Student Loan Program Pumps Legal Ed Bubble: For Now
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  • Verinder Syal

    Do we need this many lawyers to start with? De we need a country of a million lawyers, millions of laws, laws that are selectively enforced?

    The result is actually corruption in a multitude of ways.

    Not too long ago, it seemed, that 10 commandments were all we needed.

  • chase

    Very good advice Professor. I wish every student, or prospective student, in America read this blog post.

    Your arguments are excellent. I just worry that there is no way for young people to get through to the powers that be in higher education, who seem to be oblivious to the pain they are imposing on their students.

  • Walter Sobchak

    There is no reason why classroom legal education is not a 2 year program at the community college level, other than the artificial regulations.

    My benchmark for lawyers is Abraham Lincoln. He did not have any organized secondary school, or college education. If you think you are better lawyer than Abraham Lincoln was, you are wrong.

  • Gerald

    Just a thought – anyone stupid enough to borrow $200K to attend law school when there is already a glut of “lawyers” looking for a job with no realistic prospects – is too stupid to be attending a reputable college in the first place. If one can not understand the math involved, do something else.

    Secondarily, there is nothing involved in law school that could not be accomplished in a quality undergraduate program. There is certainly nothing more complex or demanding in law school than in chemical engineering, electrical engineering, etc. The requirement is simply a political and guild issue – not one of education or learning.

  • Mr. Mead:

    As a young lawyer who graduated in 2005, I sympathize with your discussion.

    I would also like to note that (what was rumor for us in 2005 at my law school) much of the cost of law school might be passed along to the remainder of the university for use in other places.

    See this article, for instance: http://abovethelaw.com/2011/07/a-law-dean-resigns-and-spills-the-beans-on-how-his-university-has-been-taking-advantage-of-law-students/ – where a resigning dean of the University of Baltimore noted that:

    “As of academic year 2010-11, the University retained approximately 45% of the revenue generated by law tuition, fees and state subsidy. Using any reasonable calculation of the direct and indirect University costs, the University was still diverting millions of dollars in law school revenue to non-law University functions.”

    THIS is madness. The ABA should make every law school it certifies reveal how much of its law school revenue is diverted to other university sources.

  • Tony

    One thing that was not mentioned is the Income Based Repayment (IBR) program. The program allows graduates with federal student loans to pay 10 or 15% of their income above 150% of the Federal Poverty Level for 10/20/25 years and have the remainder of the loan discharged.

    Graduates who work in the public sector or at non-profits get the 10 year loan discharge, while others get 20 or 25 years. Also, the discharged amount is not counted as taxable income for the public sector and non-profit workers while it is taxable for regular workers.

    To run an example, assume a graduate takes out the $200,000 at 6.8% in loans and gets a $50,000 job. The student would have a $415 monthly payment while the interest on the loan costs $717. This negative amortization quickly balloons, but it does not capitalize. After 25 years assuming their income grows 3% yearly they will have a total of $358,000 forgiven by the government. This clearly is unsustainable, and once taxpayers realize the extent to which they are subsidizing these schools they will demand the student loan program be drastically cut back.

    You can run your own calculations on the IBR program here:
    http://www.finaid.org/calculators/ibr.phtml

  • Kris

    How wonderful that we have public universities like the University of California system, instead of those private for-profit universities whose unbridled lust for lucre lead them to exploit students!

    [email protected]: Thanks for giving me the opportunity to once again mention a pet peeve of mine: Why on Earth should graduates who work in the public sector get preferential treatment in student loan repayments?!

  • teapartydoc

    When the next couple of generations finally figure out the extent to which they have been screwed over by preceding generations, I’m afraid they are going to make the French Revolution look like an episode of Barney and Friends.

  • Truth

    There’s no “artificial barrier.” You can sit for the bar exam in NY or California by working under the supervision of a lawyer for 5 or 6 years. You may need 1 year of law school as well.

    The problem is, without a law degree, no one will ever hire you. No client, no firm, no company.

    If you want to talk about a really bad investment, it’s the undergraduate liberal arts degree.

    The law degree will actually help you get a job and boost your income, not like studying English or History.

    You can see labor market data here:

    The average lawyer makes $130K ($115K median) and the unemployment rate for lawyers is around 2%.

    http://askapeer.com/pages/labor-market-data

    Starting salaries for law grads are around 80K per year.
    http://www.nalp.org/new_associate_sal_oct2011

    In the middle of the worse recession since the 1930s.

    Some crisis, huh?

  • Really, Truth?

    Not sure of the Kool Aid you are drinking but I want some!

    Those stats you point to are very misleading. A few things not counted by them:

    1. Those who never work as lawyers do not get counted in those stats even if they are licensed. Read here: law graduates who never become lawyers.

    2. An attorney who becomes unemployed and does not find employment in the field after a certain amount of time is NOT COUNTED as an unemployed lawyer.

    3. Solos (including those not making any money) are not counted either because they are self-employed. Their salaries are not counted so the average salary made by those in the profession rises.

    See how the numbers get skewed and tossed around? Without those key data points, the truth gets blurred, Truth. There is a revolution taking place in the legal profession as we speak. Anyone going to law school outside the top 5 schools is a fool. The public does not care about lawyers but the same problems inherent in the legal profession will start to arise in all areas of the higher ed scam.

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