govinfo:USCOURTS-ohsd-2_25-cv-01482-0

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION
Andrew Brown,
Plaintiff,
V.
Pennsylvania Higher
Education Assistance Agency,

Judge Michael H. Watson
Magistrate Judge Vascura
Defendant.
OPINION AND ORDER
Andrew Brown ("Plaintiff"), proceeding without the assistance of counsel,
sues the Pennsylvania Higher Education Assistance Agency ("PHEAA") under
the Fair Debt Collection Practices Act ("FDCPA"). Compl, ECF No. 2. He also
moves for a "stay of debt. " Mot., ECF No. 7.
PHEAA argues that the Complaint fails to state a claim for relief against it
because PHEAA is not a "debt collector" for purposes of the FDCPA. Mot., ECF
No. 8. PHEAA attached exhibits and an affidavit to its motion, asking the Court
to convert the motion into one for summary judgment if necessary to resolve the
issue. Id. at 1. The Court did so. Op. and Order, ECF No. 12. Thereafter,
PHEAA submitted a second affidavit, and Plaintiff responded to the same.
MorrisonAff., ECF No. 13; Resp., ECF No. 14. For the following reasons, the
Court concludes that PHEAA is entitled to summary judgment.
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I. FACTS
The following facts1 are taken from Plaintiff's Complaint. Plaintiff obtained
student loans approximately twenty to twenty-five years ago to assist with the
cost of attending DeVry University. Compl. ^ 2, ECF No. 2. Those loans are
subject to an account with PHEAA. Id. Plaintiff is unable to repay the debt and
contests the validity of the debt. Id. ^ 3. Despite Plaintiff's attempts to
communicate the invalidity of the debt to PHEAA, PHEAA continues to pursue
repayment of the debt. , (,. ^13-14. Plaintiff seeks injunctive relief. See
genera///Corn pl., ECF No. 2.
II. STANDARD OF REVIEW
The standard governing summary judgment is set forth in Federal Rule of
Civil Procedure 56(a): "The court shall grant summary judgment if the movant
shows that there is no genuine dispute as to any material fact and the movant is
entitled to judgment as a matter of law."
The Court must grant summary judgment if the opposing party "fails to
make a showing sufficient to establish the existence of an element essential to
that party's case" and "on which that party will bear the burden of proof at trial."
Celotex Corp. v. Catrett, 477 U. S. 317, 322 (1986). When reviewing a summary
judgment motion, the Court must draw all reasonable inferences in favor of the
1 Other facts, like that Plaintiff suffered a skull injury in his hotel room in Brazil or that the
Chinese Government agreed to assume his student-loan debt, see Compl. ^14, 15,
ECF No. 2, are unimportant to the pending motion.

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nonmoving party, who must set forth specific facts showing there is a genuine
dispute of material fact for trial, and the Court must refrain from making credibility
determinations or weighing the evidence. Matsushita Bee. Indus. Co., Ltd. v.
Zenith Radio Corp., 475 U. S. 574, 587 (1986) (citation omitted); Anderson v.
Liberty Lobby, Inc., 477 U. S. 242, 248-49, 255(1986). The Court disregards "all
evidence favorable to the moving party that the jury would not be required to
believe. " Reeves v. Sanderson Plumbing Prods., Inc., 530 U. S. 133, 151 (2000)
(citation omitted). Summary judgment will "not lie if the dispute about a material
fact is 'genuine, ' that is, if the evidence is such that a reasonable jury could return
a verdict for the nonmoving party. " Anderson, 477 U. S. at 248 (internal citations
and quotation marks omitted).
The Court is not "obligated to wade through and search the entire record
for some specific facts that might support the nonmoving party's claim."
InterRoyal Corp. v. Sponseller, 889 F.2d 108, 111 (6th Cir. 1989). The Court
may rely on the parties to call attention to the specific portions of the record that
demonstrate a genuine issue of material fact. Wells Fargo Bank, N. A. v. LaSalle
Bank N. A., 643 F. Supp. 2d 1014, 1022 (S. D. Ohio 2009).
III. ANALYSIS
The FDCPA prohibits certain actions by "debt collectors, " who the statute
defines as, in pertinent part, "any person who uses any instrumentality of
interstate commerce or the mails in any business the principal purpose of which
is the collection of any debts, or who regularly collects or attempts to collect,

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directly or indirectly, debts owed or due or asserted to be owed or due another."
15U. S. C. §1692a(6).
The FDCPA specifically excludes from the definition of "debt collector,"
though, "any person collecting or attempting to collect any debt owed or due or
asserted to be owed or due another to the extent such activity ... is incidental to
a bona fide fiduciary obligation or a bona fide escrow arrangement!. ]" Id.
§ 1692a(6)(F). It is this "fiduciary exception" that is at issue.
As explained below, guaranty agencies collecting debt on behalf of the
United States Department of Education under the Federal Family Education Loan
Program ("FFELP") satisfy that fiduciary exception, and PHEAAwas acting as a
guaranty agency in this case such that it was not a debt collector under the
FDCPA.
Under the FFELP, "lenders make guaranteed loans under favorable terms
to students and their parents, and these loans are guaranteed by guaranty
agencies and ultimately by the federal government. " Darrisaw v. Penn. Higher
Educ. Assistance Agency, 949 F. 3d 1302, 1305-08 (11th Cir. 2020) (internal
quotations marks and citations omitted)). PhlEAA is one such guaranty agency.
Donohue v. Regional Adjustment Bureau, Inc., Civ. A. No. 12-1460, 2013 WL
607853, at *7 (E. D. Penn. Feb. 19, 2013) (citation modified); see also 24 Pa.
Stat. Ann. §§5102-04.
Upon paying private lenders on a defaulted loan, guaranty agencies, such
as PHEAA, are reimbursed by the Secretary of the Department of Education.

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Darrisaw, 949 F. 3d at 1305 (citing 34 C. F. R. § 682. 100(b)(1); 20 U. S. C.
§ 1078(c)(1 )(A)). The guaranty agency then attempts to collect the unpaid debt
from the borrower "on behalf of the Secretary. " Id. (citing 34 C. F. R.
§ 682.410(b)(6)(i); 20 U. S. C. §§ 1078(c)(2)(A), (c)(6)). When doing so, the
guaranty agency must act as a fiduciary for the Secretary. Id. (citing 34 C. F. R.
§ 682. 419(a)).
Given the fiduciary obligations that PHEAA (as a guaranty agency) owes
the Secretary, multiple courts have concluded that, where PHEAA attempts to
collect debts as a guarantor for the Department of Education, PHEAA satisfies
the fiduciary exception to FDCPA's definition of "debt collector" such that it is not
a "debt collector" for purposes of the statute. Darrisaw, 949 F. 3d at 1305-08
(affirming dismissal because the Complaint did not "allege facts plausibly
establishing" that PHEAA qualified as a debt collector); Keller v. GC Sen/s., L. P.,
No. 13-cv-1654, 2013 WL 3213338, at *4 (E. D. Penn. June 26, 2013) ("Hence,
PHEAA is not a debt collector under the FDCPA, rendering that statute
immaterial. " (citation omitted)); Donohue, 2013 WL 607853, at *6 ("I find that
PHEAA is not a debt collector under the Act because it falls into one of the
enumerated exclusions, namely, that PHEAAwas attempting to collect a debt
incidental to a bona fide fiduciary obligation. " (citing 15 U. S.C. § 1692a(6)(F)(i)).
Courts have held the same regarding other guaranty agencies. E. g., Lima
\f. U. S. Dep'tofEduc., 947 F. 3d 1122, 1126-27 (9th Cir. 2020) (concluding that
guaranty agency satisfied FDCPA's fiduciary exception to the definition of "debt

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collector"); Rowe v. Educ. Credit Mgmt. Corp., 730 F. Supp. 2d 1285, 1288-89
(D. Or. 2010) (same); Sea/s i/. Nat'l Student Loan Program, Civ. A. No. 5:02 CV
101, 2004 WL 3314948, at *4 (N. D. W. Va. Aug. 16, 2004) (same), aff'd 124 F.
App'x 182 (4th Cir. 2005).
The only question, then, is whether there exists a genuine dispute of
material fact regarding whether PHEAAwas acting as a guaranty agency here.
There is none.
The loan documents and Aaron Morrison's second affidavit show that, in
2005, Plaintiff completed a Federal Consolidation Loan Application and
Promissory Note in connection with FFELP. Mot. Ex. A, ECF No. 8-1 at PAGEID
## 29-37; Morrison Aff. ^ 4, ECF No. 13. In doing so, Plaintiff sought to
consolidate Direct Subsidized Stafford/Ford Loans and Direct Unsubsidized
Stafford/Ford Loans, all of which were held by the United States Department of
Education. Mot. Ex. A, ECF No. 8-1 at PAGEID ## 30, 34.
Certain disclosure statements then became a part of the Note. Mot. Ex. A,
ECF No. 8-1 at PAGEID ## 38-41; MorrisonAff. ^ 7-8, ECF No. 13. Those
disclosure statements establish that PHEAA guaranteed the at-issue
consolidated loans for the United States Department of Education. Mot. Ex. B,
ECF No. 8-1 at PAGEID ## 38-41; see a/so Morrison Aff. ^ 9, ECF No. 13
("PHEAA served as the guarantor of Brown's obligations under the Consolidation
Loan. "). Indeed, that PhlEAA acted as a guarantor during the at-issue debt
collection efforts is also supported by the letter Plaintiff attached to his Complaint.

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Compl. Ex. 1, ECF No. 2 at PAGEID # 5 ("Pennsylvania Higher Education
Assistance Agency (PHEAA), acting as a guarantor on behalf of the U. S.
Department of Education .. . . "); MorrisonAff. ^ 15-21, EOF No. 13 (explaining
that the letter corresponded to this loan); See a/so ECF No. 13-1 at PAGEID
##71-75.
The Court invited Plaintiff to submit any evidence in his possession that the
submitted disclosure statements correlated to a different loan "or that PHEAA
was not acting as a guaranty agency in connection with the challenged collection
effort. " Op. and Order 2, ECF No. 12. Although Plaintiff responded to Morrison's
second affidavit, he did not raise a genuine dispute of material fact regarding
PHEAA's status as a guaranty agency. Instead, Plaintiff's response repeats his
prior assertion that he suffered a skull injury in Brazil and notes that he wishes to
hold PHEAA liable for that injury as a joint tortfeasor. Resp. 1-2, ECF No. 14.
He asserts that he has raised a federal question in this lawsuit and repeats that
the debt is invalid. Id. Plaintiff also argues that Morrison's affidavits should be
stricken because they contain the sentence, "further affiant sayeth naught, " which
Plaintiff argues is not English and therefore voids the affidavits. Id. at 2-3.
Plaintiff next references perceived deficiencies in the consolidation note, but he
does not actually contest the note's authenticity or the fact that PHEAA's
collection efforts concerned that note. Id. at 3-4. Finally, Plaintiff repeats that
the debt is "Chinese debt" and suggests that PHEAA's motion was prematurely
filed. Id. at 4.

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Plaintiff's response is insufficient to create a genuine dispute of material
fact. Thus, because PHEAA was collecting the debt incidental to its bona fide
fiduciary obligation to the Department of Education, it was not a "debt collector"
as that term is defined in the FDCPA. Plaintiff's FDCPA claim fails, and the Court
GRANTS summary judgment to PHEAA and dismisses the FDCPA claim WITH
PREJUDICE. As such, the Court necessarily DENIES as moot Plaintiff's motion
to stay the debt. The Clerk shall enter judgment for PHEAA and terminate this
case.
IT IS SO ORDERED.
MlfcftAEL H. WAfSON, JUDGE
UNITED STATES DISTRICT COURT
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