The social network

TLS thread: "What to do if I just can't find work?"

If I just can't find work, and I need money to (eat, not sleep in gutter,etc) does it make sense to stay in school longer until I line something up?

It would defer student loans and keep finaid coming in to keep the bills paid.

Worth it?

Meanwhile in Las Vegas (if this were a novel the location would be a very heavy-handed piece of symbolism indeed):

President Barack Obama will urge Congress to prevent student loan interest rates from doubling when he speaks at UNLV on Thursday, as part of his broader push to get Congress to act on his policies.


According to a White House briefing, Obama will direct his administration to “improve students’ information about repayment options, and access to repayment options that can help them make their payments.”

Under current law, 7.4 million students will have their interest rates double on July 1. The White House said this would be the equivalent of a $1,000 tax increase. It’s part of his broader effort to get Congress to pass reforms that he said would create jobs.

One federal program Obama will emphasize is an income-based repayment, which caps borrowers’ monthly payments based on their ability to pay.

The social network is (rapidly?) chipping away at juvenile and to a lesser extent parental ignorance regarding the law school trap.  A law professor writes:

I was told by a prof at a mid-range school that their discount rate across the class is way up (tuition is coming down) and despite this they will still get a much smaller class than desired.    

It’s not just that applicant numbers are down (we knew that), but also that students are refusing to pay full fare. 

This rapid shift is the result of the internet, I’m convinced.  My teenage children get ALL their information online.  With the scam blogs, your blog, Above the Law, all relentlessly putting out the same message—college age kids now KNOW that law school is a risky bet.  You can even see the change on TLS over the past year.  A year ago posters regularly called the scambloggers losers, but now the scamblog message is common wisdom on TLS.  That doesn’t mean there won’t be kids who continue to go to law school—they will in droves no matter how ill-advised—for all the reasons you say on your blog.  But even they will demand a reduced price. 

There's a flip side to this however. The newest big threat to reform efforts is the attempt to make IBR a substitute for restoring some sort of sanity to the price of higher education in general, and law school in particular.  President Obama's speech today is premised on the idea that a very large percentage of people with federal educational debt are only vaguely aware, or not aware at all, that IBR exists. (I'm continually taken aback by how many 0Ls and 1Ls still know nothing about IBR).  But that too is no doubt changing rapidly.

This is an especially bad problem when it comes to law schools because, as in so many other ways, when it comes to debt law school is a particularly extreme example of what's wrong with higher education in America.  Average educational debt among the 15% of adult Americans (40% of adults under 30) with such debt is "only" around $23,300, with 10% owing more than $54,000 and about three per cent owing more than $100,000.

What this means is that the typical person going into IBR is going to be somebody who owes $40,000, makes $30,000, and is paying $165 per month in IBR rather than the $450 or $275 they would owe on a ten-year or 20-year repayment plan.

People who graduated from law school this year, on the other hand, probably owed an average of $125,000 to $130,000 in educational debt (a number that will likely rise to around $150,000 for the graduating class of 2014, given the rapid rise in tuition that is already baked into their particular cake).

The document reviewer making $30,000, in other words, is going to be paying $165 per month on what would be a $1750 or $1100 dollar monthly payment per ten and 25-year repayment schedules.  As Bored Law Student noted in a comment a couple of days ago, IBR simply wasn't designed for this sort of extraordinary scenario -- extraordinary, that is, in the context of higher education in America, but completely ordinary in the context of legal education today.

There's a real danger that, until the federal government wakes up to what's happening in our little corner of the world, law schools in the next few years will increasingly fill their classrooms with people who, as the social network alerts them to the existence of IBR, will choose to incur $150,000 or $200,000 or more in debt simply to eat and not sleep in a gutter.  (Contrary to assertions of various Horatio Algers in the linked TLS thread, there is no longer any "welfare" in America, beyond food stamps, for non-disabled people who aren't the primary caretakers of small children.) A disturbing number of 0Ls on TLS who are told in no uncertain terms that taking out big debt to go to the average law school is a terrible idea are now replying that "there's IBR if you're stuck with a $50,000 job and high debt."  Among other things these people don't realize that there's a good chance that their law degree will make it much more difficult for them to get any job, let alone one that pays $50,000.

Speaking of novels:

A sovereign fell, bright and new, on the soft pile of the tablecloth. —Three, Mr Deasy said, turning his little savingsbox about in his hand. These are handy things to have. See. This is for sovereigns. This is for shillings. Sixpences, halfcrowns. And here crowns. See.
He shot from it two crowns and two shillings.
—Three twelve, he said. I think you'll find that's right.
—Thank you, sir, Stephen said, gathering the money together with shy haste and putting it all in a pocket of his trousers.
—No thanks at all, Mr Deasy said. You have earned it.
Stephen's hand, free again, went back to the hollow shells. Symbols too of beauty and of power. A lump in my pocket: symbols soiled by greed and misery.
—Don't carry it like that, Mr Deasy said. You'll pull it out somewhere and lose it. You just buy one of these machines. You'll find them very handy.
Answer something.
—Mine would be often empty, Stephen said.
The same room and hour, the same wisdom: and I the same. Three times now. Three nooses round me here. Well? I can break them in this instant if I will.
—Because you don't save, Mr Deasy said, pointing his finger. You don't know yet what money is. Money is power. When you have lived as long as I have. I know, I know. If youth but knew. But what does Shakespeare say? Put but money in thy purse.
—Iago, Stephen murmured.
He lifted his gaze from the idle shells to the old man's stare.
—He knew what money was, Mr Deasy said. He made money. A poet, yes, but an Englishman too. Do you know what is the pride of the English? Do you know what is the proudest word you will ever hear from an Englishman's mouth?
The seas' ruler. His seacold eyes looked on the empty bay: it seems history is to blame: on me and on my words, unhating.
—That on his empire, Stephen said, the sun never sets.
—Ba! Mr Deasy cried. That's not English. A French Celt said that. He tapped his savingsbox against his thumbnail.
—I will tell you, he said solemnly, what is his proudest boast. I paid my way.
Good man, good man.
—I paid my way. I never borrowed a shilling in my life. Can you feel that? I owe nothing. Can you?
Mulligan, nine pounds, three pairs of socks, one pair brogues, ties. Curran, ten guineas. McCann, one guinea. Fred Ryan, two shillings. Temple, two lunches. Russell, one guinea, Cousins, ten shillings, Bob Reynolds, half a guinea, Koehler, three guineas, Mrs MacKernan, five weeks' board. The lump I have is useless.
—For the moment, no, Stephen answered.
Mr Deasy laughed with rich delight, putting back his savingsbox.
—I knew you couldn't, he said joyously. But one day you must feel it. We are a generous people but we must also be just.
—I fear those big words, Stephen said, which make us so unhappy.