Cutting off the addicts

Law schools have become addicted to federal educational loan money.  Under current law, schools can charge whatever they want for tuition, and the federal government will loan 100% of that amount, plus 100% of estimated living expenses, to any admitted student who isn't in default on an educational loan, no questions asked.  You don't have to have a Ph.D. in economics (something an increasing number of law professors actually have, not that it seems to be doing any good in regard to this particular subject) to realize this is a recipe for reckless financial behavior on the part of everyone -- students, schools, and the government -- involved in these transactions.

These are very high-interest loans that aren't dischargeable in bankruptcy, which means that the people who are borrowing the money will be doing severe damage to their financial futures if they aren't able to repay the loans in a timely manner.  Despite the best efforts of legal academia to hide the fact, it's becoming increasingly clear that an actual majority of recent law school graduates and current students are or will soon find themselves in that precise position.


A crucial goal of the push for greater law school transparency is to make the specifics of this situation as clear as possible to three groups of people: prospective law students and their families, people working inside law schools, and government officials.  The need to educate the first group is obvious: what's not as immediately obvious is that it's just as important to raise the consciousness of the people who draw their paychecks from law schools, and the people who make the laws that keep the ever-increasing supply of taxpayer-funded tuition money flowing.

People inside law schools need to be confronted with the real numbers for two reasons: First, some will feel moral qualms about making a living by selling a service which is leaving the majority of the people to whom they're selling it worse off than they were before.  Second, even those who don't feel such qualms will, if they are prudently self-interested, recognize that they're making their living off what in the long term is an unsustainable business model, and that it's in their interest to change that model before it's changed for them.

Government officials need to see the real numbers so they can reform a system that at present does immense damage to borrowers and then leaves taxpayers holding the bag.

How should the federal educational loan system be reformed? This is a complicated question, which of course applies to all of higher education. Here I'm merely suggesting what might make sense for law school loans, which by themselves represent a several-billion dollar a year "investment" on the part of law students and, ultimately, taxpayers.

The most obvious initial reform would involve the federal government refusing to allow law schools to stick the government with the bill for whatever amount of tuition the schools decide to charge.  For example, the government could limit federal educational loans for law school tuition to $15,000 per year (this figure represents the average cost of private law school tuition, in current dollars,  25 years ago. Public law school tuition averaged a quarter of that).   Schools that wanted to charge more tuition than that would be free to do so, but students would either have to come up with the money themselves, or borrow it from private lenders (these loans would be dischargeable in bankruptcy), or be granted the difference by the school in the form of scholarships.

Such a reform would only be a first step.  The way higher education is paid for in this country is in need of a complete overhaul, and law schools are only a small part of the picture. But if you're reading this blog it's probably because it's the part of the picture you happen to be in. Stopping the absurd practice of requiring taxpayers to pay literally whatever law schools decide they want to charge for law degrees is a good place to start.