present in 1993 such that application of the disqualification provisions of the statute would no longer be "inequitable." Certainly Congress has granted the Secretary sufficient discretion to require a showing of exceptional mitigating circumstances each year that a school faces the prospect of loss of eligibility.
Under this reasonable interpretation of the statute, the 1992 mitigating circumstances appeal could have prolonged McCarrie's participation in the FFEL program only until the 1993 cohort default rates were published. Because the school did in fact remain in the program until the 1993 rates were released, the Secretary was justified in dismissing McCarrie's 1992 mitigating circumstances appeal as moot when the 1993 rates were published.
III. Adequacy of Administrative Record
Plaintiff next argues that the administrative record is inadequate to support the Secretary's actions with respect to McCarrie's 1993 loan servicing appeal and 1991 erroneous data appeal. The argument lacks merit.
"The purpose of the APA provision requiring specific findings and conclusions are [sic] to prevent arbitrary agency decisions, provide parties with a reasoned explanation for those decisions, settle the law for future cases, and furnish a basis for effective judicial review." Armstrong v. Commodity Futures Trading Comm'n, 12 F.3d 401, 403 (3d Cir. 1993) (context of action under 5 U.S.C. § 557). The Third Circuit has indicated that the facilitation of judicial review is the most important of these factors. See id. (citing Wensel v. Director, Office of Workers' Compensation Programs, 888 F.2d 14, 16 (3d Cir. 1989)); Bethlehem Steel Corp. v. Occupational Safety & Health Review Comm'n, 607 F.2d 1069, 1073-74 (3d Cir. 1979); see also Rickards v. United States Dep't of Housing & Urban Dev't, 623 F. Supp. 463, 467 (E.D. Pa. 1985) ("When an administrative decision is subject to judicial review, the agency must indicate the grounds for its decision so that the court may properly determine whether the agency has abused its discretion.").
"The absence of formal findings does not necessarily require that the case be remanded to the Secretary." Citizens to Preserve Overton Park, 401 U.S. at 408. Our court of appeals has indicated that where, as here, an agency is granted considerable discretion in exercising informal agency action, the Secretary need not provide detailed explanations of how it reached its decision. See C.K., 92 F.3d at 183. Rather, a court will find an administrative record adequate and uphold the agency's decision if it is "satisfied that the materials before the Secretary sufficed for a 'consideration of the relevant factors' by him and that there was no 'clear error of judgment' on his part." Id. (quoting Aguayo v. Richardson, 473 F.2d 1090, 1106 (2d Cir. 1973), cert. denied, 414 U.S. 1146, 94 S. Ct. 900, 39 L. Ed. 2d 101 (1974)).
The administrative record is adequate to show that the Secretary considered the relevant factors and that there was no clear error of judgment on his part.
A. 1991 Erroneous Data Appeal
The Secretary has identified the relevant factors to be considered in an erroneous data appeal at 34 C.F.R. § 668.17(c)(1)(i). The standard is quite straightforward--a school must demonstrate that its cohort default rate includes erroneous data and, if such data were removed from the cohort default rate, the rate would be below 25%. See id. The administrative record reveals that each factor was considered for each contested loan on an individual basis. See A.R. at 61675-90, 63009-25. The cited portions of the record are worksheets used by the Secretary in evaluating erroneous data appeals. A review of these completed worksheets satisfies the court that the Department considered the "relevant factors" in resolving McCarrie's erroneous data appeal.
McCarrie argues, however, that the Secretary's refusal to include certain loans in the calculation of its 1991 cohort default rate constitutes a clear error of judgment. The court has reviewed the administrative record and determined that each of these challenged loans was either actually included in the school's 1991 CDR as requested by McCarrie,
or properly disposed of by the Department as not belonging in the school's CDR.
The record clearly reveals that the Secretary considered the relevant factors in deciding McCarrie's 1991 erroneous data appeal, and McCarrie has failed to show that there has been a clear error of judgment on the Secretary's part. Therefore the court "may not disturb the Secretary's decision." C.K., 92 F.3d at 183.
B. 1993 Loan Servicing Appeals
McCarrie next claims that the administrative record regarding its 1993 Loan Servicing Appeal is inadequate, and that the Secretary acted arbitrarily and capriciously in his handling of McCarrie's appeal.
The Secretary has promulgated regulations which define the factors which the Department will consider in evaluating an appeal based on improper loan servicing. 34 C.F.R.§ 668.17(h)(3)(viii) provides:
For purposes of this paragraph, a default is considered to have been due to improper servicing or collection only if the borrower did not make a payment on the loan and the institution proves that the lender failed to perform one or more of the following activities: