Articles Information and Due Process of Law: Does the mode of information affect the property rights of participants in the federal student loan program? 2001. Saint Louis University.
Excerpts from Information and Due Process of Law – Does the Mode of Information Influence the Property Rights of Participants in the Federal Student Loan Program?
Timothy C. Bagwell, 2001.
DIGEST
This study examined the laws, policies and practices of the Federally Guaranteed Student Loan Program in relation to the theory of the mode of information as set out by Mark Poster (1990). The research question focused on the relationship of information to due process. The role of information was delineated by Poster’s “mode of information” theory.
The mode of information consists of three elements. The first is the monitoring and surveillance of people and populations through electronic records. The second is the utilization of these records to constitute the individual based on a norm. The third is utilization of this information to discipline or punish the person or population.
The study found a relationship between how information is utilized within the student loan program and due process issues in regards to the offset of income tax refunds. In regards to the monitoring and surveillance element, the study found that the regulatory principles of due diligence had been compromised by the information processes and policies of student loan guarantors and the Department of Education. The practice of reasonable due diligence is the accepted standard for valid administrative record keeping. The efforts of the Department and USAFunds to circumvent application of the Fair Debt Collection Practices Act constituted the core of the compromise of the principles of due diligence.
CHAPTER I
Description of the Problem
This is a study of the relationship between information and due process of law. The study examines information from the post modern perspective of information systems as processes that monitor and control individuals and groups. This is described by Mark Poster (1990) as the "Mode of Information ." The power to control and monitor, as theorized, is accomplished through control of databases and data gathering mechanisms. As a case study, it examines the process of the administrative taking of the federal income tax refunds of people who have defaulted on loans made under the Guaranteed Student Loan Program (GSLP) . Income tax refunds are monies held by the federal government that are owed to taxpayers as a result of excess payment on their annual income tax. Judge Murray Schwartz, in the "Constitutional" section of his decision in
Games v Cavasos 737 F Supp. 1368 (D. Del 1990), recognized the Fifth and Fourteenth Amendments property interest of the consumer plaintiff toward the consumer's income tax refund. Because these administrative takings involve records about private individuals, there may be Fourth Amendment privacy implications toward the basis of the taking. This may also extend to privacy provisions of the Administrative Procedure Act (PL75-404, 5 U.S.C. 1001(a)) and to similar provisions within the Consumer Credit Protection Act of 1968 (PL90-321, 15 U.S.C.A. 1001).
These properties may be taken by the federal government through administrative offset upon a finding against the individual toward moneys owed to the government (S. Hrg. 101-1116, 1990). This can be owed through a variety of government programs such as the GSLP, taxes owed for prior years or overpayments of government benefits. In the first four years (1986-1990) following enactment of the income tax refund-offset program, nearly $1.2 million in income tax refunds were taken toward payment of student loans (S. Hrg. 101-1116, 1990). From 1966 to 1992 the various loan programs authorized under the Higher Education Act of 1965 have amounted to 142 billion dollars lent to 22 million consumers (GAO/AFMD-93-20).
The Fifth and Fourteenth Amendments of the Constitution permit the government to take property only through due process of law. This would have normally required an administrative or civil court hearing prior to the actual taking. Today, under the structure of the GSLP and related legislation the taking of income tax refunds is largely exempt from these hearing requirements as a result of passage of the Deficit Reduction Act of 1984 (PL98-369, 31 U.S.C. 3720A, July 18, 1984). A consumer may initiate the procedure for a hearing, but this will not delay the taking of the income tax refund. An important aspect of this procedure is that it will apply only to those consumers who are owed an income tax refund. Taxpayers who plan their taxes well, can plan not to have a refund. They are thus able to evade this procedure.
If consumers are capable of that kind of financial management, they are not likely to be in default or may be managing their finances to rebuild their credit and repay their loans. The administrative takings are being made on relatively small income tax refunds, toward taxpayers who are not likely to be in high income tax brackets, based on loans that are not themselves large.
Complete copies of this work may be ordered through Proquest's UMI Dissertation Publishing at http://disexpress.umi.com/dxweb .
