Steven J. Menashi, who worked as a senior official at the U.S. Department of Education in 2017, has been nominated to a lifetime judicial appointment on a federal appeals court.
Menashi is the former General Counsel for the U.S. Department of Education under Secretary Betsy DeVos. And in his capacity, he made concerted efforts in 2017 to deny student loan forgiveness to thousands of borrowers – efforts that a federal court found to be illegal.
The loan forgiveness program in question pertains to Borrower Defense to Repayment. This program was formalized through regulations in 2016 at the tail end of the Obama administration to provide relief to student loan borrowers who had been defrauded by their schools. When DeVos took over as Secretary in 2017, her administration tried to rewrite the rules governing the program to make it easier to deny people student loan forgiveness.
Menashi was integral in the Department’s efforts to water down Borrower Defense to Repayment. He drafted a memo, which formed the basis of formal Department policy, advocating for pulling employment earnings data of student loan borrowers from the Social Security Administration – without their permission. That data was then used to deny relief to student loan borrowers on the basis that they were making too much money – a criteria that is not relevant to the 2016 governing regulations.
This practice was ultimately challenged in court by consumer rights advocates, and a federal district court judge struck down the practice. The judge held that Menashi’s policy was illegal and violated the federal Privacy Act.
After that, Menashi left the Department of Education and became part of the White House legal team. He has now been nominated to be a federal appeals court judge.
Yesterday, the Senate Judiciary Committee approved Menashi’s nomination to the 2nd Circuit Court of Appeals on a party-line vote, all but assuring that he will be confirmed by the full Senate.
Student loan borrowers have been increasingly litigating their disputes with the Department of Education via the courts, recently scoring some major victories against DeVos as well as student loan servicing companies. Will Menashi’s appointment jeopardize this progress? If any cases involving student loan borrowers make their way to the 2nd Circuit Court of Appeals, consumer advocates will be watching closely.