                   FOR PUBLICATION
  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

ANN CHAE, Individually and On            
Behalf of All Others Similarly
Situated; WILLIAM COAKLEY,
Individually and On Behalf of All
Others Similarly Situated; HOON
KOO, Individually and On Behalf
of All Others Similarly Situated;
CARLOS A. PINEDA, Individually                No. 08-56154
and On Behalf of All Others
                                                D.C. No.
                                         
Similarly Situated,
                Plaintiffs-Appellants,       2:07-cv-02319-
                                                  R-RC
                   v.
                                                OPINION
SLM CORPORATION, DBA Sallie
Mae; SALLIE MAE SERVICING
CORPORATION; SALLIE MAE, INC.,
              Defendants-Appellees,
                  and
UNITED STATES OF AMERICA,
       Plaintiff-intervenor-Appellee.
                                         
        Appeal from the United States District Court
           for the Central District of California
         Manuel L. Real, District Judge, Presiding

                 Argued and Submitted
          November 5, 2009—Pasadena, California

                    Filed January 25, 2010




                              1371
1372                 CHAE v. SLM CORPORATION
Before: Ronald M. Gould and Carlos T. Bea, Circuit Judges,
          and William T. Hart,* District Judge.

                     Opinion by Judge Gould




  *The Honorable William T. Hart, Senior District Judge for the Northern
District of Illinois, sitting by designation.
                CHAE v. SLM CORPORATION             1375




                      COUNSEL

William J. Genego (argued), Nasatir, Hirsch, Podberesky &
Genego, Santa Monica, California; Michael D. Braun, Braun
1376              CHAE v. SLM CORPORATION
Law Group, P.C., Los Angeles, California; Andrew Friedman
and Victoria Nugent, Cohen, Milstein, Sellers & Troll, Wash-
ington, D.C., for the plaintiffs-appellants.

S. Dawn Scaniffe, Mark B. Stern and Sydney Foster (argued),
Department of Justice, Washington, D.C., for the plaintiff-
intervenor-appellee.

Julia B. Strickland (argued), Lisa M. Simonetti, and David W.
Moon, Stroock & Stroock & Lavan LLP, Los Angeles, Cali-
fornia, for the defendants-appellees.


                         OPINION

GOULD, Circuit Judge:

   Appellants urge error in the district court’s grant of sum-
mary judgment rejecting student borrowers’ claims that chal-
lenge loan servicer methods of calculating interest, assessing
late fees and setting the repayment start date on their loans.
We must determine the preemptive scope of the statutes and
regulations governing lenders and third-party loan servicers
under the Federal Family Education Loan Program of the
Higher Education Act. We conclude that the student borrow-
ers’ claims are preempted by this federal law and we affirm
the district court’s grant of summary judgment on that ground.

                               I

   The Higher Education Act (HEA) of 1965, now codified at
20 U.S.C. §§ 1001-1155, was passed “to keep the college
door open to all students of ability, regardless of socioeco-
nomic background.” Rowe v. Educ. Credit Mgmt. Corp., 559
F.3d 1028, 1030 (9th Cir. 2009) (internal quotation marks
omitted). As part of that effort, Congress established the Fed-
eral Family Education Loan Program (FFELP), a system of
                     CHAE v. SLM CORPORATION                        1377
loan guarantees meant to encourage lenders to loan money to
students and their parents on favorable terms.1 See 20 U.S.C.
§§ 1071-1087-4; Rowe, 559 F.3d at 1030. The Secretary of
the Department of Education (DOE) is authorized to “pre-
scribe such regulations as may be necessary to carry out the
purposes” of the FFELP. 20 U.S.C. § 1082(a)(1). Under that
authority, the DOE has promulgated detailed regulations. See
34 C.F.R. §§ 682.100-682.800. We preliminarily review how
the FFELP operates, and thereafter explain the procedural his-
tory of this case.

                                   A

   The FFELP regulates a series of transactions related to stu-
dent loans. The first layer of transactions occurs between
lenders and student or parent borrowers. Eligible banks, credit
unions, schools, government agencies, non-profits, and others
may make loans to students. 34 C.F.R. § 682.101(a). The
lenders must abide by the terms of the FFELP, and the DOE
may terminate the participation of any lender who does not
follow the rules. 34 C.F.R. §§ 682.700-.713. Lenders may
assign their loans to third-party loan servicers, in which case
the loan servicer must also abide by the FFELP regulations.
See 20 U.S.C. § 1082(a)(1); 34 C.F.R. §§ 682.203,
682.700(a).

   A second layer of FFELP transactions involves “guaranty
agencies” that guarantee the lenders’ loans. A guaranty
agency is a “State or private nonprofit organization that has
an agreement with the Secretary under which it will adminis-
ter a loan guarantee program under the Act.” 34 C.F.R.
  1
   The FFELP governs loans made to students by private lenders. It was
formerly named the “Guaranteed Student Loan Program” before being
renamed in 1992. Higher Education Amendments of 1992, Pub. L. No.
102-325, § 411(a)(1), 106 Stat. 448, 510 (1992). The government operates
a parallel program through which it lends money to students directly, cal-
led the William D. Ford Federal Direct Loan Program. See 20 U.S.C.
§§ 1087a-1087j.
1378                 CHAE v. SLM CORPORATION
§ 682.200(b); see also 34 C.F.R. § 682.400 (requiring that a
guarantee agency enter into four specific agreements with the
DOE before it may participate in the FFELP). When a bor-
rower defaults on his or her student loan and the lender is
unable to recover the amount despite due diligence, the lender
recoups its loss from the guarantor. 34 C.F.R. § 682.102(e)(7)
(“If a borrower defaults on a loan, the guarantor reimburses
the lender for the amount of its loss. The guarantor then col-
lects the amount owed from the borrower.”).

   A third level of FFELP transactions takes place between
the guaranty agencies and the DOE. Guaranty agencies must
enter agreements with the DOE in order to participate in the
FFELP. 20 U.S.C. § 1078(c). After an agreement is entered,
the DOE acts as a secondary insurer on the loans guaranteed
by the agency. 20 U.S.C. §§ 1071(a)(1)(D), 1078(c). When a
lender assigns its guaranty agency a defaulted loan, the guar-
anty agency must take diligent steps to recover the default
amount, but, having done so, may then recover up to one hun-
dred percent of its losses from the DOE if it is unable to col-
lect the debt. 34 C.F.R. §§ 682.404(a), 682.410(b)(6).

   The FFELP governs four types of loans. Three of these are
at issue in this appeal.2 First, Stafford Loans are made to stu-
dents, 20 U.S.C. §§ 1071(c), 1078, 1078-8, and may be either
subsidized or unsubsidized. For subsidized Stafford Loans,
the government pays interest on the loan during specified
periods, such as when the student borrower is attending
school on at least a part-time basis. 20 U.S.C. § 1078(a)-(b).
For unsubsidized Stafford Loans, the student is responsible
for all accrued interest from the time the loan is disbursed and
the government pays none of it. 20 U.S.C. § 1078-8(e)(3).
The second type of loan here involved is a Consolidation
Loan, which allows the borrower to consolidate multiple loan
  2
   Also regulated by the FFELP, but not at issue on this appeal, are PLUS
Loans made to the parents of college students. See 20 U.S.C. § 1078-2. All
plaintiffs here were student borrowers; none had PLUS Loans.
                     CHAE v. SLM CORPORATION                      1379
obligations with one lender. See 20 U.S.C. § 1078-3(a). The
third type of loan falls under the Supplemental Loans to Stu-
dents Program, which applied to periods of student enrollment
beginning before July 1, 1994, and has since been discontin-
ued. 34 C.F.R. § 682.100(a)(2).

   Congress directs the DOE to issue common application
forms and promissory notes to be used by FFELP participants.
20 U.S.C. §§ 1082(m)(1)-(4). These common forms include a
free application form, master promissory note, and common
loan deferment form. Id. The purpose of the common forms
is to standardize the terms and formatting to help applicants
understand their loan obligations. Id. § 1082(m)(1)(B).

                                   B

   The plaintiffs in this diversity action—Ann Chae, William
Coakley, Hoon Koo, and Carlos A. Pineda—took out Staf-
ford, Supplemental, and Consolidated Loans from various
lenders between 1993 and 2006. Sallie Mae, Inc. (Sallie Mae)
was the loan servicer for each of the plaintiffs’ loans.3 In its
capacity as a third-party servicer, Sallie Mae performed
administrative and servicing functions related to the loans,
such as issuing billing statements, collecting and processing
payments, assessing and collecting late fees, and giving
notices to borrowers required by FFELP regulations.

   The plaintiffs sued Sallie Mae, on behalf of a purported
class of similarly-situated borrowers, complaining about three
practices Sallie Mae uses in servicing student loans. First, the
plaintiffs challenge Sallie Mae’s use of the “daily simple
interest” or “simple daily interest” method of calculating
interest. This calculation method applies a borrower’s pay-
  3
   Sallie Mae argues that the other defendants—SLM Corporation and
Sallie Mae Servicing Corporation—are not proper parties. In light of our
holding that all the defendants were entitled to summary judgment, we
need not and do not reach this argument.
1380                 CHAE v. SLM CORPORATION
ment on the date the payment is received, not the date the
payment is due, such that interest accrues based on the num-
ber of days since the last payment. This means that borrowers
who make payments before the due date pay less overall inter-
est, while borrowers who make payments after the due date
pay more overall interest. The plaintiffs claim that the terms
of the loan agreements prevent Sallie Mae from using the
daily simple method of calculating interest. Instead, the plain-
tiffs allege that their loan contracts require Sallie Mae to use
the “installment method.” Under the installment method, the
total amount of interest is fixed and does not vary depending
on the date when payment is remitted. The plaintiffs in their
complaint asserted that Sallie Mae’s failure to use the install-
ment method conflicts with the FFELP statutes and regula-
tions, offends the terms of the loan documents and otherwise
violates California law.

   Second, the plaintiffs challenge Sallie Mae’s practice of
assessing late fees. When permitted by the borrower’s promis-
sory note, Sallie Mae charges a late fee of up to six percent
of each installment remitted more than fifteen days after it is
due. The plaintiffs allege that California law prohibits Sallie
Mae from charging late fees, at least where Sallie Mae also
charges daily simple interest.

   Third, the plaintiffs challenge Sallie Mae’s method of set-
ting the first repayment date on a Consolidation or PLUS
loan. Sallie Mae charges interest on these loans from the day
they are disbursed and sets the borrower’s first repayment
date within sixty days after disbursement. Because Sallie Mae
charges interest during that period of up to sixty days, the
plaintiffs argue that Sallie Mae deceptively increases the cost
and life span of the loan.

  All told, the plaintiffs allege and have argued that Sallie
Mae’s loan-servicing practices violate California business,
contract, and consumer-protection law.4 They request actual
  4
    The plaintiffs pleaded five causes of action: (1) engagement in unlaw-
ful, unfair or fraudulent business practices as defined by the Unfair Com-
                     CHAE v. SLM CORPORATION                        1381
and punitive damages, restitution, and injunctive relief to pre-
vent Sallie Mae from employing the challenged practices in
the future. The United States filed a motion to intervene as a
plaintiff seeking a declaratory judgment that the plaintiffs’
state law claims were preempted by federal law. The district
court granted the United States’ motion. The parties then
moved for summary judgment in whole or in part, and the
plaintiffs also moved to certify the class.

   The district court granted summary judgment in favor of
Sallie Mae. It held that all the plaintiffs’ claims were pre-
empted by the HEA, and alternatively held that each claim
failed on the merits. The district court dismissed the remain-
ing motions as moot and entered judgment in favor of Sallie
Mae. The plaintiffs timely appealed.

   We have jurisdiction under 28 U.S.C. § 1291. We review
the district court’s grant of summary judgment de novo.
Engine Mfrs. Ass’n v. S. Coast Air Quality Mgmt. Dist., 498
F.3d 1031, 1035 (9th Cir. 2007).

                                   II

  [1] The Supremacy Clause of the Constitution provides that
federal law “shall be the supreme Law of the Land.” U.S.
Const. art. VI, cl. 2.5 “Consistent with that command,” the
United States Supreme Court has recognized that “state laws

petition Law at California Business & Professional Code § 17200; (2)
breach of contract; (3) breach of the implied covenant of good faith and
fair dealing; (4) violation of the Consumer Legal Remedies Act under Cal-
ifornia Civil Code § 1770(a); and (5) unjust enrichment.
   5
     Article VI, clause 2, states: “This Constitution, and the Laws of the
United States which shall be made in Pursuance thereof; and all Treaties
made, or which shall be made, under the Authority of the United States,
shall be the supreme Law of the Land; and the Judges in every State shall
be bound thereby, any Thing in the Constitution or Laws of any State to
the Contrary notwithstanding.”
1382              CHAE v. SLM CORPORATION
that conflict with federal law are ‘without effect.’ ” Altria
Group, Inc. v. Good, 129 S. Ct. 538, 543 (2008) (quoting
Maryland v. Louisiana, 451 U.S. 725, 746 (1981)). We have
succinctly delineated the Supreme Court’s principles, holding:
“Federal preemption occurs when: (1) Congress enacts a stat-
ute that explicitly pre-empts state law; (2) state law actually
conflicts with federal law; or (3) federal law occupies a legis-
lative field to such an extent that it is reasonable to conclude
that Congress left no room for state regulation in that field.”
Tocher v. City of Santa Ana, 219 F.3d 1040, 1045 (9th Cir.
2000), abrogated on other grounds by City of Columbus v.
Ours Garage & Wrecker Serv., Inc., 536 U.S. 424, 431-34
(2002); see also Crosby v. Nat’l Foreign Trade Council, 530
U.S. 363, 372-73 (2000) (discussing express, conflict, and
field preemption); Cipollone v. Liggett Group, Inc., 505 U.S.
504, 516 (1992) (same).

   [2] Turning now to the issues before us, we have previously
held that field preemption does not apply to the HEA. See
Keams v. Tempe Technical Inst., Inc., 39 F.3d 222, 225-226
(9th Cir. 1994) (“It is apparent . . . that Congress expected
state law to operate in much of the field in which it was legis-
lating.”); accord Armstrong v. Accrediting Council for Con-
tinuing Educ. and Training, Inc., 168 F.3d 1362, 1369 (D.C.
Cir. 1999) (affirming prior holding that “federal education
policy regarding [private lending to students] is not so exten-
sive as to occupy the field”). Accordingly, under our prece-
dent field preemption is off the table to resolve this case
involving the HEA and its attendant federal regulations. The
legal standards governing express preemption and conflict
preemption are the standards that control our decision.

                              III

   [3] We focus first on the law of express preemption. The
Supreme Court has made clear that Congress may indicate its
intent to displace state law through express language. Altria
Group, 129 S. Ct. at 543. Where Congress enacts an express
                  CHAE v. SLM CORPORATION                  1383
preemption provision, our task is to interpret the provision
and “identify the domain expressly pre-empted by that lan-
guage.” Medtronic, Inc. v. Lohr, 518 U.S. 470, 484 (1996)
(internal quotation marks omitted). We use the text of the pro-
vision, the surrounding statutory framework, and Congress’s
stated purposes in enacting the statute to determine the proper
scope of an express preemption provision. Id. at 485-86;
Cipollone, 505 U.S. at 516.

   [4] Congress has enacted several express preemption provi-
sions applicable to FFELP participants. See, e.g., 20 U.S.C.
§§ 1078(d), 1091a(a)(2)(B), 1091a(b)(1)-(3), 1095a(a),
1098g. These provisions expressly preempt the operation of
state usury laws, statutes of limitations, limitations on recov-
ering the costs of debt collection, infancy defenses to contract
liability, wage garnishment limitations, and disclosure
requirements. This last provision, 20 U.S.C. § 1098g, is enti-
tled, “Exemption from State disclosure requirements.” The
text of the statute reads: “Loans made, insured, or guaranteed
pursuant to a program authorized by Title IV of the Higher
Education Act . . . shall not be subject to any disclosure
requirements of any State law.” Id. The FFELP falls within
Title IV of the HEA, and is thus subject to its express preemp-
tion provision.

   [5] We conclude that 20 U.S.C. § 1098g applies to, and
thus precludes, several of the plaintiffs’ state law claims. Two
of the plaintiffs’ Unfair Competition Law claims allege that
Sallie Mae employs “unfair” and “fraudulent” business prac-
tices by using billing statements and coupon books that trick
borrowers into thinking that interest is being calculated via
the installment method when Sallie Mae really uses a simple
daily calculation. See Cal. Bus. & Prof. Code § 17200. A sim-
ilar allegation concerns Sallie Mae’s practice of using state-
ments that set the first repayment date. Under California’s
Consumer Legal Remedies Act, the plaintiffs allege that the
billing statements and standardized loan applications “misrep-
resent[ ] that the Student Loans confer rights, remedies, and
1384                 CHAE v. SLM CORPORATION
obligations” which do not exist, thereby constituting an unfair
or deceptive practice. See Cal. Civ. Code § 1770(a).

   At bottom, the plaintiffs’ misrepresentation claims are
improper-disclosure claims. The plaintiffs do not contend that
California law prevents Sallie Mae from employing any of the
three loan-servicing practices at issue. We consider these alle-
gations in substance to be a challenge to the allegedly-
misleading method Sallie Mae used to communicate with the
plaintiffs about its practices. In this context, the state-law pro-
hibition on misrepresenting a business practice “is merely the
converse” of a state-law requirement that alternate disclosures
be made. See Cipollone, 505 U.S. at 527.

   [6] The plaintiffs dispute this characterization of their
claims, arguing that they do not seek specific disclosures, but
merely seek to stop Sallie Mae from fraudulently and decep-
tively misleading borrowers through the written documents.
But preemption cannot be avoided simply by relabeling an
otherwise-preempted claim. Id. (recognizing that a fraudulent-
misrepresentation claim was a restated failure-to-warn claim
subject to express preemption). Under the very terms of the
FFELP, a “misleading” disclosure would be improper. See 20
U.S.C. § 1082(m)(1)(B) (requiring common forms to use
“clear, concise, and simple language to facilitate understand-
ing of loan terms and conditions by applicants”); 34 C.F.R.
§ 682.205(a)(1), (b), (c)(1) (requiring lenders to make a series
of disclosures in “simple and understandable terms”). A
properly-disclosed FFELP practice cannot simultaneously be
misleading under state law, for state disclosure law is pre-
empted by the federal statutory and regulatory scheme. We
conclude that the plaintiffs’ claims challenging the language
in Sallie Mae’s billing statements and coupon books are
restyled improper-disclosure claims, and are therefore subject
to express preemption under 20 U.S.C. § 1098g.6
  6
   The plaintiffs argue that our holding will leave them without a means
to remedy Sallie Mae’s alleged misrepresentations. We disagree. The
                     CHAE v. SLM CORPORATION                        1385
   The plaintiffs’ remaining claims allege breach of contract,
unjust enrichment, breach of the implied covenant of good
faith and fair dealing, and the use of fraudulent and deceptive
practices apart from the billing statements. These claims are
not impacted by any of the FFELP’s express preemption pro-
visions. We next examine whether principles of conflict pre-
emption apply to bar any of those claims.

                                   IV

   [7] Addressing conflict preemption, we again may start
with a principle that has been declared by the United States
Supreme Court: A state law, whether arising from statute or
common law, is preempted if it creates an “obstacle to the
accomplishment and execution of the full purposes and objec-
tives of Congress.” Crosby, 530 U.S. at 373 (quoting Hines v.
Davidowitz, 312 U.S. 52, 67 (1941)). We discern congressio-
nal objectives by “examining the federal statute as a whole
and identifying its purpose and intended effects.” Id. Congress
codified several explicit FFELP purposes at 20 U.S.C.
§ 1071(a)(1). The first is “to encourage States and nonprofit
private institutions and organizations to establish adequate
loan insurance programs for students in eligible institutions.”
Id. § 1071(a)(1)(A). Adequate loan insurance programs make
lending to college students a less-risky proposition. Two addi-
tional FFELP purposes—“to provide a Federal program of
student loan insurance,” and “to guarantee a portion of each
loan insured”—have the same effect. See id.
§§ 1071(a)(1)(B), (D). By covering student loans with layers
of insurance and guarantees, Congress encourages private
lenders to help fund higher education. The government argues

DOE has the power to institute informal compliance procedures against a
third-party servicer who is the subject of a complaint. 34 C.F.R.
§ 682.703. When stronger medicine is required, the DOE may file suit
against the servicer, impose civil penalties, and terminate the servicer’s
participation in the program. 20 U.S.C. §§ 1082(a)(2), (g)(1), (h)(1). If
Sallie Mae’s disclosures are misleading, the plaintiffs’ remedy is to com-
plain about Sallie Mae to the DOE and to ask the agency to intervene.
1386              CHAE v. SLM CORPORATION
that to accomplish the goal of encouraging such lending, Con-
gress intended that the core aspects of the FFELP be uniform.
We examine the FFELP to evaluate whether it shows a prefer-
ence for uniformity, and, if we find such intent demonstrated,
we will determine whether the plaintiffs’ claims conflict with
a policy of uniformity.

   We must be cautious about conflict preemption where a
federal statute is urged to conflict with state law regulations
within the traditional scope of the state’s police powers. When
we deal with an area in which states have traditionally acted,
the Supreme Court has told us to start with the assumption
that a state’s historic police powers will not be superseded
absent a “clear and manifest purpose of Congress.” Wyeth v.
Levine, 129 S. Ct. 1187, 1195 (2009). Contract and consumer
protection laws have traditionally been in state law enforce-
ment hands. See, e.g., Fidelity Fed. Sav. & Loan Ass’n v. de
la Cuesta, 458 U.S. 141, 174 (1982); Florida Lime & Avo-
cado Growers, Inc. v. Paul, 373 U.S. 132, 144 (1963); Cliff
v. Payco Gen. Am. Credits, Inc., 363 F.3d 1113, 1125 (11th
Cir. 2004). The Supreme Court has said that a “presumption
against preemption” may apply to preserve state law claims in
the face of preemption claims. See Medtronic, 518 U.S. at 485
(citing Cipollone, 505 U.S. at 518). Accordingly, we would
not lightly decide that the plaintiffs’ contract and consumer
protection claims under California law are preempted by con-
flict preemption with the HEA. Yet, it is our duty to consider
carefully what Congress was trying to accomplish in the HEA
and whether these state law claims create an “obstacle” to the
congressional purposes. See Crosby, 530 U.S. at 373.

                              A

  [8] In determining Congress’s intent in enacting the
FFELP, “we must not be guided by a single sentence or mem-
ber of a sentence, but look to the provisions of the whole
law.” See Gade v. Nat’l Solid Wastes Mgmt. Ass’n, 505 U.S.
88, 99 (1992) (quoting Pilot Life Ins. Co. v. Dedeaux, 481
                  CHAE v. SLM CORPORATION                  1387
U.S. 41, 51 (1987) (alteration omitted)). After reviewing the
FFELP as a whole, we agree with the DOE that Congress
intended it to operate uniformly. That intent is shown by the
comprehensive framework that Congress set up to govern the
$2 billion per year program. See 20 U.S.C. § 1074. The stat-
utes describe the nuts and bolts of the FFELP, defining the
required terms of each type of loan. See id. §§ 1078, 1078-2,
1078-3. The statutes go so far as to mandate specified repay-
ment terms and specified insurance and guaranty require-
ments. Id. As one example, the FFELP sets the maximum
interest rate that a lender may charge, depending on the type
of loan and the date when it was taken out. Id. §§ 1077a. Such
precisely-detailed provisions show congressional intent that
FFELP participants be held to clear, uniform standards.

   Congress’s direction to the DOE shows that it aimed for
uniformity of FFELP regulations. The DOE has the power to
prescribe regulations necessary “to establish minimum stan-
dards” for lenders and servicers. Id. § 1082(a)(1). In a subsec-
tion entitled, “Uniform administrative and claims
procedures,” Congress tells the DOE to develop standardized
forms and to require their use within the program. Id.
§ 1082(l)(1). Here is Congress: “The forms and procedures
[that the DOE must prescribe] shall include all aspects of the
loan process as such process involves eligible lenders and
guaranty agencies.” Id. § 1082(l)(2)(A) (emphasis added).
This is a clear command for uniformity. Yet another section,
this one entitled “Common forms and formats,” tells the DOE
to “prescribe common application forms and promissory
notes,” including forms used by FFELP participants for fund-
ing applications, payment deferrals, and loan reporting. Id.
§ 1082(m)(1)-(3). In the rules governing the Direct Loan Pro-
gram, Congress created a policy of inter-program uniformity
by requiring that “loans made to borrowers [under the Direct
Loan Program] shall have the same terms, conditions, and
benefits, and be available in the same amounts, as loans made
to borrowers under [the FFELP].” Id. § 1087e(a)(1). Con-
gress’s instructions to the DOE on how to implement the
1388              CHAE v. SLM CORPORATION
student-loan statutes carry this unmistakable command:
Establish a set of rules that will apply across the board.

   Regulatory uniformity can be a helpful tool if Congress’s
objectives in passing the FFELP are to be realized fully. The
House Committee on Education and Labor discussed the need
for binding regulations during the major amendments to the
FFELP in 1992. H.R. Rep. No. 102-447, at 41-42 (1992),
reprinted in 1992 U.S.C.C.A.N. 334, 374-75. The Committee
emphasized the federal nature of the program, and sought
more thorough regulations that would, among other things,
“ensure the stability in the loan program.” Id. at 41. Stability
is necessarily affected by the continued participation of pri-
vate lenders. One need not have an advanced degree in risk
management and financial practices to believe, as we have
previously suggested, that “exposure to lawsuits under fifty
separate sets of laws and court systems could make lenders
reluctant to make new federally-guaranteed student loans.”
Brannan v. United Student Aid Funds, Inc., 94 F.3d 1260,
1264 (9th Cir. 1996). Thus we have held that the FFELP “re-
quires uniformly administered . . . standards in order to
remain viable.” Id. at 1266. In this sense, were the law to
indulge the plaintiffs’ California state law claims, and thereby
to endorse the possibility of similar claims being asserted
under varying state laws in each of the fifty states, it would
impair and threaten the efficacy of the federal lending effort
for students.

   The plaintiffs’ primary reply to the DOE’s uniformity argu-
ment is based on the Fourth Circuit’s decision in College
Loan Corp. v. SLM Corp., 396 F.3d 588 (4th Cir. 2005). In
that suit between two lenders, the plaintiff sought to use evi-
dence that the defendant violated the FFELP regulations to
satisfy elements of various state law causes of action. Id. at
589, 597. The district court found the claims preempted inso-
far as they permitted a private entity to interpret and enforce
the HEA, because only the DOE was permitted to remedy
FFELP violations under the HEA, and permitting the state suit
                  CHAE v. SLM CORPORATION                  1389
would therefore erect an obstacle to uniform FFELP enforce-
ment. Id. at 593, 96-97. The Fourth Circuit reversed, explain-
ing that it was “unable to confirm that the creation of
‘uniformity’ . . . was actually an important goal of the HEA.”
Id. at 597.

   College Loan is not the law of our circuit, and we do not
consider the plaintiffs’ argument based on it to be persuasive
for the reasons we set forth above. Permitting varying state
law challenges across the country, with state law standards
that may differ and impede uniformity, will almost certainly
be harmful to the FFELP. The costs of the program would go
up and either there would be fewer loans made or loans made
for lesser amounts or for higher interest, making it harder for
students to gain the loan funds they need to get the education
they want.

   Moreover, even if within the Fourth Circuit, we would not
apply College Loan because it is distinguishable from our
case. First, College Loan involved a contractual relationship
between lenders, which is not a relationship that the FFELP
is primarily designed to govern. The Fourth Circuit stressed,
“[i]mportantly, neither the district court nor the parties have
explained how [the FFELP’s] purposes would be compro-
mised by a lender . . . pursuing breach of contract or tort
claims against other lenders or servicers.” Id. The situation
differs where student borrowers invoke state law principles
against lenders. To permit that would subject a national-level
lender to the potentially varying laws of fifty states, dissuad-
ing lenders from FFELP participation and contravening the
congressional purpose of facilitating student loans. Second,
the plaintiff in College Loan sought to enforce FFELP rules,
not to vary them. See id. at 591-94. The plaintiff’s liability
theory turned on the inter-lender contract that required HEA
compliance. Id. Using an FFELP violation there as an element
of the prima facie breach claim did not undermine the regula-
tions, and posed no threat to accomplishment of congressional
purposes. See id. at 597-98. The situation faced by the Fourth
1390               CHAE v. SLM CORPORATION
Circuit is fundamentally different from that presented here,
where the plaintiffs ask us to hold that Sallie Mae cannot rely
on the FFELP statutes and regulations—at least not in Cali-
fornia. The plaintiffs do not seek to buttress the FFELP
framework, but rather to alter it in their home state. The Col-
lege Loan analysis is inapplicable.

   The plaintiffs also argue that uniformity cannot be a goal
of the FFELP because the regulations set only “minimum
standards” and permit flexibility within those standards. See,
e.g., 20 U.S.C. § 1082(a)(1) (authorizing the DOE to “estab-
lish minimum standards with respect to sound management
and accountability of programs under [the FFELP]”). In par-
ticular, the plaintiffs point to regulatory flexibility with regard
to the form of the billing statements and the decision about
whether or not to charge late fees. See 34 C.F.R.
§§ 682.202(f) (stating that a lender “may” charge a late fee),
682.205 (prescribing required disclosures but not a specific
billing or disclosure form).

   But the presence of some flexibility in the regulations does
not mean that regulatory uniformity is not vital to the
FFELP’s success. Federal regulators often include calculated
flexibility within their programs without violating congressio-
nal intent to have a federal program uniformly control. In
Geier v. American Honda Motor Co., 529 U.S. 861 (2000),
for example, a Department of Transportation regulation “de-
liberately provided [car manufacturers] with a range of
choices among different passive restraint devices” after deter-
mining that doing so would maximize the congressional
objective of road safety. Id. at 875. The flexibility in the regu-
lation did not mean, as the plaintiffs would have us conclude
here, that state law could further restrict the car manufactur-
ers’ choices. Rather, the flexible federal standard alone gov-
erned. Id. at 881.

  Fidelity Federal Savings and Loan Ass’n v. de la Cuesta,
458 U.S. 141 (1982), involved a similarly flexible regulation.
                   CHAE v. SLM CORPORATION                  1391
There, the Federal Home Loan Bank Board issued a regula-
tion permitting savings and loan associations to include a due
on sale clause in a mortgage contract “at its option.” Id. at
147. The flexible policy was critical to the financial stability
of the lending institutions, which in turn furthered the con-
gressional purpose of encouraging associations to provide
affordable credit for home purchases. Id. at 168; see also 12
U.S.C. § 1464(a) (“The lending and investment powers con-
ferred by this section are intended to encourage [Federal sav-
ings associations] to provide credit for housing safely and
soundly.”). Because the permissive policy was “essential to
the economic soundness of the thrift industry,” only the fed-
eral regulation, and not a stricter California-law rule, was per-
mitted to operate. de la Cuesta, 458 U.S. at 170.

   Geier and de la Cuesta suggest that a uniform federal regu-
latory scheme can nevertheless contain a measure of flexibil-
ity within it. In this case, the DOE policy of permitting, but
not requiring, lenders to charge late fees does not automati-
cally mean that state law may operate freely. The same can be
said for the disclosure requirements, which set out the manda-
tory elements but do not dictate the precise billing form Sallie
Mae must use. The measured flexibility embodied in the DOE
regulations does not contradict the overall purpose of nation-
wide regulatory uniformity that will be enhanced by a holding
that the federal statute and federal regulations exclusively
govern the uniform application of standards for the FFELP.

  [9] In sum, we agree with the DOE that Congress intended
uniformity within the program. The statutory design, its
detailed provisions for the FFELP’s operation, and its focus
on the relationship between borrowers and lenders persuade
us that Congress intended to subject FFELP participants to
uniform federal law and regulations. See Gade, 505 U.S. at
99.

                               B

  Having determined that Congress intended the FFELP to
operate uniformly, we revisit and elaborate on whether the
1392              CHAE v. SLM CORPORATION
California state law claims would stand as an obstacle to the
FFELP’s uniform operation. The DOE contends that applica-
tion of California law here to the FFELP is an obstacle. We
describe the agency’s regulations on interest calculation, late
fees, and the repayment start date, and then determine
whether to defer to the DOE’s view that permitting challenge
under California law creates an obstacle to the regulations’
uniform implementation.

   The DOE’s position on late fees and the repayment start
date is straightforward. The FFELP regulations permit lenders
to charge a late fee of up to six percent, if permitted by the
borrower’s promissory note, when a borrower “fails to pay all
or a portion of a required installment payment within 15 days
after it is due.” 34 C.F.R. § 682.202(f)(2). The DOE contends
that the plaintiffs’ position—that California law prohibits the
imposition of a late fee when daily simple interest is used—
would create an obstacle to the uniform regulatory system that
permits late fees. The conflict does not vanish, according to
the DOE, merely because the regulation permits, but does not
require, late fees. See de la Cuesta, 458 U.S. at 155 (accepting
a nearly identical argument made by the Federal Home Loan
Bank Board).

   The DOE makes a similar argument about the repayment
start date. The plaintiffs challenge Sallie Mae’s practice of
setting the repayment start date “as close as possible” to sixty
days after disbursement, claiming that this practice allows
Sallie Mae unfairly to collect additional interest. The DOE
responds that Sallie Mae is authorized by statute and regula-
tion to set the first repayment date up to sixty days out. See
20 U.S.C. §§ 1078-2(d)(1), 1078-3(c)(4); 34 C.F.R.
§§ 682.209(a). To the extent that California law may lessen
the sixty-day window, the DOE urges that state law would
create an obstacle to the uniform administration of the
FFELP.

  [10] To our thinking, the DOE position on late fees and the
repayment start date makes sense. If federal law permits late
                   CHAE v. SLM CORPORATION                   1393
fees and gives up to sixty days for repayment, to say that state
law prohibits late fees and requires a prompter repayment
period is in conflict. We therefore agree with the DOE that the
plaintiffs’ claims create a conflict with federal law on these
two issues.

   The DOE position on the interest charges is persuasive to
us. The parties dispute whether, and how, the FFELP could
work if participants were permitted to use varying methods of
calculating interest. The plaintiffs claim that nothing bars Sal-
lie Mae from using the installment method to service their
loans, under which the interest amount is fixed at the begin-
ning of the repayment period. The DOE counters that Sallie
Mae is required by the regulatory framework to use the daily
simple interest method. Although there is no regulation that
explicitly requires lenders and third-party servicers to use the
daily simple method, the DOE points to several sources that
make the daily method a practical requirement. In particular,
lenders must calculate the interest that the DOE pays on a
subsidized Stafford Loan based on a balance calculation for
“each day” in a given quarterly period. 34 C.F.R.
§ 682.304(b)-(c). That requirement would not be satisfied
merely through use of the installment method. The record
demonstrates that the DOE uses the daily method of calcula-
tion when it loans money to students directly, and also that the
statutorily-prescribed common forms for Consolidation Loans
require the consolidation lender to use the daily simple
method. When viewed as a whole, the DOE argues that the
FFELP scheme works only if all participants use the same
method of calculating interest.

   [11] We are persuaded by the DOE’s view that the plain-
tiffs’ interest-rate claims, if successful, would create an actual
conflict with federal law. First, as noted earlier, Congress has
granted the DOE broad authority to implement the FFELP.
See 20 U.S.C. § 1082(a)-(p). Congress granted the DOE the
power to prescribe regulations, access lender records, audit
participants, impose civil penalties, suspend or terminate
1394               CHAE v. SLM CORPORATION
lenders from the program, and sue regulatory violators. Id. A
grant of “ample authority” to regulate a detailed legislative
scheme, such as the one administered by the DOE here, is evi-
dence that Congress intended the agency to have the authority
to preempt state law. See de la Cuesta, 458 U.S. at 159.

   [12] Second, in explaining how the interest calculation and
transfer components of the FFELP work, the DOE is engaged
in interpreting its own regulations. An agency’s interpretation
of its own regulations is “controlling” unless “plainly errone-
ous or inconsistent with the regulation.” Auer v. Robbins, 519
U.S. 452, 461 (1997). The Supreme Court has described this
standard as “deferential,” id., and this deference is particularly
appropriate where the subject matter is technical and the rele-
vant background complex. See Geier, 529 U.S. at 883. Under
such circumstances, “[t]he agency is likely to have a thorough
understanding of its own regulation and its objectives and is
uniquely qualified to comprehend the likely impact of state
requirements.” Id. (internal quotation marks omitted). Here,
the government intervened at the trial level to explain the “ex-
tensive and comprehensive regulations” governing the mul-
tilayered transactions taking place between borrowers,
lenders, private guaranty agencies, and the DOE. These
include the frequent payments of interest by borrowers and
the DOE. The DOE made clear that the imposition of fifty
sets of state law governing the calculation of interest would
threaten its ability to carry out the congressional objectives of
ensuring uniformity and stability within the program.

   [13] Finally, the DOE contends that allowing states to
impose varying interest-calculation requirements would com-
promise related loan programs, operated by the government,
that depend on cross-program uniformity. These interpreta-
tions of the likely effect of state law on the FFELP are reason-
able and within the DOE’s statutory grant of authority. See
Long Island Care at Home, Ltd. v. Coke, 551 U.S. 158,
173-74 (2007). We therefore defer to them.
                   CHAE v. SLM CORPORATION                   1395
   Our analysis is not altered by the fact that the DOE has not
promulgated a regulation explicitly stating the preemptive
effect of its regulations. “Where, as here, an agency’s course
of action indicates that the interpretation of its own regulation
reflects its considered views . . . we have accepted that inter-
pretation as the agency’s own, even if the agency set those
views forth in a legal brief.” Id. at 171 (citing Auer, 519 U.S.
at 462). Deference can be appropriate even when an agency
position was developed in response to the litigation under
review, provided that the position does not prove to be a “post
hoc rationalization” that “does not reflect the agency’s fair
and considered judgment on the matter in question.” Id. (alter-
ation and emphasis omitted). Here, there is no evidence that
the DOE’s position represents anything other than its consid-
ered view of the need for a uniform regulatory framework.
First, intervenor DOE was not named as a defendant in this
lawsuit, so it cannot be accused of creating a post hoc ratio-
nalization to avoid liability for itself. Second, the standardized
forms—signed by the plaintiffs—were promulgated by the
DOE long before this litigation arose. Those forms contain the
“simple interest” and “daily simple interest” language that the
DOE now cites in support of its position. Moreover, the DOE
itself uses the method of calculating interest that it claims Sal-
lie Mae is bound by, and cites the detailed information about
interest calculations that it posts to its website and publishes
in a pamphlet available to borrowers. The DOE has consis-
tently implemented its uniform policy, and there is nothing to
signal that deference to its position is unwarranted. “The fail-
ure of the Federal Register to address pre-emption explicitly
is thus not determinative.” Geier, 529 U.S. at 884.

   The plaintiffs argue that the DOE’s interpretation merits no
deference, citing to the Supreme Court’s recent opinion in
Wyeth v. Levine, 129 S. Ct. 1187 (2009). We do not agree that
Wyeth commands that we accord no weight to the DOE’s
view. In Wyeth, the Supreme Court evaluated the preamble to
a Food and Drug Administration (FDA) regulation which pur-
ported to preempt any contrary state law. Id. at 1200. The
1396               CHAE v. SLM CORPORATION
Court declined to defer to the conclusory statement of pre-
emption embodied in the preamble, instead “perform[ing] its
own conflict determination, relying on the substance of state
and federal law and not on agency proclamations of pre-
emption.” Id. at 1201. The Court’s independent review
revealed that all evidence of congressional intent pointed
away from preemption, and that the FDA had recently,
abruptly, and sweepingly changed its view about the preemp-
tive role of its regulations. Id. at 1201-03.

   No such circumstances are present here. Unlike the FDA’s
position in Wyeth, here the DOE’s position about the FFELP’s
purpose of uniformity is in harmony with the evidence of con-
gressional intent. The plaintiffs have cited us to no evidence
of a “dramatic change in position” of the kind that concerned
the Supreme Court in Wyeth. See id. at 1203. Because our
independent review of the state and federal laws implicated
by this dispute leads us to agree with the DOE that the plain-
tiffs’ suit poses an obstacle to the uniform implementation of
the FFELP sought by Congress, we accord the agency inter-
pretational deference. See id. at 1201 (citing Geier, 529 U.S.
at 883).

                               V

   [14] In conclusion, the plaintiffs’ allegations that Sallie
Mae makes fraudulent misrepresentations in its billing state-
ments and coupon books are expressly preempted by the
HEA, and conflict preemption prohibits the plaintiffs from
bringing their remaining claims because, if successful, they
would create an obstacle to the achievement of congressional
purposes. Having carefully considered the FFELP and the
purposes of Congress in the HEA, we conclude, beyond any
doubt, that subjecting the federal regulatory standards to the
potentially conflicting standards of fifty states on contract and
consumer protection principles would stand as a severe obsta-
cle to the effective promotion of the funding of student loans.
Such an obstacle, which we consider hostile to the purposes
                 CHAE v. SLM CORPORATION                1397
of Congress in this program, must bow to the overriding prin-
ciples of conflict preemption and federal law supremacy.

  AFFIRMED.
