## Facts

- Marisol De La Mota, Froebel Chungata, and Oren Doron were public service attorneys employed by New York City’s Administration for Children’s Services (ACS).
- De La Mota and Chungata worked in ACS’s Child Support Litigation Unit seeking child support for children living in poverty or in foster care.
- Doron worked in ACS’s Manhattan Trial Unit prosecuting child abuse and neglect matters.
- The Higher Education Act authorized cancellation of portions of Perkins loans for borrowers employed full time in a public or nonprofit child or family service agency who provide or supervise services to high-risk children from low-income communities and their families.
- Under the statutory framework, the educational institutions holding Perkins loans make initial cancellation determinations, subject to Department of Education (DOE) regulations.
- De La Mota applied for Perkins loan cancellation through multiple schools; the plaintiffs’ applications were denied based on schools’ decisions and DOE’s interpretation of eligibility.
- Plaintiffs challenged DOE’s implementing regulation and guidance as unduly restricting the statutory cancellation category and effectively excluding certain public-sector legal jobs.

## Issues

1. Whether DOE’s regulation and interpretation of the Perkins loan cancellation provision for employment in child or family service agencies were consistent with 20 U.S.C. § 1087ee(a)(2).
2. Whether DOE’s interpretation and guidance to schools were arbitrary, capricious, or contrary to law under the Administrative Procedure Act.
3. Whether ACS attorneys’ work could qualify as providing or supervising services to high-risk children from low-income communities and their families within a public child or family service agency.

## Decision

- The Second Circuit vacated the district court’s judgment dismissing the complaint and remanded for further proceedings.
- The court held plaintiffs plausibly alleged that DOE’s narrowing interpretation was not compelled by the statutory text and might be an impermissibly narrow construction.
- The court held the complaint adequately stated claims that DOE’s interpretation could be inconsistent with the statute and/or arbitrary and capricious under the APA, making dismissal at the pleading stage improper.

## Legal Principles

- When Congress speaks clearly to the relevant question, an agency may not adopt a contrary interpretation; where statutory language supports broader coverage, a restrictive interpretation may fail Chevron review.
- Even where statutory ambiguity exists, an agency’s interpretation must be reasonable in light of the statutory scheme and cannot narrow eligibility in ways untethered to statutory terms.
- APA review permits challenges alleging that agency interpretations or guidance are arbitrary, capricious, or not in accordance with law.
- Eligibility under the Perkins cancellation provision turns on the functional nature of the borrower’s services to high-risk, low-income children and their families within a qualifying agency, not merely on professional job title.

## Conclusion

The Second Circuit allowed ACS attorneys’ challenge to proceed by vacating dismissal and remanding, holding they plausibly alleged DOE’s interpretation and guidance improperly narrowed Perkins loan cancellation eligibility and could be unlawful under the HEA and the APA.


De La Mota v. U.S. Dep’t of Educ., 412 F.3d 71 (2d Cir. 2005)