One thing is very clear: the law graduate debt explosion is now fueled almost exclusively by high-interest federal government loans, courtesy of the unwitting American taxpayer. In 2010, the Obama administration eliminated most private educational lending, by no longer providing government guarantees for private educational loans. This was a good thing, as the educational lending industry had become a crony capitalist's fondest fantasy come true, i.e., the industry socialized risk but privatized profit. Private educational loans were in effect risk-free arbitrage: private financial institutions lent money at highly profitable rates, the public took on all the risk of default, and the banksters laughed all the way to the bank.
Private educational loans still exist. Since graduate and professional school government loans charge such high interest rates (6.8% for the first $24,000 per year and 7.9% for anything beyond that) private lenders still try get a piece of the market by offering much lower variable rates, pegged to LIBOR etc. Since such loans aren't eligible for IBR, they are a high risk option for borrowers, many of whom can't qualify for such loans, which generally require a good credit rating and often a solvent co-signer (government loans require neither). But some law students still take out private loans, and the extent to which, if at all, these new "purely private" loans are reflected in the current graduate debt data is one of the questions we're going to look at this week.
With the exception of the handful of institutions that have significant endowments, the large majority of law school operating budgets consist of federal loan money. How large? Thanks to this website it's now possible to get a good idea of the extent to which the contemporary American law school is a taxpayer-funded operation. This site reveals the volume of federal educational loans, and the percentage of students receiving those loans, at more than 5500 institutions of higher learning. Most law schools are units inside larger universities, but 24 ABA law schools -- 12% of the current total -- are either free-standing institutions or for some reason have their federal loan figures listed in this spreadsheet.
The data below include an estimate of how many students at these schools received federal loan money in the 2010-11 and 2011-12 academic years (unfortunately the data for stand-alone law schools does not seem to go back to earlier years, probably due to a change in reporting requirements after the 2010 loan reforms). It also includes exact figures regarding how much federal loan money was funneled to the schools, what this worked out to on average (mean) per student receiving federal loans, what percentage of students were part-time, and what the average debt of 2011 graduates was purported to be.
1,128 students took out federal loans
Total borrowed: $46.5 million
Average per student borrower: $41,223
Part-time students: 12.5%
1.020 students took out federal loans
Total borrowed: $44.7 million
Average per student borrower: $43,824
Average indebtedness of 2011 graduates who took on law school debt per US News: $99,681
New York Law School 2011
1,534 student borrowers
Total borrowed: $79.1 million
Part-time students: 22.7%
Total borrowed: $72.88 million
Average debt of 2011 graduates per US News: $146,230
Total borrowed: $113.2 million
Part-time students: 79.1%
Total borrowed: $107.5 million
Average debt of 2011 grads per US News: $115,364
Michigan State 2011
Total borrowed: $25.15 million
Part-time students: 21.7%
Michigan State 2012
Total borrowed: $25.6 million
Average debt of 2011 graduates per US News: $113,809
Total borrowed: $41.1 million
Part-time students: None
Total borrowers: 1,082
Total borrowed: $41.75 million
Average debt of 2011 graduates per US News: $102,030
Total borrowers: 689
Total borrowed: $32.1 million
Part-time students: 28%
Total borrowers: 948
Total borrowed: $46.4 million
Average debt of 2011 graduates per US News: $145,357
Florida Coastal 2011
Total borrowers: 1,622
Total borrowed: $69.1 million
Part-time students: 2.9%
Florida Coastal 2012
Total borrowers: 1,655
Total borrowed: $73.5 million
Average debt of 2011 graduates per US News: $134,355
Total borrowers: 769
Total borrowed: $30.7 million
Part-time students: 17.2%
$44.3 million borrowed
Average debt of 2011 graduates per US News: $100,417
New England School of Law 2011
Total borrowed: $39.3 million
Part-time students: 28.6%
Total borrowers: 980
Total borrowed: $42.3 million
Average debt of 2011 graduates per US News: $120,480
Total borrowers: 551
Total borrowed: $19.8 million
Part-time students: 34%
Total borrowers: 557
Total borrowed: $21.1 million
Average debt of 2011 graduates per US News: $142,606
Western State 2011
Total borrowers: 394
Total borrowed: $12.9 million
Part-time students: 26.4%
Western State 2012
Total borrowers: 426
Total borrowed: $15.2 million
Average debt of 2011 graduates per US News: Not reported
Thomas Jefferson 2011
Total borrowers: 1,053
Total borrowed: $47 million
Part-time students: 28.8%
Thomas Jefferson 2012
Total borrowers: 1,158
Total borrowed: $50.3 million
Average debt of 2011 graduates per US News: $153,006
John Marshall (Chicago)
Total borrowers: 1,376
Total borrowed: $53 million
Part-time students: 18.9%
John Marshall 2012
Total borrowers: 1358
Total borrowed: $51.9 million
Average debt of 2011 grads per ABA: $136,486 (US News has left this number uncorrected for five months).
John Marshall Atlanta 2011
Total borrowers: 557
Total borrowed: $24.5 million
Part-time students: 27.9%
John Marshall Atlanta 2012
Total borrowers: 647
Total borrowed: $30.9 million
Average debt of 2011 grads per US News: $138,819
Total borrowers: 440
Total borrowed: $18 million
No part-time students
Total borrowers 396
Total borrowed: $15.4 million
Average debt of 2011 graduates per US News: $136,089
Total borrowers: 588
Total borrowed: $23.5 million
Part-time students: 2.3%
Total borrowers: 560
Total borrowed: $23.05 million
Average debt of 2011 graduates per US News: $129,326
William Mitchell 2011
Total borrowers: 533
Total borrowed: $18.06 million
Part-time students: 30.5%
William Mitchell 2012
Total borrowers: 499
Total borrowed: $17.1 million
Average debt of 2011 graduates per US News: $109,771
Ave Maria 2011
Total borrowers: 408
Total borrowed: $17.05 million
No part-time students
Ave Maria 2012
Total borrowers: 430
Total borrowed: $18.5 million
Average debt of 2011 graduates per US News: $108,275
South Texas 2011
Total borrowers: 1,083
Total borrowed: $37.3 million
Part-time students: 21.4%
South Texas: 2012
Total borrowers: 1,050
Total borrowed: $38.4 million
Average debt of 2011 graduates per US News: $114,170
California Western 2011
Total borrowers: 849
Total borrowed: $40.5 million
Part-time students: 17.7%
California Western 2012
Total borrowers: 778
Total borrowed: $37.74 million
Average debt of 2011 graduates per US News: $153,145
New Hampshire 2011
Total borrowers: 377
Total borrowed: $17.85 million
Part-time students: None
New Hampshire 2012
Total borrowers: 353
Total borrowed: $15.05 million
Average 2011 graduate debt per US News: $119,997
Total borrowers: 287
Total borrowed: $6.31 million
Part-time students: None
Total borrowers: 306
Total borrowed: $7.24 million
Average 2011 graduate debt per US News: $72,749
Total borrowers: 597
Total borrowed: $26.73 million
Part-time students: 26.9%
Total borrowers: 606
Total borrowed: $27.46 million
Average 2011 graduate debt per US News: $129,125
Total borrowers: 286
Total borrowed: $11.08 million
Part-time students: None
Total borrowers: 301
Total borrowed: $12.48 million
Average 2010 graduate debt per US News: $59,071 (did not report 2011 numbers)
Some preliminary notes:
(1) Nine of the 24 schools actually saw federal loan revenues decline in 2011-12, as a result of declining enrollments.
(2) Compare Brooklyn's federal loan volume to the school's reported graduate debt. It seems probable the latter figure is considerably understated.
(3) Keep in mind that the larger the percentage of a school's students are part-time, the less one can extrapolate likely average federal debt in terms of principal owed at graduation by multiplying average federal money borrowed by three, since part-time students are borrowing for at least four years. Note that 79% of Cooley's students are part-time. (We'll have more on the distinction between principal owed and actual debt soon).
(4) Speaking of which, there's something very odd about Cooley's numbers. In every other school's case, the difference between the loan origination and loan disbursement figures are very small -- around one to two percent (I would imagine this is accounted for largely by origination fees). In Cooley's case the difference is enormous -- in the range of 15% to 20%. Why? Is this a product of a high attrition rate, leading to many originated loans not disbursing? Extraordinary fees of some sort? Something else?
(5) Note these figures are not solely for JD candidates. They include loans taken out by LLM students. This is probably a minor distorting factor, because most of these schools have very few LLM students relative to JDs, and the LLM students they do have are often foreign nationals, who aren't eligible to take out federal loans (How clueless would an American law school graduate have to be to get an LLM from a lower-tier school? I'm sure there are a few, but seriously . . .).
(6) These numbers put an exclamation point on the extent to which the whole enterprise of American legal education is funded directly by what in a huge number of cases will end up being unrecoverable federal loans. At almost all these schools, the average student taking out federal loans is taking out more in such loans each year than the school's listed tuition. Our whole thing is essentially on the national credit card.
(7) This is all working out very nicely for the good folks at Sterling Partners. (Take a close look at the figures for Phoenix, Florida Coastal and Charlotte for an example of how not having even a residual sense of shame is a big advantage when investing in providing "access to legal education.").
There's much more to say on this subject, but these numbers are a good place to start.
Tee Hee. FirstReplyDelete
@ 6:55 A.M.ReplyDelete
Those numbers are staggering.ReplyDelete
Faced with poor prospects of employment, or underemployment the debt loads per graduate are staggering and as indicated, how in the world is an individual to pay them off after the initial grace period when the monthly payments have to be at least eight hundred dollars.
Yet the schools take in millions and as also indicated, the taxpayer is probably clueless but dragged into the whole mess anyway.
There has to be some institutional responsibility at this point.
We can't just keep blaming the individual graduate for not being sophisticated enough and tell them things like "buyer beware."
Still though, one has to wonder if the overall public, including prospective law students has yet to fully understand and appreciate what is going on, in spite of all the blogging.
the fed gummint needs to get busy investigating some of these numbers.ReplyDelete
"Still though, one has to wonder if the overall public, including prospective law students has yet to fully understand and appreciate what is going on, in spite of all the blogging."ReplyDelete
The overall public has absolutely no idea of what has been going on. None whatsoever.
"This is all working out very nicely for the good folks at Sterling Partners."ReplyDelete
If you keep leaving open cans of tuna fish by your back door, it's in the nature of things that pretty soon you're going to have a herd of cats coming by every night for a meal.
These numbers reveal the amount of money being wrestled from the federal coffers, i.e. the taxpayers, to fund programs that provide education for which there is absolutely no need. That is, the recipients of this education cannot possibly contribute a single thing to society that hundreds of thousands of unemployed and underemployed who have already acquired this education cannot already contribute.ReplyDelete
The loan rates aren't really "high interest," although, since risk is lower due to them being non-dischargeable, an argument can certainly be made that they could be lower.ReplyDelete
Since the loans require a co-signer, it seems like it would be in many law students' (and the co-signers' (i.e. the parents)best interests to finance their youngling's education via a home equity loan, if possible, since they might be on the hook for it anyway (especially for those parents who are the ones pushing their children to stay in law school).
At least that way the interest rates would be a good 4-5% lower, the interest would be tax-deductible, and, worst-case, possibly dischargeable.
If the student has UNDERGRADUATE loans those loans become due right after graduation.ReplyDelete
IBR just delays the crisis and allows law faculty to enjoy the comfortable status quo for a few more years. This is a necessary element of the scam -- avoid change and get yours.ReplyDelete
At some point, people will stop thinking about law school in terms of total cost, and will start thinking about it the same way that boat salesmen want customers to think of their purchases: monthly payments. "If you go to our law school, like any law school, you will pay 15% of your post-graduate income toward your debt. But unlike so many law schools, we send a lot of students to public interest so your payments are only 15% for 10 years, not 20 or 25. We're a bargain."
The whole IBR concept sounds like it was developed by a law professor: it ignores true costs, ignores consequences, and is done in the name of inclusiveness and do-gooding. Soon it will be so entrenched that people will accept it as normal.
If price means anything, it is a signal of value or scarcity that allows people to compare apples and oranges. Law faculty are successfully convincing students to ignore such market failures as "prices" and to think in terms of percentages. This is plain crazy and only benefits the suppliers of law school.
These are very rough numbers and I'm calculating quickly, but if these schools as a group represent any kind of average, then in 2011 alone the 201 schools of the ABA facilitated a borrowing of over $7 billion. If half of these people defaulted, the taxpaying public would owe $3.5 billion sans interest. Per year.ReplyDelete
7:57, I ran some numbers two weeks ago to get an estimate of between $4b and $5b collected in tuition (not necessarily debt-financed from the federal gov't) by 200 ABA approved schools (excluded JAG). I'd say $7b is a tad high, but it's not totally out of this world.ReplyDelete
Here is an article about how useless an LLM is:ReplyDelete
When people take out a mortgage, they usually know the true cost of it. Of course, by the time most people are ready to buy homes, they're savvy enough to ask about such things. The same cannot be said for recent college graduates going to law school. Or, worse, people think that if buying a home is a good investment, even though their mortgages actually end up costing them twice as much as what they pay for their homes, then taking out, in effect, a mortgage for law or graduate school must be even better.
"At some point, people will stop thinking about law school in terms of total cost, and will start thinking about it the same way that boat salesmen want customers to think of their purchases: monthly payments. "If you go to our law school, like any law school, you will pay 15% of your post-graduate income toward your debt. But unlike so many law schools, we send a lot of students to public interest so your payments are only 15% for 10 years, not 20 or 25. We're a bargain.""
I went to a law school like that. Public interest oriented but still cost more than the superior non-PI oriented law schools around it. It's somewhere in the $70k grand range these days. They also "utilized" IBR to pretty much eradicate their own LRAP program, which was pretty meager in the first place.
LST (7:57 here), that's interesting. I just added up the total borrowed from these 24 schools in 2011, divided by 24, and multiplied by 201. That gave 7,100 or so (in millions!). It's a big assumption to say these private schools are average, I know. But even with the $4B to $5B figure, if say $3B were financed and half of it ended up in default, then every presidential term would see $6B in lost money.ReplyDelete
We need to get these numbers to the Tea Party...they would really get worked up by this.ReplyDelete
Someone above mentioned undergrad loans. How true. Combined with undergrad loans the average debt could well be a lot higher, making the monthly payment over a thousand dollars.ReplyDelete
Also, I recall reading somewhere that after the real estate bubble collapsed, more people have lower home values (the most valuable asset for many families) and so they cannot get substantial enough home equity loans and so are driven to student loans by necessity.
The tea party would call all of this tax and spend liberalism gone bad, just like the housing bubble, and just like Obamacare is going to be. It is all so confusing.
***"If you keep leaving open cans of tuna fish by your back door, it's in the nature of things that pretty soon you're going to have a herd of cats coming by every night for a meal."***ReplyDelete
And perhaps rats, skunks, opossum, raccoons and even an occasional bear.
Predatory creatures all.
Private loan providers have the power to say "No" to an application, as opposed to the federal Stafford loan that approves anyone with a FAFSA being filed, admission to a qualified school, and a pulse.ReplyDelete
As a result, defaults on federal loans can be much more common because there is no credit check or determination of the applicants ability to repay involved.
If the federal loan program instituted a credit check on applications, we would prevent certain loans from being originated to people unable to repay, but there would also be a public backlash from individuals that want access to this loan as a form of "financial aid"
How can the Gov't loan program provide a viable financing option without artificially driving up the cost of college, and loaning to people that should not be approved?
Can the federal loan program fairly lend by considering an application's credit, what school they are attending, and what major they are pursuing? It seems like they cannot given the current market, social and political conditions being faced.
Perhaps something could be done about this. Politicians like going after low-hanging fruits, and it makes no sense to anyonoe with half a brain that the taxpayers should loan billions which go straight to law school employees/investors at for-profit universities in return for graduating twice as many legal graduates as the country needs at over twice the price that they should charge.ReplyDelete
I mean, is this really controversial?
This entire operation is the detention of "rent seeking," "redistribution," and "socialization" that the conservative banker clammers against. There is no product; in fact there is no need to loan the money. It's robbery.ReplyDelete
A comparison of the law school scam and the science grad school scam:ReplyDelete
"clammers" s/b "clamors"ReplyDelete
What is so incredible is that the ABA has control over the amount of law school enrollment as well as accrediting foreign law schools and effectively can funnel billions of taxpayer dollars to law schools and then into default. That is happening already.ReplyDelete
The other thing that is incredible is that in a market where there is vast unemployment of experienced lawyers, the federal government is sponsoring a system that no question is pushing more experienced lawyers out of work by flooding the market.
It ia incredible that there is no federal regulator of this area the way the SEC strictly regulates securities offering. We need not only full disclosure, including outcomes of experienced law grads at all levels, but also some effort to balance supply and demand and simply not accredit law schools that do not place a substantial portion of their grads for jobs that enable them to repay. A good solution would be to cut back the school to their placement rate that enables the students to repay plus 10% in federal loans.
After looking at the enrollment numbers above for schools that are undisputably TTTs (or worse), I think that informing 0Ls, by itself, will not be enough to fix the problem. There needs to be top-down reform.ReplyDelete
This should be reprinted in the Wall street Journal and in the NY Times, and there should be major television news coverage about it.ReplyDelete
LawProf has already been on TV so it is very possible.
Maybe if word kept getting out then law school enrollments would decline and the problem would correct itself.
As for the people already financially ruined by SL debt with only IBR as a last gasp remedy, I really don't know what to say.
I've read NYT articles. Gawker is constantly posting hilarious articles too. The challenge is getting kids to understand.Delete
Total borrowed: $72.88 million
Average debt of 2011 graduates per US News: $146,230"
I guess NYLS "wins." Some how they are convincing their students to borrow far more than students at other schools.
Off topic, but you know, there's this from Vikram Amar, via TaxProf, on why faculty citation rankings are important and why students should care:ReplyDelete
"[T]he single biggest long-run reputational input for a law school bearing on the overall credibility and marketability of its degrees and programs is the perception of its quality by other law faculty across the country."
Kudos to the single commenter for: "I can't imagine anything I would care less about as a student than the volume of a faculty member's citations."
Kudos to the single commenter for: "I can't imagine anything I would care less about as a student than the volume of a faculty member's citations."ReplyDelete
Seems to me the commenter missed the point. Amar's point was evidently that students should care because (i) academics care, (ii) the opinion of academics is the primary factor in a school's reputation, and (iii) a school's reputation is related to the market value of its degrees.
(Of course, whether one agrees with Amar's argument is another matter altogether.)
The Oregonian ripped law schools in the state a new one. Now the journalist is hosting a web discussion on spiraling costs, high debt loads and greedy administrators. Join the chat now at http://www.oregonlive.com/business/index.ssf/2012/08/new_law_school_grads_hurt_by_w.html#incart_river_defaultReplyDelete
Re: getting an LLM. I don't know much about the how & why, because I'm just not interested in starting the conversation, but two or three folks I graduated with a year ago are working on their LLM degrees. All, I believe, at what LawProf refers to as "a lower-tier school."ReplyDelete
If I had to guess, I'd say it was because they don't have anything else to do and their parents are paying for it. But I really don't know.
A delicate issue no one has mentioned - debt and employee risk and security clearances. High debt and particularly in default debt can prevent someone from getting a government security clearance. Moreover, for a wide array of jobs, including many management jobs - and for that matter when it comes to lawyers' indemnity insurance which usually covers their client account - high debt is regarded as a serious risk factor - because desperate people do desperate things. It is one reason that for some jobs employers run a credit check on candidates.ReplyDelete
Absurd as it may sound, things may be developing into a situation where the debt levels that law graduates may end up carrying may be a real issue for getting serious and responsible jobs.
"Absurd as it may sound, things may be developing into a situation where the debt levels that law graduates may end up carrying may be a real issue for getting serious and responsible jobs."ReplyDelete
Such as, for example, being a lawyer:
High debt means poor credit too in the form of a high 'Debt To income Ratio' or another term used when rejecting a credit application is: 'Excessive obligations in relation to income'ReplyDelete
And of course the ruined credit follows one around in so many, many ways that can almost be called 2nd class citizenship.
A person's credit is even factored into the determination of how much a person will pay for car insurance because, for some reason, the Insurance Industry decided that people with bad credit are poor drivers and somehow accident prone.
Fortunately the F&I dept of a used car dealership will most always get a high interest car loan for people with bad credit, even ruined student loan debtors.
Because they would never be able to move those used cars off the lot if they didn't.
This is an excellent post. I think we should do this for all schools.. The public will be staggered by the total. I'm staggered and I have been following this blog for months.ReplyDelete
These numbers will get the attention of the public .
Yikes! I did not realise it had already happened.
Maybe this is a way to do something about accreditation - push the ABA to set as a criteria a maximum-average-debt-to-average-expected-income-ratio that law schools need to be below in order to be accredited - lose accreditation and no more federally backed loans....
The ABA accreditation is part of the problem. They force schools to have a billion law books in their library etc that runs the overhead up.Delete
President Obama did make passing reference to "making Higher Ed more affordable" or else the money would be cut off in so many words, in a past State of the Union Address.ReplyDelete
I hope he is reading this Post.
I left this comment on the last post, but what would be interesting to know is how many students can take advantage of their school's LRAP? I remember a couple years ago there was an article in the NYTimes discussing how even if Harvard grads couldn't find big law jobs, they could take advantage of their school's loan repayment program. How many schools offer such program?ReplyDelete
This makes the point that interested students should make close comparisons of the types of programs.
LP @ 1:09ReplyDelete
My goodness! What distinguishes him from thousands of others? Why isn't his plan to work his way in to the public defenders office good enough? This must put the fear of God in other people. What an incredible Catch-22. Frankly, I think there must be some additional information that is not in the opinion. The Ohio Bar people must certainly be apprised of the current employment situation. And certainly the applicant's lawyer must have put that information in front of the Supreme Court. Surely that's what happened. Right?
Harvard's program is pretty good. I know UVA has a program as well:ReplyDelete
He's been working 24-32 hours a week since he finished his 1L year, living at home and contributing minimally to household expenses and yet somehow he still has $16,500 of credit card debt. It also says he stopped paying his credit card bills in December 2008 and that he hasn't paid anything on his student loans. He first took the bar in 2008 and he's still working part time in 2011 and he acknowledges he could receive higher paying work elsewhere.
Why did you pick Brooklyn and not Hofstra or Cardozo? BLS is a much better regarded law school than some of the other toilets you at comparing it to like Appalachian, Ave Maria and CUNY for crimes sake.!!!ReplyDelete
The UVA program basically indicates that if you get a government job that pays less than $55k, you need pay back zero dollars. They force you into IBR to be eligible.
So, it basically means that if you can get a government job at $54,000, it's the equivalent to getting an extra $5k per year in salary from the IBR savings. So you're basically in the equivalent of a $60k a year government job. Now factor in the debt savings versus IBR private sector at $60k. (25 years versus 10) or an extra $7,500 per year ignoring interest.
In short, unless you make at least $67,500 in the private sector coming out of Virginia, it makes more financial sense to make $54,000 in the public sector.
And that ignores the tax differences.
Factor in taxes, and it's probably closer to $75k. Factor differences in benefits, and we're probably pushing $90k
So, the system rewards government workers to a significant degree. A D.A. job at $50k is a pretty nice gig coming out of Virginia. Those should become increasingly difficult to get for numerous reasons, and there likely will be little turnover in such positions for the foreseeable future.
@ Anonymous AUGUST 6, 2012 2:14 PM, I read it a bit differently. It sounds to me like this guy is stuck in one of those foot-in-the-door positions rather than purposely under-employed:ReplyDelete
"Since completing his first year of law school, however, respondent has worked part-time, 24 to 32 hours a week, at the Franklin County Public Defender’s Office, earning $12 per hour." https://www.supremecourt.ohio.gov/rod/docs/pdf/0/2011/2011-ohio-20.pdf.
This is where it gets totally fucking bananas:
"The applicant has contemplated filing bankruptcy and has submitted a letter from his bankruptcy attorney dated January 29, 2010, advising of the applicant’s intent to file a voluntary petition under Chapter 13 of the Bankruptcy Code. The applicant testified that during the pendency of the bankruptcy proceeding, the payments on his student-loan obligation would be greatly reduced. This strategy would give him time to obtain full-time employment once he passes the bar and to get his financial affairs in order. The panel found, however, that as of the May 27, 2010 hearing date, the bankruptcy petition had not been filed. Moreover, the panel observed that the only debt that could be discharged in a bankruptcy proceeding would be the applicant’s $16,500 in consumer debt, as the applicant’s $170,000 in student loans is nondischargeable in bankruptcy. Noting that the applicant has no plan or ability to pay these debts, the panel recommended that his application be denied but that he be permitted to reapply for the February 2011 bar examination." Id.
In other words, yes, the Law School Machine has destroyed this man. He can't pay his bills because he hasn't passed the bar. He can't sit for the bar because he can't pay his bills. But, it's not our problem.
He sat for and failed the bar twice. He's probably not getting full time employment at the public defender's office because he's too much of a moron to pass the bar.
I'm sure that this guy would trade his ability to practice law for elimination of his debt.
Frankly, we should lobby to make surrender of one's license as the basis for discharge of professional student debt. It would eliminate "moral hazard" to the extent such a thing exists, and allow these poor bastards to move on with their lives.
Bankruptcy + voluntary surrender of license + affirmation that you will not apply to take the bar exam/medical boards/dental boards for a period of years (say 10), and you can have your student debt discharged. Sound fair?
I know somebody that goes to a mill college and she is basically living on her loans. That is how she supports her kids. She is now working on a masters at that same mill. She is earning degrees in criminal justice and she has a record. Some people get suckered; some use it for survival.Delete
Personally (speaking as a taxpayer), I prefer the idea of putting in place a procedure for restructuring the debt with both lower interest and principal, if someone can show that his net worth and income are below certain ceiling amounts.ReplyDelete
Why not just adequately fund good public colleges sufficiently?Delete
This is the part that I'm stuck on: In every jurisdiction I have read about, with the lone exception of Wisconsin, the bar passage rate is not 100%. http://www.wicourts.gov/services/attorney/bardiploma.htm.ReplyDelete
Not everyone who sits can pass. It just isn't possible. Are we suggesting that two and out is the new normal? The sharp side of this filter is brutal - if you don't pass, you must demonstrate an ability to service your student loans with the job you have (and will keep during bar prep?), or you will never take the bar exam again.
In my state, you can sit three times before you must then petition the bar for a fourth attempt. It seems you can go on and on as I have heard of folks sitting four and even seven times before passing. It seems to me that if someone can earn that JD, they ought be be able to sit for the bar exam without an examination of the loans it took to earn that JD serving as a barrier.
No, turning in your license is not a fair proposition to creditors. In a foreclosure proceeding, at least the creditor gets the house which has some resale value. A professional degree, including a JD, is worthless since it is non-transferable and is intangible. If people are too stupid to realize there is a problem in the law school model and cannot compute that it is a losing proposition, they deserve to carry the debt like a 10 ton anvil around their neck.ReplyDelete
This is all insane. It blows my mind that you all sit here on the internet whining about law school and the opportunities that you lost. There are so many conspiracy theories floating around the internet regarding law school, and it's just sad that many kids that would have done well in law school are being turned away.ReplyDelete
That's kind of like the what if game that so many first year students like to play. Is there any indication that his bar failures were due to his being a moron? What if........ and what if....? In other words if it ain't in the record we should not speculate about it!
Looks like we both need to learn to RTFA ;)
He took and failed the bar exam three times. Yes, I'm ok with three strikes and you're out.
Stupid people deserve to suffer!ReplyDelete
The second part of that comment was made somewhat tongue in cheek. There probably aren't any jobs available, but, at any rate I'm sure he's not impressing them with his three time bar failure.
Higher Ed lending needs to be reformed. They should NOT be 100% guaranteed. IMO, if you made loans only guaranteed, say at 50%, and clawed back amounts that were defaulted on or on IBR, that would go a long way to introducing downward market pressure on tuition.ReplyDelete
A TTTT might have a lot of trouble staying in business if they suddenly had to hand back a ton of money back to the govt due to its defaulting or IBR students.
Also the Dept of Ed should setup a system where the amount of loans available is tied to that school's default rate/IBR rate. As a simple example, if a school has an effective 50% default rate, total loans to that school get capped based on that rate.
Govt lending without restriction to any school and grad program regardless of what that school charges and regardless of whether grads of that school can get jobs that pay back those loans is just mind boggling.
And what does the government that's loaning taxpayer money for useless degrees deserve? The current system produces the worst of both worlds: it produces high levels of default, so the government doesn't get its money, but it doesn't let debtors get out from life-crushing debt.ReplyDelete
Meanwhile the only people who benefit are hypocritical scum getting paid $200,000 to teach three classes a year and write completely useless articles that nobody will ever read.
"Also the Dept of Ed should setup a system where the amount of loans available is tied to that school's default rate/IBR rate. As a simple example, if a school has an effective 50% default rate, total loans to that school get capped based on that rate."ReplyDelete
I once had a nice stroll and walk with a high powered Corporate Atty that told me that a former classmate from a 1st tier school took the Bar 9 times and couldn't pass.ReplyDelete
I also well remember a former classmate from Touro wandering the halls of the Jacob Javitt center taking the Bar for the 8th time.
Let me remind people that the Bar is 2X a year.
Law School is 3 years.
So let me see.......3 years of law school and my Cousin Vinny taking the Bar Exam for at least seven times (as was portrayed in the movie) is at least 6.5 years to become a lawyer. (Take note med people)
Maybe the pop culture is as much to blame for this life destroying mess, and paperback rag authors such as John Grisham and the other guy Scott Turow, and other movie industry wall street shills such as the TV Law And Order producers and crew are responsible in that they put out a lot of myths that led the lemmings to debt destruction for life.
I won't get into the baby boomer hatred and the hypocrisy of the baby boomers and how the summer of 69 was a precursor to usury so as to support the most selfish and narcissistic generation America has ever produced: The Cruel Boomers.
Baby Boomers are all morally bad. The counterculture and the woodstock concert was an excuse for cruel banking cartel oppression on all that followed after the mean spirited, foul mouthed and dirty hippies, now 3X as old and 3X as corrupt.
$100 million dollars+ each year to Cooley?? What an absurd waste of money.ReplyDelete
This is unbelievable. Subsidized grifters.
Not too sure about blaming Mssrs. Grisham and Turow for the law school scam, to be honest.ReplyDelete
You are wisely skeptical,Lois Turner.ReplyDelete
Hit a nerve and got you off your complacent ass hey?
Grisham and Turow are Boomers, and right off the bat not to be trusted. In some corner of their minds (selfish hippiecrites that by omission sponsor blatant Student Lending Usury for all law grads today) they think of themselves as good people.
The gauntlet is down, and if they have the nerve, they will respond about the current day law school scam.
Otherwise they are just wall street shills and part of the 1% collecting residuals on their shallow literary efforts followed up by lucrative Hollywood pop culture crap.
They speak so well and finely about corruption and etc. and yet in a real life sense don't want to step up to a damn real life an non-fiction thing while Lawprof and DJM are putting it all on the line.
If that is not surreal hypocrisy I don't know what is.
I'm a horrible person to ACS telephone jockeys.ReplyDelete
Baby Boomers said the same kinds of things about their parents.ReplyDelete
I see JD Painter Guy can't stop posting on this blog even though he said he would.ReplyDelete
Baby Boomers were all about their selfish generation, and ONLY their generation.ReplyDelete
Baby Boomers hated their parents and hate all the generations that dared to be born and come after them.
What proof is there?
I can think of 1 trillion dollars worth of proof of all that.
The very human Soul of a Baby Boomer is full of counterculture ephemeral garbage, and the Boomers only want to enslave fellow mankind in debt servitude.ReplyDelete
To the young: Be wise. Never trust an old and now ugly Baby Boomer, and be kind to your children, and generations to come.
Crosby, Stills, Nash and Young are rich wall street shills and part of the one percent.ReplyDelete
Hendrix wasn't meant to be played 10 million times, and is hardly anyone's idol and not that good all things considered.
John Lennon and Yoko Ono are, respectively, wealthy Poop and Snot.
Stop shoving the creepy summer of 69 down everybody's throats and charging, in your old age, 800% interest on Student loan debt.
John Lennon wrote and sang:ReplyDelete
"Imagine there are no countries"
And Boomer Bill Clinton stood up in public and sang along to that song.
Yeah, well, I guess if the young and educated people are all robbed of their futures and placed in deep debt for life I guess there is no more country for them.
The late American Philosophy Professor Allan Bloom seemed to imply at the time that Yoko Ono had more wealth than US Steel executives.
The Boomers SUCK! ;)
"To the young: Be wise. Never trust an old and now ugly Baby Boomer, "ReplyDelete
Yer just mad b/c your (former) girlfriend decided my boomerlucious pot belly, in combination with my boomerlicious pot o' gold, is more worth spending time with than yer lazy unemployed buttkins.
"I see JD Painter Guy can't stop posting on this blog"ReplyDelete
Which post is his? Mr. Infinity?
Not to mention that baby boomers contracepted and aborted their children out of existence.ReplyDelete
Is anyone the least bit surprised that the children who did survive the baby boomers initial selfishness and weren't killed or prevented from entering the world have now been subsequently impoverished with mountains of student loan debt?
Why do people say that colleges need more funding? If the general idea is that costs are out of control how is throwing more money at the problem a solution?ReplyDelete
It use to be that States heavily funded their colleges directly and used that leverage to control costs. Starting under Reagan, there was a shift to defund the colleges through direct subsidies and shift the costs to individuals and their families through student loans.Delete
What an unbelievably awful way of making a living. To have some putrid old person destroy the life of a young person with debt and a worthless degree, all so that old bastard can make a huge salary for their few remaining years.ReplyDelete
@ 8:07 PMReplyDelete
Just a quick note on LRAP: There are very generous programs at the top schools (maybe T20), but the assistance diminishes quickly after that. Many lower-ranked schools advertise these programs, but the actual funds available can be quite small. At some point, I'll try to dig up more info on LRAP at a variety of schools. I do know that Thomas Cooley lacks an LRAP (surprise).ReplyDelete
We are living in a time where the unregulated capitalistic system that has been uniquely American is falling apart. We have witnessed the banks giving credit to home buyers without regard for their ability to pay resulting in a real estate bubble and subsequent bust. The federal government then bailed out the too big to fail banks and left millions of homeowners in foreclosure. The system is bankrupt and falling apart. How much more evidence do you need? No sensible human being would buy a law degree on credit in this atmosphere.ReplyDelete
DJM--you're spot on about the LRAP situation. I used to work at a #80-ish school that will tell you all day long that it is the public interest-iest school that ever public interested, but their LRAP was peanuts and only was given to a handful of students a year. That didn't stop them from prominently advertising LRAP in their admissions materials and putting a gigantic monument to it in the law school commons, though.ReplyDelete
"The Federal Government should never have become involved in Higher Ed. in the first place!"ReplyDelete
If I had a nickel for every time I have heard or read that sentiment I would be rich.
A few months ago I read an online Journal article about Student lending that had lots of comments, and also a long series of long comments by a tenacious individual Conservative, and he would not let any comments counter to his (assuming it was a man) go unresponded to.
Basically, this Conservative person said that Government Intervention in most anything and in the form of billions of taxpayer dollars leads to inevitable abuses that bureaucracy , inefficient by its nature, cannot correct.
That is because when the free market is removed, there is no motivation for efficiency.
So to reiterate, and let me see, and for example this Conservative person that I am talking about wrote that whenever tax and spend liberalism causes huge sums of money to be dumped by the Feds into, say Higher ed, the money grab will be inevitable by: 1. The liberal/socialistically/counterculturally oriented universities in the form of higher faculty and administrative salaries and also higher tuitions, 2. The Financial Industry in the form of excessive fees and interest and, with the help of powerful lobbying, such unprecedented moves like the removal of bankruptcy protections for consumers, 3. The collection agencies that can legally get 20% of a defaulted loan's principal as a fee and who are also lined up at the trough along with others, and so on.
There is no Government control over all this because bureaucracy is by it's nature inefficient, and not motivated by free market forces to be so.
Private, Corporate Capitalism, on the other hand, is motivated by the free market and would correct all problems and would never loan money with no questions asked in the first place, and this whole disaster would have been averted from the get-go. And if that meant that less people can afford Higher ed. so be it. Because.......not every kid gets a trophy and not everyone can win.
And last but not least, asking or wanting the Federal Gov't to step in and correct a problem of its own creation is no solution at all and that is why we all have to get out and vote for Mitt Romney :)
Ha Ha, I don' t believe all of the above myself, but some of it does sound plausible.
Personally though, I think that there is nothing wrong with Capitalism per se. but there is something wrong with unregulated Capitalism.
Ah, fine ideas
One more follow up to 4:57AMReplyDelete
^^^And if the past is prologue, Obamacare is going to take us all down a long road of similar abuses, so sayeth the Conservatives.
Because Socialistic Liberals want to enslave people. That is just what they do, so sayeth the likes of Limbaugh, Hannity, Coulter, Levin, O'Reilly, Beck.
I do sometimes laugh though when a young college student call up a sympathetic and understanding Rush Limbaugh to complain about one of his or her "Liberal" America hating professors.
I promise everyone that I will post more needling insults for the baby boomers later today.ReplyDelete
And they will care...ReplyDelete
^^ Can you believe one of those old boomers admitted to, and is proud of having a pot belly? Gross!ReplyDelete
Wonderful comment from 7:42 above:ReplyDelete
"The whole IBR concept sounds like it was developed by a law professor: it ignores true costs, ignores consequences, and is done in the name of inclusiveness and do-gooding. Soon it will be so entrenched that people will accept it as normal."
Anonymous at 10:08 writes:ReplyDelete
"It ia incredible that there is no federal regulator of this area the way the SEC strictly regulates securities offering. We need not only full disclosure, including outcomes of experienced law grads at all levels, but also some effort to balance supply and demand and simply not accredit law schools that do not place a substantial portion of their grads for jobs that enable them to repay."
But it seems to me that the problem is already a federal program that provides loans that should never be made, the money to be spent where it should never be spent. Is further government interference the solution to government interference? Why not just stop the federally guaranteed loans? Nice simple solution. The market will do correct this if you let it.
-- Simple Path
4:57 AM--I agree with what that poster wrote, except the part about Romney. He is no different than Obama regarding crony capitalism and social engineering, paid for by tax dollars.ReplyDelete
As another commenter noted, the law school scam is an issue that should agitate both conservatives and liberals. Conservatives should fight it because taxpayers are being soaked to pay for useless degrees. Liberals should fight it because the young and powerless are having their lives ruined in order to benefit the wealthy and powerful (e.g. law school deans, profs, admins).
I for one am mystified by the lack of outrage in the general public and Congress.
Almost laughable, but understandable really, that Mr. Blogger's alma mater made the cut. There are some law schools doing things right, I guess. Somewhere.ReplyDelete
This isn't to make light of a terrible situation, but I recall how happy everyone in my family was when I got $5000/year loans at a modest 10 percent interest rate for my three years of law school back in the 1980s. This was during the era of 21 percent home mortgages, so 10 percent was pretty spectacular. Then again, I graduated with less than $20K total worth of debt, as compared to a friend of mine who graduated in 2010 with somewhere north of $150K worth of debt. And he's still unemployed. OUCH. (I now work with computers for an evil too big to fail bank and have nothing to do with the law.)ReplyDelete
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