Last night @ericagreene had a story in the @NYT misrepresenting a 2017 Department of Education regulation about which Second Circuit nominee Steven Menashi advised Secretary Betsy Devos when he was Acting GC of the agency. /1
In 2015, Corinthian Colleges Inc., a for-profit college chain, filed for bankruptcy and shuttered its doors. Thereafter a group of 100,000 Corinthian alumni filed claims under the Department of Ed’s “borrower defense” rule seeking to have their student loans discharged. /2
Needless to say, these federal student loans were made from U.S. taxpayers to student borrowers who were now hoping to avoid repayment. /3
Under the “borrower defense” rule, first promulgated in the 1990s, the Department of Ed will discharge a student’s debt if “any act or omission of the
school attended by the student . . . would give rise to a cause of action against the school under applicable State law.” /4
school attended by the student . . . would give rise to a cause of action against the school under applicable State law.” /4
After Corinthian filed for bankruptcy, the Obama Admin’s Dept of Ed determined that Corinthian had misrepresented its job placement data to prospective students and began discharging the student loans of the complainants—without using any methodology for assessing actual harm. /5
When President Trump was elected, the Department of Ed under Secretary DeVos sought to develop a method of calculating actual harm to student borrowers. /6
To do this, the Department of Ed compared the *average* earnings of Corinthian grads to those of students from other comparable institutions. This was a means by which to assess the actual “value” of the education provided to Corinthian students. /7
Under the regulation, the Department of Ed entered into an exchange agreement with the Social Security Administration. Through the exchange, the Department of Ed provided lists of Corinthian students and the SSA in turn provided *aggregate* earnings data for those students. /8
In litigation currently pending before the Ninth Circuit, the Department of Ed maintains that the provision of “aggregate, statistical data without any personal identifiers” does not violate the Privacy Act, contrary to the finding of the magistrate judge below. /9
The obtained SSA data showed that while students who attended certain Corinthian programs (e.g. Computer Science) earned far less on average, students who attended other Corinthian programs (e.g. Pharmacy Techs) earned as much as those attending other comparable institutions. /10
Note the prudence of this regulation from a good governance perspective: If a student borrower who attended Corinthian is gainfully employed, was the student actually harmed by any misrepresentations by the school? /11
And if the student borrower not actually harmed, why should taxpayers pick up the cost of that employed person’s loan? /12
This regulation helped to ensure an equitable outcome for the students who were actually harmed by Corinthian and also promoted the prudent use of taxpayer dollars. /13
Moreover, the district court found that the adoption of the Department of Ed's regulation (about which Menashi provided legal advice to Secretary DeVos), "was a legitimate exercise of the Secretary's discretion under the Higher Education Act" and did not violate the APA. /14
The @NYT story makes no mention of the fact that the Department of Ed used *aggregate* SSA data to calculate average earnings (as opposed to individual data), and is thus misleading. /15
This story amounts to yet another hit job against Steve Menashi. From the very first @Maddow story accusing him of being an ethnonationalist the day after his nomination was announced, the baseless smears against Menashi have been unrelenting. /16
The only thing this new @NYT story proves is how desperate the left is to kill Steve Menashi’s nomination. /end
