Monday, June 4, 2012

The bubble

Here's a piece of on line advice that a rising 2L gave to an 0L this weekend.

Background: The 0L has just gotten into a couple of second-tier law schools off the waitlist, and is still on the waitlist at CU, which he says he would attend at sticker "without a second thought.""

The rising 2L advises the 0L that while "CU is a phenomenal school and my experience here has been outstanding, CU is too expensive."

This surprises the 0L, on the grounds that "CU is the best law school in the region and I believe that any graduating student that did relatively well and has some decent drive to succeed should find success."

The rising 2L responds:

If you do get in, I'd recommend not going unless you want to be a broke lawyer for the next X years depending on debt. Same goes for all these schools. Expected outcome for sticker with no money in the bank should be 150k debt with a 60k job. Some people want that and that's cool. I mean, seems like everyone is in debt nowadays and if you really want to practice law that's fine. Just know what the expected outcome is going in. I don't doubt that that CU gets the better jobs in the state because I've seen that, but if the expected outcome at DU is 45k instead of 60k it really doesn't change anything. Both dudes are starting out totally broke. That should be the takeaway.

Don't plan on being in the top ten percent, grades are so random. I was above median in two classes and below in the other two last semester, without a clue as to why. This is normal.

Probably don't go to law school.

(I don't know who the rising 2L is, although he's indicated he was a student of mine last year).

Now on one level R2L's advice is pretty good all things considered. He's starting to come out of the 1L bubble, and beginning to grapple straightforwardly with the fact that almost all law schools these days are a bad idea at sticker, and that people just shouldn't do that (CU is a relatively cheap school; everybody gets in-state tuition after first year, and COL in the Boulder area for a student isn't anything like NYC or DC or LA etc., but nevertheless an entering Colorado resident 1L who debt finances attendance is going to end up with $178K in loans per this calculator). Non-resident 1Ls can tack on another $10K to that figure).

On another he's still living in a mental world in which his expected outcome is a (legal?) job that pays $60K.  How many 2010 CU law grads -- the most recent year for which the figures are available to me -- got a job paying at least $60K?  The reported salary data indicates that about 24 grads got jobs with law firms paying that much or more, along with six people in "business" and a couple in government. So that's 32 out of 183 grads -- 17.5% of the class, which happens to be exactly the same number of 2010 grads who were unemployed or whose status was unknown nine months after graduation.

Now it's true this probably understates the number of grads making $60K or more, since half the grads who had jobs of some sort didn't have their salary reported.   (The uncertainty arises because I suspect an auditing of these salary numbers would produce a certain degree of exaggeration on the part of the grads who did provide salary information).  So perhaps 20% or even 25% of the class was making $60K.  It's unlikely to be more than that since as is typical with law school reporting all the grads who had jobs with larger law firms had reported salaries (This is mostly because people with high salaries report, but also because big firm salaries are quasi-public information and can therefore be reported by CSOs per NALP reporting rules with or without the cooperation of graduates).

Here is a very rough cut of the mental map of the median student enrolling at "solid top tier regional law schools" these days (CU is ranked 44th right now).

0L: I probably won't get a six-figure job straight out of law school but it's very likely I'll get a $60K job unless I'm at the bottom of the class.

After 1L:  The median outcome is $60K which frankly is pretty scary given this cost structure so I really need to hustle.

After graduation: I don't have a $60K job and neither do any of my friends. What was I thinking?

Unfortunately while 0Ls and 1Ls get tossed out of their bubbles eventually, law school faculty can (and largely do) stay in theirs.


  1. If you claim that you're American Indian solely based on family lore with no substantiation whatsoever, you can get hired as a tenured Harvard professor even if you graduated from the 82nd-ranked law school in the country.

  2. Lord Randolph McDuff

  3. If I had to guess, I'd bet that the median salary for employed, practicing lawyer CU grads 1 year after graduation is $55k/year. And most (say, 90 percent of the employed, practicing lawyer CU grads) fall within a bell-shaped distribution of $35k/year to $75k/year. Ten percent of those employed as lawyers will be earning more than $75k or less than $35k, and I'd guess the percentages of each would be about the same.

    Though $35k to $75k would be a respectable outcome for CU undergrads 3 years post-graduation, it is really lousy given the opportunity cost and the massive soul-crippling debt that you just borrowed.

    An econ, history, business, english lit, etc. major can actually consider buying a house or a car or getting married or trying a small start-up enterprise if he earns in the $35k to $75k range. You, law graduate, cannot.

    Instead, you will be repaying thousands, and maybe tens of thousands of dollars in debt each year. In short, you are much worse off economically than if you hadn't gone to law school for this big investment in your human capital.

    And for the poor bastards in the unemployed 17.5 percent (people who were above-average graduates, yes graduates, of undergraduate universities), these guys are just totally screwed. They'll likely never break into law. And if they do, they'll never crawl out of law's basement.

  4. @8:10-- Not without having written a lot of good stuff, you won't.

  5. The 2L has started down the road to wisdom, but still has a long way to go. A 60K job? Try unpaid internship.

  6. 8:10 -- I don't have any substantiation of where my parents were born, let alone my great-great-grandparents. Nonetheless, when asked my ethnic heritage, I generally report what I was told by my parents and grandparents. Sure, they could have their facts wrong, I suppose, but who gives a hoot?

  7. The salaries for lawyers also under-reports the cost of being a lawyer.

    If you are a manager at a lumber mill and earn $50k per year, not only do you not have law school debt. You also do not have to pay $1,000 per year in bar dues and CLE costs. Your professional clothing and dry cleaning costs are probably approximately $1,000 per year lower too. Add in the odd political fundraiser that is "optional" to attend, bar association fees, etc., and it's another $500/year saved at the lumber mill.

    So, the lumber mill manager earns $50k. The lawyer earns the same, but he then must deduct his student debt costs and another $2,500 per year in practicing lawyer costs.

    And I'm willing to bet that lumberyard manager has more predictable hours and predictable stresses than does practicing lawyer.

  8. The scam goes on because IBR enables it to. Lawprof, the best reform we can have is for Uncle Sam to stop IBR, and maybe stop federal student lending (or at least cap it again). Right now, you can borrow every cent you need to attend Cooley, Cooley gets paid in full, Cooley grad gets massive debt, and taxpayer get the bill.

    How is that good policy? How is that a market outcome? How does that benefit anyone other than the law school?

    IBR is not about law graduates. It is about law professors.

  9. I don't understand the "taxpayer gets the bill" meme.

    While the Feds may either [or both] make the loans to law students or guarantee them, the LOANS ARE NOT DISCHARGEABLE IN BANKRUPTCY.

    Thus while Uncle Sam may have a "delay" in getting $$$ blood from the law school student turnip, it can hound said turnip to the grave [even attaching his social security] to get paid back.

    Yes, there's the "cost" of recovering those funds from the LS Turnips, but those costs should be more than covered by the horrendous fees and interest tacked on to the never-decreasing loan amount.

    Again, where's the "taxpayer gets screwed" in this scenario -- except, perhaps for the costs of food stamps and other "safety net" items the hounded, unemployed, increasingly crazy law student/lawyers are going to need. But we know those items will be vanishing soon as well -- in the name of "cost-cutting" and debt-reduction.

    The only people this system screws are the students/new lawyers -- and any of their parents stupid enough to have co-signed for the loan(s).

    The only way to escape this monster is to flee the country, which I'm assuming is going to become increasingly attractive as folks wake up to their predicament.

  10. 9:27 --

    How can you not see that the taxpayer gets screwed here?

    TTT gets paid up front, in full by the taxpaper. The Law Student goes to school, then defaults or resorts to IBR, which is substantially below the principal due for most law loans.

    If the taxpayer pays more money than uncle sam ever gets repaid (not withstanding any interest), then the taxpayer gets screwed.

    I mean, you're dead right that it sucks worse for the poor debtor. Who does it not suck for? The TTT law school who got paid up front, and in full.

    So, to recap: debtor's life is miserable; taxpayer gets screwed; TTT law faculty continue the scam and get paid in full.

  11. 9:31,
    I think the expectation is that, on average, the performing loans will cover the non-performing ones. Twenty years is a long time for collections.

  12. The taxpayer gets screwed at the end of IBR when the remaining balance, which could be quite substantial, is "forgiven". So Cooley profs/admins get paid in 2012, student pays 10% salary (which will probably be quite insubstantial), principal balance continues to grow, whats left at the end of IBR period "goes to money heaven". In reality that money has already been spent by profs/admin, someone has to step to make the accounts balance, enter fed gov financed by taxpayer. "That which cannot go on forever, wont"

  13. 9:27 does not know about income based repayment. Essentially, depending on whether the student works for a public or not-for-profit entity (so that they pay for 10 years) or everywhere else (20 or 25 years of payment depending on when loan was taken out) the student pays according to a formula, usually not covering the interest due nor dipping in to the principal. The student pays until their time is up and the remaining loan balance is "forgiven" and/or taxpayers "pay" for the rest of your loan. I'm on the 10 year track and depending on how much my income goes up (probably not at all), I'll have somewhere between a 100-150k balance when my time is up.

    Money isn't real though when it gets to that point, so don't worry.

  14. @8:10: That, of course, is true. However, the question then becomes did you or your employer benefitted (or appeared to benefit) from the race designation you learned from your parents and grandparents.

    If you are a blue eyed, blonde being described as the "woman of color" on the HLS faculty and there is no substantion of your claims, that is a problem. If you claim you designated yourself as a particular race/ethnicity to meet similar individuals, but never attend the events by a campus association for your minority, that's a problem. If you have a history of false bio claims, say such as claiming to be the "first nursing mother to sit for the bar in the state of NJ" and you add this on top of it, well that's a problem too.

  15. 9:42,
    You can't calculate the taxpayer loss at 6.8%. You have to calculate it based on the cost of capital + unpaid principal balance + administrative fees - amount paid. The actual loss is somewhat less than the accrued balance.

  16. 9:45, definitely true...but as a rough go of it, and what matters to the individual paying, that's essentially the gist of it. How far the specific calculation differs from the main objective I'm not sure, and I doubt it really matters. Point being, the system is set up to maintain status quo. And I think it will do that quite well.

    In other news:

    Maybe CO 2L should look at that. Of course, that's in Boston...

  17. "I think the expectation is that, on average, the performing loans will cover the non-performing ones. Twenty years is a long time for collections."


    When you factor in deferment, forbearance, and IBR, ICR, and PSLF, 61% of nearly 40 million student loan debtors in this country are not paying on their student loans. Furthermore, you have to figure that on average, those with higher balances are probably deferring and forbearing, or on IBR.

    This is less than a 50% payback rate. The government is taking a huge loss NOW.

  18. @9:45: Unfortunately, that is not true. The cost borne by taxpayers will be at the statutory interest rate on the loans (6.8% for Stafford 7.9% for PLUS).

    The "profits" the government reaps are assumed in the CBO budget baseline, meaning when they are not fully repaid, there is a cost borne by taxpayers.

    An excellent example is the current political fight over subsidized loans for undergraduate students. Both parties agree we need to maintain these rates at 3.4% (they are set to double to 6.8%), but they can't agree how to offset the cost. The only reason there is a cost is because CBO is projecting more profits from the 6.8% loans. If it was just on the cost of funds plus a spread for admin costs, 3.4% would be plenty in the current interest rate environment.

  19. 9:52,
    I think we had this discussion in a prior thread actually. :)

    So, let's say I pay off my loans right now. What you're saying is the lost "profit margin" for lack of a better word is screwing the taxpayer? My point is that, even if politicians are playing games with the numbers, you can't honestly say the taxpayers are getting screwed when gains don't materialize.

  20. "CU is the best law school in the region and I believe that any graduating student that did relatively well and has some decent drive to succeed should find success."

    I am a graduate of the University of Colorado, and I can agree that CU is probably the best law school in the region. However, the above type of thinking is flawed for two reasons: (1.) Colorado is a destination for a lot of people. When you're in the job market in the Denver you're not just competing against other CU or DU (U of Denver) grads, you're competing against people from all over the midwest and east coast. At my first job I was the only attorney who graduated from a law school in this state. (2.) In my experience grades were completely irrelevant to my success at getting a job. (BTW, my lowest grade was in Lawprof's class but I'm finally starting to get over it.)

  21. 9:51,
    The 47% that forms the base of that 61% includes people in graduate school...

  22. 10:09:

    "How many have an “approved” excuse not to pay? 47%. That’s right. Essentially half of the people out there with student loans aren’t paying because they’re in graduate school or because they’re under “financial hardship”.

    Really? All of em? I wonder how many are in grad school as opposed to having a "financial hardship" in this shitty economy. 50% of college grads are under or unemployed. Bet you a significant amount of that 47% are experiencing financial hardship.

    Read the WHOLE sentence. Don't do what the law schools do and only report a part of the information.

  23. All,

    I write separately to note that during the flush times there were plenty of people complaining (accurately in my humble opinion) about what a crappy job practicing law was even at more than $100k per year.

    Now that the bottom has fallen out, what remains is the same crappy work, hours, and lifestyle for far less money.

    If anyone is thinking that law school is a good lifeboat in troubled waters, please rethink your analysis. In law, even the "good" outcomes are objectively bad these days. The "bad" outcomes are life-burdening.

  24. 8:10 and 9:42 -- do you know where Scott Brown's great-great-grandparents were born? has he provided substantiation to your satisfaction? How about the 40 or so other Republican Senators?

  25. 10:29: "do you know where Scott Brown's great-great-grandparents were born? has he provided substantiation to your satisfaction? How about the 40 or so other Republican Senators?"

    Ahem. How many of them have made status-enhancing claims about said great-grands?




  26. Do not read this article if you do not want your head to explode due to blatant and outrageous hypocricy.

  27. (It's an article by a law professor from a wretched, overpriced, taxpayer loan funded toilet arguing that such loans should be taken away)

  28. 60k a year? I think the 2L is in the bargaining stage on Kubler-Ross. That's where I was at that time.

  29. "60k a year? I think the 2L is in the bargaining stage on Kubler-Ross. That's where I was at that time."

    Fantastic post SS, he is seriously deluded if he thinks a $60k job will land in his lap. Biglaw would be hitting the lottery, but any paying law job - or frankly any paying job ITE - is an achievement. A $60k job is a huge accomplishment.

  30. In all seriousness, this "the worst thing that could happen in law school is you get bad grades and become a PD earning $40k (or 60k, whatever) lie NEEDS TO END."

  31. @10:29:

    9:42 here. I am no GOPer, so I understand knee-jerk reactions to defend the Dems, but Warren has serious baggage as a candidate.

    What about this business about the "first nursing mother to sit for the bar," which Warren's campaign openly acknowledges has no basis in truth:

    " 'I was the first nursing mother to take a bar exam in the state of New Jersey,' Warren told an audience at the Chicago Humanities Festival in 2011, in a video posted on the CHF website. When asked how Warren knows that, her campaign said: 'Elizabeth was making a point about the very serious challenges she faced as a working mom — from taking an all-day bar exam when she was still breast-feeding, to finding work as a lawyer that would accommodate a mom with two small children.' "

    Regardless of her ideology, it is obvious this candidate has some issues with the truth when it comes to her biography.

  32. 10:18,
    Obviously it's not all of them...

    The point is it's not a very valuable statistic because it doesn't make a distinction as to how many are deferring because of grad school.

  33. Elizabeth Warren is the new John Edwards...

  34. True story: I have more than a decade of experience as an attorney, and recently lost out on a (relatively icky) attorney job that paid $57K, which I would have been thrilled to get. What I wouldn't do for $60K and health insurance. Take note, 0Ls!

  35. Liberals like Elizabeth Warren have no problem using opportunistic tactics to advance. She sees everyone is in debt, so she "invents" the idea of consumer financial protection. She sees she can get affirmative action, so she writes that she's a native american.

    Elizabeth Warren is a damn disgrace, like the Clintons who destroyed the country with their reckless "enjoy now pay later" policies during the 1990s.

  36. Clinton left office with a budge surplus.

  37. Kubler Ross is now worms meat, but the living still gotta EAT!

    And who says you can't be a poor student loan debtor and eat well?

    Here is a great Sloppy Joe Recipe guaranteed to satify the old tum!

    As Andy Griffith (a much greater life coach than Kubler Ross could ever have hoped to be) would say. "It's GOOOOOOOOOOOOD!"

    Now, pay careful attention to the directions :)


    2-1/2 ounces lean ground beef
    2 teaspoons chopped onion
    2 teaspoons chopped green bell pepper
    1/8 teaspoon garlic powder
    1/8 teaspoon prepared yellow mustard
    2 tablespoons ketchup
    1/2 teaspoon brown sugar
    salt to taste
    ground black pepper to taste


    This recipe's Ingredients were scaled to yield a new amount. The directions below still refer to the original recipe yield of 6 servings.

    1. In a medium skillet over medium heat, brown the ground beef, onion, and green pepper; drain off liquids.

    2. Stir in the garlic powder, mustard, ketchup, and brown sugar; mix thoroughly. Reduce heat, and simmer for 30 minutes. Season with salt and pepper.

    Nutritional Information

    Amount Per Serving Calories: 189 | Total Fat: 9.4g | Cholesterol: 50mgPowered by ESHA Nutrient Database

  38. 11:16 -- I do not really care whether or not there were other nursing mothers to take the bar exam before her; it does not really seem relevant to a senate candidacy.

    It seems Ms. Warren would be an advocate for the kind of consumer protections often advocated on this site. It is surprising to see so much anti-Warren comments.

  39. "Clinton left office with a budge surplus."

    What part of "enjoy now pay later" don't you understand? He created a lot of short term fun with long term pain.

  40. @11:47 a.m.:

    Funny, I thought having a budget surplus meant that revenues exceeded outlays, but I defer to your expertise.

  41. @11:44: You said: "I do not really care whether or not there were other nursing mothers to take the bar exam before her; it does not really seem relevant to a senate candidacy."

    Exactly! I agree 100 percent. However, apparently professor Warren thinks otherwise or she would not have (falsely) made the claim from the stump. Where it becomes an issue for me is when she falsified information. Then I start to care.

    Also, as far as Warren and consumer protections on student loans, it is not a pretty picture. Her talk on "taking on the banks," CFPB, yada yada yada is very nice, but when it comes to student loans she takes the position that as long as all borrowing is through the federal programs to traditional schools, there is very little problem with costs, debt, etc.

  42. This talk about "drive" as they key success reminds of multi-level marketing propaganda.  Unfortunately, a relation of mine was suckered into this a few years ago.  She was going to become rich not just by selling makeup, but by developing a vast pyramid of subordinate makeup sellers, all of whom would be paying her with each sale they made.

    Like law, "MLM" produces some highly visable winners and a lot of losers.  New recruits are taught to focus on the visable winners and to ignore the losers.  And there is an explanation MLM propagandists use to explain the existence of the losers:  their attitude.  They didn't "want" it bad enough.  They listed to the "negativity" from other people who didn't want to see them succeed.  (then they'd sell them a lecture series on how to have a winning attidue)  

  43. 11:20 --

    That's why law school is such a scam. Law profs hide the truth from the sheep who later are fleeced.

    The whole scam drives down wages. The media formerly played along and publicized the huge biglaw wages paid by NY. The deception caused prospectives to incorrectly surmise that most young lawyers earned at least $100,000. Meanwhile, back on earth, many experienced and competent attorneys struggle to make $50k.

    I've said it before and I'll say it again. If you are experienced (more than 5 years as a practicing lawyer), competent, hard working, and not a jerk, it is relatively easy to make $45k per year, and damn near impossible to make $100k per year.

  44. I was recently at the Charlottesville, NCAA Baseball regional tournament. I decided to get something to eat and so I sit down at a common table and met a very pretty young girl who was obviously studying (we had a rain delay). So I ask her what are you studying and she tells me she is going to take the New York bar exam. Right then and there I realized she just met the wrong person. Firts thing I did was ask her if she knew about the law school scam. Seemed like she did not really. So I went on to discuss the very things that have been repetitively mentioned on this site. I think at one time I saw her face get flushed and realized I had struck a nerve. She was such a sweet girl and I felt kind of bad after our discussion. She was just trying to pass the bar so she could get that position she so desired in NYC. I did mention that maybe 50% of lawyers will never practice law and that may have put her over the edge. All I could say was I wish her luck, but I really wish she would have seen this site, before she probably paid sticker price at UVA.

  45. It's also possible you creeped her out.

  46. 12:23, Tell us more about this UVA girl. I thought UVA was a good school? She didn't have a job?

  47. Stop projecting 12:26.

  48. Just bustin your stones 12:23 :)


  49. Thanks 12:26, I guess that could have happened but I am considerably older then her. My son is an attorney. We actually had a good conversation and she was very nice. No she did not have a job! She was concerned but at least she had no undergrad debt, her Dad worked at a University. She actually mentioned she could have gotten more money from U/F, but she chose UVA.

    She was nice looking though, and I may be an asshole boomer as most of you like to point out, but I'm not dead either.

  50. "She actually mentioned she could have gotten more money from U/F, but she chose UVA."

    That's what you get for being a dumb prestige obsessed b*tch.

  51. 1:06 --

    Everyone knows that UVA has a better fashion and the law program than UF, as well as a better art law program.

    I mean, by your logic, I would pass on a good space law program, just to go to Harvard.

  52. Um. Taking UF over UVA under any circumstances would have been an objectively stupid decision.

  53. Talking about the law school scam to someone who has graduated and is studying for the bar exam is just too late. You should have just wished her good luck. There is nothing you can do to help her now.

    If she was taking the LSAT - that would be a different story.

  54. Forget about all the meaningless and detatched and ineffective talk on this blog by well paid and well positioned, cruel hypocrites.

    God how my damned indebted soul is sometimes consumed with a burning hatred.

    For all who are lifetime and Danmed American outcasts and debtors for having done nothing wrong except to pass the teenage years in a trusting state of mind, and are now probably thinking about fleeing the USA and begging another country for asylum from a cruel and inhumane USA student lending system that will never let you out of slavery:

    •Rinse the blackberries carefully.

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    •Fill 1/2 - 2/3 of the jar with fully ripe berries.

    •Fill up with clear, unflavoured vodka - 40% alcohol content (80 proof).

    •Steep for 3-4 months in a dark place at room temperature, 18-20°C (64-68°F).

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    The flavours will change rather much during storage. For the better I think. But it's a matter of taste. Some prefer the fresh, fruity taste - while others prefer their blackberry schnapps after some storage.

    Note: If for some reason you are not satisfied with your infusion, there are ways to adjust both taste and flavours - click here to see how.

    Serve your blackberry schnapps at room temperature in suitable glasses. And remember to keep your schnapps bottle tightly closed and in a dark place before and between servings.

  55. speaking of UVA, about 1 year ago I worked in a debt collection call center operation--10 big ones a hour, that job paid. Down the aisle from me sat a young lady with a newly minted UVA JD. And she had a BS and MS from NYU in business related degrees.

    The scam lives on....

  56. ok, i'll bite. what's your financial situation, 1:17?

  57. Anyone able to find this online advice/discussion?

  58. I guess I'll take a moment to vent. My law school just hit me up for a donation using my law firm e-mail account (I never provided this to them nor authorized them to contact me on it) AND sent a letter to me at my work address. I'm lucky, things are working out ok for me, but who do they think they are that they can contact me at work for a donation.

    Full disclosure: I pledged a small amount of money to them when I was graduating, back before I realized how things worked. Even though I didn't get a scholly I might have donated to them had they not raised tuition by almost $15K in the last five years.

  59. Given the number of people who seemingly go down this progression:

    0L: If I finish at the median, I should be able to get a 60k job easily.

    1L: If I finish well above the median, I should be able to get a 60k job easily.

    2L: If I do really well to finish out and specialize in some field, I should be able to land a 50k job easily.

    3L: If I finish strong and impress someone at this part-time internship, I should be able to get on for 40k easily.

    >3L: Wait, I finished in the top 15% and I can't even get a 25k job?

    How can there NOT be legal misrepresentations going on? "Puffery" does not do THAT.

  60. Yes, for those who can't find it:

    The discussion is in this thread:

  61. That is an amazing TLS thread.

    It really hammers home the point that undergrads just flat out cant grasp the significance of $150k in debt.

  62. The thread also shows that transparency alone will not solve this problem. The thread on TLS is sad. I feel sad for the person about to undertake the biggest mistake of their life.

    Anybody going to law school now would have to be a fool. The information is out there. There is no way to explain to someone who has never made a monthly payment of 1000.00 how it feels until they actually have to do it. These kids are too busy telling people wiser than them they are mature for their age.

    It is pathetic. Some people need to be protected from themselves.

  63. 3:19 - some are beginning to talk in terms of IBR, which is a big worry of mine.

    Beginning now, law school is not priced in terms of sticker cost. Rather, it is priced in terms of your indenture. If the law schools can convince President Obama to pay $100mm per year, it no longer impacts students. They still will owe 15% of their salary per year for 20 or 25 years, unless they snag a government job, in which case the price of school is only 15% for 10 years.

    Crazy! School is priced no longer in money, but in terms of one's sentence.

  64. Here is another example of how the American Popular Culture taught everyone that Higher Ed. was the key to success, and not the key to lifetime debt and despair.

    The very premise of the Cosby Show and the Huxtable family was the father being an MD, and the mother being a lawyer and hence successful and/or winners in this society.

    Theo should have perhaps also been taught by his father in this scene that the regular people should have become "sophisticated consumers" after college, and thereafter sensibly have steered away from the career of Theo's mother, who was a lawyer.

  65. 3:23 (1):

    3:19 Here. Agreed. IBR (for everyone) and transparency are the two traps that the powers-that-be will eventually embrace in an attempt to placate the masses. The CID (College Industrial Complex) will attempt to move on and call it reform. This is not reform.

  66. We must ridicule people like this to warn others not to make such stupid mistakes.

    Best school for Entertainment Law in the South? Really??

    I recall a conversation I had with a graduating senior (I was a junior at the time). He told me, and this is almost a verbatim quote that I still remember now 15 years later b/c it seems so stupid: "I don't want to be a lawyer, but they have a good human rights law program, and I think I would like to be an international human rights lawyer." It was a T-50 school, not a T-14.

  67. Another cultural day to day an in the face and in or on the streets observation that sophisticated consumers of higher education should be aware of is the rear windshield decals boasting of whatever university.

    Think hard about all of that.

  68. 4:02 -

    The reason students fall for this is because they are gullible and not the sophisticated consumers that Judge Schweitzer so ruled.

    Students know that sports agents, and music lawyers, and art lawyers exist. These sound more interesting than "lawyer." The schools play along and even convince US News and other periodicals to rank these marketing pitches, which is why you see "best law school for environmental law" etc. listed.

    They don't know what law school is all about and that they'll take the same contracts class at any law school. Nor do they realize that environmental law means they'll take the same admin law class that everyone else takes and then one or maybe two environmental electives.

    It's just such nonsense.

    They can't fathom that law schools are giving them sales pitches. It is expensive and comes with the aura of authority, so it must be true. Schools wouldn't lie to you, would they?

    This is how we end up where we are. With idiots asking other idiots what school has the best Music Entertainment Law program in the South.

  69. "The very premise of the Cosby Show and the Huxtable family was the father being an MD, and the mother being a lawyer and hence successful and/or winners in this society."

    Anyone else you want to blame before dragging your lazy bum ass out and getting a job, any job?

  70. 4:09:

    Ahh,the troll is back. Missed you over the weekend, fuckface.

  71. Law Prof,

    Can you run an article on the "best law school for [fill in blank] program" scam? Like the "best law school for environmental law."

    I have personally witnessed people fall for this. One was going to go to local state university (on East Coast), but went to Colorado because they had a better environmental program.

    Such faux specialization is another bait and switch pulled by the law schools. It's also a way for TTTs to falsely distinguish themselves and extract more cash than the market otherwise would bear.

  72. "This is how we end up where we are. With idiots asking other idiots what school has the best Music Entertainment Law program in the South."

    Perfectly said.

  73. 4:27,

    Unless you are looking at a specialty LLM in corporate taxation from NYU or possibly an LLM in admiralty from Tulane, the rule is do not pick any law program -- including LLM programs -- based on a specialty "field" of law.

  74. 4:24:

    It is not just the best program scam...schools also mention diversity, location (red flag shit heap warning), history of the place, whether the chicks are hot and will put out on the first date, etc....

  75. @ June 4, 2012 2:36 PM

    Actually for some its more like:

    How can I be top 15% and not get accepted to this no-pay internship program that will hopefully lead to a $25k job eventually?

  76. "Unless you are looking at a specialty LLM in corporate taxation from NYU or possibly an LLM in admiralty from Tulane, the rule is do not pick any law program -- including LLM programs -- based on a specialty "field" of law."

    You stupid idiot. An NYU Tax LLM is worth shit, as is a Tulane admiralty degree.

  77. Nice to read someone is benefiting from IBR repayment schedule. IBR is not a good solution for those with higher incomes,unless they work for the government, so I find it useless.

    Too much focus on these comments are about the initial law graduate salary. I find initial salary to be only a small part of the picture---what matters is the average salary per law graduate on a 5 year out basis. Typically what happens is 1-2 years out those without connections or as much luck will start small, and then upon gaining real legal skills will build up to a decent rate.

    Another comment is about loans. I find the closer I am to repaying off my loans, the more I can say by the time you get to the 50 to 75% total student loan payoff mark the initial principal is nearly paid and the remaining debt is to service the interest charges. So if someone is paying a substantial portion of the debt, then the taxpayer doesn't get screwed.

  78. I have a friend who has just completed his first year at GW Law with a 3.0 GPA. I do not know if he is paying full sticker, but in the absence of any strong family connections, I cannot imagine a scenario where it would make sense for him to continue. I told him to drop out immediately, but he wasn't listening. I can't seem to get through to him.

  79. For all those who think any sort of debt forgiveness (or interest forgiveness) would "screw" the taxpayer, how do you rationalize the fact that people with existing student loan balances today are paying all sorts of different interest rates on that debt? Ranging from 2 percent all the way up to 8 percent, and everywhere in between? Would making the interest on all loans, say, 2 percent, be "screwing" the taxpayer, and if so, out of what, exactly? There's no logical justification why someone who graduated in 2001 has to pay 6 percent and someone who graduated in 2010 has to pay 3 percent, on government-issued loans. No justification at all. It's basically just usury.

  80. PoorGrad, I'm fairly certain that does not "typically" happen to most grads by the time they are 5 years out of law school. There is barely any work to go around.

    As for loans and IBR, many law grads simply aren't paying a substantial portion of their debt.

  81. 7:39, what does the point you raise about varying interest rates (which is a good one) have to do with IBR screwing the taxpayers out of money? Law schools currently charge outrageous sums for law degrees, which they get straight from taxpayers, and which in many cases won't be paid back in full.

  82. I'm not sure Poor Grad has it right, because the more you pay off a loan, the lower the amount of interest you pay, and most of the money paid cuts into the principal. But there is another way to note how the taxpayer may not necessarily be screwed if some of the law students cannot pay back the loans.

    However, this depends on the interest accumulated.

    Remember, ONLY the principal is payed to the schools. The lender makes money on THE INTEREST.

    Lets look at the example from this Campos post, and say two people have to pay $255,143 total for law school.

    Person #1: Pays the loan off on a 25 year plan = $571,496 total payed

    Person #2: Pays $0. Flees the country to Brazil.

    The lender still makes a $61,000 profit on the two loans, when one person has not payed at all!!!!!

    This is the secret to how the lender makes money from these loans.

  83. Holy shit 8:22, have you told the media?

  84. In other news, (Crain's Chicago Business), Northwestern and Loyola-Chicago are toying with the idea of reducing class sizes because of the job market.

    Leave it to the dean of JMLS-Chicago to come out with an ostrich head-in-sand comment that if people want to go to law school, why should they be stopped.....(hint, dean's make good salaries when more students, errr grist for the mill apply for financial doom)

  85. Get a job. Let's see.........

    Here is a field for which a JD is always in demand:

    Or, try this field. As Vince Lombardi said: "Winning isn't everything, but wanting to win is:

    Or this:

    Or this:

    Or this:

    Better yet, get aboard the nearest time machine and start life over again.

    And never take out a student loan.

  86. Get a job..........lets see.......

    oh here is a nice job. Actually it is a sales job, though you might not understand that "Account Manager" really means "Salesman"

    And notice towards the bottom that even for this sales job they run a credit check.

    If the student loan fucks up your credit, you will be in the same boat as having failed a drug test and you won't even be able to get a job in sales.

    But take a gander:

  87. Whether or not taxpayers are getting "screwed" by student loans depends on whether:

    Total Repaid >= Total Lent * (1+interest)
    where interest should be calculated as the interest rate of T-bonds only (no justification for the govt expecting higher interest) with no capitalize interest, no penalities, just straight up interest over time

    I suspect that even with the higher ed scam, govt loans are still "profitable" when you calculate the total numbers as above.

    Of course with tuition rising out of control, the balance is tilting towards the govt eventually losing money unless tuition price increases slow to below inflation.

  88. Are you aware that after the housing bubble collapse and stock market crash, student loan default is next wave to start a new economic recession? Student loan now exceeds credit card debt. Student loan defaults are at an all time high with vast majority either getting deferment or defaulting. This will have a spiraling effect towards the already weak economy. It appears nobody is aware of this ticking time bomb. So far the only response of major economic leaders is "do any job, if you can't find real job". But that can't stop this next wave of disaster, can it?

  89. So the real median is about 55k? Confused as to why everyone is making a big deal of a 5k discrepancy...

  90. Forbes. 17 hrs. ago:

  91. "The Dodd-Frank Act requires a formal report on the private student loan market. But the student loan problem cannot be understood without equally examining government student loans: The Consumer Financial Protection Bureau needs absolutely to include government student loans in its report, which otherwise would be obviously partial and incomplete.

    “If these borrowers are so overleveraged that it carries throughout their entire adult life, this is a big problem,” a Consumer Financial Protection Bureau officer has pronounced. His bureau needs immediately to get busy making sure that the Department of Education is not saddling students with unpayable debt for life."

  92. It's true. There is wayyy too much focus on private student loans at the expensive of government loans, but hey -- the government writes the rules so I guess they get a free pass.

  93. 7:48, the point I was trying, however inarticulately, to make was that after someone pays on a loan for 20 years, in many cases that person has already paid the amount he/she originally borrowed. What remains is often just capitalized interest. Forgiving that interest money doesn't screw the taxpayer out of anything, because it's just hypothetical "profit" that the taxpayer "expected" to make off the loan. And I would argue that the notion that the government should be profiting off student loans is illegitimate and offensive in a democratic society. You're right about the law schools being the ultimate beneficiaries, getting their money up front with no risk and laughing all the way to the bank.

  94. @ 6:22 AM, June 5: "Forgiving that interest money doesn't screw the taxpayer out of anything, because it's just hypothetical "profit" that the taxpayer "expected" to make off the loan."

    Really? I'm not so sure about that, but I'm also not an econ type. But just thinking out loud - that original amount borrowed was essentially paid at once to the school (i.e., over a ~ 2.5 year period). That money costs the government something, doesn't it? I.e., either it is borrowed from somewhere else (at an interest rate), or if the money is already thought to have been "owned" by the gummint, then this is money that the gummint cannot collect interest on elsewhere.

    To say that the interest forgiven 20-odd years later is not more than lost hypothetical profit cannot be true, IMHO.

  95. In the mists of my past, I was in a Christian fellowship and attended an evangelical church.

    During meetings, people used to talk about "saving souls." I never quite understood it, and I'm not sure I ever "saved" a soul.

    However, in the past year, I've talked two of my students out of applying to law schools. (In the schools in which I have been teaching, not many students express interest in it.) Does that count as "God's work?"

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  97. Lawprof: I'm giving up on trying to warn people.

    On TLS a recent post stated that "$270, 000 in non-dischargeable debt is not a death sentence or anything close to it for most people. And IBR obviates most of that concern entirely."

    That poster justifies his statement with the idea that most law students are upper-middle class who can just move in with their parents until they get back on track. Note: the writer of that quote is a very respected TLS poster, not a random troll.

    ( Not sure that is a reasonable assumption. I thought many people were going to law school because there are no other jobs. )

    The quote is from a thread about repaying $210,000 in debt, it started out with a foolish question but ended up in a debate. I think the debate shows how entrenched OLs and law students are in justifying going to law school.

    You might be interested in reading this thread:

    My honest feeling is that IBR is going to be a huge block in any effort for reform. I think it will take a number of people who went to top schools and who are unemployed or struggling to come forward. Until that happens, people are not going to understand the day to day cost.

    I'm lucky - I have no debt. I'm going to live with my Mom in our apartment in the city and work at a biglaw firm in the fall. I would never have taken on the debt of these people, and I can live rent free in Manhattan! I know how expensive NYC is to live in.

    I think these students are making a huge mistake. But there seems to be no way to reach them. So I am going to stop wasting my time. Hopefully we will get better weather so I can enjoy my summer instead of posting online.


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