Case Information
*1 Before K ANNE H AMILTON , S T . E VE , Circuit Judges . H AMILTON Circuit Judge
. Like many students, plainti ff Ni cole borrowed money pay her education. De fendant Lakes Educational Loan Services, services federally insured loans. On website, o ered provide guidance strug gling make payments. It told borrowers: “Our trained experts work your behalf,” “You don’t pay for student loan services advice,” because “Our expert representatives access to your latest infor mation and understand all your options.” Nelson alleges that despite these representations, when she mem bers putative class struggled to make payments, Great Lakes did not work behalf. Instead, Nelson contends, Great Lakes steered into plans that were to Great Lakes’ advantage to borrowers’ detriment. alleges that defendant’s conduct violated Illi nois Consumer Fraud Deceptive Business Practices Act constituted constructive fraud negligent misrepre sentation Illinois common law. The district court granted Great Lakes’ motion to dismiss, holding all claims were expressly preempted by provision Higher Education Act: “Loans made, insured, guaranteed pursuant to program authorized by title IV Higher Education Act (20 U.S.C. et seq.) shall not subject any requirements any State Law.” 1098g. district court reasoned Nel son’s claims are expressly preempted because they allege substance only Lakes failed disclose certain information. district court’s ruling was overly broad. When
servicer holds itself out borrower having experts who work her, tells her she does need look elsewhere advice, tells her experts know what options are her best interest, statements, when untrue, cannot treated courts mere failures disclose information. Those misrepresentations, failures dis close. chose make them. A borrower who rea sonably relied them detriment barred 18 ‐ 1531 3 1098g from bringing consumer protection tort claims against servicer. Tort has long recognized di erence between mere failures disclose information ffi rmative deceptions. And we explain below, Ninth Circuit decision district court relied upon, Chae v. SLM Corp. , 593 F.3d 936 (9th Cir. 2010), does apply claims ffi rmative misrepresentations in counseling bor rowers distress.
Accordingly, Nelson’s claims expressly preempted extent she alleging made false misleading representations her counsel ing process. Also, neither con fl ict preemption nor eld applies claims. We vacate judgment district court remand further proceedings sistent opinion.
I. Factual & Procedural Background district court granted defendant’s Rule 12(b)(6) mo tion dismiss grounds, legal determination we review de novo . Guilbeau v. P zer Inc. , F.3d 304, (7th Cir. 2018), citing Toney v. L’Oreal USA, Inc. , F.3d 905, 907–08 (7th Cir. 2005). We accept true all well pleaded fac tual allegations amended complaint draw all per missible inferences favor. E.g., Fortres Grand Corp. v. Warner Bros. Entertainment F.3d (7th Cir. 2014).
A. Loans Under Higher Education Act Higher Education Act (“HEA”) was enacted “to keep college door open students ability, regardless socioeconomic background.” Rowe Educational Credit Man agement Corp. (9th Cir. 2009) (citation *4 4 No. 18 1531 internal quotation marks omi tt ed); see also 20 U.S.C. § 1071(a)(1) (identifying purposes statute). HEA estab lished the Federal Family Education Loan Program (“FFELP”), system loan guarantees administered by the U.S. Secretary Education were “meant to encourage lenders loan money students and their parents favor able terms.” Chae v. SLM Corp. , 593 F.3d at 938–39 (footnote omi tt ed). FFELP regulated three parts transac
tions: (1) between lenders and borrowers, (2) between bor rowers and guaranty agencies, and (3) between guaranty agencies the Department Education. Bible United Stu dent Aid Funds, , 799 F.3d 633, 640 (7th Cir. 2015), citing Chae , 593 F.3d at 939. Under the program, lenders used own funds make loans students ending postsecondary institutions. These loans were guaranteed by guaranty agen cies reinsured federal government. U.S.C. § 1078(a)–(c). Thus, government served (and still serves) as ultimate guarantor FFELP loans. Bible 640. Lenders assigned loans servicers like manage process with bor rowers.
In 2010, Congress ordered halt new FFELP loans transitioned “Direct Loan” program, which United States serves lender contracts non governmental entities service loans issued Department. U.S.C. § 1071(d); see also Health Care Education Reconciliation Act Pub. L. 152, et seq . Stat. Federal Direct Loans “have same terms, conditions, bene ts” issued FFELP. 1087e(a)(1).
Central to issue here, HEA requires lenders and loan servicers make certain “disclosures” ‐ fore disbursement of loans, before repayment of loans, and during repayment of loans. U.S.C. § Required dis ‐ closures include core terms loan origination, as well before and during repayment. § 1083(a), (b), & (e). But when borrower having di culty making payments, Nelson was, § 1083(e)(2)(A) requires loan servicers provide: “A description repayment plans available bor rower, including how borrower should request change repayment plan.” Loan servicers must also provide dis tressed borrowers descriptions forbearance op tions avoid default expected costs fees associated with options. 1083(e)(2)(B) & (2)(C). HEA includes several express provisions,
including one dealing with “disclosures,” which fo cus appeal. Entitled “Exemption from State disclosure requirements,” again provides: “Loans made, insured, guaranteed pursuant program authorized title IV Higher Education Act (20 U.S.C. et seq.) shall subject any requirements any State law.” 1098g. Both Federal Direct Loan Program FFELP loans are so authorized, so lenders ser vicers subject “disclosure requirements” imposed law.
B. Nelson’s Loans Claims
Nicole nanced education with loans. Lakes, servicer, manages borrow ers’ accounts, processes payments, assists with al ternative repayment plans, communicates borrow ers about loans. services ‐ many billions dollars loans for millions borrowers.
Nelson began repaying her loans December 2009. In September she changed jobs her income dropped. She contacted Great Lakes, representative led Nelson believe “forbearance” was best option for her personal fi nancial situation. A few months later, Nelson lost her new job. She contacted Great Lakes again March Great Lakes’ representative again did inform her income ‐ driven repayment plans instead steered into “deferment.” Nelson alleges Great Lakes’ representatives were working o ff script provided them when they made these recommendations her. Nelson alleges she relied information provided Lakes.
Forbearance is “the temporary cessation payments, al lowing an extension time for making payments, tempo rarily accepting smaller payments than previously were scheduled.” C.F.R. 682.211(a)(1). Nelson argues bearance appropriate borrowers experiencing long term nancial di culty. Under forbearance, unpaid interest capitalized (i.e., added loan principal), which can substantially increase monthly payments after forbear ance period ends.
Federal requires lenders servicers o ff er income driven plans, which set monthly payments percentage borrower’s discretionary income. 1098e(b); C.F.R. §§ 682.215 & 685.208. argues these plans more appropriate situations longer term nancial hardship. These plans can o er extended payment relief ‐ reduced monthly payments can still count toward various loan forgiveness programs. Despite availability these plans, Nelson alleges, Lakes steered borrowers away from income ‐ driven repayment plans less lucrative lenders and toward more burdensome options, especially forbearance. Am. Cplt. ¶ asserts enrolling borrowers income driven plans “time consuming” and requires “lengthy and detailed conversations” about nancial situations. She argues thus “failed perform core duties servicing student loans.”
To help focus factor we view as decisive here—the di ff erence between misrepresentation failure disclose information—we lay out next some details Nelson’s allegations.
Count I Amended Complaint asserts viola tions Illinois Consumer Fraud Deceptive Business Practices Act, Ill. Comp. Stat. 505/1 et seq. She highlights seven unfair acts practices servicing loans:
(a) Holding themselves out experts stu dent loan servicing issues o ff ering “expert” help;
(b) Holding themselves out working Plainti ff ’s Class Members’ behalves, when they worked bene t Defendants; (c) Holding themselves out understanding student options, o ering options borrowers, including Plainti ff Class Members; (d) O ering forbearance as a recommended or best option struggling student loan borrow ers who could enrolled in a much tt er re payment plan;
(e) Failing provide struggling student loan borrowers options, or discussing come driven repayment plans prior enrolling student loan borrowers forbearance; (f) Failing follow up student loan bor rowers after rst forbearance explaining or alerting student loan other, more advantageous repayment options; (g) Systematically steering struggling student borrowers, including Plainti ff Class Members into forbearance without explaining, even identifying other, er options, based part Defendants’ failure adequately sta ff operations providing scripts call center employees had follow, reviewing call center employees call duration how many times borrower was cut o ff mid sentence, providing incentives quick call times.
Am. Cplt. ¶ (emphasis original). These allegations com bine both misrepresentations Lakes, such recommending forbearance best option partic ular borrower, failures disclose information.
Count II alleges constructive fraud under Illinois common law, saying part:
154. Defendants accomplish this breach fi dential or fi duciary relationship misrep ‐ resenting, concealing, or omi tt ing detri ‐ mental e ects entering continuing bearance, omi tt ing alternative repayment options, including income driven options would allow $0.00 monthly pay ments holding themselves out as “experts,” holding themselves out as having all student loan borrowers information, holding them selves out as working best interest stu dent loan borrowers, including Plainti ff Illinois Constructive Fraud Class Members. … .
158. Defendants held themselves out stu dent loan borrowers as “experts,” held them selves out knowledgeable regarding student loan situations, held themselves out working behalf bene fi t student borrowers.
Am. Cplt. ¶¶ & 158. These allegations also combine af misrepresentations failures disclose.
Count III alleges negligent misrepresentation Illi nois common law. asserts that, increase pro ts, Lakes “supplied false information omi ed material information guidance borrowers.” Am. Cplt. ¶ alleged accomplished “misrepresenting ‘expert’ status, misrepresenting they work for bene t student loan borrowers, misrepresenting or omi tt ing material information, including alternative or income driven student loan repayment options which may have o ff ered $0.00 monthly repayment amount.” Am. Cplt. ¶ includes list alleges both mis representations omissions information similar list in Count I:
(a) Defendants claim be “experts” regarding student loan;
(b) Defendants work bene t student loan borrowers;
(c) Forbearance or deferment only op tions struggling student loan borrowers; (d) Failure discuss or counsel student loan borrowers alternative income driven re payment plans.
(e) O ering forbearance recommended or best option struggling student loan borrow ers who could enrolled much tt er re payment plan;
(f) Failing provide struggling student loan borrowers options, discussing come driven repayment plans prior enrolling student forbearance; (g) Systematically steering struggling borrowers, including Plainti ff Class Members into forbearance without explaining, even identifying other, er op tions, based part Defendants’ failure *11 No. ‐
adequately sta ff operations or by providing incentives for quick call times. Am. Cplt. ¶ 172.
The district court agreed with Great Lakes all of Nel ‐ son’s allegations pertain to information Lakes suppos ‐ edly failed disclose. The court dismissed of Nelson’s claims, holding they expressly preempted 1098g. Educ. Loan Servs., 3:17 ‐ CV ‐ WL 6501919, at *5–6 (S.D. Ill. Dec. 19, 2017). court did determine whether Nelson’s claims were preempted fl ict ‐ or eld *12 12 18 1531 doctrines or whether, in the absence preemption, otherwise stated viable claims.
II. Analysis Supremacy Clause the United States Constitution
“invalidates state laws ‘interfere with, or contrary to,’ federal law.” Hillsborough County v. Automated Medical Labs., Inc. , 471 U.S. 707, 712–13 (1985), quoting Gibbons v. Ogden , 22 U.S. 1, 211 (1824). Clause provides:
This Constitution, Laws the United States which shall be made Pursuance thereof; Treaties made, or which shall be made, Authority United States, shall supreme Law Land; Judges every State shall bound thereby, any Thing Constitution Laws any State Contrary notwithstanding.
U.S. Const. art. VI, cl. “Since state law may contradict federal law, sometimes la er will render former unen forceable.” Int’l Ass’n Machinists Dist. Ten v. Allen , F.3d 490, (7th Cir. 2018).
Preemption can occur three di erent ways: express, con fl ict, eld. Express applies when Con gress clearly declares intention preempt state law. Mason v. SmithKline Beecham Corp. , F.3d (7th Cir. 2010). Con fl ict applies when there an actual fl ict between state such impossible person obey both, when stands an obstacle fully accomplishing objectives Congress. Mason 390; see also Patriotic Veterans, Indiana F.3d (7th Cir. 2013). Field preemption, which applies ‐ 13 only a few fi elds law, occurs when “federal law so thor ‐ oughly occupies a legislative fi eld make reasonable infer Congress left no room for states act.” Aux Sable Liquid Products Murphy (7th Cir. 2008) (citation internal quotation marks omi ed). We fi rst ex plain why some claims are not expressly preempted. We then explain why claims are not preempted by either fl ict fi eld preemption.
A. Express Preemption Statutory Language
Express presents a question statutory inter pretation, so we start with preemptive language: “Loans made, insured, guaranteed pursuant a program author ized title IV Higher Education Act (20 U.S.C. et seq.) shall subject any require ments any State Law.” § 1098g. intent preempt some state laws evident, but Congress did de fi ne term “disclosure requirements” HEA itself. central question here whether how phrase “disclo sure requirements” § 1098g applies state ‐ law remedies for misleading business practices. Section 1098g preempts state declaring, example, student loan servicers must rmatively disclose X Y speci c format at speci c time. But Congress did use language preempts state ‐ consumer protections when they communicating ser vicers.
While 1098g indicates Congress “intended [HEA] pre empt least some law, we must nonethe less ‘identify domain expressly pre empted’ *14 14 18 ‐ 1531 language.” Medtronic, Inc. v. Lohr , 518 U.S. 470, 484 (1996), quoting Cipollone v. Ligge tt Group, Inc. , 505 U.S. 504, 517 (1992). As Supreme Court often reminds us, “fundamental canon statutory construction words statute must read in their context view their place in overall statutory scheme.” Home Depot U.S.A., v. Jack son 139 S. Ct. 1748 (2019), quoting Davis Michigan Dep’t Treasury U. S. 809 (1989). The statutory text scheme here provide helpful guidance for ques tion we face here.
In general, disclosure requirements are familiar regulatory tools applied consumer borrowing other fi nancial transactions. Rather than regulating substance transaction terms (such usury laws do limiting interest rates), disclosure requirements are intended ensure consumer ‐ accurate, relevant information can make own informed choices about their fi nancial af fairs. Such disclosure requirements familiar many regulatory regimes, including, example, Truth in Lending Act federal securities regulation, including FINRA rules broker dealers. See, e.g., U.S.C. § et seq.; C.F.R. § 240.15c2 5; FINRA Rule (2011). language § 1098g itself provides no speci c guid ance about scope “disclosure requirements.” Other HEA provisions, however, impose explicit disclosure require ments lenders servicers, particularly U.S.C. § 1083. It makes sense understand “disclosure re quirements” § 1098g against backdrop requirements § HEA also includes, addition § 1098g, several fairly speci c provisions: 1078(d) (usury laws), 1091a(a)(2) (statutes limitations), § 1091a(b) (collection costs/infancy defenses), and § 1095a(a) (garnishment requirements). These provisions in the HEA help guide our interpretation 1098g.
First, several speci fi c preemption provisions the HEA weigh against a ributing Congress a desire to preempt state broadly. speci fi c preemption provi sions show Congress considered issue preemption and decided preempt on particular topics. It most certainly did enact language imposing broad any laws, even any state consumer protection or tort laws, might apply student loans servicing.
At same time, express requirements HEA lead us disagree with argument “disclosure requirements”—and associated intended Congress—pertain solely “standardized, pre scribed provision terms conditions facts a lending transaction,” counseling borrow ers nancial di ffi culty. In particular, spells out disclosures required before disbursement loans, before loans, during repayment loans . Under subsection entitled “Required disclosures during repayment,” paragraph entitled “Information provided borrower having di ffi culty making payments” provides:
Each eligible lender shall provide borrower who has noti ed lender borrower having di culty making payments made, insured, guaranteed part following information simple understandable terms:
(A) A description the repayment plans
available to the borrower, including how borrower should request a change in
repayment plan.
(B) A description requirements
obtaining forbearance on a loan, includ ‐
ing expected costs associated with ‐ bearance.
(C) A description options available borrower avoid defaulting loan, any relevant fees costs associated with such options. § 1083(e)(2).
In context these express requirements in phrase “disclosure requirements” § 1098g ap plies information must given borrowers who struggling repay their loans. Listed a “required disclo sure” borrowers struggling during repayment is “de scription repayment plans available borrower, cluding how borrower should request change repay ment plan.” 1083(e)(2)(A). This sort communication tween lender borrower exactly what issue present case. alleges when she informed she was struggling with repayment, did ap propriately inform her plan options. We therefore disagree with e ort distinguish between disclosures standardized origination billing forms communications struggling about re payment options. ‐
That being said, we agree with Nelson that HEA’s state ‐ law “disclosure requirements” does not bar entirely her a tt empt use Illinois consumer protection tort law. Nelson complains false misleading state ‐ ments Great Lakes made voluntarily, not required by fed ‐ eral law. Imposing liability for those voluntary but deceptive statements does not impose additional “disclosure require ments” on Great Lakes.
Many Nelson’s speci c claims allege Great Lakes misled class members by making ffi rmative misrepresentations—about expertise its devotion borrowers’ best interests, recommending forbearance best option nancial trouble. dis trict court found these claims were preempted by recasting them omissions, such law would implicitly im pose on Great Lakes some disclosure requirements addi tion imposed by federal law. WL at *5.
We respectfully disagree reasoning. At least some claims ffi rmative deception do nec essarily imply any additional disclosure requirements at all. She complaining about least some deceptive statements Great Lakes chose make voluntarily, because fed eral law required them. could avoided these claims remaining silent. State could impose liability these ffi misrepresentations without imposing addi tional requirements Lakes, thus avoid 1098g. Altria Group, Good U.S. 79–82 (2008) (state fraud claims false rma tive representations cigare e advertising were preempted law).
18 18 1531
One foundation the law of fraud negligent misrep resentation is the di ff erence between an a ffi rmative misrepre sentation a failure disclose. common tort fraud ordinarily requires a deliberately false statement ma terial fact. E.g., Davis v. G.N. Mortgage Corp ., 396 F.3d 869, 881– 82 (7th Cir. 2005); Connick v. Suzuki Motor Co ., 675 N.E.2d 584, (Ill. 1996); Siegel v. Levy Organization Development Co. , 607 N.E.2d (Ill. 1992). An omission or failure disclose, the hand, will not support a common fraud claim but may actionable constructive fraud fraudulent con cealment if defendant was under a particular duty speak, which may stem from a fi duciary duty a similar re lationship trust dence. Joyce v. Morgan Stanley & Co ., F.3d (7th Cir. 2008) (Illinois law); Connick N.E.2d 593; Restatement (Second) Torts (1977).
When a plainti ff alleges a defendant’s actionable failure disclose, it is easy understand how claim implies a “disclosure requirement,” use language 1098g. But when a plainti ff alleges a defendant’s false a ffi rmative mis representation, recasting claim imposing “disclosure requirement” necessary may not even appropri ate. If claim defendant said something false was required say rst place, claim does necessarily imply requirement. defendant could complied its legal obligations, plainti ’s theory, merely refraining from making false misrepresentation about its expertise, its work borrowers’ best interests, recommendation forbear ance most distressed borrowers.
In case, district court relied upon broad reading Ninth Circuit’s opinion Chae SLM Corp. (9th Cir. 2010), to treat Nelson’s complaints about ffi rm ‐ ative misrepresentations as implying some additional disclo ‐ sure requirements. While Chae may apply to some claims, it was mistake to read Chae so broadly. plainti ff s in Chae complained about supposed failures to disclose key information speci c ways, such terms re ‐ payment requirements. Since defendant was required to disclose that information by federal law had disclosed it ways permi ed by law, Ninth Circuit found that plainti s were implicitly seeking to impose additional dis ‐ closure requirements under state law. We do not disagree Ninth Circuit’s reasoning, but Chae itself made clear § 1098g would extend other sorts disclosures borrowers. Chae limited reach some broader lan guage by holding state claims, focusing on “use fraudulent deceptive practices apart from bill ing statements ,” preempted 1098g. at (emphasis added).
That limitation applies this case, least parts it. broad language Chae simply does extend Nel son’s claims about Lakes’ ffi rmative misrepresenta tions counseling, where could avoided liability under state remaining silent (or telling truth) on certain topics. On theory, plainti ff may proceed claims based on misrepresentations, dis tinct from require proof defendant failed dis close information.
We recognize would possible apply sumer protection laws impose additional re quirements servicers federally insured loans. Such applications would preempted 1098g, as Ninth Circuit made clear Chae . F.3d at 942–43. But that result not necessary inherent Nelson’s claims, at least to extent she alleges ffi rmative misrepresenta tions. We cannot say on pleadings that Nelson’s claims are preempted § 1098g. On remand, district court may need use jury instructions and tools to al low Nelson proceed claims misrepre sentations while ensuring that case does not become ve hicle for state law impose new requirements.
B. Con fl ict and Field Preemption Great Lakes has argued alternative con fl ict eld preemption. district court did not reach those issues, but we should. They present questions law that we can ad dress pleading stage. To show con fl ict preemption, Great Lakes must show either that it would “impossible” Lakes comply both state federal law state (as seeks apply it) constitutes an “ob stacle” satisfying purposes objectives Congress. Patriotic Veterans, Indiana (7th Cir. 2013). does identify any impossible fl ict, but argues application here would an obstacle operation programs.
Con fl ict preemption does bar claims. Recall there several express provisions HEA: 1078(d) (usury laws), 1091a(a)(2) (statutes limitations), 1091a(b)(collections costs infancy defenses), 1095a(a) (garnishment requirements), well 1098g (dis closure requirements). number those provisions speci city show Congress considered issues made decisions. Courts should enforce provisions, but we should add them theory 18 1531 21 more sweeping preemption seems like be tt er policy. E.g., Virginia Uranium, v. Warren , 139 S. Ct. 1894, 1901 (2019) (plurality opinion) (“Invoking some brooding federal interest appealing judicial policy preference should never be enough win of state law Y .”). Properly un ‐ derstood, state and federal law can exist in harmony here. [2]
The Ninth Circuit in Chae used broad language on fl ict and the value of uniformity in the federal program: “Congress intended uniformity within the [FFELP]. statutory design, its detailed provisions the FFELP’s operation, its focus on the relationship between borrow ers lenders persuade us Congress intended subject FFELP participants uniform regulations.” 593 at 947. That broad language, however, focused di erent sorts claims, where value uniformity would more compelling than it is here. Chae focused uni formity method se ing late fees, start *22 22 18 1531 dates, interest calculations. See id . at 944–47. We assume the need nationwide consistency on those sorts of admin ‐ istrative mechanics is substantial. That need does not extend the claims asserts based a misrepre ‐ sentations—not required by federal law—to hav ing trouble making payments. [3]
Finally, eld does apply here. Field is rare. It applies “when federal occupies a ‘ eld’ of regulation ‘so comprehensively that it has left no 18 1531 23 room supplementary state legislation.’” Int’l Ass’n of Ma chinists Dist. Ten v. Allen , 904 F.3d 490, 498 (7th Cir. 2018), quoting R.J. Reynolds Tobacco Co. v. Durham County , 479 U.S. 130, 140 (1986). “Federal statutes that preempt fi eld ‘re fl ect[ ] congressional decision to foreclose any state regulation area, even if it is parallel to standards.’” Int’l Ass’n of Machinists , 904 F.3d at 498, quoting Murphy v. Nat’l Colle giate Athletic Ass’n , 138 S. Ct. 1461, 1481 (2018).
On point we agree Chae . 593 F.3d 941–42 (“we previously held that fi eld preemption does not ap ply to HEA”), citing Keams v. Tempe Technical Inst., Inc. , F.3d 222, 225–26 (9th Cir. 1994) (holding fi eld preemption did not apply HEA to preempt state tort claim stu dents against accrediting agency: “It is apparent … Con gress expected state operate much of fi eld which it was legislating.”); accord, Armstrong v. Accrediting Council Continuing Educ. Training, Inc. , F.3d 1362, (D.C. Cir. 1999) (a rming prior holding “federal ed ucation policy regarding [private lending students] so extensive occupy fi eld”). In HEA, Congress chose displace state only certain speci fi ed, express provisions. Those provisions indicate Con gress has sought displace regulation loans. And absence language indicating an intent oc cupy fi eld weighs heavily, course, “in favor holding was intent Congress occupy eld.” Frank Bros. v. Wisconsin Dep’t Transp. (7th Cir. 2005), citing Hillsborough County Automated Medical Labs., U.S. (1985).
Field ned only few areas law, such National Labor Relations Act, Int’l Ass’n Machinists F.3d 497–98, Employee Retirement Income Security Act, Trustees AFTRA Health Fund Biondi 776–79 (7th Cir. 2002). Courts consistently apply eld cases dealing with federal statutes. opposite is true here. Courts consistently held eld does apply HEA, we do well.
Conclusion has alleged claims nec
essarily preempted law. judgment dis trict court VACATED case REMANDED fur ther proceedings consistent opinion.
[1] allegations echo findings of an Inspector General’s re ‐ port servicers’ compliance with generally advice about repayment options particular. U.S. Department of Education Office Inspector General, ED OIG/A05Q0008, Federal Student Aid: Ad ‐ ditional Actions Needed Mitigate Risk Servicer Noncompliance with Requirements for Servicing Federally Held Student Loans (Feb. 2019), available at: https://www2.ed.gov/about/offices/list/oig/audit reports/fy2019/a05q0008.pdf. According report, Department’s “oversight activities regularly identified instances servicers’ servic ing federally held loans accordance with Federal require ments,” yet Department “rarely used available contract accountability provisions hold servicers accountable instances noncompliance” “did provide servicers an incentive take actions mitigate risk continued servicer noncompliance could harm students.” Id. at 2. Inspector General found these failures can result “in creased interest repayment costs incurred borrowers, missed op portunity more take advantage certain pro grams, negative effects borrowers’ credit ratings, an increased like lihood delinquency even default.” Id. at Particularly relevant case section entitled “Servicer Representatives Not Sufficiently In forming Borrowers Available Repayment Options.” Id. 10–13.
[2] We do not give special deference U.S. Department Educa tion’s 2018 informal guidance, entitled “Federal Preemption State Regulation Department Education ʹ s Federal Student Loan Pro grams Federal Student Loan Servicers.” Fed. Reg. (Mar. 2018). Department expressed view HEA preempts regulations “impact” FFELP servicing. We agree with district court’s thorough analysis issue Student Loan Servicing Alliance v. District Columbia , F. Supp. 3d 48–49 (D.D.C. 2018), Skidmore Swift & Co. , U.S. (1944), provides appropriate test defer ence here. We also agree Preemption Notice is persuasive cause particularly thorough it “represents stark, unex plained change” Department’s position . Student Loan Servicing Alli ance F. Supp. 3d 50; see Skidmore U.S. at That say we disagree every particular Department’s informal guidance, but we give document itself little weight.
[3] Department’s Preemption Notice also cited Boyle United Tech nologies Corp. , 487 U.S. 500 (1988), argue that the servicing of student loans “is an area ‘involving uniquely Federal interests’ that must be ‘gov erned exclusively by Federal law.’” See Fed. Reg at citing Boyle , U.S. at 504. Department explained that “there no question that the ‘imposition of liability Government contractors will directly affect terms Government contracts,’ at the very least by raising the price such contracts, ‘the interests United States will directly affected.’” Id. at quoting Boyle , U.S. at 507. It true federal government has an interest protecting rights obligations established its contracts, interest extends “liability third persons.” Boyle U.S. at 505. At same time, Illinois has a com pelling interest protecting consumers providing oversight fed eral servicers. Student Loan Servicing Alliance F. Supp. 3d at Boyle itself noted just because an area involves a “uniquely federal interest,” “does not, however, end inquiry. That merely establishes necessary, sufficient, condition displacement state law. Displacement will occur only where Y significant conflict ex ists between an identifiable federal policy interest [operation] law, application state would frustrate specific objec tives legislation.” U.S. at (internal citations, quotation marks, footnote omitted). While Boyle explained conflict such situation “need sharp” generally would find preemption, “conflict there must be.” Id. at 507–08. We see no such conflict posed claims here, least extent claims fined affirmative misrepresentations.