Sunday, December 23, 2012

Will IBR bail out law schools?

Here's a nice little puzzle for people who put a lot of stock in models that assume people are rational maximizers of utility: Why are law school applications cratering even as the long-term cost of attending law school is (arguably) declining sharply?

The argument for declining cost is very straightforward: as of now, no one has to actually pay back their loans any longer, because of IBR/PAYE, which limits liability for federal loan repayment to 15% or (for most law students going forward) 10% of that portion of your annual AGI that’s more than 150% above the poverty line, for the next 25, 20, or ten years.   Sure you get hit with a tax bill at the end if you’re not in PSLF, but only to the extent you’re solvent at that point, and besides when you’re 23, 25 years from now might as well be in the year 2525.

As IBR/PAYE’s growing booster club within legal academia is starting to point out, this means it makes literally no difference whether you have $100,000 or $250,000 or (just wait a few more years) $500,000 in educational debt: your loan payments will be the same.

That sounds like a pretty sweet deal, and it’s one whose existence was almost completely unknown within legal academia even three years ago, let alone to law school applicants (I doubt one in a thousand law school applicants during, say, the 2009-2010 cycle had even heard of IBR, which was brand new and  unadvertised by the government at that point).

So why did 88,000 people who thought they had to repay their loans apply to law school in 2010, while in 2013 perhaps only 53,000 will apply, when many of them will know it’s all monopoly money anyway?  (How many is unclear, but IBR is a much-discussed topic on forums such as TLS and JDU).

Some possible explanations:

(1)    Not enough potential applicants have heard that law school is becoming a genteel version of the Roman Legion (20 years of service to the Emperor and your debts are wiped out).   This probably plays a role, but I would guess not a particularly big one.  The Obama administration has been pushing IBR hard lately, and Kids These Days are all on Facebook so they hear about stuff like this.

(2)    A variation on (1) is that, although potential applicants may have heard of IBR, law schools are still soft-pedaling it, relatively speaking, for a couple of reasons: First, because it’s politically tricky to advertise that your operation’s budget is based on the assumption that taxpayers will pick up the tab for the large percentage of the loans your graduates take out that won’t be repaid.  That’s the kind of thing you probably want to keep on the down low to the extent possible.  Second, it’s important not to underestimate how much denial still grips legal academia.  Telling law professors that they’re peddling worthless degrees that generate enormous debts that won’t be repaid naturally injures their amour-propre, so they tend not to believe it, statistics be damned.

(3)    Potential applicants are skeptical about whether IBR/PAYE is really going to work as advertised.  Perhaps it will be cut back or eliminated altogether over the years, as the political process para-glides over an ongoing series of fiscal cliffs.

(4)    Some people believe they should pay their debts, even if they’re legally entitled to escape or minimize them, and dislike the idea of getting bailed out as if they were politically well-connected investment banks.

(5)    Special Snowflake Syndrome may be coming back to haunt law schools in a particularly ironic way.  Here’s how: Many potential law students lack the necessary combination of realism and cynicism to go to law school on the basis of the availability of a soft-default/backdoor bankruptcy option, which is what IBR is.  Telling overly optimistic potential law students it’s OK if they rack up debts they can’t possibly pay because Uncle Sam will pick up the bill is tantamount to telling them they’re not so special after all.  And they don’t want to hear that, so you can’t really pitch IBR to them, which means IBR does law schools no good when it comes to a key portion of their customer demographic. Update:  As DJM and other commenters point out, a better way of phrasing this might be, IBR/PAYE sends what is, in terms of the economic interests of law schools, an unfortunate signal to two groups of potential applicants: those who have unrealistic expectations about the likely value of a law degree, and those who have realistic expectations.  In different ways, the program sends very negative messages about law school to each group.

To the extent that any of these explanations other than (1) are valid, IBR/PAYE isn’t going to end up saving nearly as much legal academic bacon as many an increasingly panicky administrator now imagines it will. 


  1. Have you read this article yet? Law School Marketing and Legal Ethics by B. Trachtenberg It suggests going after deans & others administrators law licenses. Sounds good to me.

    1. Interesting article but how many deans keep their law license? The ABA really should require administrators maintain bar membership but of course as a tool of the law school establishment it won't.

    2. Most deans are bar members.

    3. You sure about that? Law deans are typically selected from among senior faculty, many of whom retire their licenses shortly after entering academia.

    4. Most academics stop practicing after entering academia, but they can easily keep their licenses by paying an annual fee and satisfying CLE requirements (some states waive these for academics). A better point is that many deans don't care if they loses their licenses as they don't plan on ever returning to practice.

  2. 5) is interesting. An applicant would have to be both cynical and naive at the same moment. I suppose the duality of man allows for such a person.

    Full Metal Jacket

    "Wait, you're selling me on the fact that I can claim financial hardship when you are done with me? But I thought I was going to be a respected member of an elite profession."

  3. Is not IBR a form of welfare or government "relief?"

    It's a fine thing when one goes to a law school to supposedly become a leader (as they all say) in society, and then the person turns out to have to resort to charity in the form of mercifully lower payments as the interest keeps growing on their loans.

    Does the ABA approve of turning law grads into IBR charity cases?

    IBR doesn't let the person out of debt. It just prolongs the situation and at the end of the road there is a whopping tax bill on an inflated principal balance.

    As the decades go on and people get older and die with crippling Sloan debt, more debt will have to be written off.

    John Boehner recently said that the US debt is a grim milestone in that it is greater than the entire US economy, and seems to have more or less given up on trying to solve the problem, given the partisan opposition.

    So score one for the Republicans.

    1. just a minor tweak-

      the way the tax issue currently is structured is that those in public service or public interest get the forgiveness tax free while those who are not get the forgiveness and its taxable BUT if you have more debt than assets its not taxable to the extent of the insolvency.

      of course there is state tax and the tax law will change-but its not so simple to just say "there is a huge tax bill at the end"

  4. I think there's another possibility, which is basically an expanded version of 5):

    6) The majority of law school applicants have been people who weren't certain that they wanted to be lawyers, but instead wanted to go to law school because they thought that it was the ticket to at least a middle class lifestyle. These include both the sufferers of Special Snowflake Syndrome and people who were realistic about their chances (i.e., didn't think they were guaranteed a BigLaw job because of their personal brilliance). IBR, because of its income limitation, explicitly tells people that anyone who is a participant program won't even be living a middle class lifestyle, let alone be wealthy. Therefore, the advertising of IBR as a reason to go to law school tells both Special Snowflakes and realistic applicants that a law degree doesn't guarantee them a middle class lifestyle. As a result, the Special Snowflakes don't apply for the reason LawProf stated in 5) AND the realistic people don't apply because they've rationally that if the law degree leaves them on IBR, they won't get the middle class lifestyle that they want.

    1. * participant in the program
      *rationally concluded

  5. I think all five explanations are true--and Number (5) is particularly insightful. I'll add one more explanation that draws upon some of these points: For a large number of students, law school has always been "Plan B." It's what we did after our parents pointed out that we couldn't aspire to an upper-middle-class lifestyle while teaching fourth graders, working for the Sierra Club, playing with a rock band, or writing short stories. Law school was what we did when we put aside these childish things and started "acting like a grown up."

    IBR and PAYE make clear that law school isn't so adult and responsible after all. The plans underscore the fact that you *won't* make a lot of money as a lawyer, and they're fiscally irresponsible to boot. Even if the individual escapes fiscal responsibility, the plans are fiscally irresponsible on a societal scale--and Gen Y seems to care about that (while too many Boomers appear to have forgotten all about responsibility to others).

    If law school won't make you rich or responsible, then why not teach fourth graders or scrape by as a musician? Or, if you're just beginning college, steel yourself to major in accounting, computer science, engineering, pre-med, nursing, or business, rather than relying upon an English or Poli Sci degree to set you up for law school? Law faculty forget that today's college seniors didn't enter college until fall 2009. They've had plenty of time to adapt their plans away from law. If law won't make you rich or grown up, then today's students will seek a career with more promise of doing so--or at least one that offers more personal fulfillment.

  6. Also, Professor Campos is a bit mean spirited when he keeps harping on the special snowflake thing.

    IBR and charity and welfare and food stamps do not bring pride, and if one wants to pay off debt with honor so that no one can ever point a finger at them and call them person a leech or a burden, there is nothing wrong with that.

    With all due respect, Campos has his own point of view and from his own catbird seat tenured position, and one can never argue with a point of view.

    But for a student to go through all the hoops of three years of law school, and to later in life find out that the debt is unmanageable.... go through all that, the last thing one wants to hear is an academic who seems to have always had viewpoints on the liberal fringe tell them more or less what lost causes they are for thinking they are special.

    Hell, DJM flitters and flys around in the atmosphere of abstract theories like a silly, migrating bird after the harvest (at times :)

    Put it this way. When the Vietman War ended the hippies had no more beef, and so they had to jump on another bandwagon like the nukes issue or the Enviornment or whatever.

    If the economy crashes and all Sloan debt is written off in a way that no one has anticipated, the authors of this blog may well be blogging about an endangered species of marine life or whatever because they are inherently: "Oppositional" whilst always making sure they are paid for doing so.

    Oh just kidding and I take it all back. I didn't mean a word of any of the above :)

    I just feel like being a Republican tonight.

    1. I would ask if this was really necessary, but I'm positive you would say yes.

    2. Campos seems to think that by repeating the phrase "special snowflake", he is somehow insulating himself from its meaning.

      Sadly, he is as disposable as every other law professor when all is said and done.

      And DJM? She's the foreskin of this blog - we can live without her, and nobody is sure exactly what she does.

  7. well, whether someone is a special snowflake or not, who in the hell signs up for something where the goal is not to be over 150% of the poverty line. how do you pitch that to anyone you'd want to be a member of the bar?

    it sounds more like a short term welfare program (where most of the reward goes to the school) with a bankruptcy when its over. what person with anything like ambition signs up for that????

  8. PAYE tells students three things: 1. Law school is unbelievably expensive; 2. Lawyers, supposed members of the upper middle class, don't make enough money to pay for their schooling. This is an economic failure under any human capital economic theory. 3. My life after law school won't be any better financially than now.

    Suppose I can earn 40k as an sbove average recent college grad. I anticipate making 48k in 3 years. I'll need to make 55k to start as a baby lawyer just to break even financially (not counting 3 years of foregone wages). There aren't that many gigs paying baby lawyers 55k. And non lawyer alternatives w law degrees pay in the 40 to 60k range. Not worth it.

  9. IBR/PAYE programs are line items. As soon as we get a Republican president, those programs will follow the path of the dodo bird and bankruptcy protection for private student loans. There are already members of Congress trying to do away with them.

    1. unclear whether congress can retroactively take it away for those currently on it or for those who took loans while it was in place.

      but agreed in general.

  10. I think the issue is essentially 5. People who go to graduate school, even the "special snowflakes" are electing to spend at least 21 years in education - they want to make something of themselves and they see education as the way to achieve that. IBR is essentially a welfare program - and the message the schools are sending is in effect "go to law school young man/woman, and you too can be on food stamps..."

    In effect by promoting IBR the law schools are saying our graduates are mostly economic failures. How many 23 year olds with a college degree want to sign up for that?

  11. Somewhere buried in all of the past comments was a statement about how, in order to handle or justify the Sloan debt, the annual income right off the starting blocks after school had to be equal to the amount borrowed.

    A formula in other words.

    If that formula is accurate, I never was anywhere close to that.

  12. I wonder if US News could create another column it its shitrag magazine that gives the percentage of each outgoing class on IBR for each law school.

    Would like to see the schools bs their way through that.

    1. Fantastic suggestion. One can hope.
      But do the schools have that info, or would gathering it require that grads self report? Which they obviously would be eager to do.

      (sarcasm off)

  13. 150% of the Federal Poverty Guidelines is equivalent to $16,755.00 a year (in 2012). This means that if you are earning the minimum wage of $8.25/hr. in NJ, you are disqualified from IBR.

    Now who the hell on earth would be dumb enough to enroll in law school, incur $150K in student loans, waste 3 years of your prime (to learn archaic nonsense such as Shelley's Rule) and be in a situation where it is Biglaw or work below minimum wage for 20 years?

    Ambulance chasing isn't what it used to be. I once had a law professor (an alcoholic who wore a garlic necklace to hide the alcoholic stench emanating from his body) who was fond of saying that you are one case away from a million dollar verdict. This is the kind of bullshit law students fall for. Some solos wait all their careers for the million dollar case and it never comes through. With tort reform, verbal threshold restrictions, unsympathetic jurors, and insurance companies that are willing to litigate thousands of dollars so that they won't have to pay crumbs these days, it is hard for law schools to work the ambulance chasing angle.

    I was in family court the other day and the clerk told me that DIY kits and pro se cases actually outnumbered cases with attorneys this year. So yes, perhaps as a struggling solo, earning less than a barrista, you will qualify for IBR. Let's just hope that million dollar case doesn't roll in on year 20 of your IBR schedule.

    1. It's 10% of your annual AGI that’s MORE THAN 150% above the poverty line.

  14. "go to law school young man/woman, and you too can be on food stamps..."

    3 wasted years of life with no income because the law school mandated to work as little as posible for that time and ending up a failure and shameful financial burden on society and for the rest of your best and good years until you are old and into your geriatric illnesses.

    A pariah and hated disgrace in the eyes of the taxpayers that will never have any sympathy for you. (I have read enough articles and comments on Sl debt to realize that)

    All caused by what?

    I regret to say that this blog has accomplished nothing by now. Absolutely nothing but a lot of talk and no result.

    Nothing is ever necessary to the tenured academics because they get paid anyway, even if their scholarship production is whimsical and silly and has no bearing on the real world of suffering that they have helped to create as they profited on the backs of their students.

    By now I would rather hear from an unapologetic thief of an academic than from one that has it- orwants to have it- both ways because it is fashionable to shit on and be critical of the ripped off class by calling them Special Snowflakes.

    What an insult.

    Calling someone who wants to better himself or herself a deluded ignoramus or special snowflake after having done well by a system that feeds them is not a position of strength.

    I'm not asking Campos to resign and sell all to the poor and go thru the eye of the needle as a camel....

    but still.

    In that sense Leiter and his friends who are perhaps honest thieves have something there.

    1. I cannot agree - this Blog, Brian Tamahama's book, the law school transparency project, The New York Times series, what is found in Above the Law - have cause a basic change in the "received wisdom" that going to law school will make you rich and successful. One result is that the class of 2016 is likely to be undersubscribed based on current numbers by some 5000 JD candidates - that is between 10 and 12 law schools' worth. Read Prawfsblawg and the incipient panic among the professoriate is quite apparent. Moreover, the other impact of this blog is that view that law schools are running a scam have gone from an outrage to hardly unusual among lawyers and even many professors. A year ago Campos was an oddity, now he is becoming mainstream, even respectable. Consider how Larry Mitchell's article in eye New York Times last month was roundly excoriated, even on Prawfsblawg - he was outside naked in a shitstorm that makes the reaction to Wayne la Pierre seem moderate - at least LaPierre had the gun nuts with him, the rest of the law schools deans let Mitchell twist in the wind.

    2. I see your point, 1:17, even if few others will.

      I'd rather have a victim lead this movement, or a disinterested third party, rather than a law professor who is - no matter what the "arguments" to the contrary are - profiting from this whole mess.

      And insulting many of us in the process.

      Are we special snowflakes? Or victims? Because I for one am tired of being treated like a special snowflake who should have known better.

      I'm a victim, Campos. You're a profiteer. Don't call me a special fucking snowflake.

      My financial mess was not my fault. But it was partly yours, Mr. Taking a Salary from Law School.

      Have the respect to at least not insult us as you take our money.

  15. i dont need IBR. i will make top 10% at my 93rd ranked school and get biglaw.

  16. This blog, along with others, have shed a wonderful light on the problems. Although it won't dissuade everyone from going to a non-T14 school, I am pretty sure that a LOT of people thinking about law school are going to now be smart enough to NOT sign up for welfare. It seems like that is what a prospective OL would be doing outside of T14. College students should be smart enough to not sign up for essentially 25 years of welfare - and a government program where they can still ruin your life by changing the rules in the future or even just making a simple billing or paperwork mistake. With the results of law school now, it seems smarter to buy a few lottery tickets and work an average job. At least you have a shot at a middle-class life.

  17. Yeah the wonderful and all powerful light on the problems.

    Baby steps maybe. Even now.

    If the money ain't there, it ain't there- and no one can live on not enough money and in the middle of a collapsing economy of the very last of the Superpowers without opting for whatever the collapsing govt has to offer in the way of charity or welfare or relief or humiliating food stamps (IBR) for law grads.

    It is so obvious and obnoxious and yeah, shamefully disgraceful.

    In the big picture of the US financial debacle, the law school debtors are a crappy and embittered class hated by the rest of US society as a burden, and would probably trade their JD degrees in and in a heartbeat to be free of debt and to get back to where they were before they threw their lives away by going to a US law school.

    Just an opinion.

  18. A lot of the arguments here are moot. People will soon put aside all pride and forget that IBR was meant for low income borderline poverty-struck graduates. They will soon come to just accept that it's something that almost all graduates do.

    Could many law schools cut costs even if they wanted to? I expect many are mortgaged to the hilt and have already spent future tuition income. They can't afford to be proud. They will push IBR with everything they have.

    And many students have shown a severe lack of wisdom so far. They will embrace IBR without question if it allows them to chase their "dream" or put off looking for work for another three years.

    So I think (1) is the most likely answer. IBR is still not that widely know. Once it is, the decline in applications is likely to level off or maybe increase a bit. But on the bright side, law school seems to have lost a lot of its prestige and luster. IBR might halt the decline, but law school will hopefully never be as popular as it was even 4 years ago.

  19. @11:49 has some good ideas about alternate careers. I would caution some engineering fields, though. You might wind up in a cubicle farm helping DARPA design the next novel way to kill hapless third-world villagers. You might consider that career a living death - and you would be right. Accounting and general business degrees seem very flexible and portable if not as initially well-paying as engineering.

  20. Why do you keep pretending like there aren't enough applications? There are still WAY MORE THAN enough applications to fill EVERY SINGLE LAW SCHOOL SEAT and leave tens of thousands of hopeful applicants WITHOUT A SINGLE ACCEPTANCE LETTER.

    The math completely contradicts your "demand is cratering" mantra.

    1. This is untrue. The projected 52,000-53,000 applicants for this year represents 7,000 to 8,000 fewer people than were admitted to law schools in the class of 2013. And since 12-14% of people admitted don't end up enrolling anywhere, this means the class of 2016 would be far smaller than this coming spring's graduating class even if every single person who applies to law school in this cycle were admitted, which of course isn't going to come close to happening.

    2. Great. You, er I mean law professors, are still living large. A 12% cut on a $200K salary for 6 hours of work per week?

      Fuck, Campos, most of us would do your job for $50K per year. So let's not split hairs about how much smaller law classes are.

      They are still large enough to give you and everyone else sucking the teat of this scam a handsome living.

    3. I'm sure you would like to have Campos's job. The problem is you're an imbecile, with a shit resume. Know your place and shut your mouth.

  21. I choose #3. Students are not counting on IBR long term. There are plenty of complaints online about the process being a nightmare every year to renew.

    I don't think anyone realistically thinks IBR will be around 20-25 years from now. Young people also have zero faith that social security or medicare will be available.

    This program seems like a ripe target in some future round of budget cuts. It is part of the discretionary spending budget within Congress and that is where most cuts are coming from each year. Young people don't vote as much, senior citizens do. IBR will get cut before Medicare.

  22. Most deans are bar members.

  23. Building on what Robert, DJM, and others have said, I'll add this.

    Here's what the IBR pitch sounds like to me: "Come attend law school, and even though tuition costs are exorbitant, don't worry you won't have to pay it. Politicians set up a program so your massive loans are written off after ten years. The huge amount of debt you'll have won't be 'real'."

    This sounds RISKY to me. You're going to have massive loans but you wont actually need to repay them because the government is going to save you after ten years.

    Hearing this would just make me think again -- why on earth is the tuition cost so high for a liberal arts degree? Its not science where you need an expensive particle accelerator, liquid nitrogen on tap, or fresh biological compounds delivered weekly. Its just liberal arts style lectures.

    I digress. IBR sounds like this: "Here, hold this ticking bomb. It won't go off, I promise. You can put it down later, but just hold it for a while."

    1. We're talking about the same group of people, a great many of whom took out $100k+ in debt on the blind assumption they would automatically get a BigLaw job.

      Many law students are d.u.m.b. Not low-IQ dumb, but seriously lacking in wisdom and realism dumb. They are quite possibility incapable of serious long-term thought. They will love IBR.

    2. It is 20 years, not ten.

  24. "Why are law school applications cratering even as the long-term cost of attending law school is arguably declining sharply?"

    Because people are starting to see through the charade of governmental intervention. There are always strings attached, and the rules of the game can be changed on the whim of a legislator's pen. Those are not odds I would want to play. The whole social structure is breaking down. Point in case, there is a lot of talk about doing with with home mortgage interest deductions. Yet, many signed up for mortgage debt with this as an incentive. Like everything that the government does, it's like the frog in the water scenario - they'll keep slowly changing the terms and adding all sorts of stipulations that ultimately make IBR a completely unattractive idea. Educators (like that idiot from Northeastern University Law on the online seminar Campos participated in the other day) will keep drinking the Kool Aid since it benefits them. They can talk all day about how if they just make the curriculum for "practice-oriented" or they add a clinic in immigration law (or god forbid sports law), then this will change students' employment outlook. As you all know, it won't make one damn bit of difference. The bottom line is ... law school is too expensive relative to the current salary structures (outside of the few lucky bigflaw winners), there are too many lawyers, law jobs are too unstable (even if you do win the bigflaw lottery - it might only last 2-5 years), there is too much outsourcing, there are too many LLM people coming over here and taking our jobs (while further enriching the law schools' pocketbooks), and technology has reduced the need for lawyers. Unless and until academia and the ABA address these issues, the status quo will continue. When the academics have finally managed to kill the golden Goose, it will be too late. The party will be over and then the market will start to correct.

  25. "I don't think anyone realistically thinks IBR will be around 20-25 years from now. Young people also have zero faith that social security or medicare will be available."

    There may not be a United States left standing as a unified nation in 20-25 years from now.

    1. Agreed.

      Almost no one in the US understands just how instantaneously economic secession can occur in the modern world.

      Unified faith in the US government as a moral actor is more or less gone - the only thing keeping the country together *now* is a common currency (and the economic self-interest behind it).

      But DC's repeated dilution of the dollar (they really lack the existential competence to do anything requiring thought, sacrifice, or honor) has dangerously eroded faith in the dollar as a store of value as well.

      Once that goes - the whole country will go.

      Almost overnight.

      The US will break up into two or more new nations, with at least one having a commodities-backed currency.

      It might happen tomorrow or in ten years, but it will happen.

      An two or three generations of an utterly, utterly corrupt and talent-less political class (which has descended to kleptocracy) guarantees it.

  26. I agree with the above; no way the entire system will not collapse soon. Eleven years of undeclared, illegal wars going nowhere. Kids being sent over four, five, and six times, apparently until they are a casualty. Perfumed generals flying above the battlefield in their Gulfstream business jets with their mistresses with their oiled legs seated beside them while kids on the ground get blown apart by the IEDs. The idiot Panetta flying from DC to California on a government jet every weekend to visit his family. And on and on and on.. The law schools scam is the least of it.

    1. This scam isn't going anywhere anytime soon.

      Which is why Campos can sit in his office and rail against it all day long. Because he knows that in reality, his salary is paid until he retires. He's got his, so he can play the part of Messiah because the scam will not collapse before he retires. A scam within a scam. A Russian doll of scams...

  27. IT all makes me wish I had stayed in science, or better yet gone to medical school. See, no matter what a legislator says or does, the human body is the same no matter the country or the clown in office. Law is a man-made construct, which can be changed or ignored at will. When the shit hits the fan, we will no longer be a country of laws, but a country of anarchy. At that time, there won't be much of a need for lawyers. Even criminal law won't be that much in demand because due process is on the way out. They'll probably just kill you based on a hunch soon. No jury or court needed. Welcome to Amerika.

    1. "IT all makes me wish I had stayed in science,"

      IT is a pretty good field to be in; you shouldn't diss it like that.

  28. Replies
    1. DIM and Lawprof provide a valuable service with this blog. Those of you making critical posts are basically complete jerks. Kudos to Dr. Campos and Dr. Merritt for shedding light on an issue in the tradition of Harriett Beecher Stowe, Rachel Carson, and Ralph Jaded etc.

  29. anyone who made it to in the 2009-2010 application cycle would have known about IBR. I also think that some schools had tied their LRAP to IBR by that point. I remember Michigan pushing their LRAP at admitted students weekend and there was significant discussion, initiated by students as to whether they would tie it to IBR. The school said it was not sure, but was leaning against it, they said that if they decided to tie to IBR then they would allow that class of students to be grandfathered into the old program if they so choose. About 6 months later they tied their LRAP to IBR (its so much cheaper for them) but as they promised the class of 2013 has the option to be grandfathered into the old program.

  30. I think you are missing other reasons why people might not apply to law school:

    6. Law school is a miserable way to spend three years of your life. You are expected to give up a career and not start a family during this period. After high school and college, most people begin an adult life where they get a job, start making money and have a family. Law students usually defer this for an additional three years.

    7. Law school is often the second choice. My first loves were music and history. However, neither seemed to be particularly lucrative endeavors, so I went to law school, hoping that it would provide me with a comfortable lifestyle. In retrospect, I would have been better off pursuing an academic career as a musicologist. Once it is apparent that law is not longer a viable option, many people will lose interest in it.

    8. Practicing law is not fun. You spend every waking hour fighting with everyone. First, you battle opposing counsel in your cases. In the courtroom, you have to fight with the judge. Then you have to fight with your client when they don't want to pay you, or they blame you for a bad outcome in ahitty case. Then you have to battle the firm's partners, who believe that you should work longer hours for less pay. Then you get to fight with a paralegal who believes he understands the law better than you. Then you fight with a secretary who believes she is overworked, underpaid and underappreciated. When all is said and done, you go home to fight with a spouse who thinks his/her lawyer spouse is a failure because he does not make enough money.

    1. Law school was my first choice, and I still agree that practicing law is not fun. But current law students don't want to hear this - they think if they just get that First Job, they will have it made, forever and ever. I think the only thing that can get through to them is the argument that they probably won't get that first job.

  31. A lot of people still don't really understand IBR, as illustrated by a number of posts above, e.g. the people who think that having an income over 150% of FPL means ineligibility. Those that do learn something about it tend to fall into one of two camps: Either (A) they think it is too good to be true and assume it will soon be revoked, or (B) they see it as welfare and desire to avoid the social stigma associated with that.

    In reality, IBR is a back-end method by which the government pays for higher education. In Europe, they're much more up-front about public subsidies and college has historically been free or nearly so. Here, the difference between what the grad can afford to pay and what his education actually cost is the taxpayers' share. The societal goal, apparently, is universal access not only to education but to choice as well. Policy-wise, we don't want some socialist authority telling students things like "we need more engineers and fewer liberal artists," so we write a blank check to both.

    Also, let us not forget that GradPLUS is the only federal program that allows limitless borrowing directly by the student. Stafford loans are still subject to annual and aggregate caps, which means that the price of undergrad is largely controlled by those caps. That's why average undergrad debt is still below 30k. The percentage of people who go to any kind of grad school at all is low.

    Anyone remember that period around 2005 or so when interest rates on Staffords were absurdly low, like 2%? Those rates are a LOT higher now. An undergrad-only guy who incurs 20-30k in loans will pay those off with interest even working at Starbucks. His payments, and those of millions like him, subsidize the few who go to grad school and get massive forgiveness. So the taxpayers' share as referenced above is actually a lot smaller than it may appear and, depending on the accounting method you use, the student loan portfolio as a whole may even be profitable.

    Bottom line: IBR ensures that anyone can go to school for anything, and the people who take advantage of it are not mooching off the government. They are enjoying a benefit of American citizenship akin to driving on roads or enrolling in public high schools or any number of other taxpayer-funded benefits to which we are all entitled.

    It is stupid that we have to get the government to kick in its fair share of educational cost in such a back-ended and roundabout way. But it isn't really new. ICR (an older form of IBR) has existed for a very, very long time. This is how our system works: Those who can pay subsidize those who can't, and anyone can study anything they want. The debate should center around whether we as a society are willing to pay for people to study things we don't need. The question of whether IBR should exist or not, or whether it should factor into people's decision-making, is too narrow. But at the end of the day, I think it's important to recognize that IBR can function as a back-end way by which congress is convinced to fund higher education.


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