Appeal from the United States District Court for the District of Columbia (94cv1372)
Before: Silberman, Ginsburg, and Henderson, Circuit Judges.
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Opinion for the Court filed by Circuit Judge Silberman.
The Higher Education Act, Title IV, governs federally funded student financial aid programs for college and post-secondary vocational training. 20 U.S.C. Section(s) 1070-1099 (1990 & 1992 Supp.). Congress amended the HEA in 1992 to improve the accountability and integrity of institutions participating in Title IV programs. The Department of Education (DOE) conducted regional meetings and "negotiated rulemaking sessions" to develop regulations to implement these amendments. Appellants raise five separate challenges to the regulations ultimately promulgated by the DOE. We reject these and affirm the district court's grant of summary judgment for Secretary Riley. We address each issue and the relevant facts in turn.
Appellants contend that the entire set of regulations amending 34 C.F.R. Part 668, the Student Assistance General Provisions, is ineffective for the award year 1994-95 because it was not promulgated "in final form" by May 1, 1994, as required by the Master Calendar Provision. The Master Calendar Provision states that Any regulatory changes initiated by the Secretary ... that have not been published in final form by December 1 prior to the start of the award year shall not become effective until the beginning of the second award year after such December 1 date. For award year 1994-95, this subsection shall not require a delay in the effectiveness of regulatory changes ... that are published in final form by May 1, 1994.
20 U.S.C. Section(s) 1089(c) (1992). On February 17 and 28, 1994, the DOE published proposed rules for Part 668 and provided a 30-day comment period. 59 Fed. Reg. 8,044 (1994); 59 Fed. Reg. 9,526 (1994). On April 29, 1994, the DOE published an "Interim Final Rule," denominated "interim final regulations with invitation for comment." 59 Fed. Reg. 22,348 (1994). The April 29 Rule stated that its effective date was July 1, 1994, with the exception of provisions containing information collection requirements for which Office of Management and Budget (OMB) approval was required under the Paperwork Reduction Act (PRA). Upon receiving OMB approval, the DOE would publish a notice announcing the effective date for these provisions. The Rule solicited comments by June 20, 1994, and stated that the Secretary would consider any comments received "in determining whether to make any changes in these rules," and would publish any changes or a notice indicating no changes would be made. No mention was made of when any such changes would become effective. On June 22, after the comment period but prior to the Rule's effective date, appellants filed suit, seeking declaratory and injunctive relief. Subsequently, on July 7, the DOE issued a notice that announced OMB approval for the information collection requirements, explained that the April 29 Rule was final and effective for the 1994-95 award year, reopened and extended the comment period until July 28, and announced that the comments had been solicited in anticipation of possible revisions for the 1995-96 award year. 59 Fed. Reg. 34,964 (1994).
Since the Secretary published the "Interim Final Rule" on April 29, 1994, the dispute turns on whether those regulations were then "in final form." Appellants assert that the use of "interim" necessarily implies that the regulations were subject to change and therefore not in final form. Congress did not explicitly authorize "interim final regulations" in the HEA, as it has elsewhere, and the other DOE regulations published the same day were not described as "interim," showing that the Secretary himself did not view Part 668 as a final rule. The Secretary also requested comments on the Rule by June 20 and stated that notice of any changes-or the lack thereof-would be published. This deadline, prior to the Rule's July 1 effective date, indicates that the Secretary was considering changes for 1994-95. That changes were contemplated, it is argued, undermines the function of the Master Calendar Provision as a notice statute intended to apprise regulated institutions of the coming year's requirements. Comments responding to the Interim Final Rule show that such institutions viewed the April 29 notice as a proposed rather than a final rule. And the Secretary effectively recognized the ambiguity of the Rule by his publication of the July 7 correction notice. Finally, appellants argue that the regulation necessarily was subject to change since it had not yet received PRA approval from the OMB; several sections would not become effective until such approval was received, and failure to receive approval could result in changes.
The designation of the Rule as "interim," absent the explanation (given subsequently) that the Secretary contemplated that any revisions would take effect after the 1994-95 year and that comments were sought only for that purpose, was certainly maladroit. We agree with the government, however, that the rule passes muster under the Master Calendar Provision. The key word in the title "Interim Final Rule," unless the title is to be read as an oxymoron, is not interim, but final. "Interim" refers only to the Rule's intended duration-not its tentative nature. The designation of the July 1 effective date could only have meant-and, therefore, put the public on notice of that meaning-that the regulation was in final form when published and therefore complied with the Master Calendar Provision. The Secretary's request for comments on the Rule is explicable, as the government points out, in light of the short December 1 deadline for any proposed rules to be put in effect for the 1995-96 award year. That other final rules issued at the same time were not termed "interim" only suggests that the Secretary did not contemplate a possible modification of those rules in the following year. Nor do we think it particularly relevant that a number of commenters were confused. Competent counsel would surely have advised any client that the Secretary intended the Rule to be final as to the 1994-95 award year. *fn1 Any other construction would suggest that the April 29 publication was without legal significance at all (a senseless repetition of the notice of proposed rulemaking).
There remains the matter of OMB approval. The government points out that OMB's own rules specify that its action under the PRA cannot rescind or amend a rule. Therefore, the published rule's finality is not affected by the fact that the Secretary had not received OMB approval at the time of promulgation-approval came only seven days before July 1 and was not published until the July 7 notice. Admittedly, it seems a bit anomalous for a rule that is on its face subject to another entity's approval to be considered final. But as a matter of law, the regulation would have been valid on July 1 whether or not OMB had approved the relevant portions. Absent OMB approval, the Department would not have been entitled to impose a sanction or withhold a benefit to a member of the regulated class, but the regulation still would have constituted a normative standard. *fn2 Accordingly, it cannot be said that the April 29 publication was not "final" within the meaning of the Master Calendar Provision.
Two provisions in the 1992 HEA amendments deal with refunds by institutions of "unearned tuition" upon the withdrawal of students during an enrollment period. Generally under the Title IV programs, both the federal government and the student will contribute to the cost of the student's education. The federal government pays its portion for each enrollment period up front; students, in contrast, may pay at varying rates throughout the enrollment period, according to the institution's payment policy. For example, if the entire institutional charges for the enrollment period were $5,000, the government might pay $4,000 initially and the student the remaining $1,000 spread over the course of the enrollment period. When a student withdraws partway through the enrollment period, the institution must refund a certain portion of the charges to account for ...