs serving similar groups of students.” Debt Measure Rule, 76 Fed.Reg. at 34,464. Many programs serving large numbers of students receiving Pell Grants nonetheless passed the debt-to-earnings tests as well.
Nor are the debt measures arbitrarily or unconstitutionally retroactive, because they do not alter “the past legal consequences of past actions.” Nat‘l Cable, 567 F.3d at 670. “A law is ‘retroactive’ if it “takes away or impairs vested rights acquired under existing law, or creates a new obligation, imposes a new duty, or attaches a new disability in respect to transactions or considerations already past.““” Ass‘n of Accredited Cosmetology Schools, 979 F.2d at 864 (quoting Neild v. District of Columbia, 110 F.2d 246, 254 (D.C. Cir. 1940) (quoting Society for Propagation of the Gospel v. Wheeler, 22 F.Cas. 756, 767 (C.C.D.N.H. 1814) (Story, J.))). But “schools have no ‘vested right’ to future eligibility to participate” in Title IV programs, id., and a regulation is not retroactive “merely because the facts or requisites upon which its subsequent action depends ... are drawn from a time antecedent” to its promulgation, id. at 865 (quoting Reynolds v. United States, 292 U.S. 443, 449 (1934)). The debt measures look to the recent performance of a program‘s former students in order to determine whether that program will, in the future, be eligible to receive Title IV funds. “[T]erminating ... schools’ future participation in the Title IV ... programs based on their past track record ... cannot amount to retroactive application under Association of Accredited Cosmetology Schools.” Career Coll. Ass‘n v. Riley, 1994 WL 396294, at *5 n. 7 (D.D.C. July 19, 1994), aff‘d 70 F.3d 637 (D.C. Cir. 1995) (unpublished). Nor are the debt measures secondarily retroactive. Impermissible secondary retroactivity can arise when a regulation “impair[s] the future value of a past bargain,” Nat‘l Cable, 567 F.3d at 670, by, for instance, altering the value of a contract or license entered into under a prior regulatory scheme. “Because there were no prior rules that related to the [gainful employment] regulation[s] at issue in this case, plaintiffs cannot claim they have incurred any past investment in reliance on any rule.” Career Coll. Ass‘n, 1994 WL 396294, at *5.
The Association argues that the debt measures are arbitrary in light of the statutory “90/10 rule” and the Department‘s inability to set a program‘s tuition, and that the debt repayment test arbitrarily treats loans in deferment or forbearance and students who have not completed their program, while the debt-to-earnings tests consider an arbitrarily short window of time. The court rejects those arguments. By statute, proprietary institutions of higher education—most of whose programs are gainful employment programs—lose their Title IV eligibility if more than 90% of their revenue comes from Title IV funds for two consecutive years.
Finally, the Association argues that the Department has not provided explanations of either the loan repayment test or the debt-to-income tests that are sufficient for the court to conclude that the tests are the product of reasoned decisionmaking. The debt-to-earnings ratios were established “after consideration of industry practice and expert recommendations.” Debt Measure Rule, 76 Fed.Reg. at 34,395. Those experts suggested that 20 percent was the maximum affordable ratio of debt payments to discretionary income,
The debt repayment rate was chosen because it identified “the approximately one quarter of programs” where the fewest former students were repaying their debts.
When an agency “must select some[] necessarily somewhat arbitrary figure” in establishing bright-line rules, a court “will defer to [its] expertise if it provides substantial evidence to support its choice and responds to substantial criticism of that figure.” United Distribution Cos. v. FERC, 88 F.3d 1105, 1141 n. 45 (D.C. Cir. 1996). Such rules “generally do not violate the APA‘s deferential arbitrary-and-capricious standard ... so long as those rules fall within a zone of reasonableness and are reasonably explained.” Emily‘s List v. FEC, 581 F.3d 1, 22 n. 20 (D.C. Cir. 2009). “But where an agency has articulated no reasoned basis for its decision ... we will not ‘abdicate the judicial duty carefully to “review the record to ascertain that the agency has made a reasoned decision based on reasonable extrapolations from some reliable evidence.““” Tripoli Rocketry Ass‘n, Inc. v. ATF, 437 F.3d 75, 83 (D.C. Cir. 2006) (quoting Am. Mining Cong. v. EPA, 907 F.2d 1179, 1187 (D.C. Cir. 1990) (quoting Natural Res. Def. Council v. EPA, 902 F.2d 962, 968 (D.C. Cir. 1990))). The question before the court is whether the Department has provided a reasoned basis for selecting the debt repayment and debt-to-income standards.
The debt-to-income standards were based upon expert studies and industry practice—objective criteria upon which the Department could reasonably rely. That some commenters criticized those standards does not invalidate the rule, but only places a burden on the Department to respond to that criticism. See United Distribution Cos., 88 F.3d at 1141 n. 45. The Department did so. See Debt Measure Rule, 76 Fed.Reg. at 34,395-400. The debt to income standards were the product of a “rational connection
The repayment rate test cannot be severed from the other debt measures. “Whether an administrative agency‘s order or regulation is severable, permitting a court to affirm it in part and reverse it in part, depends on the issuing agency‘s intent.” Davis Cty. Solid Waste Mgmt. v. EPA, 108 F.3d 1454, 1459 (D.C. Cir. 1997) (quoting North Carolina v. FERC, 730 F.2d 790, 795-96 (D.C. Cir. 1984)). That the component parts of a regulation are “intertwined ... gives rise to a substantial doubt that a partial affirmance would comport with the [agency‘s] intent.” Telephone & Data Sys., Inc. v. FCC, 19 F.3d 42, 50 (D.C. Cir. 1994). Because the Department has repeatedly emphasized the ways in which the debt repayment and debt-to-income tests were designed to work together, see Debt Measure Rule, 76 Fed.Reg. at 34,394-400, the tests are obviously “intertwined” and so the court cannot sever one from the others. The entire debt measure rule must therefore be vacated and remanded to the Department.7
B. The Reporting and Disclosure Rule
i. Reporting
The court turns to the reporting and disclosure rule. The Association argues that this rule must also be vacated because it is “centered on” the debt measure rule, see Nat‘l Mining Ass‘n v. Dep‘t of Interior, 105 F.3d 691, 696 (D.C. Cir. 1997), and because the Higher Education Act prohibits “the development, implementation, or maintenance of a Federal database of personally identifiable information on individuals receiving assistance under this chapter” unless that information “is necessary for the operation of programs authorized by” Title IV (among other subchapters).
ii. Disclosure
The disclosure portion of the rule, however, does not run afoul of that statutory prohibition. See
Finally, the disclosure requirements are not arbitrary and capricious. The Association argues that because the on-time graduation rate disclosure mandated by the reporting and disclosure rule, see
Nor is the Department‘s treatment of students who transfer within an institution arbitrary. As the Department has explained, in some circumstances there may be an incentive to shift students between programs to mask the true performance of a particular program. Cf. Debt Measure Rule, 76 Fed.Reg. at 34,417. The Department therefore decided not to re-start the on-time completion clock for students that change programs within an institution. See Reporting and Disclosure Rule, 75 Fed.Reg. at 66,839.
iii. Severability
The disclosure requirements are not so intertwined with the reporting requirements as to raise “a substantial doubt that a partial affirmance would comport with the [agency‘s] intent.” Telephone & Data Sys., 19 F.3d at 50. The Department intended to use the reported data “to assess the outcomes of programs that lead to gainful employment in a recognized occu-
C. The Program Approval Rule
Finally, the Court considers the program approval rule, which requires that institutions operating gainful employment programs notify the Department and, if the Department so demands, obtain its approval for new gainful employment programs.
In promulgating the program approval rule, the Department explained that it was:
concerned that some institutions might attempt to circumvent the proposed gainful employment standards ... by adding new programs before those standards would take effect. Although the proposed standards would evaluate most programs based on past performance, newly offered programs would not be subject to the standards for several years until they established an operating history. For example, an institution
may seek to offer a significant number of new programs that would not be evaluated under the new standards for up to five years as a contingency plan in case its current programs are eliminated or restricted under measures that would be established in the final gainful employment regulations. We believe that such an approach by an institution should be examined closely to determine whether those new programs are substantially different and offer more potential benefits to its students. With these regulations, the Department intends to mitigate the potential for this type of response by identifying such circumstances and requiring those new programs to be approved.
Program Approval Rule, 75 Fed.Reg. at 66,669-70. As the debt measures have been vacated, the danger that schools would circumvent them can no longer animate the program approval rule. The Department‘s defense of the program approval and its recent proposal to amend it, see Application and Approval Process for New Programs, 76 Fed.Reg. 59,864 (Sept. 27, 2011), demonstrate that the current program approval process is truly “centered on” the debt measures; the program approval rule will therefore be vacated as well. See Nat‘l Mining Ass‘n, 105 F.3d at 696.
IV. CONCLUSION
The Department has set out to address a serious policy problem, regulating pursuant to a reasonable interpretation of its statutory authority. But it has failed to provide a reasoned explanation for a core element of its central regulation. Both that regulation and those that depend upon it must therefore be vacated. Because the disclosure requirements,