Wednesday, August 24, 2011

The Road to Serfdom

Government-guaranteed non-dischargeable student loans have become the crack cocaine of higher education in general, and law school education in particular.  Over the past decade, total outstanding student debt in the United States has risen from $180 billion to nearly one trillion dollars.
Such loans, more than anything else, are what has allowed private law school tuition to nearly triple in real, inflation-adjusted terms over the past 25 years, and public law school resident tuition to increase by a factor of five (Again, in real dollars. One sign of how out of control the situation has become is that when I present these numbers to even highly educated people who have no recent contact with higher education, they sometimes find it impossible to understand what I'm saying, apparently because their incredulity when confronted with the numbers is so great that, despite my description, they assume I must not be adjusting for inflation. I often have to clarify this point. And when you think about it, the situation in regard to the rising cost of law school really is rather crazy -- it's as if a Honda Accord cost $20,000 in constant dollars in 1986 but costs $100,000 today, with the explanation from the manufacturer being that now it features a very nice DVD player and optional moon roof).

How did this happen?  I'm far from an expert on matters of finance, but I would appreciate it if someone could explain to me how the federal government giving a private bank the ability to borrow money at 2%, which the bank then loans out at 7%, while the government guarantees that loan against all risk of default, is something other than risk-free arbitrage, aka roughly the equivalent of a license to print money. I'm also not a political scientist, but I suspect you don't have to be Kenneth Arrow Jr. to figure out that the people benefiting from this scheme are going to do everything in their power to keep it in place, no matter how many "negative externalities" it may generate for society in general, and law school graduates in particular. (Edit: The new student loan regime in place as of last year limits non-dischargeable loans to loans from the federal government, although some of these are serviced by private banks for a fee).

What we seem to have here, in other words, is some sort of bastard child of laissez-faire ideology and regulatory capture.  The laissez-faire part is the idea that potential law students don't need paternalistic institutional actors (law school and university administrators, federal and state governments, the ABA, etc.) to protect them against the consequences of their financial decisions because, in the immortal words of Harvard law professor John Chipman Gray:

The common law has recognized certain classes of persons who may be kept in pupilage, viz. infants, lunatics, married women; but it has held that sane grown men must look out for themselves, that it is not the function of the law to join in the futile effort to save the foolish and the vicious from the consequences of their own vice and folly. It is wholesome doctrine, fit to produce a manly race, based on sound morality and wise philosophy.

Harrumph. Gray wrote this in the late 19th century, but of course the last three decades or so have seen this sort of social Darwinism make a big comeback on the American political scene (although curiously enough in the context of a political movement that largely rejects the theory of natural selection as applied to biology -- apparently it only works in economics). 

The regulatory capture part involves ensuring that 100% of the risk generated by the loan decisions made jointly by students and lenders will be borne by the students, rather than the lenders.  This is a doctrine fit to produce a remarkably rich race of bankers, based on pure class privilege and endemic political corruption (it's also working out quite well for law school faculty and administrators).

What to do?  Again, I'm far from an expert on anything related to this subject, so my thoughts regarding reform are very tentative (As always, the first step toward reform is recognizing the inherent rottenness of the current system -- a step which is only beginning to be taken in higher education in general and legal academia in particular).  With that caveat in mind, it seems to me that either real laissez-faire or genuine regulatory paternalism would be far preferable to the current hybrid, which manages to combine the disadvantages of both with very few of the advantages of either, at least from the perspective of law students and taxpayers.

As things now stand we are producing a generation of graduates whose lives are being wrecked by debts they will never be rid of (or, if they go into the Income-Based Repayment program, will be rid of in 25 years, which to be fair is only five years longer than the term of service for ordinary soldiers in the Roman Legions when that empire was at its height).  The extent of that debt is truly startling, and will be the subject of my next post.

89 comments:

  1. Here's a shorter way of putting it: If you subsidize something, you will get more of it.

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  2. "... it seems to me that either real laissez-faire or genuine regulatory paternalism would be far preferable to the current hybrid, which manages to combine the disadvantages of both with very few of the advantages of either, at least from the perspective of law students and taxpayers."

    Bingo. This is what libertarians and small-government conservatives have been saying for decades. (Unlike the caricature you provide two paragraphs above.)

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  3. LawProf,

    This debt is the prime motivator for many disgruntled law grads. It prevents us from moving on with our lives. Every month I get a bill that requires me to pay $500 towards my private loan debt. That's money that would have gone to a car or other necessities, but which has to go to Citibank because I am trying to avoid a default. The rest of my loans (over $200,000) are on IBR where they rapidly grow with interest and effectively foreclose my ability get any credit in the future. "You make what, and you owe how much? Ummm, no you're not getting that car loan, mortgage, whatever . . ."

    Plus, I have to work 60-70 hours a week (if you include things like commuting) to make the meager wage that allows me not to be on the street. Also, being poor, I have no life.

    Then I see someone like Ann Althouse, and her blog, where she lives such a cush and frivolous life. Her day consists of getting up in whatever town she is travelling to at that moment, going to whatever eating establishment she chooses and, if she likes it, taking pictures of the cupcake or whatever and posting about it on her blog. Her life is the life of most law professors. They work 15 hours a week, make obscene amounts of money (well in the top 5% of society) and many of them effectively have no boss of any kind because they have tenure. It's the most stress free way to make a living that one could imagine. The most difficult part of their life is writing a paper, which is something I would do for free if I had the time.

    You f'ing pieces of vermin. How dare you live on such largesse on the backs of people like me? I deeply hate my law school professors and administration. They lied to me, put me through a bunch of abusive bullshit, and then sh*t me out into the world. And every month when I survey my student loan statement I am reminded of that hatred.

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  4. Here's a shorter way of putting it: If you subsidize something, you will get more of it.

    --------------------

    This is missing something though. The government subsidizes *all* education. So why do law schools benefit so much as opposed to engineering, medical or other programs? The prime argument for why this is, is that law school is the most profitable of all forms of education. You don't need a lab, you don't need equipment, you just need a room and a professor.

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  5. There is the fight club solution. We could let it all burn.

    Having a cousin put a bullet through his temple over debt, and drowning in it myself (thanks Brooklyn Law School), I have come to the conclusion that my family had a better chance at an honest life on the stony grasslands of Ireland. Likely to starve, but every breath a free one.

    Now, to quote the boss, "I've got debts no honest man can pay."

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  6. Undergraduate education is vastly more profitable than law school. Classes are larger and professor salaries are 1/2 as much.

    Paul, your fire is trained far too narrowly. Education has become too expensive in general -- undergrad, grad, law, etc.

    The reason law school is attracting more ire is that people go to law school thinking they will save the world rather than practice law, and can't get a job doing either.

    But people do BA's, master's degrees, etc. and end up heavily in debt and have to take jobs they don't like or are unemployed. It's a broader problem.

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  7. "Having a cousin put a bullet through his temple over debt"

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    Jesus. Really? That's horrible. Of all the reasons to lose a life.

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  8. How much of the debt is guaranteed? Is it just the principle or is it all of the accruing interest and finance charges?

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  9. But people do BA's, master's degrees, etc. and end up heavily in debt and have to take jobs they don't like or are unemployed. It's a broader problem.

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    That's true, but I specifically went to law school - and not a fun major like French Literature or whatever - because I wanted a job. I looked at my school's career placement statistics, and the % employed and median salary made it seem like you would have to be terribly terribly unlucky to not get a good job (i.e. $80k or more). In fact you would have to be very lucky to get such a job.

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  10. How much of the debt is guaranteed? Is it just the principle or is it all of the accruing interest and finance charges?

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    For me? The IBR debt is all government debt (GRAD PLUS and Stafford Loans), but it's accruing interest. You can't go on IBR for non-government debt. Safe assumption to say that government debt is guaranteed.

    The rest is private education loans and, I'm not sure, but I believe those are not dischargeable in bankruptcy but they might not be guaranteed by the government. Regardless, a default is something I would like to avoid which is why I make the payment on those.

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  11. "What to do?"

    This:

    1. Shut down all the law schools in this country except for (a) one flagship public law school in each state; and (b) all the well-known, quality private law schools that are currently ranked from about #30 on up. In essence, create and follow a system of education for the legal profession that mirrors what is done for the medical profession - only admit, educate and train the number of people for whom there are jobs waiting at the end of the process.

    2. Change the system of giving government-backed student loans to anyone who can sign their name with a pen. Revise the structure of the loan programs so that the loans are better tied to actual needs, which in turn are predicated on documented results.

    3. As per #1 above, push all the unnecessary law school professors, do nothing adjuncts and disgusting administrators out the door and tell them to go find real jobs and work for a living.

    The current system has to change. The legal education complex cannot continue to support the leaches and arrogant pigs who live off the backs of debt-laden students. This is unsustainable. There is no reason why students who have done their homework, are well-prepared and want to enter the legal profession should be treated like homeless failures by the digusting administrators and professorial pinheads who care nothing about anything other than keeping the student loan gravy train running. The current system is no way to train people for a profession.

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  12. Undergraduate education is vastly more profitable than law school. Classes are larger and professor salaries are 1/2 as much.

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    I smell yet another rat law professor trying to take the focus off of them. That's the sole argument in response to the scamblogs, "look over there."

    Classes at my undergrad weren't larger than those at my law school, and my undergrad professors (some of whom were serious Nobel candidates) barely made above $100k. Some not even that! I'm not kidding one complained to me about his salary even though he was a genius in his field. They are certainly not more profitable either. In my organic chem class we had a ton of very expensive equipment.

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  13. in response to 8:24 AM...

    What they are subsidizing is loans, not education. Even using grants rather than loans would be subsidizing tuition payment rather than education. It's true that by creating more loans and more tuition payment that the amount of educating is increased, but not as efficiently as it could be.

    The federal government would probably be better off negotiating blocks of full and partial scholarships from schools for lump sum payments, then distributing the scholarships to students as it wishes. If the grants and loans disappeared, schools would be hard pressed to fill their classes. Prices would come down for all students, and the government could use massive buying power to negotiate even lower rates.

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  14. My cousin worked for 20 years at a factory that closed, and couldn't find another job. A big, work-strong guy whom everyone loved. He had an offer for a union job driving buses, but a heart condition prevent him from getting under the union's insurance, so no job. The bank wanted to take his house, and his unemployed adult children had been forced back under his roof. He felt he had no where to go.

    I thought, at the time, that doing very well in college and law school (even a mediocre one) would insulate me from his hardship. Two years on, in the dark of the night, I know a little bit about how he feels.

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  15. 8:54
    Apologies, a more clear way to phrase my question would be: If you default on your loans, (or if you do IBR on your govt loans for 25 years after which they are forgiven and the govt pays off your lender) how much does the lender get? Do they just get the outstanding principle or do they get interest and fees as well?

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  16. At least you don't have any kids 9:05. By the way, that's another harm done by these obscene loans use to fund Ms. Althouse's cupcakes, it prevents us from ever having a family. My life is bad enough. I don't want to put kids through this kind of crap.

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  17. 8:54
    Apologies, a more clear way to phrase my question would be: If you default on your loans, (or if you do IBR on your govt loans for 25 years after which they are forgiven and the govt pays off your lender) how much does the lender get? Do they just get the outstanding principle or do they get interest and fees as well?

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    I don't know exactly how that works. Obviously, if they are guaranteed the lender is not going to lose any money, but I'm not sure about the details. One option could be that Citibank is made whole when they transferred my IBR loans to Sallie Mae for servicing and so Citibank no longer has any stake in my loans. Another would be that these loans are still on Citibank's books as a government guaranteed asset whose value grows with the unpaid interest [my loans being an asset lolz] similar to a zero coupon treasury, for 25 years, at which point the government makes them whole.

    I would imagine it's the former though. I would imagine that once they moved my loans to sallie mae for servicing, the government paid them the amount in full and so now Citibank is completely out of the picture for the IBR loans.

    Any bankers out there?

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  18. LawProf,

    Congress doesn't subsidize loans anymore. The Health Care and Education Reconciliation Act of 2010 passed in March 2010 did away with the Federal Family Education Loan Program (FFELP) and now all student lending is directly from the Department of Education, though the loans are serviced by the banks for a fee.

    As for law school, since 2007, eligible students can finance the full costs of their legal educations plus living expenses with a combination of Unsubsidized Stafford Loans and Grad PLUS loans, which include living costs as determined by the law school. These are both eligible for IBR (created in 2009), which will begin canceling loans issued after 2014 after 20 years rather than 25. This is undoubtedly a loss to taxpayers given that law schools are vastly over-enrolled. Law schools are now SNL's Winston Universities. Life imitates art.

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  19. "There is no reason why students who have done their homework, are well-prepared and want to enter the legal profession should be treated like homeless failures by the digusting administrators and professorial pinheads who care nothing about anything other than keeping the student loan gravy train running."

    Well said. If you don't succeed, it is your fault for not being in the top 10%. You didn't work hard enough or network enough (what does that mean, anyway?).

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  20. 1. Re "or, if they go into the Income-Based Repayment program, will be rid of in 25 years, which to be fair is only five years longer than the term of service for ordinary soldiers in the Roman Legions when that empire was at its height"

    A pedantic correction from one pedant to another: Actually the Roman Army's term of service was 25 years, not 20. But then the veterans, the vast majority of whom survived all of their battles (their main cause of death was disease, as it was for most soldiers until the 20th century), would retire at around age 45 or so with a pension equivalent to around several millon dollars in today's terms, enough to purchase a villa in some rural province plus enough to live on until their natural end at around 70; many of them married for the first time and began to sire children at around age 45-50 (A Roman who survived until age 45 had a life expectancy of around 70 or more; Julius Caesar was still considered "in his prime" when he was murdered at age 55.)

    2. "What to do?" Simple, abolish law schools and revert to the old fashioned system of training lawyers as apprentices who "read law" while working as clerks for practicing lawyers. It worked for the likes of John Adams, to great effect. And the present rapid decay of the Rule of Law in the USA indicates that the quality of lawyers and judges has not been improved at all by 140 years of Langdell's pseudo-scientific method of "spotting the issue".

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  21. I do have another option for you guys (other than the military as described in my comment on the other post). I know a girl that's doing this and it's working out fairly well for her. She's sharing office space with a practitioner who gives her about 10-20 hours of work per week. She pays rent but has full use of the office and most importantly, the system for forms, examples, etc. He's also a mentor for her as well as I promise you that even with simple cases you'll have a lot of wtf moments regarding what type of motion to use.

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  22. Oh wow 9:38, I'm sure no one thought of that before. Why don't you call the solos in your city and see how many are willing to do such arrangements? The answer is none. There are a bunch who will rent you an office, but few who will guarantee you enough work to pay that rent (not to mention have a little left over).

    You sound like a law professor, sharing ideas that work in theory but have nothing to do with reality.

    But if you have any actual names of attorneys willing to do the above arrangement, feel free to post again Prof.

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  23. PS to my above comment, Sir Thomas More never went to law school, but he DID "spot the issue" in ways earned him an "F" on his fatal "exam":

    http://www.youtube.com/watch?v=DX0_FGu8v9A

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  24. Anonymous 9:41 wrote, "feel free to post again Prof"

    The only person who has the right to invite me to "feel free to post again" is the owner of this blog. Are you he?

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  25. Correction, "9:41" was not addressing me. Still, I wonder if he's the owner of this blog?

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  26. Judges of the Third Reich "spotting the issue":

    http://www.youtube.com/watch?v=_6I1zTdgYlY

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  27. Judges "spot the issue" to convict Lord Surrey (who introduced the sonnet form of poetry to England):

    http://www.youtube.com/watch?v=6MSrYgAphpU

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  28. 9:41
    Sorry, just trying to help. I'm not a law prof, I'm one of the lucky ones that got a biglaw job. I don't have any specific names, but I ran into two people who while I was at my deferral job who had an arrangement like that so it seemed like an option in a place that's not NYC or saturated with law grads. Also, I don't know if that was the initial arrangement. Maybe she started off just renting space from a busy solo and positioned herself to get work from him.
    Other possibilities (NY only): I know people that appear as local counsel in foreclosure settlement conferences. I'm not sure what they pay per appearance, but it's an easy gig that's run through some staffing agency. All you do is say the bank is still reviewing paperwork.

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  29. LSTB,

    Thanks for the correction/clarification. So the situation as I understand it is:

    (1) Student loans are non-dischargeable in bankruptcy, subject to some extremely difficult to get exceptions.

    (2) Federally-issued privately-serviced loans are fully federally guaranteed.

    (3) Truly private loans that aren't federally-issued aren't guaranteed.

    Is that more or less correct?

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  30. I think (3) is wrong, at least historically. Might be true prospectively though.

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  31. More "spotting the issue", US Supreme Court Justice Taney SPOTS THE ISSUE in Scott v Sanford (1857):

    "...the only matter in dispute on the pleadings, the court must be understood as speaking in this opinion of that class only, that is, of those persons who are the descendants of Africans who were imported into this country and sold as slaves.
    ...The question before us is whether the class of persons described in the plea in abatement compose a portion of this people, and are constituent members of this sovereignty? We think they are not, and that they are not included, and were not intended to be included, under the word "citizens" in the Constitution, and can therefore claim none of the rights and privileges which that instrument provides for and secures to citizens of the United States. On the contrary, they were at that time considered as a subordinate and inferior class of beings who had been subjugated by the dominant race, and, whether emancipated or not, yet remained subject to their authority, and had no rights or privileges but such as those who held the power and the Government might choose to grant them."

    Today's equivalents of this kind of "spotting the issue" are the Federal Courts' acknowledgement of "enemy combatants" - such as those imprisoned indefinitely in Guantanamo - as a category of persons unprotected by any law at all.

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  32. The debt is the most important part of this issue. The debt is what makes the standard defenses of law school and law professors fail. Those defenses would be a lot stronger if law school were merely a waste of 3 years, or merely a waste of 3 years and 15 or 20K. That's the sort of thing you can bounce back from.

    You cannot bounce back from 200K in debt. The debt has now achieved life-ruining levels. I look forward to a future post from Lawprof explaining exactly what it means to carry these levels of debt. I think this is the part the law professors are not getting. If law school was literally killing people upon graduation, you might understand why people are demanding immediate action and thrusting upon you an obviously unwanted responsiblity to do something about it. Law school is not actually killing people, but it is hurting them in a very serious way.

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  33. 10:20, if you're saying that the legal profession is the most intellectually dishonest of all forms of academic related professions, then I would agree with you. This is also another problem with the Law and X folks. True X academics look down on Law and X academics.

    Perhaps dishonesty is endemic and indeed a principle of law?

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  34. "You cannot bounce back from 200K in debt. The debt has now achieved life-ruining levels."

    Exactly. Well said.

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  35. LawProf,

    (1) and (3) are correct. I don't think (2) is. Under the FFELP, if a borrower defaulted, the government bailed the lender out via a state guarantee agency. Now, all government student loans are originated via the Direct Loan program, so if the borrower defaults, a guarantee would mean the government bails itself out.

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  36. Yes, thank you LSTB, there needs to be a lot more factual information integrated in to this blog (whose message I agree with). I have no idea whether the still truly "private" student loans are dischargeable. I kept up with the DOE decision to go to direct lending only really closely. It is worth going back and looking at news articles to read the arguments law-prof-like people (i.e. financial services employees) used to argue against this switch. How was there any possible way to defend such a direct subsidization of banks? These people found a way.

    LawProf should know that any discussion of debt should definitely include an aknowledgement of the new "debt-ceiling" deal. Part of this "agreement" is that there will no longer be any subsidized government issued loans for grad students. This change will have little to no impact on the amount of students willing to go to grad school as some proponents champion. Instead, while I'm not a big fan of taxpayer waste, this increase in cost will be completely absorbed by the already immensely burdened students. At 6.8%/year, I would guess the average increase in cost for a law student whose total costs of attending law school for 3 years is around $100,000, when combined with undergrad, should easily serve up an additional $10,000 worth of debt.

    Hey, we got to cut costs. We just got to.

    2009 Law Grad: T50 School - 140k in debt; 42K year salary

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  37. Also, keep in mind that ending "subsidization" by form of paying interest while in school doesn't end complete subsidization. Giving someone a loan that they couldn't get from the private sector without the government guaranty is a subsidy, and a far more valuable one than simply paying the interest while the student is in school.

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  38. One more thought on this important question:

    What no one has yet done is to figure out what a the bursting of a student loan bubble would look like.

    For example, in the real estate bubble it looked like this: (a) people couldn't make their mortgage payments, (b) banks thus had to write down the value of these loans. Simultaneously, the market figured this out and started buying credit default swaps on these loans. (c) the write downs put the commercial banks (Citi, JP Morgan etc.) on the verge of collapse, meanwhile the payments that had to be made on the credit default swaps put AIG/Goldman Sachs on the verge of collapse. (d) all of this was prevented by a government bailout.

    Perhaps the student loan bubble bursting would look like this: (a) Tea partiers prevent any further increase in the national debt. (b) not being able to take on more debt, the president ends IBR and forces grads to at least pay the interest on their loans, (c) their credit ruined, a number of students declare bankruptcy thus wiping out their credit card debt too which again puts pressure on the banks, (d) simultaneously, the government can's make any new loans to future students, which causes a collapse in enrollment and a disaster for many schools.

    I don't know enough about the student loan financial system to know if this is right, but it's a thought. What would a collapse of the student loan bubble look like?

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  39. Revolution.
    -Jean-Paul Marat.

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  40. "So why do law schools benefit so much as opposed to engineering, medical or other programs?"

    Because Americans can't do math.

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  41. @ Law Prof

    How do you run a site that lets a commenter call another human being "vermin" with no comment from you. You have raised serious issues and brought much attention to them. But you should have some standards. That people are angry is no excuse. I am sure many of the graduates think you are their champion. I, on the other hand, sense extreme condescension toward them. I cannot imagine that you would encourage, or allow, any young person you really cared about to think that anger justifies saying anything they want to say. You would hold him or her to a standard of behavior that would mark that person as honorable. Your refusal to impose any restraints upon, or make any comment about this really reprehensible statement suggests that you believe angry law graduates do not have the character do any better. That is not true.

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  42. If its true that the school misrepresented its placement statistics adn median salary, isn't that fraud? Why not sue them to get your tuition back?
    ______________________________________________
    That's true, but I specifically went to law school - and not a fun major like French Literature or whatever - because I wanted a job. I looked at my school's career placement statistics, and the % employed and median salary made it seem like you would have to be terribly terribly unlucky to not get a good job (i.e. $80k or more). In fact you would have to be very lucky to get such a job.

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  43. While I think "vermin" was a little extreme, I frankly think the situation calls for candid dialogue, not for self-important pearl-clutching.

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  44. If its true that the school misrepresented its placement statistics adn median salary, isn't that fraud? Why not sue them to get your tuition back?

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    First of all such lawsuits have started.

    But in my case, I don't have the time to sue them right now because as I wrote above I have to work 60-70 hours a week to earn my meager paycheck. Not to mention that I don't have the money to sue. However, if I see one of those ads soliciting plaintiffs against my law school, I will seriously consider it.

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  45. Part of this issue, and I shall paint with a broad brush, is that there was, or still is, a strong public policy argument for the government backing student loans. Everyone can go to college, no matter their socioeconomic status, right? But, this was predicated upon the assumption that the cost of the education society would underwrite would remain constant. Instead, the educational as a business model folks saw what was in the trough, just waiting for the taking, and they behaved like so many others in like situations such as, say, the mortgage refinance folks. And the cost of a legal education exploded. Much like the refinance folks were doing just fine as long as home values continued to increase at 10-20% a year, legal academia profited handsomely. But, of course, such conduct is ultimately unsustainable, self-destructive & short-sighted. And here we are.

    Full disclosure: I graduated from a for-profit, private law school in May of 2011.

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  46. How do you run a site that lets a commenter call another human being "vermin" with no comment from you.

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    I wrote that comment, and law professors are vermin. The fact that you don't see this after reading the story above exemplifies why. How do you people live with yourselves after seeing what your largesse does to your graduates? I'd die of shame and guilt, but you're such vermin, completely shameless vermin, that you're outrage manifests only when you are called on your behavior.

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  47. It's not "pearl clutching" to protest calling a human being "vermin". That has been bad news all throughout history whenever people resort to that kind of talk. Candid dialogue can be had without that.

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  48. I don't think largesse means what you think it means...

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  49. P.S. If you think "vermin" is bad, you should see what I call some of my professors under my breath every month when I have to make that student loan payment and assess my obliterated finances. There might be no one that I have hated more in my entire than some of the members of my law school's administration and professors. You are vile animals. Disgusting, lazy, shameless, opportunistic dogs. There are not words in the dirty thesaurus to describe you.

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  50. "I don't think largesse means what you think it means..."

    $150,000 salary + huge benefits to work as a law professor isn't "largesse?" You should take a look at the lives of your graduates, and not the tiny minority slaving away for 70 hours a week for such a salary in biglaw, you should look at those slaving away for 1/3 of that whose lives are essentially one of indentured servitude, to pay your vermin salary. You shameless and loathsome scoundrels.

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  51. Paul, start moderating. This guy is not merely critical or resentful, but sounds Virginia Tech-y.

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  52. Why not just let the man (or woman or person or whatever) rant? That would seem an appropriate place to vent such frustrations.

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  53. Definition of LARGESSE

    1
    : liberal giving (as of money) to or as if to an inferior; also : something so given
    2
    : generosity



    You meant to say the "students' largesse" in paying tuition that helps pay law professors' salaries. Or you were being sarcastic in using "largesse of professors" to say that what they provide is not really "largesse"-- a gift-- at all.

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  54. Paul, start moderating. This guy is not merely critical or resentful, but sounds Virginia Tech-y.

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    Don't worry you vile piece of vermin, you shameless thief, you loathsome and opportunistic animal - people like me have a conscience. I don't hurt people. If I was in your despicable shoes, you vermin, I would die of shame and guilt. You, on the other hand, are arguably a borderline sociopath in the way you reap rewards by destroying lives.

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  55. No, the need to rant is no excuse. Law Prof has invited a discussion about some very serious issues. How that discussion is carried out matters. When no holds are are barred-- people can use whatever epithets they choose, with no comment from the host or other people-- the discussion degrades.

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  56. Where do you teach any way, you vermin? Can you tell us the school so that perhaps your graduates can have a word or two about what going to your school did to their lives?

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  57. "the discussion degrades."

    -----------------

    Yes, let's not discuss the harm you do to your students' lives, and the money you make doing it, and let's not get angry about that. Let's keep it intellectual and let's obfuscate the issue by placing the blame on other things and trying to apportion it.

    If you don't like being called a vermin thief by your graduates, then you better go into another line of profession because that's how the vast majority of your graduates view you. Censoring them, although a part of your fascist and opportunistic world view, isn't going to change what they think of you.

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  58. You know nothing about me. I have not tried to obfuscate the issue, nor have I said anything about apportioning blame. I just said that dehumanizing people is never right. It never leads to anything good. You disagree. Anyway, I was not addressing you. I was addressing the person responsible for this blog.

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  59. Common sense people.

    Look before you leap.

    And don't cry like bitches when you land with 100k+ in debt.

    Smart enough to get in to law skool but too stupid to graduate.

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  60. "I just said that dehumanizing people is never right"

    Nice try you thieving, dishonest, vermin scumbag. You are a true piece of work.

    First of all you tried to silence my voice by labeling me as another V-Tech shooter, the worst most defamatory thing you could say about people. When called on your projection of your own sociopathy and willingness to trick and hurt innocent people onto me, now you're coming back with a weak "don't dehumanize people" line. You have no shame whatsoever. You will say completely inconsistent things to get your way. Oh, that line didn't work, let me try this line. You have no understanding of values or ethics or principal or character. You are just a loathsome vermin cockroach scrounging around for your next meal and I was dumb enough to subject myself to a life of indentured servitude to provide you that meal.

    Second of all, humans can take on many forms. When they do things that harm other people's lives, they should be called on it. It's not dehumanizing in any way. It's done to correct a problem with their behavior.

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  61. One last thing, and I have to go because I have a ton of stuff to do and I'll be working late due to this digression to interrupt your cush life, one last thing - there was a poll done on abovethelaw and this blog (which trashes legal academia) won an overwhelming 90% approval rating.

    I'm just one nobody, and my singular opinion doesn't matter. What matters, though, is the popular opinion and that is squarely against you.

    Good day. Good luck with your efforts to censor anyone who tries to call legal academia out on its behavior, or anyone who shares stories of the harm done by legal academia.

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  62. You are getting your "Anonymous(es)" mixed up. I did not say you were Virginia Tech-Y. That was another Anonymous.

    It is not weak to object to dehumanizing people.

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  63. This blog has thus far attracted a nice mixture of inputs and they each lend something. I don't think its time for moderation yet. The anger is justified, why don't you respond to it? Trying to smear the guy as "virginia techy" was pathetic, as was the lame attempt at reverse psychology. Engage the issues or go away.

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  64. To be clear I "Anonymous at 1:51" who raised the issue of the use of the word "vermin" did not call "the guy" "Virginia tech-y". That person began using Prof Law's first name, "Paul". I do no know Law Prof and would not address him by his first name.

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  65. Hilarious. Some prof thinks being called vermin is something to complain about. Take on 200 grand of debt and no job and then maybe we can hear your squeals. My god, who the hell do you Profs think you are?!? What world do you live in? You;re just proving that you're as dopey and clueless as we all thought. You do know that most of us held our noses whenever we were forced to interact with you in any way? You do know that, right?

    Finally this blog has dealt with the crux of the matter. As I've stated before on this blog, it is the combination of the worst of capitalism and the worst of socialism to create huge rewards for the financial elite (thanks again baby boom generation) and huge costs for the rest of us.

    But I do have to agree with some of the criticisms of people who went to 3rd tier schools and took on that enormous debt. Was I the only one who went to a lower ranked school in the top tier so that half my tuition was paid? Was I the only one who used any sort of common sense? At the time I didn't really judge the rest of you...people can make their own stupid decisions...but now I realize the true effect of your lousy financial decisions. The ruination of the entire market. which has deeply effected me.

    And that is not to take away from who the true "vermin" are, namely admins bankes and faculty. But I have had the the pleasure to work amongst the TTT cast-offs in doc review about 5 years ago and the viciousness and stupidity the vast majority of you exhibited makes it hard to be more than just a slightly sympathetic. Instead of attacking the people and system that led to your ruination and using your vast numbers as an advantage, I just remember a lot of miserable a-holes trying to get each other fired and hen-pecking at a level that would make the kids in Lord Of The Flies look like pikers. Now you just cry and complain and flail instead of actually taking real action and going after profs and faculty and banks or making a real game plan like collectively defaulting on loans or ANYTHING. There are tons of historical examples of what to do. But just sit here and whine instead....very productive. A pox on all your houses.

    Finally, Ive been complaining about all this for over a decade and the looks of disgust or dismissiveness I got in return were fairly consistent. People whose lives were being ruined just wanted me to shut the f%ck up because there was that chance that they would hit the lottery and get that associate job of their dreams. (smh) Now that the situation has hit a crisis point and effected the top ten....now its getting attention. lmfao.

    Like I said, a pox on all your houses.

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  66. Prof,

    I appreciate the blog and the attention you're bringing to the issue. And this post, in particular, gets close to the nub of the issue - student loan non-discharability in bankruptcy. Graduating 150K in the hole into a 42K salary would suck under the best of circumstances, but if you know that after 5 years of not "making it", you could effectively return your JD, surrender your license, and declare BK in exchange for a release from your student loan debt, the graduates would accept it - they really would.

    But the situation as it exists today means that there is absolutely no way out for these people other than fleeing to to Belize, Thailand, or the Philippines - note that the 100k tax hit on your IBR forgiveness after 25 years isn't dischargeable in bankruptcy either, although the IRS is a much more understanding creditor than the student loan companies.

    As someone wrote above, we've reached the level where the debt required for anyone of modest means to attend grad school is absolutely ruinous. The rage is going to continue to build as more and more young people graduate into this labor market saddled with the kind of educational debt necessary to get the degree. Sorry to say for the likely "professor" upset over the use of the term "vermin," you ain't seen nothing yet.

    If we don't fix it, and fast, this is going to end very, very badly.

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  67. Every day.

    Every, every single day

    at least five or six times..

    I think about killing myself over my Law School absurd debt.

    This is not a statement of intention to do it.

    But I still think about it.

    It is only natural.

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  68. Not sure if this was covered, but when you're talking about the student lending fraud you also need to account for how schools report default statistics to the government. Until the health care bill, the government only looked at the percentage of borrowers from a school in default two years after repayment begins. Now it's only three years. Others can correct me if I'm wrong, but my understanding is that lenders benefit from this because while the schools report the default statistics, the lenders are the ones that receive a guarantee from the government, such that the lower the default rate, the higher the guarantee. This, in turn, allows lenders to issue the same kinds of DERIVATIVES based on borrower default that they issued with home mortgages, except theoretically much more safe - because the government guarantee effectively says that the original instrument can never really go bad. That is very much a license to print money. Taking away the ability of lenders to create SLABs would be a great first step.

    Also, when John Chipman Gray was saying all his stuff . . . um . . . do you think he meant that it was, therefore, O.K. to lie to people? Law school applicants can indeed look out for themselves, LawProf. But not when they're being lied to on an institutional level.

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  69. Further: My understanding is that after 25 years on IBR, you get taxed on whatever balance is discharged. What is the likelihood that people are going to be getting $100,000 or more discharged 25 years from now, resulting in a tax bill for about $35,000?

    Fuck me.

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  70. @ Anon. 12:37 PM: You're vermin, too.

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  71. "My understanding is that after 25 years on IBR, you get taxed on whatever balance is discharged."

    lol.

    $160,000 growing with interest at 6.5% for 25 years = $820,000 of discharge of debt income. 35% of $820,000 = $287,000 owed to the IRS!

    oh dear lord.

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  72. One other funny thing about student loans is that law schools call it "financial aid." My law school had a statistic saying that 89% of their students received financial aid. I was flabbergasted because I hadn't received a penny in grants or scholarships, and when I inquired they said they counted student loans as financial aid.

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  73. Please don't institute comment control. (Or at least not unless someone is obviously trolling.) The comments here are extremely interesting.

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  74. @ 4:19 PM: You know, that's really a good point. I was just thinking the other day that I'm going to have to start figuring out some way to deal with this . . . 25 years from now (as you say, oh, dear lord), but I'm not so certain that the die isn't already cast on this one. There's just no way that even people who pay something during the next 25 years will come close to keeping up with the interest on these things. So, I mean, what then? There's more student loan debt than credit card debt!!

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  75. Please moderate comments by banning the troll who started this long and pointless derailment onto the topic of the word "vermin" and whether people should be allowed to say it.

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  76. Profs, if you can't handle being called names, you shouldn't be reading these comments.

    Glad you're here, though. You need to see what a lot of students actually think of you. You've been insulated in the law school building where you're academic credentials buy you some respect. Outside of those facilities, nobody cares.

    By the way, this isn't that much worse than the torture you inflict on your students in the name of promoting your completely unproven scientific Socratic method.

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  77. I said it before, and I'll say it again, the only reason you haven't seen violent action taken against law schools and their benefactors is because of the safety net offered by the IBR. Once that goes (as a result of austerity), kiss your fat asses goodbye.

    -waiting with pitchfork

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  78. This entire comment stream should be required reading for any law professor.

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  79. If I could purge my brain (or undo the damage depending how you look at it) of all the "education" I received from law school in exchange for a discharge, I'd do it in a heartbeat. I wouldn't even care about the three years of youth I lost.

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  80. My solution was emigration. Not because of my own student loans--I got those paid off by age 36 thanks to the housing bubble (in other words, I was lucky rather than smart and sold my shack in the hood about five minutes before the crash). It was in the neighborhood of $115K, which seemed life-ruining at the time. I cannot imagine what my younger lawyer friends who have 175K, 200K, or even more--with few prospects for work that pays enough that they will ever get rid of the debt--must go through.

    After retiring my own loans I looked at my own young kids and did the math about what THEIR student loan burdens would look like if this system doesn't change. It was horrifying. In our new country, once we find jobs they will almost certainly be of the unskilled-immigrant variety (because my JD is no good here, and good riddance to that). However, taking the long view I realized that it was a choice between us maybe being able to survive the recession and have a decent life -- or leaving and giving our kids a chance at a decent life in a country where quality higher education is free. I chose them. Unlike the selfish, disgusting Baby Boomer law professors and senior administrators who, having been given the world on a silver platter, are openly fucking over the next generation. Hey, they've got theirs!

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  81. It's obscene that our society puts student loan defaulters in the same category as people who skip out on their child support obligations and people who intentionally harm others.

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  82. But student loan defaulters are worse than parents who skip out on thier child support obligations. Where else would a Boomer be able to buy an AAA investment with guaranteed return for 25 years to fund thier retirements, except for SLABS?

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  83. You would need to be myopic to not recognize that the whole concept of paying to go to college is losing credibility. Technology has changed every other aspect of human life and folks better wake up to the fact that it has changed the face of education.

    Real education comes down to self motivation and personal desire. In the past - the main reason to go to school was to get access to the information. Now most humans have instant access to all the data on the planet at their fingertips. They can learn as fast or as slowly as their hearts desire.

    I will offer the hypothesis that a determined and industrious individual could use the syllabus for any college class and research the topics for 2 months on the internet and then I propose that they could easily pass the final exam for that course. They would likely know more about the subject matter at that point than the teacher in some cases.

    In conclusion, as the data becomes more and more accessible to average individuals for free - it makes less and less sense to charge so much money just for the luxury of presenting the data in a classroom.

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  84. In addition to the financial fraud there is clearly a more resounding educational deficit being perpetrated. I don't know how many of these folks are lawyers but there are over 300,000 waitresses/waiters with college degrees. All the excess supply has to go somewhere. This infographic on student debt is quite interesting http://moneytipcentral.com/student-debt-infographic

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  85. If a law professor can't handle being called vermin on the internet, I am curious to know what the law professors are going to do when the huddled masses come after them with pitchforks.

    Any idiot can understand the problem. You cannot graduate with 200k in debt to a job that pays your 50k a year. This situation is becoming way to common nowadays.

    And why can't we discharge our loans, or at least restructure them in bankruptcy like any other god damned consumer out there? F**ken real housewives star goes 10 million in debt buying leopard skin outfits and she can discharge it all in bankruptcy, but taking on debt to go to law school, no you're stuck with that for life. Perhaps I should advise my kids to forgo schooling and try to run up their consumer debts as high as possible until it all comes crashing down and they can declare bankruptcy. At least that way they can live it up a little, rather than get beat on by some vermin professor demanding to know the issue in Int'l Shoe.

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  86. Anon 8:59...

    You've hit the nail on the head. Why the ABA doesn't start revoking the accreditation of superfluous law schools is beyond me. In the alternative, the ABA should require a moratorium on law school admissions for one year, i.e., no Class of 2014, followed by a blanket reduction in future class sizes by 25% across-the-board, applying equally to all law schools.

    In 10-15 years, ours could once again be a semi-respectable profession, like dentistry.

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