Friday, August 10, 2012

Scholarship and scholarships

Bill Henderson's newish site The Legal Whiteboard has a couple of excellent posts this week, from Henderson and Jerry Organ.  Henderson on the higher education bubble:

Student loans are viewed as "assets" by the federal government ... until they become uncollectable, in which case the value of the assets eventually has to be adjusted through write-downs, just like mortgages in the mortgage crisis.  Extensive use of Income-Based Repayment makes it possible for a student loan to be simultaneously uncollectable but not in default.

Folks, I am an unapologetic New Deal Democrat.  But the current "system" of federal higher education financing is near perfect insanity.  We set tuition and, no questions asked, the federal government writes us checks in exact proportion to students' willingness to sign loan papers.  For young people who have never worked, it is all like monopoly money.

The only way the math works is if the real earnings go up en masse for virtually all college and professional school graduates.  In a rapidly globalizing world in which our students are competing against Chinese and Indian professionals, the assumption of mass rising real incomes is implausible.  See, e.g., views of economist Alan Blinder in this NPR article.

Right now we--higher ed and the nation as a whole--are maintaining the illusion of prosperity through debt financing heaped on naive young people.  This is immoral in the extreme.  Moreover, in the long run, it is economic and political ruination.

The only long term solution is cost containment imposed on higher ed by reforming the terms of federal financing.  The financing has to incentivize educational productivity -- i.e., fewer tuition dollars expended to obtain better skills and learning as measured by marketplace earnings and innovation.

How many current legal academics are in a position to impart "better skills and learning as measured by marketplace earnings and innovation" to law students? Given that the most important skill for 93% of lawyers is how to acquire clients and get them to pay their bills, which is a skill 97% of legal academics are no more qualified to impart than they are to translate The Antichrist from Estonian to Urdu, this should be a fairly daunting question.

Organ compares 2011 to 2010 matriculant totals, and does a bit of extrapolating to this month's entering class:

ENROLLMENT IN DECLINE – Between 2010 and 2011, 141 law schools had a decline in enrollment (of which 63 had a decline of 10% or more), 30 had an increase in enrollment (of which 6 had an increase of 10% or more), and 26 had flat enrollment (within +/- 1% of 2010 enrollment).  This means over 70% of schools had a decline in enrollment and that nearly one-third had a decline in enrollment of 10% or more.  The decline in enrollment totaled roughly 4000 students or roughly 8 percent.
 ENROLLMENT AND PROFILES IN DECLINE – Most significantly, 75 schools (roughly 38%) saw declines in enrollment and in their LSAT/GPA profiles, of which 37 schools saw declines in enrollment of greater than 10% and saw declines in their LSAT/GPA profiles.  These 37 schools are highlighted here -- Download 37 schools with declines in enrollment of 10% or more and declines in profiles.  Four of the schools are ranked in the top-50, while the other 33 schools are relatively evenly divided between the second-50, the third-45 and the alphabetical schools.  There is some geographic concentration, with five Ohio schools (plus Northern Kentucky), three Illinois schools and four of the six Missouri and Kansas schools on the list.  Notably, 16 of the 37 are state law schools, several of which are relatively low-tuition schools that should conceivably fare better in the current climate in which prospective students are increasingly concerned about the cost of legal education.

FORECAST FOR 2012-- Given that LSAC has estimated a decline of roughly 14.4% in the number of applicants for fall 2012, from 78500 to roughly 67000, and given that the decline has been greatest among those with higher LSAT scores, one should anticipate further declines in enrollment and further erosion of entering class LSAT/GPA profiles for fall 2012.  The admit rate will be the highest it has been this millennium, probably exceeding 75% and possibly exceeding 80% (after increasing from 55% to 71% between 2004 and 2011).
 So the collapse has started, and is likely to accelerate.

We've spent this week talking about law graduate debt. Yesterday CU's president sent a campus-wide email highlighting a public interest scholarship at the law school in the context of a broader fundraising appeal:

As we walked past the U.S. Capitol in Washington, D. C., on our way to an alumni event at the Library of Congress, a gentleman noticed my CU lapel pin and asked if we were from the university. I introduced myself and asked if he was an alumnus. No, he said, but his late brother graduated from our law school, so he was on his way to our event.
 David Barash told me the story of his brother, Dan, who loved the outdoors, particularly the Rocky Mountains, and treasured his time at CU. After graduation in 2002, he pursued his passion and became a public defender in Colorado Springs before his untimely death at age 30. David and his family decided to honor Dan by creating the Daniel Barash Scholarship Fund to support students with demonstrated interest in criminal defense work.
When I asked how much was in the fund, I was shocked by the answer: $750,000. Most memorial scholarship funds never approach that. . . . 

The first recipient of the Barash Scholarship, David Brown, received $1,000 in 2004. The 2011 recipients, Yona Porat and Jake Taufer, each received $13,000. The 2012 recipients, who will be annouced soon, will each receive $14,000. Of the 13 recipients since its inception, 11 are public defenders. All engage in pro-bono work or public service. It's a fitting tribute to Dan Barash's legacy.
It's of course a very fine thing that the Barash family has done, and I'm particularly pleased for Taufer, who was an outstanding student in a seminar on punishment I teach (I don't know the other recipient).   Here are some other numbers relevant to this subject:

Resident tuition at CU Law the year after Dan Barash graduated (2003): $7,645

Resident tuition last year:  $31,115

In other words, if we had merely doubled resident tuition over the last eight years, we would have done the equivalent of giving every single CU law student either a two or three-year scholarship (everyone gets resident tuition after 1L) larger than the very generous one-year scholarships the Barash Scholarship Fund provided for two CU students last year.

A final stat: Number of graduates in the CU Class of 2011 who got jobs as public defenders: Two.


  1. "Folks, I am an unapologetic New Deal Democrat. . . Right now we--higher ed and the nation as a whole--are maintaining the illusion of prosperity through debt financing heaped on naive young people. This is immoral in the extreme. Moreover, in the long run, it is economic and political ruination."

    Funny, he doesn't see the connection between the two...

  2. "Given that LSAC has estimated a decline of roughly 14.4% in the number of applicants for fall 2012, from 78500 to roughly 67000, and given that the decline has been greatest among those with higher LSAT scores, one should anticipate further declines in enrollment and further erosion of entering class LSAT/GPA profiles for fall 2012."

    In other words, the system is culling the best raw material. This is the future of the profession? Judges, if you hate incomprehensible submissions and counsel who can't seem to follow the rules, take note.

  3. "Funny, he doesn't see the connection between the two..."

    Be reasonable. One cognitive crisis at a time.

  4. The current system of higher education funding was brought to you by the believers in The Magic of Privatization, not by New Deal Democrats.

  5. In my experience it was somewhat difficult to land my public defender job in Colorado, so I'm not surprised by the "2" statistic. A lot of law grads from other states wanted to relocate here.

  6. "The current system of higher education funding was brought to you by the believers in The Magic of Privatization, not by New Deal Democrats."

    LOL, ok. Because unlimited government funding to whomever asks is a definite tell-tale sign of privatization.

  7. William Henderson also told me that he is against protecting industries via unions. However, he is in favor of the ABA cartel fixing salaries and "workloads" for tenured "professors." Frankly, the man isn't smart enough to see the connection.

  8. 6:53: "Because unlimited government funding to whomever asks is a definite tell-tale sign of privatization."

    Yes, it is. Having worked in a privatized area that was formerly a government function, I can promise you that you just have to be the right person asking.

  9. Boilerplate response from ABA/most law school administrators:

    We strive to make legal education available to all individuals regardless of economic circumstance, race or gender. Our financial aid packages allow us to advance this goal, which in turn, allows our graduates to serve the accused, represent the needy, and provide legal services needed by all individuals regardless of economic circumstance, race or gender. Loans from the federal government are an important tool allowing students to continue this tradition in an era of rising costs. We kindly ask that you not rock the boat and ignore the man behind the curtain.

  10. If you see an end to practically unlimited government funding coming, then the sensible thing for individuals employed by law schools to do is to make sure that they get paid as much as possible before the door slams shut. From that perspective, quintupling Colorado's in-state tuition in less than ten years makes all the sense in the world.

    It might have been more ethical to make full and honest disclosure to the student, but hey, we can't have a scam without a mark.

  11. Because unlimited government funding to whomever asks is a definite tell-tale sign of privatization

    Fannie and Freddie, and everyone who took a percentage off the origination and securitization.

    Home ownership WOW!

    privatize gains and socializing losses is SOP for whatever economic system we have now. It sure as hell isn't capitalism.

  12. "...the most important skill for 93% of lawyers is how to acquire clients and get them to pay their bills, which is a skill 97% of legal academics are [not] qualified to impart..."

    Ah, one of the most important aspects of the law school scam (and the higher education scam in general)--- THEY DON'T TEACH USEFUL SKILLS! This crucial component is not mentioned enough.

  13. @ 7:30 your comment reminds me of this cartoon scene...the last ten seconds of the clip some it up.

  14. @6:33

    Actually the New Deal was notable for the toughness with which the Federal Government scrutinized expenditures to ensure that it was getting value for money. The current student lending program has no controls worth mentioning.

    You can say you are a New Deal Democrat and demand accountability for how government money is spent - it may even be part of the definition

  15. "Thinking like a lawyer" once learned, is a skill and highly prized and valuable one in the overall job market.

    You can do anything and go anywhere with a law degree.

  16. What we have overall is too complicated to play the blame the right-wing or left-wing game. We need to figure out who in the higher-ups, whether in Congress, in state government, in law school, or whatever, regardless of political afflition, is worried about the scam being pulled.

    There is a lot of the scam that will appeal to those on either side of the political aisle.

    But I can't resist: it is ironic that a strongly left-wing profession/faculty/administration has done what they have done. The people most hurt are the low-income students who score lower and pay more.

  17. In Soviet Russia, debt services you!

  18. What we have now is a hybrid system with both free market and socialist elements that is structured to protect the most powerful stakeholders on down. The government seems to have abandoned the position that we should start from what is best for the individual students (getting a quality education with no debt) and work from there.

  19. BoredJD: Exactly.

    There's no political ideology that would defend the present system, unless "stealing everything that isn't nailed down for as long as you can get away with it" can be characterized as an ideology.

    And the left wing affectations of (some) law professors are purely decorative.

  20. @MacK you are a maniac if you actually believe the New Deal was notorious for getting value on investments, unless you think there is value in votes. But anyway, UT Law "cut" its incoming class from 400 to 300 this year. They were careful to tell us they did it benevolently, not that they couldn't fill it.

  21. To the choirboys at LST,

    You weren't included on the email where Henderson told me that we shouldn't work to protect American lawyer jobs, because protectionism is b___s___. (This was in regards to ABA "Ethics" Opinion 08-451, where U.S. firms can hire foreign lawyers and nonlawyers to engage in American legal discovery.) By his account, he was a former local labor leader, before becoming an academic.

    Have you seen Henderson make the same argument as it pertains to protecting "law professors" via pay structure and security?! Why should they be guaranteed such easy schedules and massive pay, for their minimal work product. Before you chime in, learn the facts. You're welcome for the education.

    Also, your contributions to this movement have been rather tepid. Yes, politely asking the schools to furnish data to you guys, when they routinely ignored the ABA and NALP, was a recipe for success, right?! Remind everyone how successful that first year was, boys. Only after the scamblogs and mainstream media raked these pigs over the coals did you gain any traction. You are welcome for that, too.

    In the end, it only matters that future students are better informed. Set aside your need for accolades and focus on that goal.

  22. @LawProf:
    First off, I recently discovered your blog and ABSOLUTELY LOVE IT! This explains so much about the seedy underbelly of legal practice that I was blithely unaware prior to graduation in 2010.

    That having been said, I don't see how your comment on privatization holds water. CU itself is state funded and they too raised tuition by absurd amounts over the last decade. The entire education bubble is a mirror of the housing bubble where government policy fueled cheap credit completely unattached to creditworthiness of the borrower. This was done in the name of publicly subsidizing a social good : first home ownership and now higher education.

    This bubble is not possible without limitless federal money available to all and sundry regardless of creditworthiness. What private lender would give a prospective law student $100K+ of loans to a T4 school? Short answer : none! It takes public funding to achieve that level of stupidity.

  23. Not a maniac - the WPA and other new deal projects actually had very tough auditors and did check all spending very carefully. Indeed even during WW II there was very tough oversight (led initially by Harry S Truman.) It was actually when the Republicans got back in - starting with Eisenhower that the tough auditing started to slip - mainly because business hated it.

  24. At the risk of stating the obvious, the law-school-scam movement is reaching the point where 0Ls would have to be willfully blind not to be aware of the evidence showing that law school is a terrible investment for almost everyone. To the extent this makes the incoming victims of the scam less and less sympathetic, the movement will have to articulate better why the system needs to be reformed even if we assume that kids entering law school now have no one but themselves to blame.

  25. @9:02 a.m.:

    When law schools themselves are putting forth the evidence that shows how much of a risk they are, and the ABA punishes law schools for deceiving or attempting to deceive prospective law students, I'll accept that the point has been reached. Until then, there's a lot of doubt and the benefit should go to the people whose lives are ruined thereafter.

  26. This is a fascinating blog, a bit redundant at times, but I can't stay away because it is like watching a spectacular disaster occur in slow motion.

    9:02--I agree, enough information is out there that a reasonable person would seriously question the judgment of anyone who enters law school today, unless they have a full scholarship to a T6 school or the family/political connections to guarantee a well paying job upon graduation. The general public doesn't really like lawyers or law students anyway.

    The movement will have to focus on the enormous waste of taxpayer dollars. It affects all of us (at least those of us who pay federal income taxes). Spend $130K on a JD from Cooley if you wish, but don't ask me to foot the bill.

  27. 9:02: I'm still not sure that is the case. We'd have to survey some prospective students or recent 0Ls on the level of research and knowledge of the legal hiring market they had prior to enrollment. "How many of these websites have you viewed (JDU, ATL, ITLSS)" "Have you seen any articles in media publications about law school in the last three months" "Rate the following factors from most to least important in making your decision to go to law school- parents, teachers and advisors, friends, attorneys, media publications, blogs and law school forums."

    Having spoken with prospective students this year, I am astounded at their lack of research skills and inability to process the information they were receiving in a rational manner. One woman estimated to me that only one half of her pre-law program had even heard of the MSM articles on this topic.

  28. Spend $130K on a JD from Cooley if you wish, but don't ask me to foot the bill.


  29. Law Prof - you cannot possibly be correct. The current system of education financing has been brought about by a combination of crony capitalism and big government education advocates, who foolishly believe that any kind of education at any price is worth the cost. This is of course similar to the housing advocates, who thought that putting the maximum number of people in owner occupied dwellings would solve all sorts of social ills, irrespective of a borrower's actually ability to service a 30 year debt obligation. Of course, over time no one - including bankers, underwriters, GSE's, and yes, particularly the Government, gave any real thought to the consequences of extending cheap and reckless credit.

    The student loan market was only notionally private. What other form of commercial lending obtains statutory protection from dischargeabilty in bankruptcy, with Government guarantees to boot? You call that privatization? Looks like the worst form of crony capitalism to me. You are correct to point out that both political parties supported this course of action, but really, the lending function was never really privatized, with the private sector assuming the risks from its borrowers. Oh, only if it was! There would be very few lenders willing to underwrite students, and then only those students with extraordinary records with a clear shot at timely servicing the loans. Costs of education would come down out of necessity. And you would not have seen a law school like your employer raise in-state tuition 400% in 7 years, with frankly, in marketplace and asset value terms, all for a product which has greatly diminished in value.

    And as you well know, the recent "takeover" by the Government of the student loan process will not solve any of the marketplace's current problems - in fact - it may make them worse. IBR is worse than any sub-prime used car automobile transaction. It is not a privatization issue, but an economic policy issue. We would all be better off if the student loan spigot was significantly curtailed to levels which are reasonable, which, of course, was the situation that governed and controlled when those of us in our 50's attended school years ago. (The rot, however, was already starting).

    The political angle? It is difficult to escape from the fact that one of the most liberal and progressive set of institutions in America - law schools and law school faculty, have helped bring about a state of affairs which have greatly damaged young people and lower to middle class and middle class people. Like it or not, these overwhelmingly liberal institutions own this problem, whether they want to deal with it now, or later. Those which choose to deal with it later, of course, will be perplexed at the speed at which economic destruction will visit. Don't take this an argument that having more conservatives around would have solved the problem, but there is no way around it - the liberals own it here.

  30. @8:38 a.m.:

    I think of it as being more analogous to what happened in California under Gray Davis' tenure. Wholesale electricity generation prices were deregulated, but the retail price remained under regulatory control. While some might argue that the rolling brownouts might not have happened if both had been deregulated, it should be mentioned that the regulated system ran 40 years without them and while providing an affordable source of power for consumers.

    If we had a truly socialist system of higher education, there would be no debt on the student's balance sheet (even if access to universities were then controlled by resource availability and central planning, as in Europe). People would attend for a nominal fee, and the taxpayer would bear almost all of the burden. If the taxpayer didn't like the cost, then it could negotiate directly with the provider (and with far greater bargaining power than any individual consumer).

    The most sophisticated party in this transaction is the law school, and they have no actual regulatory restraints in what they charge or what they teach. The government's not bargaining directly with them, but instead backing the students who know little about the process and can do even less to change it. I am sympathetic to the argument that burning down student lending as we know it would solve this problem, but there are at least other solutions to the cost spiral that don't require us to remove access to graduate and professional schools from anybody who can't pay out of pocket for them.

  31. Also, there is the argument that the bad PR will hurt the profession in the long-run. For example, the decrease in applicants is occurring disproportionately among people with higher LSAT scores. I think the reason for this is that more of these people have better options. A few years ago they may have turned down those options to go to law school.

    While this is certainly the smart move for those individual students and is what has created the crisis at GW and other top law schools that is trickling down to lower ranked law schools, it's unsustainable for the profession's reputation in the long-term. What happens when lawyers are seen as the dumb kid who went to law school because they couldn't find anything else to do? Who is going to pay for us to do their legal work then? What will be the fate of unauthorized practice laws?

    It's not uncommon to hear lawyer jokes. It's quite another thing to hear lawyers and people who went to law school described as dumb, irrational, gamblers, or people with no other options.

    It's not even about the publicity or the blogs. When you graduate 45000 JDs but there are only 25000 legal jobs, eventually the middle class can't help but look around and see that Bill's kid down the street who went to law school is still working the same job he worked in high school, or that Sally's daughter is still living at home and can't pay her student loans.

    I have no doubt the current power brokers in the ABA don't give two shits about this. They need the 140 LSAT takers to fill their classes and they would outsource legal jobs in a second to increase their profits. This is a problem that only people who plan to be around in this profession in 25 years need to address.

  32. People would attend for a nominal fee, and the taxpayer would bear almost all of the burden. If the taxpayer didn't like the cost, then it could negotiate directly with the provider (and with far greater bargaining power than any individual consumer).

    I'm not getting this part.

  33. Morse Code @ 9:23: Couldn't have put it better myself. The "free market" aspect of the current system is the idea that schools need price flexibility to be able to compete to offer the best service and that students are rational actors/sophisticated consumers who can rationally adjudge value.

  34. Just for shits and giggles, I googled "law school" and the second result is the Wikipedia entry on law schools. It has a section "Controversies involving US law schools" which nicely summarizes the basics of the law school scam.

    Then I googled "law school loans" and the first page of results includes a US News article summarizing the problem of law school student loans, as well as an Above The Law article with the eye catching title "Law Schools Misreport Debt Figures."

    Note that these results came up with general search terms not referencing scams or rip offs. If a 0L cannot even do this type of minimal research, I don't know what to tell them.

    1. You think those few articles - espicially from a gossipy blog like ATL- will convince anyone?

  35. @9:38 AM "If a 0L cannot even do this type of minimal research, I don't know what to tell them."

    If they can't do that minimal level of research, then they shouldn't be in law school. If they can do it, then they would learn why they shouldn't be in law school anyway.

  36. So basically the people who are most vulnerable to getting ripped off will get ripped off.

  37. 9:38: I think that there is a second question- whether they are able to process that information against all the pro-law school propaganda out there. I did the same Google search and got results for LSAC, "Prepping for Law School" and NYLS in the top four (I wonder how NYLS got up there?)

    It's one thing to know every argument made for and against law school and see a section on "Controversies," and evaluate the information then. It's another thing to be someone with no prior knowledge, who suffers from the biases discussed many times on this blog, and still be able to make the rational choice.

  38. @9:51 AM

    "Who suffers from the biases discussed many times on this blog, and still be able to make the rational choice."

    It is hard to protect people from themselves.

  39. @9:51 and 9:52

    I think that Pogo said it best when he said "We have met the enemy and he is us."

  40. 9:52: Especially when you're the one burglarizing their house. That makes it especially tough to protect them.

  41. 9:52: The point is we have to protect the taxpayer and the profession from them.

  42. Hopefully the next two weeks will be the Season of Cold Feet.

    By the way, you guys saying T-6 Full Ride, or Don't Go need to STFU (Bam Bam). You're overstating the situation to a stupid degree.

  43. Will first-year law students become more competitive because of their knowledge of employment prospects and the importance of 1L grades?

    Will drop-out rates increase next summer?

    Any chance law schools could front-load small scholarships, so instead of 8K per year, 24K in year 1? ololloolololololol

  44. A fool and his money are soon parted, but that doesn't mean that State institutions should be permitted to con the most vulnerable just because they "deserve it."

    Law schools - - indeed places of higher learning altogether - - should be held to a higher standard.

    People should be wary of used car salesmen, not State U.

  45. Yona Porat of CU is pretty cute.

  46. Why can't more tenured, but disaffected, law professors be added to this movement? There must be many out there who have job security, like our friend LawProf, but have little stake in their institutions and therefore little reason to be deterred from speaking out. I see their non-participation more as a function of their apathy or lack of information, rather than the invidious resistance to cold, hard facts displayed by deans and academic stakeholders.

  47. 10:25, what happens if they ever want to move? What institution will want to risk taking on someone who might bad mouth them?

  48. On the subject of declining applications from high-LSAT scorers, one data point - High LSAT score (175-180), admitted to T6 program, targeting biglaw only, declined law school due to unfavorable value prop/ROI vs. available alternatives. This was in 2009; recent tuition hikes only make the law school option less viable.

    Would definitely agree that students with high LSAT scores generally (not always) have options. Those options probably don't involve $160k salaries and some nebulous notion of 'preftige', but they also don't entail 3 years of school and $250K (or more) in debt.

    In my own case, it was law school or a relatively low-level job at a good company. Taking the latter path has led to working 2/3 the hours of biglaw, about 60% of the pay, similar benefits, no debt, 3+ years for full-time, credible experience on the resume, and a growing professional network.

    Someone asked me what it would take for me to consider leaving what I have for law school. I've thought about it, and I think it would take a T6 program at $100k tuition or less. I think that speaks at least somewhat to why we see the decline in applications from those with high LSAT scores.

  49. @ 10:25:

    Fair enough. I still think that the point should hold on a small scale, though. Just a few more voices in the wilderness would be helpful. Look how much press Tamanaha's book has received.

  50. Don't worry LawProf, a quick perusal of your institution's spring magazine should reassure you that no further tuition increases will be warranted.

    Embarrassingly generic and full of platitudes:

    The initial section of the message from the Dean in regard to your school's finances is like listening to a presidential "debate", re: we have no real answers, or certainly not any that we are willing to state. If we told you, you wouldn't be impressed.

    "We at Colorado Law already are making the
    changes we need to survive and thrive at this
    strategic inflection point. On the financing
    front, we have confronted the drop in state support
    that many of our peer schools in states west
    of the Mississippi—top public university law
    schools like the University of Washington, the
    University of Oregon, the University of California law schools (Berkeley, Davis, Hastings, and Irvine), and the University of Arizona—are only now truly starting to grapple with. With just around 4 percent of our budget supported by the state, we are already far along the glide path to zero and thus are well positioned to adapt to a new fiscal environment."

    HAHAHAHAHA - let's call it "Spanierspeak".

    To get back to NLG sources: "have you no decency sir?!"

    And why does Comcast or any other corporation want to give 50k-100k to a state law school?

  51. Burt Bacharach wrote the theme song for "The Blob" (1958) starring Steve McQueen.

    Thought I'd share that.

  52. I would argue that the current system of higher education financing in the US - including law school - is neither left nor right, but rather a half-assed agglomoration of statist ideas and free market approaches, that manages to blend the worst aspects of each. Thus you have an indirect form of state financing through the student loan system, but a free market in the education supplied to the borrowers.

    Even the Pentagon budget tries, a little, to align spending with needs - the highway administration only rarely builds bridges to nowhere- there are in fact some controls. The student lending system, intimidated by the arguments for "academic freedom" has essentially eschewed any underwriting standards or controls.

    State financing of higher education has some advantages - pay in academia is constrained so that European law full-professors make generally a fraction of what a starting tenured US professor can expect. On the other hand, the number of law graduates per job is still much higher than in the US - that is to say that being a law professor, even a not well paid one, is such a "cushy number" that law faculties multiply like kudzu even in such a system.

  53. Re. confirmation bias, word is definitely getting out about the scam, but it remains a fact that Special Snowflake Syndrome is alive and well among prospective law students. That said, my own experience has been that youthful prospectives are generally more open to a blunt assessment of the current economics of acquiring a JD than are their parents. Many parents seem to still regard a professional graduate degree as sacrosanct, and any questioning of this assumption as akin to heresy. I usually don’t bother engaging parents in the subject anymore, some of the responses have been so strongly negative and dismissive – You must be wrong! And why do you want to crush my child’s dreams?!? Just because YOU aren’t proud of you law degree?!?!? (Actually, I’m merely ambivalent about it.)

    This is unfortunate, because for all the boomer-bashing that goes on here (in some cases warranted, in others not), many parents of debt-beleaguered JDs are severely impacted by the scam too. Many end up supporting their adult children directly or indirectly, and share the emotional suffering and perceived stigma caused by their child’s “failure.”

    By the time some learn, it’s too late. A few months ago I met a parent of a JD from a local diploma factory who had been unable to find legal work for almost two years, with no prospects in sight. In the course of trying to help her child she had become aware, belatedly, of the actual job prospects for most graduates of the school he attended. She was angry, forlorn, bitter and ashamed of her own bad judgment. The revelation that her advice to her child had been so misguided had traumatized her.

  54. @LawProf: "So basically the people who are most vulnerable to getting ripped off will get ripped off."

    This has been true throughout human history, in all cultures, and in all occupations. Why would law school be any different? What I think is unique to this particular train wreck is that now the upper middle class is getting hit too and taking notice:

    From WSJ, "College Debt Hits Well Off":

  55. I think we're seeing that transparency (even if we could get as much of it as we want) will only go so far in undoing the scam. Transparency by itself, like Surgeon General warnings, puts a dent in the problem but doesn't solve it, especially with respect to "the people who are most vulnerable to getting ripped off," as LawProf put it above.

    But trying to go beyond "mere" transparency as a goal raises issues: What do we want besides transparency? What would a reformed system of legal education look like if we had our druthers? What are the trade-offs connected with a complete absence of government assistance?

  56. Whoops, forgot to paste my favorite pull quote:

    "The boomers are the first generation shifting the cost of college to their kids," both through increased student borrowing and reduced taxpayer support for higher education, says Susan Dynarski, a professor of education and public policy at the University of Michigan.

  57. For all the boomer bashing, many of us are in the same boat as the scammers. Our ability to work is severely impacted by the oversupply of lawyers and the dearth of legal job opportunities. I think the same thing is true for every generation of lawyers that is trying to practice currently.

    I fully blame the federal government for fueling the scam and the oversupply with unlimited money for law school education. I fully blame the federal government for paying for these spiraling cost increases with no rational explanation, given the size of the increases, and saddling unknowing students with debt they can never repay. I fully blame the federal government for not requiring these schools to collect employment and income statistics for all their classes. There is no way out until the government cuts the loan spiggot to where supply and demand meet in the legal profession and until there is full disclosure of all law graduate outcomes. To give you an example, in NY State, there is a database of everyone who is licensed to practice law. It would be easy to see how many people have jobs if that database were accessible other than by punching in a name. The State does not make that database available for this purpose. If they did, the results at least in terms of employment would be shocking - shockingly low employment and shockingly high numbers of solos not making a living.

  58. Something smells here...August 10, 2012 at 12:04 PM

    Fernando writes of Law School Transparency, "Also, your contributions to this movement have been rather tepid. "

    As opposed to Nando's own contributions, which are universally fetid.

    Alex, I'll take the category "Tepid Over Fetid" any day.

  59. 10:19 says, "Yona Porat of CU is pretty cute."

    You must not have seen her in profile, which view could make Durante or even de Bergerac green with envy.

  60. @11:53 You are exactly right. Transparency is merely step one. Not only does it allow for a substantive dent in behavior by schools and prospective students, but it (and the battle against it) serves as a facilitator for the other conversations. Without knowing that the economics are screwed up, discussions about loan reform and structural legal education reform just simply wouldn't be possible.

  61. Mack,

    It's not complicated. It just seems that way because we are all so brainwashed.

  62. 11:55 The increased borrowing has to do with the spiraling cost of education which is fueled by the boom in federal loans and other federal funds available for education.

    In NY State, a big reason for reduced taxpayer funding is a broken state constitution which guarantees every public employee that was hired up to 2012 pension and social security benefits vastly exceeding their salaries. A policeman earns $90,000 after 5 years of service and is guaranteed $2.2 million of benefits assuming retirement at age 48. Those benefits can never be taken away once a person starts working because of the state constitution. In New York City, pension benefits have been based on overtime in the last year of service. Many public servants in New York have six figure pensions. The cost of benefits in New York City equals the cost of salaries. Similar thing is true for lifetime retiree medical for state and local employees paid for by the government that a person who started work in 2012 can never have taken away, as long as he or she works. These constitutional protections will continue to guarantee that once a person starts work, the pensions and retiree medical benefits he or she had at the start of work can never be taken away, as long as he or she works for the state or a city in the state.

    This is the work of powerful public unions. Sure it benefits some of the boomers, but surely not those who work in the private sector.

    Those pensions and state constitutions are at least part of the reason for cutting back governmental support for public universities.

    I don't see anybody screaming to amend the state constitutions, but they should be amended because in the private sector, people have lower salaries, nonexistent pensions for the mostpart, and less job security. The state constitutions do not work anymore. THey are bankrupting our youth at the expense of a limited number of boomers and other public workers.

    You can blame the skyrocketing costs of education and lack of public support for education on the babyboomers, but if you look behind the reasons for the skyrocketing costs (unlimited federal money gushing out to anyone who wants it for any type of education without forcing schools to control costs) and reduced state support (partly fueled by the pension and retiree medical guarantees that your loyal state legislators gladly vote for in exchange for the public unions voting for them), you will see that blaming the boomers for this crisis is similar to what Hilter did when he started his mass exterminations.

    If you want to do something about this, go after the federal government, the schools that are skyjacking tuition, the state legislators and the powerful state unions.

  63. MacK used the term: "underwriting standards"

    That is a great way to put it, and it makes me wonder if there is somehow a nexus between Student Lending as it ought to be without gov't intervention, and how the P&C insurance industry will continue to operate in what is still supposedly a free market.

    If the P&C were to mirror current student lending, why not have no car insurance and let the taxpayer pay for all the accidents?

    Or is that a bad comparison?

    Or maybe not, because that is essentially what Obamacare is going to be, and also many other industriess over time if we keep going down this road?

    And why not have free life insurance for all, with premiums paid for by the taxpayer?

    Or why not do away with insurance, a Capitalistic phenom. altogether?

  64. @12:04

    Nando IS the Scamblog movement, along with a handful of original scambloggers.

    Without Nando's pioneering work, this blog might not even exist.

    TTR has a balance of humor (albeit crude) and fact, and if any institution doestroys lives with debt, then it ought to be compared to a toilet.

  65. BoredJD says, "When you graduate 45000 JDs but there are only 25000 legal jobs, eventually the middle class can't help but look around and see that Bill's kid down the street who went to law school is still working the same job he worked in high school, or that Sally's daughter is still living at home and can't pay her student loans. "

    Well, see, there's the problem but not the way you think. Yes, graduating an excess 20K lawyers is a real problem.

    But in the bigger picture, that 20K are just a drop in the bucket. Something on the order of 0.007% of the population.

    Main street will never notice this, not looking down their own streets (or at least, not on more than an individual/anecdotal level).

    That's why it continues to be important to get focus from NYT or other large papers of note.

    It's also a good thing that lawyers are viewed as both famous and notorious here in Americana. Think about it - if (e.g.) Agricultural Engineering programs were graduating an excess 20K per year, I don't think the NYTimes would bestir itself to cover that news.

  66. LawProf writes, "So basically the people who are most vulnerable to getting ripped off will get ripped off."

    Next Up On Dateline NBC: "Geriatric 0Ls - Why They Fell For The Law School Scam"

  67. @9:30 a.m.:

    Let's say that law schools no longer got individual students to sign off on loan guarantees, but instead got a set maximum amount from the federal government each year so long as it met certain requirements, as in Tamanaha's book.

    Let's say that a law school wants to hire more faculty and give out more sabbaticals so that it can finally achieve its institutional goal of becoming America's foremost international sports and space law school. Today, that school could just raise tuition to cover the costs of attracting these great thinkers of international sports and space law, and none of the students would be consulted. They could choose to authorize the federal government to pay the school, or else drop out.

    If the school wanted more money from the federal government, the federal government could ask why, say no and tell them that they can find private funding for the needed chairs of international sports and space law, so long as their requirements were met. If their requirements weren't met, they could withhold funding and the professors could teach for free. That's what I mean by greater bargaining power.

  68. I would imagine the Times has done about all it's going to do on this subject, unless something major happens. That could happen. But they have already devoted a whole series to this, one that was not without problems. The last article on Duncan was a fiasco. There is no other paper of record. There was a CBS feature, right? Perhaps the cable channels might pick something up. But the blogosphere is likely the best way to reach younger people.

  69. Totally off-topic, but here's one law student's response to a job rejection from an MLB franchise that then tried to add insult to injury by asking her to cough up $500 to attend a "Sports Sales Combine." She ain't no stinking lemming!

    Sorry for the long link. Happy Friday!

  70. @LP,

    i read this a while back on some other forum and perhaps you've addressed this, but in any case, here it is.

    Here's a great scam that I suffered under at Case Western Reserve University School of Law.

    Private loan funds would be disbursed to the university. Students were not allowed to access those funds until after the add-drop period ended. This meant that at the beginning of every semester we had to wait three weeks to get our book and housing money. When I complained the school told me that "We expect you will use your credit card to fund yourself during that period of time." Many students didn't have the room on their credit card to fund their housing, food, and books. So they just didn't buy their books for the first few weeks of school. The administration knew about these problems (because dozens of us complained) but they didn't give a damn. When we demanded an explanation one administrator said privately "Well if we disburse the funds and then you decide to drop out we won't be able to recoup the lost funds!" (After add-drop you were only entitled to a 75% refund) One secretary said privately "Add up all of the loans that are held for 3 weeks in a University bank account, and you'll realize that the University is making interest off of your loan money while you are running up credit card debt."

    We thought of suing, but we didn't learn how to do that in law school. I bet if you called the school they haven't changed their policies and if you ask a Case student they'll tell you how they are floating housing expenses every August and January because of a University scam.[/quote]

  71. "Main street will never notice this, not looking down their own streets (or at least, not on more than an individual/anecdotal level)."

    Yes, but the lawbloggers/scambloggers are the ones (adversarial by nature or learned nature after 3 years of law school rip off bullying at the hands of wealthy schools) best positioned to speak on behalf of the Student Lending Scam.

    And to fight for human rights.

    Institutional Law School Fraud harms society as a whole in so many ways, and it transcends the opinions of the preposterously negligent ABA, which chooses to look the other way.

    The irresponsibility, with knowledge by any educational institution which leads to hopeless debt for an entire adult lifetime for many scammed graduates that are also US citizens has to surely be somehow criminal.

    As for concerns about media from another commenter, the media is supposed to follow stories and not create them.

    It is up to us to be the story

  72. 12:09 says "You must not have seen [Yona Porat] in profile, which view could make Durante or even de Bergerac green with envy."

    I have. I think we'll have to agree to disagree on this.

  73. Reduction in Social Security benefits due to outstanding student loan balances:

    God forbid they allow a Ch. 13 style bankruptcy repayment option. It's just a matter of time apparently until we start building debtor's prison. I guess at least the law degree will allow a student to represent themselves a little more effectively than a pro-se defendant when that student is arguing for their innocence to try and stay out of debtor's prison. What a versatile degree indeed!

  74. Law Prof:

    As we are discussing student loans and debt this week, the following might be interesting. There are two major higher ed foundations/think tanks in the country, that really are responsible for funding ALL of the policy articles, research papers, mandates, suggestions/predictions for the future, etc for the higher ed sector. One is the Gates Foundation. The other is the Lumina Foundation. Lumina's big goal, as stated very clearly on its website, is to have 60% of America to sport a college degree by 2025 (up from ~30% today). This may seem a bit silly, given the massive un/underemployment among college graduates of all stripes over the last decade. Guess what? Lumina was founded when the erstwhile USA Group (the country's largest SL guarantor) sold all of its assets to Sallie Mae for $700 million back in the 90's.

    So, its board was originally comprised solely of execs of those two SL companies (and still has several on its current board, along with other luminaries as the President Emerita of the U. of Phoenix), it has something on the scale of $1.5 billion in endowment but does not offer any scholarships, one will search in vain for any mention of a student loan crisis or college grad underemployment crisis on their website, and they want to double the percentage of Americans who graduate college in the next 13 years, particularly among low-income students (who will be most dependent on student loans), and it is considered by nearly everyone in DC to be the foremost authority on higher education policy. Let's let that all sink in for a moment...

  75. @4:25

    And there it is. Policy is set by a privileged few, with their own benefit (and not the greater public's) as the goal. This is the essence of all current U.S. government policies. To see our student loan system as anything other than one giant corporate give-away is blindness.

  76. Okay back to the original post... I think this is great news. We'll see if the forecast of 75-80 percent acceptance rate in 2012 holds. If so, that's amazing considering there is an unlimited federal loan spigot. This means 0L's are start to realize that even with easy federal loans and IBR, law school is still a bad decision for most of them. Once the acceptance rate hits 100 percent, law schools will be forced to change.

    I foresee LSAC dumbing down the LSAT in order to uphold the appearance of prestige, if they haven't done so already.

    p.s. I agree with many of the posts, but can't you argue politics somewhere else?

    p.p.s. Why all the Nando hate? I still enjoy Third Tier Reality.

  77. @5:37 - unfortunately you can't take politics out of it because the root of the problem is the easy access to federal student loan money which is federal policy, ie politics.

  78. Does anyone else think it was really gauche of the CU president to have asked how much was in the fund during that encounter?

  79. the student loan industry is just another exploitation machine of the Capital. And its cannon fodder is young people, just like the military industrial complex exploits young people.

    it's not a conspiracy; it's an ecosystem.

  80. nando has done a lot for the scamblog movement, but so has LST. LST provides a mainstream sort of place, with high visibility, that the media can go to for a quote. THat is a valuable service.

  81. Amazing that there were such bargains to be had in legal education as recently as 2003!

    I wonder if boomer resentment will be extended outward to the 2003 cohort, and people will sneer at the entitled and clueless youth of that era, with their Howard Dean and Shwartzenegger bumper stickers, their portable CD players, and their cornucopia of available document review projects.


  82. Just FYI, perhaps googling a friend's name for linked in would cause a person to wonder why their friend's full name popped up on a blog, and thus stumble onto an inane argument amongst lawyers, and discover that some sniveling, undoubtedly sexually frustrated excuse for a human being thinks its clever to make a mean spirited jab against a person using their real name. Great job using a 17th century reference, I guess we all realize how smart you. Congratulations on being part of the blogosphere, where the frustrated losers who for whatever reason have the time to argue with the fellow dregs, take snipes at real people.

    Wow, you've figured out that law school is overpriced, there are too many people in law school and cheap student loans have caused prices and debt across education to skyrocket. You guys are brilliant, i'll keep a close eye on this blog, I'm sure in the next few weeks such brilliant lawyers will solve the problem. You are the scum of society, you create NOTHING. You syphons leech onto actual people because you've created a jargon language that no one else can comprehend. We have the most litigious society in the world, and an incarceration rate higher than the Soviet Union under Stalin. I hope you all end up unemployed.


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