Sunday, December 9, 2012

Who knows what they owe?

Updated Below

If you are a law professor, do you know what percentage of your students borrow money to attend your classes? Do you know the average amount of their loans? Do you know the interest rate on those loans or how much interest accumulates during law school?

If you're a student or prospective student, do you know these facts about your school or your loans? If not, how would you find them out?

School-specific loan information is difficult to find publicly. Schools do not brag about these statistics in the same way they tout their employment numbers. It's surprising, actually, that they haven't thought to do so. UC Davis's eager dean, for example, could tell prospective students: "86.2% of our students receive prestigious loans from two different federal government programs. For recent graduates, the average amount of those awards was $100,517!" And Case Western's dean could back up his claim that law school is worth the money by telling students, "90.1% of our students take advantage of their unique opportunity to participate in the supportive federal loan program. These students borrow an average of $98,900 for three years of law school--an average of just $90.32 per day. Where else can you obtain so much value for such a small investment?"

But at least for now, schools are refraining from that puffery. So where would you get loan information? Each year, schools tell the ABA the percentage of their students who borrowed federal loan money and the average (mean) amount borrowed. But the ABA doesn't publish the loan information in its Official Guide or anywhere else on its site. I wonder why not? You can read about each school's tuition, estimated living expenses, and scholarship aid--but not about the average amounts that students borrowed to make up the gap between their expenses and any scholarships. (The ABA does publish a list of general resources on loans and repayment, as well as an obscurely placed list of average amounts borrowed by all law students over the last ten years, but I couldn't find anything more specific about loan amounts.)

U.S. News gathers the same loan data from each school, but you'll have to purchase a premium online subscription for $29.95 if you want to see that information. Law school loans seem to be a highly guarded secret.

I'll be posting some sample figures soon, but I think all law professors should know about the debt their students are incurring. Federal loans, together with student willingness to borrow, keep our schools in operation. Shouldn't we know the cost to our consumers? If you want to know more about debt among your students and graduates, here's how to find out:

1. Ask your dean's office for the percentage of students who borrowed federal funds over the last ten years, together with the average amount borrowed. Those numbers should be readily accessible, since they are reported to the ABA.

2. For a more nuanced picture, ask the dean's office to request a breakdown of loan amounts by range. E.g., how many students borrowed $20,000 to $40,000? How many borrowed $220,000 to $240,000? The office that calculates averages for the ABA should be able to produce ranges as well. You will end up with a table that looks like this (note, these are hypothetical figures--NOT ones from my school or any other):


 Amounts Borrowed from Federal Loan Program
Your Law School

            2012          2011          2010
Average      $ 100,209     $ 89,230     $ 85,954
JD Recipients200198208
Percentage of class w/ debt91%88%89%
  
Amt Borrowed Ranges:   
$1 - $20,0003911
$20,001 - $40,000131818
$40,001 - $60,000121219
$60,001 - $80,000262644
$80,001 - $100,000293939
$100,001 - $120,000374128
$120,001 - $140,000391918
$140,001 - $160,0002095
$160,001+323
Total182175185
  
Highest amt borrowed    $223,412    $209,473    $201,478 
Percent of class borrowing more than $100,000

49.50%38.90%26.00%

It makes a difference to see that half of all students borrowed more than $100,000, while only a handful  borrowed less than $20,000. That's a very different picture than a simple average: the ranges more readily demonstrate the different burdens that students assume to attend law school. The students with high debt usually are ones who lost the LSAT-based scholarship game, or who come from families with insufficient wealth to contribute to their legal education.

3. Recall that "amounts borrowed" are just that--the raw amounts a student borrowed, without accumulated interest. How much interest do students pay on federal loans? 6.8% on the first $20,500 they borrow each year, and 7.9% on everything else borrowed that year. The government disburses loans at the beginning of each semester (or quarter, for schools on that system) and interest accumulates from the day of disbursal. The interest does not compound, but it accumulates.

Oh, and the government also charges origination fees for these loans. That will add 1% to the first $20,500 borrowed each year, and 4% to amounts borrowed above that amount.

If you want to calculate how much one of your students will actually owe six months after graduation (when most students begin repaying their debt), here's a quick-and-dirty way to make that calculation: Go to Georgetown Law School's handy loan calculator. Take the "amount borrowed" you want to evaluate, and divide it by three. Place that one-third figure into the "Year 1" Cost of Attendance at the top of the page. Then change "annual increase" to 0% and press enter. Scroll down to see how much a student with that amount borrowed will actually owe when she starts repayment.

A student who borrows $150,000 (like two dozen of the 2012 grads from the hypothetical school described above) will owe $178,260 at graduation. One who borrows a more humble $90,000 will owe $105,513. These amounts modestly overstate accrued interest for 2010-2012 grads, because the government subsidized some accumulating interest for those students, but the Georgetown calculator gives excellent approximations. For today's 1Ls and 0Ls, it is dead on.

*   *   *
What should you do with this information, now that you have it? Think about it, and discuss it with your colleagues. It's hard to realize that public school attendance can generate more than $100,000 of debt, but it does--even for students with scholarships. Students at private schools usually accumulate even more debt. Remember that almost everything we do at law schools rests on the personal debt of our students. Pay particular attention, finally, to the number of students at your school who fall in the highest debt ranges: They are the ones who are sacrificing the most to keep our institutions afloat.

Update: A commenter points out that the University of Akron's Law School publishes fairly comprehensive loan figures for its recent graduates. Paralleling my sample table, Akron's website shows how many students borrowed amounts falling in particular ranges. It's a helpful table, and I encourage other schools to offer the same information. Akron has an incentive to publish this type of data, because its loan amounts are lower than national averages. But there are other schools with similar incentives. The push could come from relatively low-cost schools on this issue, but higher-cost schools would begin to feel that pressure. The ABA could also use sites like Akron's as an example of what schools must disclose.

I do have one suggestion for Akron's graphs: I'd like to see students separated by full-time and part-time status. I think that would be helpful for prospective students and, as a policy matter, I'm curious about indebtedness among part-time students. Are those students better able to avoid debt?




107 comments:

  1. "Let them eat Ramen!"

    ReplyDelete
  2. You're barking up the wrong tree; the professors simply don't care.

    In my experience attending a T20 school, most of the professors treated students with condescension and contempt - I saw open displays of hostility toward the students who had the gall to forgo a life of poverty in "public interest" jobs and instead pursued jobs that actually "paid" - and had no interest in the outcomes students had coming out of law school. The professors saw students as an unwanted intrusion on their time, which, in their view, was better spent doing nothing or undertaking "research" that yielded results no one cared about or had any practical value.

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    1. exactly what i was thinking. almost all professors are not incentivized to care about students unless it starts negatively affecting them.

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    2. Agreed.

      In my experience, the professoriate cared more about the proximity of faculty parking than the financial fate of their students.

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    3. DJM refuses to accept that the law school cartel is completely incapable of reforming itself, despite all the overwhelming evidence to the contrary. See Upton Sinclair for why this is so.

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  3. Just wondering, why should law professors care about their students' loan debts?

    I really don't expect law professors to feel bad about their students' post-grad debt burdens.

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    Replies
    1. Because when students stop incurring those debts, the music stops for most American law schools and professors will have to find other chairs to sit in?

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  4. How do the employees of these great institutions live with themselves knowing they are selling snake oil to children and the taxpayers? A wise man once said "you can rationalize anything", but in the end it is simply unconscionable, if not criminal.

    Another sign of what this country has become.

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    Replies
    1. Especially since the legal profession sets itself up as ethically superior to the common run of Man - we even have ethical/professional codes that apparently law faculties ignore at will (without consequence...so far)

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  5. cant wait till the # of Dec LSAT test takers comes out. that'll put another dent in this LS scam.

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    1. expect more bs from the industry that it's never been a better time to apply to law school. And the NY Times will publish it.

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  6. The law schools have been using puffery for years by referring to loans as "financial aid."

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    1. Very good point - nobody call a home mortgage "housing assistance"...

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  7. A law professor from Europe told me recently that he never spent, still less borrowed, a red cent for any of his degrees: law school was paid for by the state, which even gave him a scholarship for graduate study at Harvard. He does know that law students in the US frequently graduate with a couple of hundred thousand dollars in debt, and he finds it appalling.

    In the US, people from families of undistinguished means have to start out by taking on a mountain of non-dischargeable debt. If, for whatever reason, they find themselves unemployable in their chosen line of work, the losses fall entirely to them. Oh, and by the way, they'll have to seek even more of that costly ejookayshun in order to find work in some other field.

    Utterly insane.

    Of course, it's not so bad for the children of the very wealthy: Daddy just writes a check, and that's that. Indeed, Daddy can even pay tuition at Baby's birth and lock in the current rate, along with a discount and big tax benefits. Hell, Baby may even be eligible for financial aid! Why doesn't every parent think of putting four years' tuition for Yale (about $240k before the discount) into one of these certificates as soon as the umbilical cord is cut?

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    1. "A law professor from Europe told me recently that he never spent, still less borrowed, a red cent for any of his degrees"

      OTOH, when my lawyer friends from Germany and Switzerland visit here, they are always amazed at the "estates" that Americans can afford.

      They can't imagine being able to afford a ~ 350 sq. meter home sitting on 4000 sq. meters of land. They're breaking the bank to afford a 150 sq. meter home on 600 sq. meters of land...


      ... Other cost of living indicators are also much, much higher throughout much of Europe. Guess what drives that?


      Might be interesting to see if someone has done a full soup to nuts comparison.

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    2. This comment has been removed by the author.

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  8. Well, this article says that Student Loan debt is not a problem and that very few people owe six figure amounts:

    http://www.kansascity.com/2012/12/07/3955029/student-loan-debt-isnt-a-crisis.html

    And this article talks about a student loan crisis and the bubble bursting:

    http://www.cnn.com/2012/12/06/opinion/bennett-student-debt/index.html


    Why is it so hard to get the real story about the whole situation?



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  9. This is a really interesting article:

    http://online.wsj.com/article/SB10001424127887323316804578161223639540916.html

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  10. I have a sense that this is what to watch and follow, and is the definitive plan for how to deal with Student Loans going forward:

    http://petri.house.gov/new-student-loan-bill

    It sounds like IBR, with the addition that the govt will set up a comprehensive wage garnishment system.

    I think it also is going to cut out private collection agencies altogether.

    What is confusing is the talk about preventng negative amortization.

    I think that means that there will be caps on the interest that a SL balance will accumulate.

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  11. Here is the language in the Petri plan:

    "In addition to the income-related cap on payments, the bill would tie the interest rates to Treasury market rates and would cap interest owed at 50% of a loan’s face value at the time of graduation."

    So I think that means that a 100K loan balance will never accumulate more than 50K of interest over the life of the loan.

    If so, would that apply retroactively for people that have doubled or tripled loan balances today?


    Anyway, just google "Petri Student Loan Bill" and you will find info about it.

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  12. And this is my favorite part:

    "The bill would also eliminate income-based programs that forgive loans entirely after 20 or 25 years — and, after 10 years, for those who enter public-service careers, such as teaching or law enforcement. The new system would apply only to new loans."


    http://www.delawareonline.com/article/20121206/BUSINESS10/312060029/Student-loan-debt-collection-targeted-overhaul-U-S-bill?odyssey=tab%7Ctopnews%7Ctext%7CHome

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  13. To flesh out the concept of European legal education, it is free because admission is by highly competitive examination and very, very few people make the cut. When the government is footing the whole bill up front they aren't going to let in any Tom, Dick or Harry who just wants to be a lawyer. In America we got the system bass-ackwards - opened the gates to everyone and then the government bought into the existing system. By flooding that system with free money and pretending it will all be paid back government enabled law schools to keep hiking their tuition to absurd levels. Maybe when the default rate reaches crisis proportions and government sees that it is, like European governments, paying the whole bill government will see the problem with producing 44,000 new lawyers every year and take a look at the European model.

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    1. And indeed very few people should make the cut. In the US, almost anyone can get into law school—and take on a couple of hundred thousand in debt. Insane.

      Train as many lawyers as are needed, and tell everyone else to find something else to do. Also eliminate "legacy" programs and other nepotistic preferences for those that already have everything. Admission by examination is imperfect—still the little Croesus will have a big advantage over the person of humble origins—but at least is a good start.

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  14. In the fall of 2009, as a student at Columbia, I heard Eben Moglen tell a group of mostly 1Ls that they shouldn't sell themselves to firms. Instead, they should figure out what kind of law they really want to practice, apprentice themselves to a practitioner, and then build their own practice. I asked him how a newly minted JD was supposed to pay off student loans while working as a solo/small firm practitioner. He said that you just had to calculate how much you needed to earn to "make your nut" and then do it.

    Right.

    He also spoke mockingly about a student he had known from a lower-middle-class background who became a corporate lawyer because of family pressure to achieve financial success.

    Moglen was at the extreme asshole end of the clueless professor spectrum at CLS, but I'm betting that few, if any of them, could actually tell you how much students borrow.

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    1. "Eben Moglen "

      Isn't this a Def Leppard song?

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  15. We've had this on our website for the last two years:

    http://www.uakron.edu/law/admissions/finaid/borrowing.dot

    We've also had our NALP reports dating back to 2007 available to the public for the last two years:

    http://www.uakron.edu/law/career/prospective/ps_employmentst.dot

    Same with our scholarship renewal standards:

    http://www.uakron.edu/law/admissions/finaid/scholarships.dot

    It took a lot of fighting to make this information publicly available, but we finally got it done.

    I think every law school should have to report debt at graduation in $5,000 or $10,000 ranges, as well as average starting salaries. That way, you'd get a debt and salary histogram for each school, like the one NALP has for national starting salaries:

    http://www.nalp.org/salarydistrib

    I think a chart like this for every single school would be incredibly useful consumer information.

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    1. This is excellent--not perfect (hey, I'm a law prof so I'm a hard grader) but a really excellent step. Thanks for bringing this to my attention. I'll update the post to link to this site and urge other schools to do the same

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    2. 15% of scholarship recipients renew 100% of the scholarship
      20% of scholarship recipients renew 50% of the scholarship
      35% of scholarship recipients lose the scholarship after the first year of law school
      30% of scholarship recipients lose the scholarship after the first semester of law school

      I commend the transparency, but wow at those number. 65% lose the scholly after year one? That should put a damper on all the kids who think getting a scholarship signals that they'll be in the top 10% for sure. Those stipulations are brutal and unwarranted IMO.

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  16. The "call to action" at the end of this post got a chuckle out of me.

    What professors should DO with the loan info is think about it, discuss it with other professors and pay attention to the students who are in debt up to their eyeballs.

    (Trying hard to keep the sarcasm out of this...)

    If the student who is responsible for the debt wasn't persuaded to avoid law school, professors SURELY won't do anything about this issue because their livelihood depends on NOT doing anything about it.

    It doesn't matter how much they "think about" and "discuss" the issue...

    ReplyDelete
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    1. It does sound weak, but it's just the first stage of this particular campaign. People don't take action on an injustice until they recognize the injustice, and most professors are completely blind to this particular problem. Sure, they're sticking their heads in the sand out of self interest, but same result. If I can get professors at just a few schools to request this info, while allowing you and others to express further outrage (which keeps the pressure on), that will be a step. Next step to come shortly: Ask the ABA to require publication of comprehensive loan data (including these ranges) on each law school site.

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    2. Get the ABA to impose a threshold on the LSAT for admissibility. I don't believe that I'd admit anyone with a score lower than 160. Currently 151 is the fiftieth percentile; that has to be the limit.

      Instantly large numbers of law schools will shut their doors. Good.

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    3. 160 is still too lenientDecember 10, 2012 at 11:09 AM

      "I don't believe that I'd admit anyone with a score lower than 160. "

      170, minimum.

      And no counting "highest amongst retakes", either.

      170 or go do something else.

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    4. That would be fine with me, but it's probably too strict. It would mean that only the top 3% of applicants would be admissible. The more generous threshold of 160 would make the top 20% of applicants admissible. Then there would be space for about forty law schools, on the assumption that the number of students per law school today is fairly even (which is not true: Cooley has the largest enrollment; Yale, one of the smallest).

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    5. There's a huge oversupply of unemployable JD's right now. I'm fine with limiting it to the top 3 percent. Better yet, all law schools should take a 3-5 year hiatus from graduating anyone until the glut gets absorbed, but since that isn't going to happen, top 3 percent it is! (The only problem is, stats show people capable of scoring that high are fleeing the whole concept of law school in droves, I wonder why?)

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    6. As one who did score that high, I wish that I hadn't come to law school.

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  17. Throwing up a little in my mouth over this:

    http://www.uclalawreview.org/pdf/discourse/60-4.pdf

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    1. It's written like a brief. Misrepresenting or ignoring opposing arguments, loaded language, arguing from the conclusion. If this is the kind of "critical thinking" he teaches his students he should be fired. Some choice quotes:

      "As law school administrators know only too well, however, most law teachers take a sizable pay cut when they join the academy from practice, and the bulk of any alleged windfall ends up in university coffers rather than in faculty
      salaries."

      "And who will replace the law professor—
      protected by tenure and unbound to clients or special interests—to reflect on and identify abuses of power and solutions to perplexing social problems from the Archimedean point of the academy?"

      "The time-honored Socratic and casebook method of legal instruction, administered
      by professional educators, is a snug fit with the pedagogical needs of future
      attorneys."

      "Troubled times needn’t lead to shortsighted measures. Jettisoning the noble
      model of the law faculty committed to vital scholarship and the teaching of critical thinking skills in favor of pedagogically unsound apprenticeships and a two-tiered system that constrains choice and opportunity and disserves the clients of those pushed through the inferior version is simply too great a price to pay."

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    2. Oh, indeed, no one other than the Law Professor™ could possibly reflect on abuses of power—such as the law-school scam, on which hackademia is taking the lead.

      How "noble" of law professors to "take a sizable pay cut" when pushed out of a law firm in order to take up their "noble" sinecure of teaching six hours per year.

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    3. If this is what passes for damage control from the law professors who want to defend the status quo then they might want to consider bringing in outside help like a PR agency.

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  18. In my experience, law profs are very much "in the bubble" when it comes to how much their schools actually cost. I remember a prof I had a seminar with when I was in law school around the turn of the century, who exclaimed at the number of hours I was working at my (paying) law clerk job, saying "You're not a student, you're a full time worker!" I think he just expected everyone in his class to be parent-funded and not have to work, and most of them at this t-14 were. Even despite the hours I worked 2nd and 3rd year, I still had/have a mountain of debt, so...

    Clueless, just clueless.

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    1. I'm sure that's a justification bandied about in the lounge- "who cares how much it costs, they're all upper-middle class/middle-class white/Asian kids who've never known real hardship anyway."

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    2. Once again, this is a very different type of debt because of PAYE. You may not like PAYE but it makes large debt much less burdensome than it would be otherwise. Why should a professor care if his students are $200,000 or $1,000,000 in debt when they don't have to pay it back? All that matters is the 10% of their income, above the poverty line they have to pay every year.

      Moreover, no professor guaranteed these students employment or underwrote their loans. You may have a problem with the students who made a shortsighted, or foolish, decision to attend law school. You may have a problem with the government who loans money to students without any reasonable expectation of getting it back.

      But you can't blame a law professor who is guilty only of taking a high paying job that demands minimal work. Who wouldn't take such a job? I'll bet you everyone of the law students you're so concerned about would jump at a similar opportunity.

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    3. But you can't blame a law professor who is guilty only of taking a high paying job that demands minimal work.

      At a certain point, a point which has long since passed for law professors, taking a job that destroys lives is a moral issue.

      You can compartmentalize what law professors do, or what they promise, all you want. In the final analysis, the money comes from the debt of the fleeced. If you're ok with that, fine. Just don't pretend that the money isn't tainted.

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    4. Half the time they don't even get to know their students much less help them out with a reference

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    5. "At a certain point, a point which has long since passed for law professors, taking a job that destroys lives is a moral issue."

      I think it would be exceedingly difficult to feed yourself with a JD without destroying a few lives along the way.

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    6. 7:43- I may not blame a law professor for taking that job, but it certainly undermines their moral authority to "reflect on and identify abuses of power and solutions to perplexing social problems from the Archimedean point of the academy?"

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    7. I've gotten to know all of my professors. And I've had no trouble obtaining references from them.

      It seems to me that most students don't make the effort to meet their professors.

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    8. I think it would be exceedingly difficult to feed yourself with a JD without destroying a few lives along the way.

      Oh, come on. "Everyone steals, why shouldn't I?"

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    9. And The Award Goes To:December 10, 2012 at 11:07 AM

      "exceedingly difficult to feed yourself with a JD without destroying a few lives"


      In the words of comedian Bill Engvall:

      Here's Your Sign.

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    10. What exactly is the issue here? Even the most polyannaish view of law school's always been "work yourself to the bone to make ends meet, or make a fortune by crushing your enemies in high-power litigation." Either you're in a position where you don't have the luxury of turning down work that might hurt somebody, or you've bought that luxury with metaphorical blood.

      Delete
    11. No Lives Destroyed Here...December 10, 2012 at 3:03 PM

      And it wasn't "exceedingly difficult".

      Sorry to be arguing with you, but histrionic hyperbole sets my teeth on edge.

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    12. Yeah, I mean, most laywers aren't necessarily doing anything GOOD for society, but they aren't destroying lives either. Unless drafting wills and divorces or effectuating corporate mergers is "destroying lives." (the last one might eventually help to destroy some lives, but probably not the first two.)

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  19. 7:43, so you'd be ok with tuition that keeps going up forever and ever, because "PAYE makes large debt much less burdensome"? Is it ok if law school eventually costs $1 million a year? $2 million? When does it stop?

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    1. If the Republican Party leaders weren't so damn stupid, they would be all over this.

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  20. Several earlier commenters pointed out that "legal educators" do not care about their students. In the end, the cartel members are paid up front, in full. Their compensation levels are not tied to job outcomes of graduating classes.

    Hell, the state bars require all sorts of personal data from applicants. Yet, the schools cannot provide long-term data on graduates?! Law school pigs will argue that they would incur immense costs to find such data - and we all know how broke these highly-profitable "non-profits" are, don't we?

    The pigs often show open contempt for their students, even though they are charging them $30K-$48K per year in tuition. Plus, the law school swine know - on some level - that MANY or MOST of their grads will not be practicing law 5-10 years after earning their JDs. So, they don't have an incentive to furnish longitudinal employment data. Then again, you can count on the bastards to claim "Learning how to think like a lawyer, and critical thinking, does help one who is selling insurance. So even those grads benefit from our instruction. We are providing a public service."

    In some ways, these dolts think they are God, i.e. everything good under the sun is the result of His work. But when a tsunami kills 20,000 pverty-strickeb people, well, it's not His fault.

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  21. i wish students would have the balls to look at professors as their oppressors rather than adults deserving of respect. First, they have almost no more education, knowledge, or insight than the students they teach. Second, they enable the scam and do it on the backs of the students.

    professors are the tollmasters on the interstate of legal practice, nothing more.

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  22. DJM & Lawprof, you go first - post your school's actual numbers. And tell us what you are going to do specifically at your school to address the problem.

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    Replies
    1. Here, here. Please lead and encourage friendly others (Tamanaka, Henderson, etc.) to join in.

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    2. You can bet that they'll publish the information. Stop trying to portray them as hypocrites. I'm sick of the unreasonable tu quoque crap that people here keep flinging at the few law professors who are fighting to change this wretched system.

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  23. I fully expect that once PAYE kicks in, that law schools will be touting:

    - Since 2012, our financial aid program makes law school affordable. The average repayment amount for our school is $---- per month, which is only 3% of the median lawyer salary per year.

    - In any event, almost no student pays more than 10% of his post-graduate salary toward student loans, and after a period of time, our financial aid program forgives the remaining debt.

    Law schools are evil. Watch and wait!

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    1. The problem with PAYE is that it shifts the theft from the student borrowers and to the taxpayers. The dollar is rapidly turning into Monopoly money or Spacebucks, so we could well see tuition at or near a cool MILLION by 2020.

      I know that figure may SOUND like an exaggeration. But I'm not so sure that it is. Like Campos said, if the tuition is guaranteed to the law schools no matter WHAT they charge, why WOULDN'T tuition skyrocket? All they have to do is convince enough 22 year olds to act as a temporary vessel for all that money. As operating budgets (and salaries) swell, law schools will turn into plush resorts - but students will still get evicted from paradise after 3 years.

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    2. So IBR existed for exactly how long? According to a White House press release, it's been since 2009.

      How long before they started tweaking with it? It looks like it was immediately in play the next election cycle.

      So every four to eight years, law school graduates will have a different set of rules to play by.

      This sounds remarkably similar to HAMP, HAMP II, whatever. The whole goal of those programs was NOT to provide relief, but to forestall default.

      You think any law professors ever thought about that?

      Borrower beware.

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    3. "So every four to eight years, law school graduates will have a different set of rules to play by."


      More like every two years, possibly with each budget.

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    4. And watch whom the educational industrial complex depicts as the bad guy when the policies change. Hint: it won't be the educational industrial complex.

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  24. Also, PAYE could be transformed or disappear at any point. As noted in the comments above, there is already a proposal in Congress to do away with it. Gambling one's entire future on a government bailout program remaining in effect for the 10 or 20 years it will take to benefit you is preeetty risky, especially in this budget environment.

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    1. Although the government can change or eliminate the IBR program for future graduates, the terms for IBR/PAYE are written into the loan agreement and are binding on the government (http://www.direct.ed.gov/mpn.html). So the government can change the program in the future, but it cannot change the terms of already signed loan agreements.

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    2. ^^^^^^^ This is completely incorrect.

      Why are you misleading people?

      What's in it for you?

      Delete
    3. Not misleading at all. In fact, it's the truth. The Dept. of Ed posts a sample master promissory note that clearly shows IBR,ICR and Public Loan Forgiveness are included in the terms of the promissory note.

      http://www.direct.ed.gov/mpn.html

      Delete
    4. If you don't believe me, ask the law professors who run this site.

      Delete
    5. Bunk, and you're a bald faced liarDecember 10, 2012 at 6:12 PM

      Why do you keep lying about this? The MPN mentions that these programs exist.

      The MPN does NOT set any particular repayment terms (nor could it, as repayment terms get figured out after graduation, not when you sign the MPN, which is before you sign for the loan).

      Just in case the peanut gallery has any doubts, see the statement in the MPN that says,

      "Any change to the Act applies to loans in accordance with the effective date of the change."


      You friggin' lyin' buffoon of a shill.

      Delete
  25. Law professors are oblivious to who is sacrificing to keep the law school afloat, as long as their paychecks clear. Do you think about the sacrifice and the misery of the people who put your Iphone together? Probably not. We live in a miserable world where cute little doggies have to get euthanized and toddlers have to endure chemotherapy and die within their cribs. It's best not to think about those things, or you will go insane. Merry Christmas, enjoy your illusory bubbles.

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  26. The notion that a law professor cares a rat's ass about his/her students provided the first comic relief of the week. When I went to law school, the only professor that took interest in his (female) students, was also the one who was having sex with them. It was very common knowledge with the school's administration that he was having sex with female law students yet the condoned that immoral and unethical animal's conduct. For the most part, law professors treated students like insects and could not be bothered with them.

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  27. I am maddened by those who state that the PAYE program somehow means that borrowers should not truly treat the loans as debt with all of its consequences. The fact is that borrowers owe the money! The negative impact of that debt may be limited in some form by the Government program of the moment, but as some have mentioned this kind of program can be taken away at a legislative whim (with forgiven debt taxable when it is all over), but there is no getting around that the debt is what it is - debt - and if young people truly aim to be prosperous, secure and in a secure financial position, the kind of debt (non-dischargeable) students are assuming is absolutely the wrong way to go about it, IBR or PAYE notwithstanding. How law school shills can so easily glide over this point astounds me.

    ReplyDelete
    Replies
    1. ^^^^^^^^ THIS.

      Delete
    2. Although the government can change or eliminate the IBR program for future graduates, the terms for IBR/PAYE are written into the loan agreement and are binding on the government (http://www.direct.ed.gov/mpn.html). So the government can change the program in the future, but they cannot change the terms of already signed loan agreements.

      Delete
    3. ^^^^^^ This is completely wrong.

      Delete
    4. Nope, you would be wrong. That's why I included a link to the sample master promissory note provided by the Department of Education. Click on "MPN with data labels" and scroll down to page 6. ICR, IBR and the Public Service Loan Forgiveness program (page 7) are all part of the promissory note in the section titled "Borrower's Rights and Responsibilities". The government cannot change the terms of the note once it has been agreed to.

      Delete
    5. Why do you keep lying about this? The MPN mentions that these programs exist.

      The MPN does NOT set any particular repayment terms (nor could it, as repayment terms get figured out after graduation, not when you sign the MPN, which is before you sign for the loan).

      Just in case the peanut gallery has any doubts, see the statement in the MPN that says,

      "Any change to the Act applies to loans in accordance with the effective date of the change."


      You friggin' lyin' buffoon of a shill.

      Delete
    6. This man or lady has clearly never taken out a loan, or he/she would know this. It's either a willfully delusional 0L or someone with a financial stake in the scam who is just lying. You don't agree to repayment terms at the time you take out a student loan. I've changed my repayment plan like 5 times since I started repaying, and could change it 15 more times if I wanted to.

      Delete
    7. "It's either a willfully delusional 0L or someone with a financial stake in the scam who is just lying. "

      My vote goes to "lying" (as mentioned above) over clueless 0L. The tone and the style of the post (providing a bit of real info, including the link, but hiding the ball as to the truth) smacks of someone taking care to navigate exactly how and how much info they are providing.

      Delete
  28. As far as I'm concerned, the only obligation the law professors have to the students is to not lie to them about their job prospects once they are in the classroom. And that includes making general statements about what will happen "when you all become lawyers" as I often heard in my classes.

    I don't begrudge them for taking, or keeping, the job. I think there is something to be said for the fact that this whole thing is kept afloat by voluntary transactions. The students are choosing to come, and remain, in school and they are choosing to pay the huge sums that fund the professor's lifestyles.

    So the very little I ask of them in return is to be honest with their students, brutally honest, about their prospects. This is why Campos and DJM are not hypocrites, but rather the only law professors out there actually entitled to their paycheck (in my opinion). They are accepting money from the students only after doing everything in their power to make clear to the students what they are paying for.

    Imagine the difference if every law professor was as bluntly honest to their students as Campos and DJM. Change would come rapidly, I believe.

    ReplyDelete
    Replies
    1. Just the deans would do the trickDecember 10, 2012 at 12:09 PM

      "Imagine the difference if every law professor was as bluntly honest to their students as"


      Don't need ten thousands of law profs falling on their swords. Just 150 or so law school deans would do the job for you.

      Delete
    2. Actually I think just a handful of honest law deans would shame the rest into complying, or risk exposing how deeply involved they are in the scam.

      We probably only need 25 law deans at most to be honest, maybe less, just enough to be able to show they are being honest with students about debt and employment.

      Delete
  29. http://gothamist.com/2012/12/10/private_colleges_are_an_easy_way_to.php

    "Out of the 20 highest-paid private college presidents across the country, five are making bank here in the Empire State. The second highest-paid college president was Shirley Ann Jackson up at RPI, where she made over $2.3 million a year. Then there's Lee C. Bollinger, whose total annual compensation at Columbia University in 2010 was $1,932,931. Hot on his heels that year was NYU's president John Sexton, who walked with $1,476,625. Bringing up the rear in the top 20 was Richard M. Joel, the president Yeshiva University, whose compensation totaled $1,242,577."

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    Replies
    1. That doesn't include all the free and reduced stuff they get as faculty - including rent allowances, or free rent of basically mansions in the city.

      Delete
  30. One thing to keep in mind that will keep the law school scam going is that a lot of people will attend and borrow huge sums to do so because THEY HAVE NOTHING TO LOSE.

    There are a lot of people who were mediocre college students who just skated by to get their liberal arts degrees and will probably only ever work at Starbucks, retail, waitstaff, etc. Say they attend Cooley or similar and strike out and go back to working those same low paying jobs again. Okay they have all this debt now. But guess what, they just won't pay it and they're no worse off and might even have gained "prestige" with their brand new Cooley JDs.

    That is what will keep the scam going. There are always going to be people who will attend BECAUSE THEY HAVE NOTHING TO LOSE IF THEY FAIL.

    ReplyDelete
    Replies
    1. And these half-ass students never should be admitted in the first place. As I said above, we should impose a threshold for admissibility, based on the LSAT.

      The ABA requires its accredited law schools to require the LSAT, yet it doesn't require any particular score. What the fuck is the point if people with scores of 130 (the second percentile), perhaps even lower, are getting in?

      Delete
    2. cant save them for being dumb

      Delete
    3. I agree, and this is the problem with PAYE.

      The cost of making the mistake of going to law school must be borne by the student, not the taxpayer. If it is a huge anchor around the necks of graduates, then word will get out and maybe, just maybe, this will return to some semblance of a profession.

      Delete
  31. 12:18 - if you are correct, and there is something to your hypothesis, the quality of student which law schools accept must precipitously decline. This likely won't be manifest until 2017/18, when bar pass rates plummet. The law schools nevertheless have a dying business model - it just won't die overnight.

    ReplyDelete
  32. 1:36, IBR is a payment plan, not a loan agreement. There's nothing to prevent the government from changing or eliminating any given payment plan. They've already started phasing out "income contingent repayment," IBR's predecessor.

    ReplyDelete
    Replies
    1. Wrong. The terms of the IBR,ICR and Public Service Loan Forgiveness are included in the Master Promissory Note. Click on "MPN with Data Labels" and see pages 6-7. http://www.direct.ed.gov/mpn.html

      Delete
    2. Why do you keep lying about this? The MPN mentions that these programs exist.

      The MPN does NOT set any particular repayment terms (nor could it, as repayment terms get figured out after graduation, not when you sign the MPN, which is before you sign for the loan).

      Just in case the peanut gallery has any doubts, see the statement in the MPN that says,

      "Any change to the Act applies to loans in accordance with the effective date of the change."


      You friggin' lyin' buffoon of a schill.

      Delete
  33. Mention to your average person that many lawyers struggle to find work or make ends meet and you will be greeted with polite laughter and disbelief. For most of society this belief in the value of a law degree is ubiquitous and unquestioned. The word is getting out there though, slowly but surely.

    ReplyDelete
  34. I graduated from Case Law School in 2010. Shortly before graduation, I had to attend a mandatory, one-on-one "financial counseling" course, like every other student who took out loans. During my session, the "counselor" told me that, for those students who borrowed to attend Case Law School, they borrowed $160,000 on average. Dean Mitchell conveniently omitted this fact in his recent op-ed. Even worse, he deceptively implied that his students borrowed an average of $125,000 to attend Case Law.

    ReplyDelete
    Replies
    1. Wow. What an evil bastard.

      Delete
    2. I remember my "exit" loan interview from a decade ago. Funny how they don't emphasize paying back the loans when you first enter law school.

      Delete
  35. End PAYE. Recent graduates should be the poor bastards whose heads on pikes stand as stark warnings to future comers about the dangers of spinning the law school roulette wheel post B.A. in political science.

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  36. IBR will go the way of the Waffle Iron and manual typewriter.

    The way of the cloth diaper, and the milkman.

    The way of the hand crank to start a car.

    The way of analog radio and tv.

    The way of vinyl records and tape cassettes.

    IBR will go the way of legal firecrackers and M-80's purchased in Chinatown, NY.

    IBR will go the way of being able to drive without a seatbelt.

    IBR will go the way of being able to buy cigarettes and cigarette lighters before the age of 17 or 18.

    IBR will go the way of the legal drinking age of 18, because going into war and getting shot at is much better when the targets are as young as possible, and sober.

    IBR will go the way of being able to smoke within 200 ft of a train station.

    IBR will go the way of children under the age of 14 being able to ride a bicycle without a helmet.

    IBR will go the way of camping on a public beach without being thrown off or even arrested for doing so.



    ReplyDelete
    Replies
    1. "IBR will go the way of the Waffle Iron and manual typewriter."

      What is a typewriter? (Manual or otherwise?)

      Gotta argue on the waffle iron, though. That's here to stay.

      Delete
  37. Well, maybe the French or Belgain waffle irons.

    And silver dollar pancakes are eternal as well.

    ReplyDelete
  38. Oh Dear Lord in Heaven.

    Oh God, has it finally come to this?

    http://www.youtube.com/watch?v=4-f8lu8wB-s

    ReplyDelete
  39. http://www.cbalaw.org/_files/publications/lawyers-quarterly/Law%20Schools%20-%20The%20Real%20Employment%20Numbers%20for%20the%20Class%20of%202011.pdf


    Interesting article written for an Ohio bar journal. The author put it together from records requests to the law schools in the state. Kudos to commenter Fat Man for bringing this forward (in yesterday's comments).

    ReplyDelete
  40. Let's not forget that the majority of students borrowing for law school are already saddled with debt from their undergrad degree. Add that to the equation.

    ReplyDelete
  41. I think the longer PAYE exists the harder it will be to dislodge because there will be more and more people relying on it. Just like social security and medicare. And of course no one is suggesting we get rid of it now. There's a congressman who wants to modify it and make it a little less generous but even he doesn't want to get rid of it.

    Here's an idea if you can't get a job. Just get an LLM. The government will loan you the tuition money and your cost of living. With PAYE your payments probably won't even increase. And if you can't get a job with the LLM, just get another one.

    ReplyDelete
  42. 8:04, what do you think is going to happen politically when the first person "cashes in" and gets 100k in loans forgiven? What about when the 100th or 1000th person does so? PAYE is going to be shut down so fast it'll make your head spin. The average voter has no sympathy for the "overeducated" overindebted class, especially when programs like Social Security, which actually help the poor, are already on the chopping block or may already have been chopped by that time. There is no way that level of loan forgiveness is not going to get cut. No freaking way.

    ReplyDelete

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