they spinnin

First.

More importantly, are you REALLY going to make this about "boomers" against everyone else? Pitiful.

And faulty logice at best.

fuck you Mystal you fat fuck. Suck it up, quit your pitiful blogging, and get a real job. So what, you chose to go to law school, pay off your loans.

dey took er jerbs

Am i first?

Am i first?

This would work contrary to the Obama plan, unless him and congress do even more tinkering.

With the risk, less loans will be made. Less loans, less people will go to college. Less people go to college, the less innovation. (Innovation being pretty much the only product the US has that is better than its competitiors).

This could be bypassed of course by saying that the banks should make more risky student loans...wait...this sounds familar....

Banks and Fed loans should make it easier to defer payments.

Could you lean any further left? What a typical leftist rant - hey, I went to school, knowingly incurring the debt, believing I would get a job paying me three times what I am worth for the first 3-4 years of my career until I learn what I really need to know. Oh, wait, I don't want to pay that debt back now. Waaaah!

Did you mention that you can't wipe away your mortgage debt via bankruptcy either? Dipshit.

Somebody help me out here--is greed.......still good?

Seems to me that the debt probably should be dischargeable in bankruptcy, especially the high interest private loans that aren't even doing students any favors. The government backed loans or other subsidized loans might be a harder sell to change the law because a contrary rule would create incentives for fraud and would make the taxpayers lose out even more.

Regardless though, taking on $150k in educational debt is probably not the brightest idea, especially given the high number of state educational institutions and scholarships/financial aid available.

Student Loans are the reason that College tuition is so high in the first place. They should just end subsidized loans all together.

Not everyone is entitled to a higher education degree, particularly law school. Graduate school is not the new college, and college is not the new high school diploma. If you can't afford to attend a four-year university, then you have no purpose going. The problem with the Democratic Party is this notion that everyone is entitled to own a home and to go to college. This is NOT correct, and it is these principles, not Bush, that got this country in the mess it's in. Blahmah the Clown is leading us down a path to perdition.

I don't remember this one. Is student loan interest tax deductible like mortgage interest?

Hey, less student loans, less lawyers! Sounds like more work for the rest of us who paid their way through night school and working two jobs while studying for finals.

Yes 10. Don't let these wimpy non-competitive types beat that out of you.

Keep your greed and competition to yourself, and when the time is right use it to your advantage.

7 - innovation? We've stopped doing that too:

http://www.patentbaristas.com/wp/wp-content/uploads/2008/10/jdoll-allowance.jpg

10 - Yes!!

Elie, you hit it out of the park with this one. This whole system is set up to benefit the baby boomers, and the comments in this thread indicate just how effective their campaign of misinformation has been.

Why do African Americans always cheat on exams and default on loans?

Smush Limbaugh

There's no need to thank me. Being your President was reward enough. All I can say is: "Mission Accomplished."

I'd be happy if they would just let you refinance them more then once. I rolled mine all into one loan when I graduated in 1996 and that is considered refinancing. Now I'm stuck with a rate of 8.5% which can't be refinanced.

I'm never sending my lenders another dime again. You want your money, get it from Latham, the firm that fucked my career.

-suicidal laid off Latham first year

13 - Precisely.

19 - Specifically, how does it benefit the boomers over anyone else for people to pay the loans they knowingly took on?

The long-term fix isn't the loans, it's getting rid of the TTT schools that charge 40K a year.

I think the people with student loans might have a claim, as they relied on promises made to them by the universities they attended. Let me research the Restatements and see if anything covers that.

19--

The fact that people need loans for things means that they shouldn't have the things they're procuring (education included) with the loans in the first place. Pull your ostrich head out of the sand.

10 -- Greed is good .. but AdBlock is better.

"You gonna tell me the difference between this guy and that guy is luck?"

#12:

Absolutely correct.

* * *

#14:

Student loan interest is deductible above the line, but only within certain income limits, and only up to $2,500 per year.

* * *

Uh...here's a possible solution: stop making college and grad school so freaking expensive!

And here's another possible solution: eliminate all private student loans, only allow the federal government to offer student loans, and tie the repayment amount and repayment period to the type and salary of the job received by the borrower.

If banks are being charged less than 1% in interest during this bailout period, I think the graduates with government loans should get the same treatment. I'm sure there will be more consumer spending if recent graduates were able to keep more of their income instead of devoting it all to interest.

With a joblessness crisis upon us,
Those whose motives were honest
But can’t pay loans at all
Do not need Mystal
Purporting to be Nostradamus.

I'm pretty left of center, and I think that discharging student loan debt is a terrible idea.

First of all, I presume that the plan is that the government have to pay all the outstanding balances (to private lenders) or forego the ability to get paid back (for federal loans). That is going to be very expensive - close to a $1 trillion, and we absolutely can't afford it.

Second, the idea of the other bailouts is that we had no choice. What happens if AIG or major banks fail? The effects on the broader economy would be catastrophic.

Third, why unjustly enrich the irresponsible? We should only do that when we have to - when failing to do so would have worse results. That's not the case here.

Fourth, fuck you, Elie. I'm not normally that rude to you on this, but you obviously couldn't hack it as a lawyer because your attention to detail is abysmal. Maybe it's your personality, maybe you're dyslexic, whatever. But don't act like the government and those of us paying shitloads of taxes should pay for you to go to Harvard Law and then fail to use your expensive education to do anything more than what a j-school undergrad does better than you.

I've diligently paid down my loans from $80k or so to around $20k. I have sympathy for those with large loan balances, but it doesn't mean that we should give them a do-over on major financial obligations.

Elie -- You are an idiot.

Student loans are not dischargeable because that allows a VERY low interest rate on an otherwise unsecured obligation.

Low interest rates usually attach to loans with collateral -- e.g., a house or a car. A credit card has high rates of interest to make up for the unsecured nature of the risks.

The security for a student loan is essentially the degree, but since the lender can't take that and resell it, it would be a very risky loan if it could be dischargeable in bankruptcy.

I believe student loans were once dischargeable, and loads of medical students were filing for BR to discharge their loans while they were residents.

And a bailout is crazy. I worked my a$$ off at a big firm to pay off my loans. You should too. Or at least write better blog posts so maybe this will be more than a glorified message board.

I can't believe I am even responding to this.

It is a well established in bankruptcy court precedent that unless you have become disabled and are unable to work, your loans must be repaid. The banks are a powerful lobby.

There's no such thing as a "BAILOUT."

It's a way to make other taxpayers pay your bills.

Aka "wealth distribution." Aka "socialism"

Aka "death of America."

Ronnie the Republican was the one who started the student loan ponzie scheme. Republican!

There's no such thing as a "BAILOUT."

It's a way to make other taxpayers pay your bills.

Aka "wealth distribution." Aka "socialism"

Aka "death of America."

Student loan interest rates would have to go up if they could be discharged in bankruptcy. Otherwise, we're setting ourselves up for failure.

Don't get me wrong, I'm a relatively junior litigator, so I still have huge student loan debt. Also, as most Biglaw litigators know, you can't deduct student interest payments if you make our salary.

Boy, what a great idea. Let's reward the idiots who got useless degrees (hi, Sociology), went straight off to grad school, and are now bitching because they can't -- or more precisely won't -- pay off their $300k in VOLUNTARILY ACCRUED debt. You mortgaged your future, and it turns out your future isn't worth very much. Boo hoo hoo. Why should I as a faithful taxpayer subsidize your sloth and incompetence, particularly when I spent a decade working incredibly hard and funneling my disposable income into paying off my loans when I could have been a fair weather wastrel like you, pontificating on minutiae in Torts or taking 11 years to get a French Poetry PhD? Why should we reward the millions of incredibly lazy and entitled Generation Y eloi out there who thought snapping up one of the 10 million English BAs printed every year was a wise investment?

Really, the recurring moan about loan bailouts is just the latest flowering of Generation Y's pathetic simpering mindset. If you really tried you could pay down your loans (the Army is always hiring), but it's easier to float along expecting Obama to siphon off money from people who earned it to buy a big velvet pillow for your educated head. The only people who MIGHT be worth a bailout are those with hard science degrees who have a demonstrated work history and a shot at contributing to society. But paying a bunch of lazy Sociology majors and environmental defense lawyers to sit around not suffering the consequences of their actions is idiotic. And your almost certain votes for Obama just demonstrate how wasted that "education" was, since his brand of socialism only benefits the half dozen politicos at its peak (namely Obama and his other lackeys) while ensuring that all the rest of us see a sure and steady decline in wealth and quality of life. Instead of haves and have lesses, everyone is equally miserable together. How do you not understand this, it's only happened several dozen times in the past 100 years.

Yet, there are all kinds of new law schools planned -- Dallas, 3 in NY, one in PG County Maryland, one in Hartford...

The babyboomers did not screw the current generation with student loans.

The Babyboomers screwed us with social security. Social security was SUPPOSED to be a means by which the government holds person's savings and then gives it back upon retirement.

Those crafty boomers instead decided to spend the money on themselves (specifically, the great Ronald Regan thought this up), and now expect US to pay for THEIR social security because they spent their own money.

Any republican that croons about wealth redistribution should agree the baby boomers should not receive social security. Talk about wealth distribution from one generation on a trillion dollar scale.

Also, Thanks Regan/Bush for racking up the national debt. Over 25% of your tax dollars goes to paying interest on the debt those jerkoffs built up. On paying the interest, not on paying off the debt. Now they crow about Obama like he invented the idea of a massive national debt. Thank the senile actor you pretend was a great president.

It is a basic tenant in economics that higher price will lower demand. College tuition is an exception. Without objective ways to measure the value of a degree, people use price as a proxy. That is, the higher the price of the education, the better it must be. I thought, and continue to think, this is fallacious reasoning. Where to go is actually the first intelligence test you get in college. Those who picked the modestly priced respectable school passed. However, if you chose to go to the overpriced school to get a pedigree to hang on the wall, knowing full-well the cost of the degree, take responsibility for your choice. You paid for the degree, not the job. You got what you bargained for. Perhaps you hoped to parley the degree into a career, but that risk was always with you.

Mixed feelings on this one. If student loans were dischargable in Bankruptcy, I imagine that interest rates would be a lot higher for those that actually pay their loans. The option to pick between dischargable and non-dischargable loans might be nice though.

In any event, the issue isn't student loans. The issue is tuition prices that don't offer a very good return on investment for a pretty substantial number of students. There's this mantra that education is always a good investment (just like a house), and after a certain price point that's just not true.

"If private student debt can be discharged in bankruptcy, that creates risk, and the result will increase the cost of tuition," says Scott Talbott, chief lobbyist for the Financial Services Roundtable.

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

This isn't completely true. Making private loans subject to bankruptcy discharge actually makes sense.

Yes, it will create an additional risk, but the result will be the exact opposite. With tighter underwriting decisions, the price of going to certain schools will likely go down because the risk of gaining employment will make it tougher to get approved for a 30K a year loan to attend Cooley or whatever third tier (or even lower first tier) law school or useless MA program. The result will yield lower tuition in certain places and will probably drive other programs and law schools out of business.

The biggest upside to tighter underwriting standards is that banks will actually need real, verifiable employment and salary data before lending to student. Considering the real estate mess, banks will likely be pretty careful in ensuring that the money they are lending can likely be paid back after a student graduates and finds work.

If they make private loans subject to discharge in bankruptcy, the pricing of school will likely cap out at the maximum federal loan amount (which I still think should never, ever be discharged).

I agree with 19.

The baby boomers have raped America's future and have skeeted all over the next generation's faces. They put the nation in massive debt with unholy amounts of government spending, knowing they would be dead long before the time to pay up rolled around, and they saddled the young 'uns with massive amounts of student and other debt for their own profit.

Fuck those old assholes.

Higher education isn't an automatic. If you actually WANT to go - as opposed to just not wanting to work for another four/seven years - go state or go scholorship or don't go. It used to be "go Ivy" as well, but that's not working so well for a lot of people right now. And undergrad tuition and board at an Ivy can rival most law school debt bills.

Floating six figures in debt only rarely makes sense. Even for a doctor or a big-firm lawyer, that's a huge amount they are going to have to repay out of their lifetime earnings.

I'd at least be a supporter of raising the threshold for deducting student loan interest. That'd be a start at least.

I have loan debt and I make very little money in my attorney job (that I feel damn lucky to have at all), so it's hard to make my payments. BUT I DO. A bailout is a terrible idea--it just creates a whole host of new problems. Also, how many people REALLY are defaulting on these loans. Mystal, you gave us one story about one attorney. That sucks for her, but she knew when she went to law school she would have to pay this back. There was zero mystery on that front.

All a bailout will do is give the government more control over your education. Which means you have less control over things like interest rates or who your lender is or anything at all relating to your educational debt. Stupid.

Increasing the unemployment deferral period SLIGHTLY is the only option that makes ANY sense.

I think you meant to say....If you are a financial idiot and rack up thousands of dollars in school debt by going to law school directly after college with no marketable skills you will soon be able to wipe out your debt, but if you planned correctly, saved for law school, had a second skill to fall back on, lose your job but get another because you planned correctly, you dont get a bailout?

Seems to be a pattern in about everything our new progressive government pursues.

A government that subsidizes idiots will fast become a nation of idiots.

fuck you idiots who think you can do whatever you want without paying for it (literally). Everyone knows that they have to pay back their student loans. Deal with it.

13 -- Yea, you're right. God damn poor people! How dare they think they should get some higher education and the jobs that go with it. I mean, seriously, stay in your place.

You over privileged, silver spoon fed twat.

What wrong with a flat screen and some rims? You give me some white, a nice flat screen, and da pimpin' rims...damn! Me gets me a date!

Fo da rest a you mugs, the ship be sinking...

What 40 said.

UNDER CONSERVATIVES' NEW DEFINITION OF PROGRESSIVE INCOME TAX AS "SOCIALISM," UNITED STATES HAS BEEN SOCIALIST STATE SINCE 1862.

45 is correct.

The rampant inflation in tuition is due to this ponzi scheme.

Cooley is charging whatever the lenders will advance and the lenders will advance whatever Cooley wants to charge right now because they know they are protected from default.

42 - Do you read anything that has been corroborated as factual?

Social Security was sliding downhill well before Reagan entered office you synaptically challenged pud.

As to your last comment, I thought Clinton fixed that, or so you like to believe.

Jesus h tap dancin' Christ, get a clue!

I love those on here that preach about how hard they worked in BigLaw to pay off their debts in three-four years. Others, should suck it up and do the same.

OK, first, what's a graduating attorney who went to the same f*cking T14, top 25, whatever, and got equal or better grades than you, supposed to do when they are coming out of school in an economy that simply does not have the same jobs available in BigLaw.

I think you would be singing a different tune if you came out of law school in this job market. Oh, wait...we should have predicted this four years ago when we applied to school. Sure...whatever.

I'm convinced that no one understands economics. Econ 101 should be mandatory. Geez. Let me explain:

1) If student loan debt can be discharged in bankruptcy, the risk associated with student loan lending would increase.

2) That would drive up the cost of getting a loan for people without stellar credit (higher interest rates).

3) That would mean that FEWER people would be able to afford loans - fewer people would be seeking loans for college.

4) Fewer people would be going to college.

5) Tuition, generally, would go DOWN to compensate for decreasing demand.

How the hell does Scott Talbot make the argument that tuition would go UP with a straight face? Free and easy access to money is what drove tuition up in the first place. At high profile schools, free and easy access to money COMBINED WITH high expected starting salaries worked to REALLY drive tuition up. Do you want to drive tuition down? STOP FREE AND EASY ACCESS TO MONEY. It's that simple.

The idea that everyone should go to college or graduate school is ridiculous. What's worse for poor people - to prevent them from having financial access to college or to prevent them from taking out WAY TOO MUCH money in loans for a college degree that isn't worth it so that they will be EVEN POORER in the future?

F'ing econ 101, people.

It is a basic tenant in economics that higher price will lower demand. College tuition is an exception. Without objective ways to measure the value of a degree, people use price as a proxy.

-----------------
I completely, utterly disagree. While certain people who can afford to pay college cash might have to do this (see people who go to NYU to get a teaching degree, or people who go to NYU generally), most people look at college from the context of potential future earnings that schools project (and lie about).

Tighter underwriting standards will fix this issue. The best way to get this done is to increase the risk of private lenders who have driven up the price of higher education by making loan money fairly easy to get. (Sound familiar).

No comment on Elie's post, but there is some logic to driving down the cost of higher education by making loans less available. Until the 60s or 70s, even fancy private colleges were within reach of a fair slice of the population if they were willing to 'work their way through." Schools had an incentive to keep costs down, because if they got too far out of control, few students could afford to attend. With the broad availability of loans, however, everyone can "afford" higher education, and there's no longer any incentive for schools to hold down costs. Doing away with this entire loan-based system might actually do more people more good. Even if some folks can't get the degree, many of those who do will be able to put it to better use. For example, you might've taken that public defender job if not for all the student loan debts ...

A few of Elie's points are valid as general propositions:
(1) The game has changed rapidly. Many of the commenters say that they are working hard to pay off their loans and that a bailout would reward the less diligent. However, they presumably became employed after graduation and gained valuable skills that enable them to remain employed during this recession, an option which is currently unavailable to many graduating students. Obviously, this point is less applicable to those who graduated a few years ago.
(2) The baby boomer generation has seen an average quality of living that far exceeds any previous generation. This was facilitated largely by the efforts of the generations before them. However (caution: generalization ahead), the baby boomer generation has not only largely failed to help subsequent generations achieve equal success, but may have set up the younger generations for a lower overall quality of living.

Did "Drudge Report" link to this site or something?

No need for a bailout, but can anyone make a reasonable argument supporting the failure to permit students to fully deduct the interest they pay on their loans?

All businesses can deduct interest on their loans they take out to create physical capital.

Law students/MD's/MBA's should be able to deduct interest on their loans they take out to create human capital.

If law firms were paying for law school themselves they would be able to deduct the cost of the education as a business expense so the distinction is totally artificial.

45 and 59 hit the nail on the head. Scott Talbot is a certifiable moron.

The problem with allowing student loans to be dischargeable is that ALMOST EVERyONE would do it. Why should some schmuck get stuck paying back 1500 a month just because he has a job when some other schmuck can get his wiped clean. Both paid for the same service but one gets to walk away scott free and the other is saddled for life as long as he works.

It is a fairness standard and a risk standard. Cost of education would go up, loans would become super difficult to get and would likely be tied to the prestigyness of the school and the grades of the student and who knows maybe committing early to a major the bank deems financially viable.

What happens then? People start bitching and moaning about how its UNFAIR to kids who didnt do as well academically, who dont have the credit history or the guarantors to back them up and who dont want to be dentists, engineers, pharmacists, and screws over the english, art, history...music theory, theatre majors.

Get it.

Im equally as screwed with my 6 figure loans. AND im unemployed collected unemployment. Guess what? For the health of financial system, the government, and not screwing over the future generations of people out there and preserving why the US is so much better than other crappy nations (you know something called OPPORTUNITY for a better life), I DONT think student loans should be dischargeable.

BUT students need to be educated by the government, by the schools, by their parents and even by their slightly older peers that it is NEVER OK to take out 6 figure debt without a guarantee of a job. Or to take out 50K for an anthropology major. And maybe just becuase you can get into a top school doesnt mean paying 100K to go there for undergrad is reasonable. It's not.

Public/state and community colleges should be an option. These schools should have their programs strengthened. But there should be a private option as well. Exclusively government managed ANYTHING screws us ALL OVER. Havent you guys learned that?

I agree with 62. Nice post, Mystal

45 and 59 hit the nail on the head. Scott Talbot is a certifiable moron.

Elie, did you miss the piece on which party was receiving lobbying dollars from recipients of the TARP funds?

The Generation of Old (White) Perverts will never let people be bailed out over debt that shouldn't have existed in the first place. That would be more socialism!

Emigrate to Scandanavia, where the winters are cold, but the health care and educations are free and the women are thinner and better looking than the US of A.

11 - you're right. I should have skipped Columbia for SUNY-Buffalo law school.

Social security seems to be where we're really getting screwed. With every paycheck I pay into a system that will yield nothing to me in return. Uncle Sam - let me keep the money; I'm planning to take care of my folks regardless.

We have programs to bail out companies in debt. We have programs to help idiots who bought houses they can't afford.

So wait? We can help the idiot who buys a $300,00 house they can't afford, but we can't help the kids who bought a $150,000 education they can't afford.

Great logic!

I pay my student tloans barely. But I also pay a large chunk of my paycheck to medicare and social secutiry, which I doubt I will ever see. Why can't those with student loans have some sort of tax reduction in those categories to pay them back. Considering most of it goes to the government anyways? One program I'll use, the other I won't. Make me inelligible for medicare then. That's fine with me. I'll figure out something else for 30 years down the road.

59- pls stop making sense. you would never make it as head of the federal reserve. don't you know that the economy rests on spending, bailouts and socializing all risk.

48 and 64 - agreed. this needs to happen. i'd go so far as to say that there should be no income cap.

72 - I agree. Get rid of medicare and social security payments for people with more than $50K in loans. Why not? When I get that stupid yearly "here's your social security benefits as of now" it can just say 0. Because at 29 that's what it's gonna be in 30 years anyway.

And maybe make old people with a certain amount of money inelligible for medicare. If not, make me elligible for welfare while I was in school. I was broke with no job and was eating ramen noodles anyways. I would've killed for some food stamps at times.

I second 64. At the minimum the cap on student loan interest deduction should be raised from where it is now.

57-

You conspicuously avoid 42's point that the Republicans created the massive national debt that currently consumes a huge percentage of our tax dollars.

This makes sense as it is an undebatable fact. Reagan stole the wealth of future generations to fund his government. Maybe he was hoping that since he purposefully allowed AIDS to turn into an epidemic we'd all be dead anyway?

58,

I don't have a lot of sympathy if a T14 grad has to work in a secondary market for a couple years for 145k, when they otherwise would have made 160k in Manahattan. It's still a ton of money and you still have to pay your loans.

Well, 73. If reform happened, it would be the "unsocializing" of risk because the private lenders would need to figure out whether it is work 125k a year to attend Depaul or Wake Forest or Chapman or any of those random law schools with fake employment stats. The current student loan system is basically "socialist" in the sense that the government is allocating the risk away from the lender.

Increasing risk would likely shut down a lot of these useless private schools and would probably lead to the improvement and support of public law schools that are cheaper and can rely on state funding to compensate for the tightening of student loan cash.

19 here, I can certainly agree that no one is entitled to a graduate education. But once the government gets into the business of encouraging or promoting policies and behaviors (imminent domain anyone?), then you are just being intellectually dishonest to just rest on "entitlement" arguments. The tax code, among other things, is used to bestow lots of entitlements. Come talk to me when the government institutes a tax scheme that treats everyone the same (no deductibles or credits for ANYTHING) and ends SS, Medicare, and Medicaid (those programs account for over 40% of the federal budget). Until then, the policy debate is about cost-benefit.

Do we want stupid young people or educated young people? Discuss.

48, 64 and 76 - have you ever seen estimates as to how much tax $ the gov. would lose if the income cap was doubled (i think it's currently 60k) or lifted? i ask purely out of curiosity.

Elie,

Best post you've ever written. Good job! debatable, relevant, and witty at times. Bravo.

Not Elie

42 = fail.

You mean FDR and the 1930s SCOTUS for Social Security a wholly unconstitutional ponzi scheme in the first place. That's what you get for electing an idiot cripple.

"Just to be clear, if you are a financial idiot and you rack up thousands of dollars in credit card debt on flat screens and rims, you can get that wiped out in bankruptcy"

Elie, uh no. Check 11 U.S.C. sec. 523(a)(2)(C) - you can't run up your credit card on luxury goods and then get it discharged in bankruptcy. This is considered fraud, and its an exception to discharge.

GET RID OF MEDICARE AND SOCIAL SECURITY PAYMENTS! Require that the same amount taken out of paychecks would go to loan payments back to the government.

Problem solved.

GET RID OF MEDICARE AND SOCIAL SECURITY PAYMENTS! Require that the same amount taken out of paychecks would go to loan payments back to the government.

Problem solved.

Answer is simple:

Loans still not dischargeable in bankruptcy (would be ridiculous)

Return to low interest rates-if banks, etc. can borrow at 0%, then 3-4% should be a reasonable return.

Allow interest to be deducted w/ no cap on amount or income.

Everyone ought to be happy under this scenario except for those who feel like they should be allowed to completely shirk any responsibility for their own actions.

GET RID OF MEDICARE AND SOCIAL SECURITY PAYMENTS! Require that the same amount taken out of paychecks would go to loan payments back to the government.

Problem solved

What 40 said.

I think a bit of the blame lies on the universities too. Schools need to publish realistic salaries upon graduation. People should know that they are accruing 70K of debt for a job that pays $20K per year. (is that what sociology majors make?). Over a year ago ATL published the salary curve for first years. It very clearly had a bimodal distribution for salaries. MOST lawyers do not make SIX figures when they graduate. MOST lawyers make around 40-60 when they graduate. So common sense would lead a person to do some math and only acquire so much debt that they could afford to pay with about a 50K salary.

I have an undergrad in engineering. I picked a law school where if I couldn't find a legal job I could pay back my loans with the engineering degree and the job experience I already had. I wasn't going to spend more than $50K to go to law school-- it doesnt make financial sense. I now make less as an attorney than I did before I went to law school but I love my job now. I didn't love what I did before but I would do it gladly again if I somehow had to pay back debt that I voluntarily acquired.

I am not trying to demean anyone with a liberal arts degree. I think going to school for the sake of going to school is a good thing. Education is great. But people need to be realistic and not study things that aren't going to earn money. If you want to study french lit then get a minor in business so you can at least run a bookstore. If you want to major in art then get a teaching certificate so you can at least teach at a high school. But I shouldn't have to pay for your poor and uninformed choices.

Discharging student loans in bankruptcy won't fix the problem. The first part of the problem is that universities decided to continuously raise tuition above the infaltion rate:

a. because they could and people were willing to pay; and
b. to continuously recruit "top professors" to teach one class and write papers and stuff nobody cares about.

The second part of the problem is the students. Students decided to go to undergrad and major in a subject that they knew was useless and run up debt. Many of them went to expensive school instead of state or smaller private schools that are less expensive. Then they go off to grad school or law school because they get to the end of their bachelors and realize there are no jobs for their useless degree. Then they go off to grad/law school and run up more debt so they can find a job.

The particular problem with law school is that a large prtion of the people don't really want to be lawyers. They simply heard that you could get a big salary when you finished (the law schools indirectly encouraged this idea) and they never did any real research or come up with a real plan of action. Most lawyers never earned that much money in the first place. Plus, they should have realized that most law schools are simply taking your money and Biglaw will never hire you because they only want the T-14 and there are very few trial lawyers that ever make it to the stage of a WillieGary.

It is sad that people are so far in debt with little to show for it. However, people chose to go to expensive schools or go to crap law schools that charge an arm and a leg without any real thought. It is not all that different from people who bought a house on the assumption that it would rise in value 20% year on year in perpetuity. At a certain point, you screwed yourself and you have to deal with it.

"Sorry about your little red bottom line bro"

tyft

what if we organized a scheme where no one pays...NO ONE PAY..

what if we organized a scheme where no one pays...NO ONE PAY..

NEW RULE! Comments are capped at 2 paragraph length. nobody reads your long essays anyway.

Suck it 94. This is one of the best comment threads I've seen in a long time. People are actually, uh, talking about the post and the issue somewhat coherently. Asswipe.

94 - NEW RULE. No one pay taxes next year.

58--
Are you in the top 10% of your class like I was, or did you just manage to get into the T14 and then try to ride the T14's name all the way to the bank? Because I'm guessing if you graduated top 10% like I did (from a T25, not a T14), you'd still have a BigLaw job.

Hope for high inflation - it will make your student debt, while crushing now, worthless in a few years.

#61 and #62 are correct. Usually when credit is artificially cheap, asset bubbles result. It happened with housing as a result of securitization, subsidization of homeownership, and the Fed's lax monetary policy. As it was with housing, so it is with tuition. Consider that tuition and room and board for Cooley Law School is approximately $39,000. What intelligent bank would loan around $120,000 for a student to go to a school with Cooley's employment stats?

Allowing loans to be dischargeable in bankruptcy going forward combined with the government's exit from the student loan business altogether will force banks to be more choosy about credit, which will change students' decisions about where to go to school, which will force schools to work harder on reducing tuition and improving employment opportunities.

I'd rather see them lower the cost of tuition, put a cap on interest rates for student loans, and be more generous with loan deferrals if a student can't find a job (ex: maybe 1-2 years of loan deferral that can be broken up and applied when needed)

I think a student loan "bailout" is a ridiculously bad idea.

1. What would be bailed out? all college? all graduate school? regardless of the field or degree? that is A LOT of money. Where is it coming from?

2. Where would it apply? People in school now? People starting school now? Anyone with any student loans period? (that would really penalize the people who had actually been paying off their loans, or who took scholarships or worked their way through school)

3. People could go to XYZ crappy college for XYZ worthless major and have it all paid for? everyone would just go to school for free for the hell of it...

4. anyone who actually could afford to pay some or all of tuition would opt to take it out in loans, because why pay for it if someone else will?

5. going to law school is a choice. do we really need MORE lawyers? just think of how flooded the legal profession would be if anyone could go to law school for free.

I'd rather see a policy that makes it easier for people to afford graduate school and to pay off the loans they choose to take out, but that still holds people accountable for the decisions they make.

Agree with raising the limit on interest deduction. $2500 is a joke. Mine was $4000 last year.

52,

Go pay for them then. Live within your means. No one is entitled to a $200k education. If you can get a master's degree in-state and you can afford it, then do it. If you can get a master's degree out-of-state and you cannot afford it, I NEED NOT PAY FOR IT.

Clown. Go work for Blahmah's administration.

Problem: costs, risks and benefits of "investment" in education are disconnected.

Reason: The lenders and sellers (schools) have no risk; their only incentive is to sell more. (don't we know how this ends? see, e.g., 2008)

Solution: Make the schools and lenders put some skin in the game for their loans, by making some or all of them dischargeable.

Benefits:
1. schools will have less incentive to churn out useless or economically inefficient (i.e., cost of degree > value of degree) to over-leveraged students;

2. With risk of failure priced in, the cost of loans for each school (or degree) will reflect the value of the specific education you are about to "invest" in. Risk of default at Harvard law < ASU law < ASU art history masters.

By the way, any argument you use against discharging student debt can be used against any discharge of debt. e.g., If you allow [hospital builders/ baby formula factories / cancer research companies] to discharge debt (which we do), the cost of [hospital builders/ baby formula factories / cancer research companies] will go up and there will be fewer of them - is that what you want?????"

So shut it, unless you are advocating abolition of the entire U.S. bankruptcty system, in which case you are an idiot.

I agree that ultimately it's a student's obligation to do their due diligence on whether it is "worth" going into debt to obtain a degree in the hopes that it will pay off in a bigger salary. But I believe schools (especially expensive private schools) have a moral obligation to disclose to the student the amount of debt they should expect to incur as well as the salary they can reasonably expect to command after graduation. I don't think law schools do enough disclosure on this point. Many students (naively) go in thinking they'll be able get a Biglaw job, but those mostly go to just the top 10% of the class. All others should not expect a 6 figure salary or even find a job for that matter.

Instead of a policy where the government would wipe out everyones student loans, which encourages apathy, what about this type of system that would encourage people to work hard?

T14 schools - free (government funded or whatever)
T40 schools - 2/3 free
T100 schools - 1/3 free

(or some other arbitrary numbers) which would then ease the financial burden on top students but wouldn't encourage every joe blow to go get a law degree because it's free

If you were a dumb english major in college, you knew you had no job after 4 yrs. What the h*ll made you think you could tack on another liberal arts degree, like law, and deserve a job. Wake up! At least asians have an engineering or bio degree going into law school.

Wow this topic really brings out the right wing nutjobs in the comments ...
Good post Elie.

100. Society needs lawyers. Just not the one's making 160K a year right out.

There is actually a huge demand for legal services on the lower end of the range which will net a new grad 30-50K a year. In an ideal world, these people would have gone to a state university that was affordable and graduated with less than 25K of debt.

Roughly 50-75 Private law schools need to go. The amount of money it costs to attend combined with employment statistics make it stupid for a lender to lend money to students at these places. The reason they get away with it now is because the bank's risk is minimal and the schools out and out lie about the earning potential that crappy private law school degree will net.

This issue is applicable to all students with student loans. Anyone analyzing this only within the context of law students and our ailing industry is very severely missing the point. Law school loans (as with other professional school loans) make up a very tiny percentage of all student loan obligations.

So, if your analysis only looks at this in the context of law students, congratulations, you are ignoring about 98% of the problem (and even assuming 1 law student for every 50 undergrads probably overstates law students importance in this issue).

Please disregard any comments by people taking this faulty analytical approach.

78: Yeah, and $145k jobs in secondary markets are really abundant right now. Last time I checked, the going rate in Manhattan was $60k/yr to go away (and that's with a prior commitment from the firm).

I was making $145k in a "secondary market" before I got laid-off with a whole 3 monhts of experience. I'm about to take a job making less than half of that b/c its the only thing I could find after 3 months of looking.

My only point was that associates who came out of school 3-5 years ago are kidding themselves if they think they wouldn't be singing the same tune as recent grads are now regarding relief of student loans. Congrats to you for being born five years ealier and having the luck, yeah its luck, of coming out in a good job market and having the opportunity to make a $145-$160k a year to pay off your massive student loan debt. Just getting another job and working hard in BigLaw is not an option right now.

I agree with 87. It would be totally irresponsible to discharge the loans entirely (and I say that as someone with 6 figure loans) because that just shifts the burden to other taxpayers.

But if the interest rate is somewhere south of 1%, how about lowering my rate to something below 6.5% (the approximate aggregate average of my loans)?

- not 87

forget the rest, the s/l interest deduction w/re income taxes should be overhauled. capped at ~$2500 & phased out beginning at ~$72k? that's fucked connsidering that, w/o incurring that expense, the "income" (really, gross revenue) isn't earned (i.e., it's not fucking "income"). so at least allow a deduction for 100% of the interest.

tax cut for the rich? EAT SHIT.

104 - prior to your law school education did you understand the term "due diligence"?

When I did my research, the programs I applied to said their job placement and average salary figures were stellar. Go figure.

So even with students doing due diligence as to value, with law schools fudging employment and salary numbers, how does that due diligence argument really work?

forget the rest, the s/l interest deduction w/re income taxes should be overhauled. capped at ~$2500 & phased out beginning at ~$72k? that's fucked connsidering that, w/o incurring that expense, the "income" (really, gross revenue) isn't earned (i.e., it's not fucking "income"). so at least allow a deduction for 100% of the interest.

tax cut for the rich? EAT SHIT.

If underwriting standards are tightened (which they will need to be if loans are going to be dischargeable), then most people won't be able to get loans.

The government says: higher education is expensive, we need to make sure that people can afford it, so let's make sure that everyone can get these loans and that they are at low interest rates. If you make them dischargeable, then most won't be able to get them, and the interest rates are going to be much higher. This is a terrible idea.

This is idiocy. The reason student loans are not dischargeable in bankruptcy is that its awfully hard to take back the stuff you bought with the loan. If you default on a mortgage, the bank takes your home. Its ability to do that is the reason its willing to give you $500K in the first place. How does one return an education? You can't. As a consequence, lenders are rightfully worried that if they make $100K loans or greater to a student, it will be routine practice to declare bankruptcy right out of the gate, discharge some or all of the loan, and only THEN start to make effective use of the education you purchased. The fact that students can't do that is the biggest reason why student loans are so widely available in the first place.

The real solution here? Understand before you take the loan that its real money, with real obligations of paying it back. If you don't want to be a lawyer, don't incur $150K in debt trying to become one, because then you will have to practice law in order to make the money to pay it back.

104 - prior to your law school education did you understand the term "due diligence"?

When I did my research, the programs I applied to said their job placement and average salary figures were stellar. Go figure.

So even with students doing due diligence as to value, with law schools fudging employment and salary numbers, how does that due diligence argument really work?

86 - but that would be the end of Social Security, and owuld would all of Elie's relatives live on? No more retirement bennies, no more s/s disability checks evry month. Do you want to force tham backonto welfare?

97: When did you graduate from law school? That is the most relevent question. If it was 2007 or earlier, then your situation is completely different than those graduating in 2008 or 2009

***** How about restructuring our loan balance to reflect the current value of our law school educations?

115: There would be less lawyers, yes. But there would be more demand to go in-state at a public law school, which is cheaper.

109: you're right but the logic is the same. I have no clue why people get teaching degree from NYU or Vanderbilt for instance. Any teacher who isn't paying cash should have attended SUNY-B or UT Knoxville.

Considering the earning potential, no one should be able to get financing for these programs. But banks give the money away anyway because the loans are basically default risk free. Hence the need for some sort of reform.

We also need to disabuse ourselves of the idea that everyone should go to college just as we are starting to criticize the idea that everyone should own a home. This is how we end up with job market inefficiencies such as legions of broke actors and actresses and a dearth of RNs. A four-year college is merely one viable option of several for students with a high-school degree.

How about letting students discharge student loans through military service or something comparable? I'd be interested in seeing how many people line up. After all, the idea isn't that much different form ROTC.

People considering expensive law school be warned....

http://abovethelaw.com/2007/09/skaddenfreude_distribution_of.php

@109. The analysis of law school debt is indicative of the larger problem. Many people go onto law school because they have run up 4 years of debt in undergrad and there is no job so they go off to law school thinking they can get a good job to pay off the debt. End result: more debt and still no job.

This post is stupid. Many people in non-legal industries take 15 years to pay off their student loans like the woman profiled.

I imagine doctors need a long time to pay off their student loans. They have a fourth year of medical school, residency requirements (where they barely make any money).

I know people with just a college degree and a regular $40-60k job who are going to take 10 years or more to pay off their student loans?

The federal government is not going to act because a few lawyers lost the biglaw ticket to paying off your loans in 2-4 years.

Also all the comments point out the obvious: we have really nice interest rates on student loans because they are nondischargeable.

109 - you're an idiot. the issue only concerns stupid majors like law. Case in point - student A goes to NYU undergrad and racks up $120k in debt. Student A goes to NYU med and racks up another $150k in debt. Student A makes a starting salary after residency of $202k/year (as a hospitalist). On the flip side, an english major (Student B) with a JD makes $0 and has the same amount of debt. Maybe if the english major went to a state undergrad and a state law school, they would have a BA/JD with only $100k total debt. Here's the point - pick majors and colleges that have job prospects proportional to cost. Go to law school at a B school only if you come from money and connections because you will use them after you graduate. Duh! (see 106).

just pay off your student loans while you live off credit cards and then declare bankruptcy once the nondischargable debt is paid off.

Making suggestions on how all students with student loans should be treated based on employment prospects of law students and an unsympathetic view of those who chose to go to law school is not a sophisticated way to look at this.

The problems in the legal industry are very different from the problems in other industries and the economy as a whole.

Many people here are suggesting "solutions" based on their analysis of a tiny percentage of the problem that is not representative of the problem as a whole.

Bad analysis leads to bad solutions. The student loan problem affects all students and all industries. Thus, if you are upset that new associates (used to) get paid too much, everyone is sorry to hear that but that doesn't mean a hill of beans in terms of how to address a serious problem affecting all students training in all industries.

126: you're not getting it. Doctors make more generally over the entire course of a career. So, it's easier to make said payments. Also, starting salaries for internal medicine is about 120K, which is basically the lowest one will make.

For most attorneys who do manage to land that 160K year job, their salary is going to fall within 5 years. They go to the government. They go to smaller shops. They just make less.

103 got it right.

55 newsflash = pinko commie rag

124: I wonder what that distribution curve looks like when it is limited to students who took out $50k or more in student loans to put themselves through law school.

I got to think a lot the people who took the govt./public interest jobs making $60 or less a year either had their school paid for (scholarship/daddy) or attended a less expenisve school (TTT) - if they're are even affordable TTT law schools anymore.

116:

All a bank has to do is ask for a cosigner and collateral.

One reason for the turbulence in Roman politics in the last years of the Republic was the fac tthat many citizens were staggering under the burden of huge loans. These loans were taken out for political purposes (to throw luxurious games, etc.) or for personal consumption. One key demand that Caesar faced when he was dictator was that he abolish the loans or at least lower the interest rates. He failed to do that.

Augustus was only able to succeed because many of his conservative opponents ended up pushing daisies, he was able to capture the loot of Egypt which was like Saudi Arabia and Kuwait combined in the ancient world, and export many Romans to newly colonized fields produced by the massacre of locals.

Debt can produce results, but used incorrectly, it can produce massive misery. I think the USA Today article indicates that student loans is now the modern day equivalent of financial servitude. Will you wake up or continue to drink the Republican Kool-Aid? Time will tell.

There are current policies that allow individuals to reduce the amount of their payments according to what they make, and a new program Income Based Repayment will make this even more accommodating starting in July.

There are several programs to relieve or discharge federal student loans through public service, public interest, teaching, and other fields AFTER making a few years of payments (usually 10).

The only thing that could be done that would help students would be to allow consolidation of some private loans (provide a cap) into a federal consolidation loan to allow access to these programs available only for federal backed loans. A happy medium would be to only allow this in lieu of defaulting on loans.

Bailouts are never the solution, as those that receive them usually fail to learn anything from the mistakes that got them in the fix in the first place; they also usually wind up with a sense of entitlement to future assistance without changing their habits.

Elie, you sometime sound so stupid.
There is not much of a connection between credit card loans and student loans.
Credit card loans are given to people with reasonable credit history and they are usually limited to relatively small amounts. If you have reasonable credit rating you can easily get to a 10-12K max of credit card loans. When you compare it to education, flat screen TVs are super cheap.

Because we want student loans to be given to people with bad credit too, and because we want huge loans with little to no security interests (because - news flash - poor students have poor credit history and no guarantees or collaterals) we can't allow it to be wiped out in bankrupcy.

It is true you can change the bankrupcy laws but who will lend 50-60K to poor students without any collaterals who can wipe it our easily at graduation? You? Or do you think that creating an environment in which poor people can get huge loan and use them to pay for graduate schools is not important?

Think before you write.

125/127,

Takes the interesting approach of "solving" a problem by denying that it exists.

Good to see that Republican philosophy hasn't changed at all.... let me know how this tactic works for the GOP. I'm guessing it will be at least as popular as their opposition to the new GI Bill.

I say let Republicans be the party against making education accessible, and Democrats for it, and then we can see how many Senators the GOP has left come 2010. I'm guessing they fall to about 35.

Here was the smart way to pay for college:

1. Build a good credit rating
2. Use credit to buy house, gold jewlery, flat screen tvs, etc.
3. Take cash out mortage against house, sell gold jewelry and tvs for cash.
4. Use cash to pay tuition
5. Declare bankruptcy after graduation but before getting job, and discharge "consumer" debts.

Now, because no one is lending, especially mortgage lending, you can no longer use this financing program to pay for higher education.

It would be retarded to bail out student debt. It just doesn't make sense for people who made bad choices - such as going to a tier three and then not studying. However, the real problem is this will just encourage more people who don't want to work to get that Phd in another obscure hermaphrodite french author who lived in borneo for 10 years. No one cares about such things but student debt lets them do this.

139 apparently believes that historically most college students already were homeowners.

That is a well thought out position that is definitely supported by the actual facts. I definitely don't think you are retarded and pulling random nonsense out of your ass.

This is an odd time in America. As recently as ten years ago, a bachelor's degree was all that was required to obtain a high paying job. A professional degree was still required for a specialty (doctor, lawyer, etc.), but other advanced degrees were simply not worth it. Thus, the focus was on the prestige of the undergraduate institution. However, bacelor's degrees are a dime-a-dozen today and do not necessarily translate to high paying jobs. Thus, more graduates are obtaining advanced degrees, including professional degrees.

In another ten or twenty years, this will result in a shift of focus from the prestige of undergraduate institutions to the prestige of graduate institutions. And as more students choose less expensive state schools for undergraduate education, this should result in a lower average cost for bachelor's degrees. However, currently we are in the grey area between these two phases and have both expensive undergraduate degrees and expensive graduate degrees.

136: Just so I'm clear, its graduating law students fault (mistake) that the economy got pulled our from under them?

Hmmm, I thought this whole thing had more to do with poor underwriting standards, innaccurately valued and rated securitized assets, and an inflated housing market. But maybe we should point fingers as the unemployed recent grads who now have unsustainble debt loads b/c firms pulled their offers or laid them off within six months of starting.

141:

The example is simplified in the extreme to show the stupidity of treating consumer and student loan debts differently in bankruptcy. To add a layer of realism: Most college student's parents are homeowners. It would be more sensible for the parents to have borrowed against thier houses to pay for junior's education than for the students/parents to take or co-sign non-dischargable student loans.

139

141:

The example is simplified in the extreme to show the stupidity of treating consumer and student loan debts differently in bankruptcy. To add a layer of realism: Most college student's parents are homeowners. It would be more sensible for the parents to have borrowed against thier houses to pay for junior's education than for the students/parents to take or co-sign non-dischargable student loans.

139

forget the rest, the s/l interest deduction w/re income taxes should be overhauled. capped at ~$2500 & phased out beginning at ~$72k? that's fucked connsidering that, w/o incurring that expense, the "income" (really, gross revenue) isn't earned (i.e., it's not fucking "income"). so at least allow a deduction for 100% of the interest.

forget the rest, the s/l interest deduction w/re income taxes should be overhauled. capped at ~$2500 & phased out beginning at ~$72k? that's fucked connsidering that, w/o incurring that expense, the "income" (really, gross revenue) isn't earned (i.e., it's not fucking "income"). so at least allow a deduction for 100% of the interest.

forget the rest, the s/l interest deduction w/re income taxes should be overhauled. capped at ~$2500 & phased out beginning at ~$72k? that's fucked connsidering that, w/o incurring that expense, the "income" (really, gross revenue) isn't earned (i.e., it's not fucking "income"). so at least allow a deduction for 100% of the interest.

forget the rest, the s/l interest deduction w/re income taxes should be overhauled. capped at ~$2500 & phased out beginning at ~$72k? that's fucked connsidering that, w/o incurring that expense, the "income" (really, gross revenue) isn't earned (i.e., it's not fucking "income"). so at least allow a deduction for 100% of the interest.

Interest free student loans!

All the discussion of forgiving student loan debt ignores the factor that colleges and law schools will have to jettison faculty and otherwise shrink in providing services because they are no longer receiving overinflated tuition payments. We will no longer have "world class" universities. I think I'll send my son to Oxford or Cambridge in that situation.

Well-Off MSFT Peon

123 - The federal government has a program that allows attorneys to discharge debt for public service. Congress uses it, the WH uses it...most agencies don't.

My agency hosed me.

I prefer we call this "student loan modification" rather than "student loan bailout." Damn, Elie, whose side are you on?

Aside from the rising tuition argument, here is why student loans are not discharged:

Student takes out $140k in loans to attend prestigious private university. Student graduates with brain full of knowledge and prestige-filled resume. Students declares bankruptcy upon graduation. Student still has brain full of knowledge and prestige-filled resume, but student has no debt.

This thread is depressing. With $250,000 in student loans and no job, I'd rather go to Salusa Secundus with its high mortality rate rather than contend with you losers whining over missed opportunities.

read the CCRA (educational repayment act). Lenders can only require the lawyer to repay an amount proportional to what the lawyer takes home. The lady paying 1500/mo should be better informed.

In 1997 I testified before a subcommittee on reforming the Bankruptcy Code, which prior to 1998, allowed student loans to be discharged. Due to my testimony and of others, lawmakers were persuaded to make student loans non-dischargeable. I raised the point that if student loans were dischargeable, it would deprive future generations of students to subsidize their education through government subsidized loans. It would create elitism in that only the wealthy could afford to send their kids to college. Congress will not repeal the 1998 Amendments to the Bankruptcy Code. You gambled and lost now deal with the consequences. I am tired of this generation's self-entitlement attitude. They would rather throw future generations of students under the bus to save their own necks.

also the Income-Based Repayment Act and
Income Contingent Repayment. They are effective in July. No mas 2k/mo on a 60k salary.

Though I would love for this to happen, it never will. Instead, we should be forward-looking: how can we reduce tuition at these institutions. Might I suggest that schools with endowments over $1 billion with an average student paying over $x,000 per year in tuition see their endowment gains taxed. Such a system would define what the average student pays as tuition-avg. grant package, thus taking into account redistributive schemes at different schools. It would also force schools that can afford to lower tuition to actually do so.

Why do we allow full deduction of home mortgage and HELOC loan interest, but we cap student loans both in terms of qualifying income level and total amount? This absolutely fucking enrages me...with this system, many current students (that aren't attending school on their homeowning-parent's dime) will NEVER BE HOMEOWNERS.

138:Btw 127 is a liberal democrat. In fact, not only did I vote for Obama, but I support many of his so-called "socialistic" theories; at least in principle so far. People feel the need to label someone as a dem or repub only because the party lines have been drawn too deep. I think I am becoming a conservative Dem only because the law school "lesson of life" is to fight for what you need to live. Jobs are not handed to you and neither are much needed school grants. My husband and I make $360k per yr. After 41% in taxes, it's enough, but not "rich" by any means. Therefore, I don't believe in entitlement, and neither do I believe in affirmative action, bailouts, medicaid, etc. In fact, as an asian I've never needed to use affirmative action and no one in my family will ever use medicaid or unemployment benefits. Yet, I gladly pay taxes because I know that not everyone can become a lawyer or a physician, etc. BUT you have to be the best freaking public school teacher out there for me to fee like you're worthy of my tax money. Does that make sense to anyone?

157 AKA PE

You benefited from the hard work and sacrifices made by the previous generation, i.e., the Great Depression generation, who created the GI Bill and expanded the national economy post-WWII.

In contrast, what have you done? You have grown rich but have done precisely nothing for future generations. It's all me, me, me. You got yours, and you don't give a squat about later generations. When your grandkids are in the soup kitchens, maybe, just maybe, you'll give a damn -- but I doubt that because you and your ilk are just too stupid -- a stupidity born out of luxury that you take for granted. The stupidity that infects modern day Republican party is born out of the affluence from the 50s, 60s and the 80s through debt financing AKA tax cuts.

Your intergenerational theft will live in history as the worst -- you stole our future and condemned the United States to massive decline. The world will be better off when you die off. Then we'll have to rebuild and we will all look back and wonder --

Why in the world did we get gulled by Ayn Rand, Ronald Reagan, tax cuts, and the white men entitlement mentality?

161--be careful about the medicaid and unemployment. You never know. Shit happens.

161,

You're rich -- don't worry about it. It doesn't matter you don't believe in bailouts, AA, medicaid and all that crap. You'll get squeezed for your share and then some.

You think you won't ever use Medicaid? No one in your family? You're better off than 99 percent of Americans. Your tunnel vision (and self-centeredness) is astounding but unfortunately quite common. We've forgotten all how it is to be poor.

Oh, bailouts? Unless you're prepared to contend with an over 50 percent unemployment rate we had to bail out banks. Even then, it's still rough sledding but far worse than the alternative.

Elie's point remains vaild. School debt is taken on for the purpose of increasing a person's economic capital. Education increases labor productivity, and leads to development of new ideas and efficiencies. Purchasing rims does none of those things. Of course, making the debt discharcheable is another form of subsidy for education financing, of which there is already plenty. But, other things equal, to the extent we treat consumer debt and education debt the same in bankruptucy, it is a stupid policy.

Elie's point remains vaild. School debt is taken on for the purpose of increasing a person's economic capital. Education increases labor productivity, and leads to development of new ideas and efficiencies. Purchasing rims does none of those things. Of course, making the debt discharcheable is another form of subsidy for education financing, of which there is already plenty. But, other things equal, to the extent we treat consumer debt and education debt the same in bankruptucy, it is a stupid policy.

Elie, there's something about your disjointed writing style that's difficult to follow. You'd be better off just reposting the article, adding a few comments at the end, and then opening it up for the shitshow. Instead, you really add nothing by breaking it up into little pieces and editorializing paragraph-by-paragraph (even though most of your observations are already implied by the article or incredibly trite). It just makes it harder to follow.

Also, the terms of student loans are not the problem, the always rising and exorbitant COST OF ATTENDANCE is.

Fire is a powerful protest tool.

Thank you comrade Mystal -- I agree with you.

To follow 128, use one of those re-donk-ulous daily mailings to transfer a balance to a 0% credit card for six months. Transfer all of, or as much of the student loan as you can to the credit card (or cards). Once the grace period ends and all the student loans are transferred. Declare bankruptcy. The "student loan" (now a credit card debt) is wiped out. Done.

You can't run up credit cards and then file bankruptcy. That's fraudulent and is not going to be discharged. All it will get you is barred from Chapter 7 for 8 years. Good job. Now the credit card companies can chase you forever; you effectively have tens of thousands in tax debt at double-digit interest rates.

GREAT SUCCESS!

Why not suggest filing Chapter 7 with a house and a car that have voluntary liens in them while you're at it...

164: The problem is that we will never know what the alternative would of been. The risk on that side was too great to allow it to happen. We'd have people complaining no matter what direction the government chose. I personally prefer this route.

170

Does that work with a Black Amex card and NYU tuition?!

164 - I misspoke, I didn't mean I don't believe in bailouts for banks, etc. I even believe in throwing grant money to small businesses because they are so imp to our economy. I understand the economic ramifications of a failure on that front. What I meant to say was that I don't believe in throwing money at the "poor" to help them better themselves. There will always be poor. That's the whole point of any economy (even a socialistic one!). As for unemployment, I was unemployed. I never took unemployment benefits because I used money I had in savings. Why dip into the pot that others might need more than me? Maybe we should all start accepting the fact that there is a difference between giving financial aid for education, especially grad school, and welfare. Welfare is free money with no chance of return.

You made your bed (went to an T25 law school while racking up ~$150K in debt) now lie in it.

Thank you comrade Mystal -- I agree with you.

175: Please explain where you went to law school, how you paid for it, and how you are paying back loans?

That point in the future will likely be after the Baby Boomers have been able to ensure that their generation soaked up a higher quality of living — at the expense of younger generations — than any other generation in world history. All the while, they’ll continue assailing the younger generations about how much harder they worked and how kids today blah blah blah…

You know what kids today aren’t responsible for? This mess. This is all you, Baby Boomer Bob and Baby Boomer Betty. You put US here with your wanton spending on cars, houses and erections, with your hubristic manipulation of interest rates and free markets, your sense of entitlement, the way in which you transformed politics and Government into a galvanized arena of us vs them, and your cohort’s giant ego.

-longorshortcapital

I agree with Elie that we need to stop people from being abused by the lenders and the schools and that most people need to be protected from themselves. Credit cards, student loans, even mortgages should no longer be allowed. This will only allow those who have the money to afford these things (folks who worked hard and appreciate what that money means) to go to school or buy a home and protect those who need to be protected (the young, inexperienced, poor, etc.) by not allowing them to take the risks that get them into trouble..

177

He probably did what my father told me to do (and I sadly failed to do) -- "Marry rich!"

174 you are a fucking idiot. Your job paid unemployment insurance so you had every right to seek unemployment if you qualified.

Also, welfare to work programs are pretty much the main reason the nursing shortage is being addressed. I can't tell you how many people using these benefits have manage to go from CNA, LPN, to RN in less than the five years (of lifetime availability). And those people? Are now tax paying middle class people that are basically keeping our health care system afloat. Fucker.

177:

State school. Paid in full (cash) each semester from earnings made before law school.

Look, expecting teenagers (high-school seniors) and 20-somethings (college kids) to make accurate and sophisticated predictions of the job market and economy many years into the future is completely unrealistic.

It's dumb for our economy to be set up to put all of the burden of job training on kids rather than employers, and then provide no safety net for kids who make decisions that turn out to be bad.

College should be cheaper. Colleges are fat, flabby, rich, coddled institutions in this country. They face no market discipline. They enjoy the benefits of all sorts of government favors.

Supporting rich, bloated colleges is not the same thing as supporting college kids. Higher education has become a scam built on the backs of kids.

177

He probably did what my father told me to do (and I sadly failed to do) -- "Marry rich!"

162, You're long on rhetoric and hyperbole but short on reasoned argument. If you want people to take you seriously, ease up on the gross overgeneralizations and try some facts.

And by the way, you can stop addressing "PE" like he's some 70 year old retired partner. He's a bored law student or laid off associate trolling for angry responses exactly like yours.

180:

No, it's called working hard and living within my means.

91: titmfcr

I go to a public, state law school and tuition, sans any cost of living, is still $21k a year. My goal is to come in under 75k by the time I'm out, and that's still too much if you ask me.

If the tuition at decent state schools were lower, many students there would probably feel much better targeting all of the legal work at the "lower end of the spectrum" as an earlier poster put it. But when even the "affordable" schools run most students 25k/year, its kind of hard to feel great about a potential salary range that tops out at 60k.

To all you people criticizing those who have a large amount of student loan debt.....FUCK YOU. It's not our fault that the economy went to shit right as we're graduating. I'm not saying it's anyone else's fault, but we worked hard, took risks, and invested in our education. We followed in YOUR footsteps, and people who told us to take out loans and get the best education you can get. Let's face facts...you get a better education at the average private institution than at the average state school.

Yes, college should be cheaper. Yes, young associates should be paid less (in fact, all associates). But we have this debt. You tell me, what are we supposed to do? If we can't get jobs, what options do we have?

189:

You hit the nail on the head when you said "we... took risks."

You took risks and you lost. Now cash out and leave the casino a broke bitch.

189: Let's face facts...you get a better education at the average private institution than at the average state school.

------------
Sigh. This is where you're wrong. After the top 10 or 15 or 25 schools, the best decision is always to go to the cheaper school, which ofttentimes is the public one. This is where you made a mistake. Depaul isn't work 125K. Neither is Tulane. Neither is Northeastern. Neither is Wake Forest. Neither is Brooklyn. And so on.

171 - you are wrong. There are many cases in which people had huge balances on their credit cards. The only cases that did not discharge credit card debt were in which the debtor spent lavishly (jewelry, vacations, etc) in the year leading up to bankruptcy. However, I don't think that paying down your student loans while living off your credit cards (without spending lavishly) would pose signigicant problems.

45, 59 and 99 are all spot on. Everyone should re-read their posts.

Partner Emeritus,

Student loans became non-dischargeable well before 1998. I believe they became non-dischargeable in the 80s. Prior to that, medical students regularly declared bankruptcy upon graduation.

Anyway, stop crying. The upcoming Zimbabwe style hyperinflation will effectively devalue the $150000 student debt into something that can be paid off in a few years.

189, you said it yourself - you took risks. Do you know what a risk is? Now yes, it looked like a good risk when you started, and I don't blame you for taking it. But it was still a RISK, i.e. nobody ever guaranteed you anything.

I'm sorry you didn't realize it was a gamble, and that it didn't work out. I'm not even trying to be an asshole - I really do feel bad for everyone in your position. But what exactly do you want now? For the rest of the taxpayers in the country to pick up the check for you?

Yes, the situation sucks, and I don't know what you should do or what I'd do if I were in your position. But as between you, who got the education, and Mr. & Ms. Average Tax Payer, who didn't get the education, who should bear the cost of that education?

Here's more Econ 101: tuition in law school is not the problem. It's the cost of living and opportunity cost that kills you. Tuition $40k, cost of living $20k, opportunity cost $20k (and that's post-tax, post-living expenses as a paralegal). That's $80k a year to go to school. Do that for 3 years and you have $240k lost. Pay only $20k for school, you're still losing $180k. Just because you don't "see" the loss doesn't mean it's not gone.

And now I'm $200k in debt. Why? T5 in NYC. Now tell me why I should have gone to SUNY-Podunk and instead be merely $150k or so in debt? I somehow think you would tell me that was stupid.

183:
When you sign on the dotted line and you are over 18 years old, you've committed yourself. You are an adult. I remember something about contracts made by a minor... but most students are not under 18.

Nobody is making anyone go to college when they are 18 or to law school when they are 23. People make choices. I made a choice to go to law school when I was in my early thirties. By that time, I knew that I was on the hook for my loans.

I agree that 18 year olds are not competent to make decisions that affect the rest of their lives but they should be smart enough to ask questions and seek guidance. If they are still unsure, then maybe they should consider taking a year or two to grow the hell up learn the value of a dollar and how hard it is to save and pay for expenses before acquiring debt.

I have a better idea than a bailout - make payments tax-deductible up to $10,000 a year.

It's not debt forgiveness, so it isn't irresponsible or excessive. It would allow a variety of career options after graduation - BigLaw wouldn't be the only option for people with massive debt. Loans would be paid off more quickly, and by the time people get them paid off they'll be making more money and have higher taxable income. It seems like this would have all of the benefits of the "student loan bailout" and also allow future generations to pursue eduction. Federal loans all go to the same place as tax dollars anyway.

Is there a monumental problem with this that I'm missing?

196-SUNY podunk would have probably been free.

And as for undergrad, if you live in a state like Georgia or Tennessee which basically gives you free tuition if you have over a certain GPA and ACT (thanks lotto playing people) your debt burden would have been much, much less.

In fact, I had a high school friend (years ago) not get into UGA. She went to Williams for a year and transferred back to save money.

I have a better idea than a bailout - make payments tax-deductible up to $10,000 a year.

It's not debt forgiveness, so it isn't irresponsible or excessive. It would allow a variety of career options after graduation - BigLaw wouldn't be the only option for people with massive debt. Loans would be paid off more quickly, and by the time people get them paid off they'll be making more money and have higher taxable income. It seems like this would have all of the benefits of the "student loan bailout" and also allow future generations to pursue eduction. Federal loans all go to the same place as tax dollars anyway.

Is there a monumental problem with this that I'm missing?

I hate any moron who wants this. Their best justification is "me, too," which is no justification at all.

While I have sympathy for those with huge debt and no job, I think you have to be realistic, that the jobs will eventually come back. So you will have the ability to pay back your loans over time, just not in the next 5 years or something.

Regarding bankruptcy, how about this idea: You can file for bankruptcy with discharge of student debt PROVIDED YOU SURRENDER THE RIGHT TO PRACTICE LAW, TAKE THE BAR, PUT IT ON YOUR RESUME, OR TAKE FURTHER EDUCATIONAL DEBT.

That would seem like an equitable trade and would probably prevent abuse of the system.

13, 34 and 40: Get a clue and a little empathy.
Bravo 58.

As a graduat of a top 5 undergrad institution in 1990 I received manageable loans and paid them off with no complaints whatsoever. My interest rate was well below the market for private loans and the monthly payments were manageable. I worked for close to 15 years before going to law school (Top Tier School). Unfortunately, I found the student loan climate considerably different. The rates are ridiculously high, much higher than loans through other means, and the payments quite burdensome. While I have a job (not with BigLaw) it remains difficult to manage the debt incurred.

I am not asking for a bailout or forgiveness of my debt, I am asking for low interest rates guaranteed by the government. I work very hard to pay off my loans every month and only ask that I receive the same favorable terms given to other loans including those given to banks, mortgage holders, etc. If a bank is paying less htan one percent for the money, why can't I get a low rate such as 3% from the government?

I'll pay the money back.

196: "tuition in law school is not the problem"

My tuition was ~$13K /yr and living expenses were ~12K. I had no problem paying for it. Once again, a student going to either a "T5 in NYC" and "SUNY-Podunk" are both making fiscally irresponsible decisions.

Allow me (204) to clarify my previous post:

A student going to either a "T5 in NYC" or "SUNY-Podunk" and paying STICKER PRICE is making a fiscally irresponsible decision.

This actually makes me kind of mad. I've been working biglaw for about a year, but living like a damn college student so I could pour nearly every dollar I earn into discharging my debt before I leave for a low-paying clerkship in a few months.

Guess what? It worked! Most of my debt is gone, and other than living in poverty for a year, it wasn't too difficult.

Grow up. If you're old enough to take out loans, you're old enough to figure out that you need to pay them back.

206 - I'm at a T20 law school in the top half of my class, and I do not have a prayer at getting a job in biglaw. If I were given the opportunity to do what you're doing and live in poverty working for a major firm, I would take it in a heartbeat. The jobs are gone, even for those of us who could probably do them.

Hmmm.... maybe instead of being complete and total status whores, people should go to the schools that offer them the best combination of education AND financial aid.

Uh oh, but if we did that, then we wouldn't be able to deride other people's educations and intelligence in effort to distract ourselves from our six figure law school debt. Frowny face...

206: You're right to be mad.

I decided to forego a higher ranked law school in my state for the sole reason that it cost more. I have secured a well-paying job and have paid every bit of my law school tuition with the money I saved prior to law school. I made fiscally responsible decisions and worked hard - where's my bailout?

The simple solution is to reduce tuition at all levels. My undergrad school has a building binge program that is sickening and my law school just spent a million dollars on art. Why? To rank higher in US news rankings. Do students really need the finest facilities in the world? My answer is no. A library is a library and a dorm needs to be functional and not the equivalent of a Four Seasons resort. The faculty needs to be culled and the academics revised. Open the course book at any undergrad school and I am sure you can eliminate 50% of the courses with no real loss. Do that and you can eliminate professors that teach one class write one paper but make 150k a year.

207:

No one held you up at gunpoint and told you that you had to attend that T20.

Well said 34.

13 = tool with a very short memory

George bush in 2002 - "You see, we want everybody in America to own their own home. That's what we want."

Hey whiners, I went part time kept my job, my life sucked since no free time, but my debt is 60k . . . .you assclowns mock all of the part time programs but fuck you, looks like I came out better. . . Oh yeah, I also have a job after graduation.

Even if the loans were dischargeable, wouldn't the banks still be able to recover on a theory of promissory estoppel?

I took a full ride at a T20 over full sticker price at a T5. I did it for a reason - didn't want to be burdened with $150k++ in student loans.

I have no problem with adjusting interest rates, increasing the cap on deductions, or putting a cap on tuition. I'd be pretty annoyed if the government just wiped out everyone's student loans though... I'm perfectly happy with my situation, but I'd be annoyed if I had to subsidize student B's cost of attending the same T5 I turned down...

you know who had no students loans, Spiro Agnew

#155's Dune reference is under-rated.

Do what someone I know did. Graduate Yale, move to europe, default on your loans, settle with the lenders for some ridiculously small amount, and then dont' ever worry about your trashed US credit because you don't live here anymore.

I worked hard to pay off my loans. For the year after I graduated I basically put everything outside my $800 rent (roommate situation in NY) and very very cheap living expenses toward my loans. I paid off everything but $40k from $110k originally in 2 years and actually could pay the rest of the $40k but the interest is so low why would I. I knew I was going in with a big risk and then made choices to pay off as quickly as possible and sacrificied time, luxuries and other things. I know a TON of fellow grads who rent for 3x what I paid, pay the minimum and are crying about the side of their debt. BTW, they also lived outside dorms in law school whereas I lived in dorm (at Top 3 school). Guess what, life is about sacrifices. I am a HUGE liberal, but if you take a risk you pay for it. Unfortunately, take huge debt and you risk not being able to pay for it. And when you have the means, slow down the lifestyle a bit until you actually deserve to live it, like when your debts are down.

I worked hard to pay off my loans. For the year after I graduated I basically put everything outside my $800 rent (roommate situation in NY) and very very cheap living expenses toward my loans. I paid off everything but $40k from $110k originally in 2 years and actually could pay the rest of the $40k but the interest is so low why would I. I knew I was going in with a big risk and then made choices to pay off as quickly as possible and sacrificied time, luxuries and other things. I know a TON of fellow grads who rent for 3x what I paid, pay the minimum and are crying about the side of their debt. BTW, they also lived outside dorms in law school whereas I lived in dorm (at Top 3 school). Guess what, life is about sacrifices. I am a HUGE liberal, but if you take a risk you pay for it. Unfortunately, take huge debt and you risk not being able to pay for it. And when you have the means, slow down the lifestyle a bit until you actually deserve to live it, like when your debts are down.

I went to a decent (but not T20) school and paid my own way through, making sure to be able to get a job regardless of the economic climate. I sacrificed glamour and a huge pay check for security. I have no desire to see the idiots who spent massive amounts of money on big name schools getting their debts paid off.

I went to a decent (but not T20) school and paid my own way through, making sure to be able to get a job regardless of the economic climate. I sacrificed glamour and a huge pay check for security. I have no desire to see the idiots who spent massive amounts of money on big name schools getting their debts paid off.

Wow.. how ironic that many were so adamantly against the bank bailout and yet, they're all for bailing out student loans! Wonder why? Sorry for your tiny pink T20 and no job.

Every one of you "pull yourself up by your bootstraps" commenters has missed the big point of all this: the straps broke a couple of years ago. Quit telling us to limit our expenses, bite the bullet, and pay down our loans - with what money? Biglaw isn't hiring, hell, even McDonald's is getting selective.

Further, to say that we "took a risk" misses yet another big point: the risk dramatically changed while we were in school (a little late to make an informed decision not to go in the first place). While I was in school, interest rates doubled, consolidation disappeared, and the economy dried up - now I'm stuck with a worthless degree in $150k in debt.

Forget about the grand schemes of making student loans dischargeable and what not - that's far too complicated for what we have hear: the perfect shit storm. Just draw a line at the first generation of students who simply couldn't have known any better and draw another line at the first generation that shouldn't have gone in the first place (pretty much entering '05 to entering '08). Everyone in the group gets an exclusive consolidation option with reduced interest, extended payouts, extra deferrment options, and low minimum payments. It's not that hard and it's a far friggin' cry from socialism.

225-It's called risk adjusted return. The returns for a lawyer were better than a non-lawyer any way you evaluate it. The risk is that the returns for a lawyer would diminish. The market spoke and you lose. To adopt a "socialist view" would essentially give a free option to everyone which would eliminate the risk, but also eliminate the reward. Did you take any econ or finance classes while getting your women's lit degree?

OK, here's the deal.

The Con Law book you read at Ivy was exactly the same as the one I read at State, except mine cost 100-150K less.

The Ivy leaguers that I work alongside make the same as me.

Transferring your student loans onto a CC to obtain a lower rate, losing your job a year later and then declaring bankruptcy is not fraud.

134, its 116 again. Thats a brilliant solution. Actually, no it isn't. Regarding cosignors, what youre saying is that in order to make the student's debt dischargeable, you would hang it on their parents or some other able co-signor. And would that obligation be discharageable as well? If not, then whats the point? If so, it won't be a remedy. And where are people in poor neighborhoods supposed to find such a co-signor?

As for collateral, the whole idea is that students at the beginning of their career generally have little or nothing to offer as collateral. The student loan allows the bank and the student to build human capital by financing education. You cant collateralize what isn't there, and if you make collateral a pre-condition to getting student financing, poor people won't be able to use such loans as a way to go to college and improve their lives. The non-dischargeability of this debt means that its effectively collateralized with the future earnings of the person going to school.

Sorry, I like rainbows, puppies and ice cream too, but that doesn't mean your policy won't be ruinous to the people who need help the most.

#225 - It seems as though YOU have missed the big picture.

"Risk" - A venture undertaken without regard to possible loss or injury.

While taking a "risk" you should be prepared for any of the following outcomes: Win big, lose it all in an instant, Come out even.

228. . . .sorry to correct you but it's not ice cream, it's cotton candy

191 - For the record, it costs a lot closer to $200k than $125k to attend Northeastern. Student budget is about $60k for 1L year, and about $65k for remaining two years (higher b/c attending school year-round due to co-op program). Which is a perfectly sensible amount for a public interest-oriented school to charge. Bastards.

Unemployed graduate who will never be able to afford to work in public interest.

226:

Which is all well and good until you come over something completely unprecedented like the situation we're in now. I'm well aware of the "risk adjusted return" concept - but you're missing the point that the variables completely changed mid-course.

You're right: the risk when I went into school was that the returns for a laywer would diminish (i.e. it would take me longer to pay down my loans). What you missed is that the returns for a lawyer completely disappeared after my career path essentially became unalterable. Instead of taking longer to pay my loans, I now have no realistic way to pay my loans, period. Meanwhile, the interest is continuing to mount and the number just keeps getting bigger and bigger.

You call it the "socialist view," I call it the "humanist view." Unless you want an entire generation of graduates who will literally never be able to pay down their loans because they simiply got too far out of control, then you and the rest of your "capitalist" friends better come up with a way to help people out. It's all well and good until its you sleeping under a bridge, pal.

#232

And again... when you take a risk, you should be prepared for ANYTHING - including unprecedented change / losses

104 & 117:

"Due diligence" is a term of art. I could have used the word "research" but I assumed (obviously incorrectly) that most posters here know what I'm talking about.

If you did only consider the salary projections provided by your school, then I agree, your "research" was incomplete and based on information that was generated by a party with a conflict of interest. As part of your "research" you should have taken the school's salary info with the proverbial grain of salt and done some of your own research.

Salary info, of course, is only part of the analysis. It would be more informative if the school would disclose something like this:

The average student should expect to graduate with a total of approximately $150,000 of debt. Assuming your interest rate is X% [insert average interest rate on student loans] and you pay the debt off in 15 years, your monthly loan payment could be $___.

A lot of people (and yes that means even chemistry and engineering majors) don't really understand how long it takes to pay off six-figure debt and how much you'll have to make just to cover the monthly payments on that debt. I just think schools should have to disclose this info to prospective students.

126 back . . . .I beg to differ, the unprecendented variables is a faulty argument. All risk can be mitigated and a few things you could have done. . . .1) go to a cheaper school 2) live at home while at school 3) have a lower standard of living 4) gone part time to have a job while in school

I did not miss that your potential returns changed, you missed that they could have before you entered law school. You are taking a ego-centric view that others should have to pay for your mistakes. I patently disagree.

It is a socialist view and I have empathy for you, but because I took assessment of the risk and had alternatives to a legal career planned out means I do not feel I should provide you a subsidy for your errors.

And just an FYI I am an '09 grad and you are in the same boat as many of my classmates, but that's shakes.

235-226 sorry

Maybe paying your excessive loans will make you think twice before opening your fucking trap and criticizing someone for graduating from a *gasp* part-time program or even a *double gasp* TTT.

231, 191 here. I haz a sad for u.

Topic? A lot of the push seems to fall on people "taking risks," etc. But if they are basing the risk on bad info (see Brooklyn) why isn't there some sort of safeguard in place to ensure accurate placement and salary data is given to students?

We regulate securities for investors in order to keep people from being mislead. We regulate drugs to prevent General Mills from saving Cheerios will drop your cholesterol. Should we demand the same for higher education? I don't know.

And who would do the enforcing? The ABA for law schools? The Department of Education? Some sort of collusion by the state bar admissions folk? The federal or state AG's office?

It just seems like the misinformation out there is simply inaccurate and should be relied upon by any potential law student. But glossy brochures continue to spew this crap. Sigh.

237=hero

This would be an easier conversation to have if people did not keep trying to create class or generational warfare, did not play the victim (or in the alternate-- blame the victim), did not perpetuate anti-intellectualism (aka-- the school's not worth it argument), and did not propose extreme solutions to the student loan problem (e.g. a bailout, stop paying, etc.)

That being said, here is what we need:

1. Consumer protections and rights attached to student loans (government and private). Consumer protections include quick solutions to SNAFUs on Sallie Mae, et al.'s part. For instance, if your loan provider accepts your payment but does not apply it to your account-- your provider should be required (at the risk of incurring stiff fines) to fix the problem promptly.

2. Student loan debt should be at least partially discharged in bankruptcy. Obviously, there needs to be a stringent test in place to prevent everyone from discharging their loans in bankruptcy. But how about lowering the threshold for hardship and making it easier to prove that one made a good faith effort to pay back as much of the loan as possible.

3. Pay lawyers outside of Big Law higher salaries, including government and public interest lawyers. Moreover, private sector employers should not be paying under 60K a year for first year associates. Now, some solos and small firm practitioners have argued that first year associates aren't worth even half that, or they can't afford to pay a living wage plus benefits. I have news-- if you can't afford to pay your associates least 60K (and that includes being able to justify this wage) then you cannot afford to hire an associate--simple as that. If you need work done-- hire a part time "legal assistant". I recommend someone with at least a GED and 3 months of work experience.

3a. In turn, lawyers need to do their part and stop accepting the 30K a year job at a personal injury/insurance defense firm. Seriously, people like Ray Schawrtzberg believe that they can afford to hire associates at 30K. Stop feeding that delusion.

3b. And for the love of all that is holy, stop accepting these low paying jobs and then complaining about how the entire legal profession is a scam on jdunderground (skadden farts, I'm looking at you). You've made your bed, stop pretending that someone forced you to lie in it.

4. Income contingent repayment plans; a very good thing: http://www.finaid.org/loans/icr.phtml

5. Fewer law schools. For example, in Illinois-- we keep open U Chicago, Northwestern, U of Illinois, merge the remaining four law schools in Chicago (Depaul, Loyola, Kent and John Marshall) into one, and limit that one's class size to 300. Shut down Southern and Northern Illinois' law schools.

227 - Sure, less likely to be fraud with the unplanned job loss, but anything that looks like a scheme to stick a credit card company with your supposedly nondischargable debt in a Chapter 7 is going to be challenged as fraud and/or bad faith "abuse."

You're not the first person to think of this and it's generally both ineffective and disasterous.

240: agree with everything but i'd keep Southern Illinois open but structure it to be an affordable public school to serve rural downstate communities.

For the love of God, I wish people would wise up and not attend Depaul, Loyola John Marshall, Kent schools. They'd be better off taking the 150K and going to Vegas.

although i generally agree with most folks who argue that you reap what you sow, and thus, you're stuck with your loans... but i think it's a bit more complex than that...

now, i don't agree with all of this bailout politics and spending that is going on, and i generally don't think government should bail out anyone, particularly individuals... but... with that being said...

if the government is bailing out folks, why not those with the biggest upswing... those that did invest in their future through education....

I went to state school on almost full scholarship, and then turned down significantly better law schools than the one i attended, simply b/c of a free ride... my parents didn't have the money to pay for lawschool, and so i put it on me.. though my school was free, i still had to take out b/w 11-15k a year to live... after 7 years of school, i have a sizable student loan now...

i got a job at a decent litigation firm, but am still finding the loan paymetns sucking all of my disposable income...

If i didn't have a job, i'd be pretty close to losing my shit right now... i do not even know how i would pay them as even minimum wage jobs wouldn't cut the payments.. and my payments are relatively low...

so - generally bailing people out is bad... generally you are responsible for your own debts/decisions... generally government shouldn't get involved in subsidizing people's lives... but in this case.. with cash being thrown around like a rapper at a strip club (make it rain!)... hook up those that were responsible.. not those whom made bad (okay, worse) choices...

242 . . . but then there would only be smart lawyers in Chicago

232, a "risk-adjusted return" includes the risk that the expected returns will change at a future date. When you buy a stock, you take the risk that the stock will become more much risky in the future. You took a risk and bet that your "risk" in attending law school would remain constant, and you lost. Sorry about your inability to understand the concept of risk, bro.

245 . . .thanks for backing me up

245: when a company out and out lies and misleads investors you better believe they can sue the shit out of that company.

Are you proposing that students start initiating fraud claims against law schools?

225 is correct that the bootstraps have broken.
I was a liberal arts major who went to law school since I had no other plans and graduated from a state law school with $25K in loans in the late 90s. I am now happily employed in an interesting government job making about $90K. I am damn lucky. Not particularly smart, hardworking, or prescient. Just lucky that things worked out for me.
Many of those who have recently taken the exact same path I did are screwed. Not dumb, lazy, or naive. Just screwed by the downturn in this economy.
I don't have any advice to give the law grads or for that matter to any other college student looking into the future except that I think opportunities in the US will be fewer and more competitive. It is as unlikely now that a law degree is a ticket to a middle class life now any more than a union job at a car plant was 15 years ago.
A lot of people borrowed a lot of money and staked their futures on an assumption that the US economy would keep booming. Turned out not to be the case. There are no easy answers to this,

245: when a company out and out lies and misleads investors you better believe they can sue the shit out of that company.

Are you proposing that students start initiating fraud claims against law schools?

247. . . Point to the fraud or inducement. The stats are available to all applicants. The real problem is you thought you were smarter and better than you really are and now the real world is setting you straight.

240,

I agree with most of what you said, except for the 30K salary bit. That's just supply and demand. There's very little demand for lawyers with bad grades from bad schools with no experience, but there's a huge supply of these attorneys. Unfortunately, that's always going to result in low salaries.

The good news is that there's relatively high demand for experienced attorneys who are halfway decent at their jobs, so those 30K salaries tend to go up pretty quickly (whether internally or by switching jobs). Most attorneys with 10 years of experience make a pretty decent living. And in the long term, that's a lot more important.

Wow. I'm amazed by the people that were able to pay $100k in tuition/living expenses at a state school entirely out of SAVINGS. What the hell kind of job did you have before law school? And why did you go to law school. Must be nice

The misrepresentation that students concerning salary and employment stats that are oftentimes utterly fiction. Yet, those glossy guides (law porn) don't point this out nor do they contain disqualifiers signifying the representative sample of the students used to compile this stat. It's not too much of a leap to say a reasonable person relied on the statistics cited in admission brochures prior to enrolling. If that brochure was a prospectus, think of the trouble a client might be in.

And this really isn't about me. I'm a 2003 grad whose paid off the debt slaving away at a big firm but is now comfortably working (with tenure) in the gov't.

245,

I'm equally sorry that you don't understand the concept of "risk." Life is full of risks, including voting for a party that stands for torture and massive deficit spending and a financial free for all that is pulling down the edifice. Yep, unregulated risk is good.

@214 and 237 - Amen to that! I suffered part-time at night for 4 yrs of summer, fall, spring semesters while working full time as a patent agent. I had to hear so many whiny full-timers (and many in the faculty) who looked down upon the PT program and worried about whether it's existence was negatively affecting our ranking. Many of those same pricks would come to evening classes expecting an easier curve as a result of the workers in PT not having time to study as much.
It sucked to do PT, but I lost nothing in opportunity cost because my patent agent salary beat my engineering salary. Only took loans to pay off higher interest debt. One upside to that suffering, it made me appreciate all the free time you have when you are only a lawyer, which is usually a shock to a 25 yo who has never worked like that.

Student loans are really daunting if you don't have a job or just started a job after school at a low salary. The thing to keep in mind is that you're payments stay relatively constant while your income (whether through raises or inflation or both) is only going to go up. The $250 a month that I pay on my $60k in federal loans every month hurt a lot more as a first year attorney than it does now. And in 20 years when college costs $500k+, it'll seem downright painless.

All I know is that the first payment I'm going to stop making is to my private student loans if it comes down to it. I would stop federal student loan payments but Uncle Sam lets me defer them while I'm unemployed--as he should.

250 was pwned by 253. ha!

254, it is true I do regret voting for Obama, given that he is defending the torture memos' conclusions and not releasing pictures that may prove torture, and the expected $1.84 trillion budget deficit (out of a total budget of ~$3 trillion), no thanks to the $787 billion stimulus bill. But hey, at least he shaved $100 million from the budget and reduced the deficit by 0.005%.

But you're wrong, the concept of "risk" includes political risk. Hence the term "political risk," genius.

I decided to stop reading this comment clusterf*ck around comment 100, but in case no one else has mentioned it, here's my proposal (which is think is narrowly tailored and also effective).
Student loans can be discharged through bankruptcy--we either get Congress to add a new provision to the Code explicitly revising the student loan--hardship standard, or we get SCOTUS to reinterpret hardship (I'm not holding my breath on this one).
Either way, bankruptcy will still be a last resort for most people. Here's why: 1) as an individual, you must meet income requirements to file for Ch 7 or 13. That would rule out most people who are working now or have been working in firms during the last six months. Those limits are pretty low--if you have an income higher than the state median, you're probably going to get stuck in Ch 13, which will require you to pay at least a portion of your loans. So no total bailouts. This will help only those who truly cannot afford their loans. 2) To avoid takings issues, the gov't will need to make the loans dischargeable only in bankruptcy rather than a "bailout for everybody" unless the gov't actually wants to pay the private lenders for the balance due. 3) In my personal opinion, you shouldn't get all your loans discharged. Perhaps whatever portion you can't pay on a reasonable salary, but you ought to pay what you can toward the loans. You promised to repay them, and absent extreme hardship, you should do so. Bankruptcy has a devastating effect on your credit, and in some states will get you brought before the Bar, so it will certainly be a last resort for lawyers at least. Just my .02, sorry if it's a big rambling.

255: I think we went to the same school.

support a student loan bailout, lower professor salaries and cap them to keep tuition down, stay away from awful schools like fordham law that will leave 2/3 of their students in ruin

support a student loan bailout, lower professor salaries and cap them to keep tuition down, stay away from awful schools like fordham law that will leave 2/3 of their students in ruin

255 214 here. . . I think we went to the same school, but the full time kids that came to my classes got their asses handed to them since us part timers knew how to grind. I have no sympathy at all for the whiny babies. Sorry kiddies the big boys out smarted you.

250 didn't get pwnd unless you are so utterly braindead that you did no due diligence. Oh sure Mr. Sales Brochure I will listen to you and do no indepenent research. Fucking Moron. Remind me not to hire an idiot like you to do any work for me since I will end up buying an ice cream store in Siberia.

Perverse incentives? If you student debt is dischargable in bankruptcy, it makes you think a bit less about paying $160k to Loyola cause what's the worst that happens? You go bankrupt. And yes, that's why credit card rates are 28% and my student loans are at prime -1% (pretty much zero these days).

generally though, the 'fresh start' that bankruptcy gives doesnt make sense for education debt. that's really stealing. Here's the plan: rack up 200k in student debt, graduate and immediately file chapter 7 - you have no assets and a sh*load of debt. wipe it away, proceed with your life making $160k (maybe). GREAT SUCCESS!

I really think everyone is missing the point. Either way, the Government is going to have to bail these private companies out.

If the default rate keeps going up and people just stop paying, eventually someone is going to have to bail these banks out. And if it does go up, so will the interest rates on the new students coming into school. So in the end, you're going to end up paying for it one way or the other.

Just bail out the student loans now and you'll see an instant increase in economy stimulation.

I take issue with everyone that says just get a firm job. Yes, some of us have been lucky to keep an hold on to them. But what about the 1000's that were laid off or couldn't get one to begin with. Now they can't pay their bills. Should we really let them starve? How would you feel if you lost your job after your first year at the big firm and then were without income trying to pay off these huge bills? I for one wouldn't mind a small increase in my taxes to help people out.

Have we really come to that point in society where we stopped caring about other human beings?

265. Have you ever worked on a securities case? If a company is misrepresenting its profits/liabilities/etc., then they might be get tagged under the securities statutes. You are a fucking idiot, considering successful shareholder derivative actions have been brought against some of the most respected and well known companies/investment banks out there.

So, I'm guessing your answer is...um, what? It's not fraud if the person who was relying on the misrepresentation should have known better? That's a pretty close judgment call and goes to a reasonable person standard.

And you, dickhead, are not reasonable.

This comment is addressed to post no. 194.

Please re-read the Bankruptcy Code pre-1998 you buffoon. Prior to 1994 any plebe could discharge their student loans after being in collection status for 7 years.

duh - pay off student loans with your credit card. THEN file bankruptcy.

113 - due diligence requires circumventing erroneous data as well as understanding methodology used to produce certain data. Statistical information is always path dependent and can be easily modified.

BTW ship be sinking guy, you're not funny at all. In fact you are the all time worst poster. leave

To Mr. Scott prewitt, lobbyist for loan companies:

Allowing student loans to be discharged in bankruptcy would increase the risk tolenders, which would means that there are fewer educational dollars out there, which would mean that tuiition would probably go down.

Thanks for preying on people's fears of not being able to get an education and their hopes for a better tomorrow while hiding the fact that the amount of educational debt some students ends up with cripples them more than credit card debt.

To Mr. Scott prewitt, lobbyist for loan companies:

Allowing student loans to be discharged in bankruptcy would increase the risk tolenders, which would means that there are fewer educational dollars out there, which would mean that tuiition would probably go down.

Thanks for preying on people's fears of not being able to get an education and their hopes for a better tomorrow while hiding the fact that the amount of educational debt some students ends up with cripples them more than credit card debt.

Thank you 267.

Anyone whining about their student loans and begging that they should be forgiven ought to go shampoo my crotch! I borrowed about $100k to go to a top-14 private law school. I graduated in 2000 and worked hard but didn't save anything, except for my 401k, for the first three years while I paid off my loans. I think that a lot of people with large loans didn't think things through when they decided to borrow all of that money.

183 here, reply to 197:

197 quote:

"I agree that 18 year olds are not competent to make decisions that affect the rest of their lives but they should be smart enough to ask questions and seek guidance. "

Really, they're not competent to make decisions generally, but they should be smart enough to . . . make really expensive decisions? Wha?

You know, I think a large percentage of law students are in law school BECAUSE they DID "seek guidance" (as you say they should) and that guidance was GO TO LAWSCHOOL. That's a pretty standard thing parents tell kids to do.

For example, my father, when I said I wanted to work for a while after college, told me that if I went straight through to law school, he'd pay, but if I worked first, he wouldn't. So I went to school. And he backed out of the deal. Happens all the time.

There's really no need, though, to make this personal. I graduated years ago, and my student loan debt doesn't bother me. I'm old enough now, though, to have some sympathy and perspective.

And I say that making our young people pay through the nose for their own job training is completely ass-backward.

Your welcome 274. I'm appalled at some of the comments. It's a screw everyone in the world that might be less fortunate than those of us with firm jobs. I wouldn't mind donating an extra 1% of my taxable income if it meant that we could ease the burden on our fellow men and women who are suffering to even afford to live month to month. Because in the end, I'm going to have to pay for it, so why not do the noble thing and offer it voluntarily rather than be forced to do it later.

268. . . Securities laws are a poor analogy to the situation. A better one would be a hedge fund based overseas. The schools are not misrepresenting anything other than future potential and may I paraphrase, that past performance is no gurantee of future returns and any investment retains a high degree of risk ergo do your outside due diligence and don't bitch when you get burned becasue you were lazy

I must say, this posting was a refreshing change from the usual crap-ola you guys peddle.

I paraphrase, that past performance is no gurantee of future returns and any investment retains a high degree of risk ergo do your outside due diligence and don't bitch when you get burned becasue you were lazy

----------

This is bullshit and unworkable. Law schools lie in brochures. They lie to US news. They lie to the ABA. If a student is going to get the information? Stand outside of UCLA for a month handing out surveys? Maybe they can break into the career services office at American? Or how about they go through the phone book and call every single attorney listed and ask, "so, um. Did you get a job out of law school right away? If so, how much did it pay?" and then require the kid to adjust responses for inflation, etc.

That's fucking stupid. And a waste of resources when it would be much, much easier to require schools in order to get ABA accreditation to report specific employment stats & salaries of all of its students at graduation and have that information certified by someone at the ABA. Right now, it's all voluntary.

280. . . 3 hours on this site would take care of unrealistic expectations

275: Your missing the entire point. The key to what you said is "I graduated in 2000". Even T14 students graduating in 2008, 2009, are having offers pulled or are being laid-off before they even get their feet wet.
I congratulate you for putting all your income towards your loans for three years. I would do the same if I had the same employment opportunities that you did coming out of school. But my fucking law firm laid me off three months into employment. $150k/year gone in a flash. Just in time for the grace period to end too.

281--Where was this site in 2004? Or in 1997 when many of the current lawyers were trying to decide between Penn with 100K loans & Penn St. with 15K in loans for undergrad. I think ATL is a recent advent and was only around over the past few years. Information accessibility isn't as easy as you might think. Just saying.

For all of you denouncing this idea as a liberal, big government intervention to save private citizens from their poor choices, answer me this: which party was in charge -- and indeed proposed the idea -- when the government decided to spend almost $1 Trillion (TRILLION!!!) to bail out private financial institutions to save those institutions from their bad choices? If the government can spend now more than a Trillion dollars to bailout these banks and other financial institutions -- the very institutions that caused the crisis -- they should help out students who took out loans for an advanced degree but cannot now find work (or were laid off) as a result of those poor choices by the very banks that were bailed out!

267/277 - you are exactly what's WRONG with too many people today: it's not the government's place to undertake your moral or philanthropic ideals & indirectly force them upon each and every taxpayer. emotion, sentiment, compassion, etc. should have NOTHING to do with fiscal policy. if it's cheaper to "bail them out" rather than incurr the costs of not doing so, fine. but only then. it's an objective issue, believe it or not, even if difficult to measure.

fuck you plenty for thinking the way you do, and fuck you more for having the audacity and arrogance to say it. quit using your morals to justify displacing the responsibility for decisions. if you feel like helping, go right ahead. maybe i will too. but you and your idea that governments should impose moral-based welfare programs can go to hell.

267/277 - you are exactly what's WRONG with too many people today: it's not the government's place to undertake your moral or philanthropic ideals & indirectly force them upon each and every taxpayer. emotion, sentiment, compassion, etc. should have NOTHING to do with fiscal policy. if it's cheaper to "bail them out" rather than incurr the costs of not doing so, fine. but only then. it's an objective issue, believe it or not, even if difficult to measure.

fuck you plenty for thinking the way you do, and fuck you more for having the audacity and arrogance to say it. quit using your morals to justify displacing the responsibility for decisions. if you feel like helping, go right ahead. maybe i will too. but you and your idea that governments should impose moral-based welfare programs can go to hell.

267/277 - you are exactly what's WRONG with too many people today: it's not the government's place to undertake your moral or philanthropic ideals & indirectly force them upon each and every taxpayer. emotion, sentiment, compassion, etc. should have NOTHING to do with fiscal policy. if it's cheaper to "bail them out" rather than incurr the costs of not doing so, fine. but only then. it's an objective issue, believe it or not, even if difficult to measure.

fuck you plenty for thinking the way you do, and fuck you more for having the audacity and arrogance to say it. quit using your morals to justify displacing the responsibility for decisions. if you feel like helping, go right ahead. maybe i will too. but you and your idea that governments should impose moral-based welfare programs can go to hell.

267/277 - you are exactly what's WRONG with too many people today: it's not the government's place to undertake your moral or philanthropic ideals & indirectly force them upon each and every taxpayer. emotion, sentiment, compassion, etc. should have NOTHING to do with fiscal policy. if it's cheaper to "bail them out" rather than incurr the costs of not doing so, fine. but only then. it's an objective issue, believe it or not, even if difficult to measure.

fuck you plenty for thinking the way you do, and fuck you more for having the audacity and arrogance to say it. quit using your morals to justify displacing the responsibility for decisions. if you feel like helping, go right ahead. maybe i will too. but you and your idea that governments should impose moral-based welfare programs can go to hell.

282, and all others making the "unlucky not to graduate pre-2008" argument:

Your argument is no different then the loser at the roulette wheel who complains, "but the guy who put all his money on red last time won!"

I'm sorry, but WHO IS SUPPOSED TO PAY FOR YOUR MISTAKE??

284, you have shit for brains. what kind of logic is that? "well, hell, they did it for those greedy banks, and since they made one bad decision they should definitely make two". RETARD.

I don't support the bail out of the banks, but I can at least agree with the basis, and it's amoral: subsidation is proper when the cost of the subsidy is materially less than the cost of the event the subsidy preempts.

If that's the case with student loans debtors, fine; but I don't see it. Irrespective of your conclusion, your reasoning is enough to keep you in the zoo.

289 -amen.

It sucks to enter a bad economy, but if the current deferred 3Ls wanna whine about how it isn't fair for them to be required to pay back their loans, how is it fair for anyone else to pay? Someone else has to pay, get it?

289-Exactly. I am completely for increasing taxes when necessary because our country is better when we are all better. But I worked extremely hard and can tell you I made a lot of sacrifices to pay these things off. I lived in crapsville for a while and now I am happy because if I lose my job, I am capable of surviving for a while and not have to worry about loans. For the record, I graduated in 2007. It was not easy. But the norm from my HYS class brethren was to pay EXPENSIVE rent and buy things. I DID NOT GO ON A BAR TRIP! I am happy because I can go on one now. BUT WHAT MADE THEM FEEL LIKE THEY COULD GO ON ONE WITH $150k DEBT? That is why the ones here who worked (or even are unemployed but argue against just wiping it clean are angry. And I am a very very proud democrat.

Ugh - 225/232 here.

I say 'ugh' because I can't believe my detractors would completely bypass a word like "unprecedented" without batting an eye lash. The fact is that we couldn't perform a "risk-adjusted return" analysis that would hold up through all of this. Not unless, as part of my analysis, I considered that we would near another Great Depression exactly a year after I got into law school and that we would hit rock bottom at the precise time that I was in the market for a job - all while I was looking (pre-law school) at the greatest prosperity the legal market has ever seen. I, like everyone else, knew it wouldn't last forever. I certainly did not, as one of you erroneously claims, not account for any change in the status quo of my expected returns. I just couldn't see all hell breaking loose literally in a matter of 2 years.

Of course, neither could you. All of your economic rationalization is complete BS, right along with the rest of the so-called "experts" - none of whom called this mess nor have a way to get us out of it. It's not that I didn't plan for this, it's that I, like the rest of the country and you, couldn't have planned for this. Everyone who has taken on any risk in the last few years has gotten completely burned and we all deserve a little help.

You say you have empathy for us, but you might need to take the next step and actually apply it to something. Which is to say, what good is a man who is crying about someone who is dying for hunger if he doesn't give him his extra loaf of bread? Oh, I'm sorry, did the hungry guy not analyze his risk well enough? What human thinks that way?

183:
197 here. Yeah, I guess I see your point. My dad told me to study engineering because he wasn't wasting his money on useless degrees like pol sci. If I wanted to go to law school, I would pay for it myself. We have different dads and thus different perspectives.

Don't make me out to be some heartless bitch because I don't want to pay for other's risky decisions. I feel sympathy for the students who can't find jobs but who made reasonable decisions by limiting their debt while in school by either working part time or going to less expensive schools. I have no sympathy for people who go to schools with poor placement rates and astronomical tuition rates. I don't think we fix the problem by forcing those of us who made good decisions to pay for those who can't do simple math. I do think that some of the suggestions on the thread today have been helpful:

-allow people to deduct more of their student debt interest rates on their taxes
-encourage law schools and other academic institutions to provide transparent data as to employability of degrees
-encourage high school guidance counselors and pre-law advisors to truly advise and guide students into making good decisions

However, I think that some people are going to make the bad financial decision even when they are given all the data. They are going to take out six figure loans to go to school and they think that they will be the one who gets the six figure job. Its like telling people they shouldn't smoke because its bad for you. No report in the last decade has said smoking has good health benefits but people still do it and I shouldn't have to pay for their stupidity.

"'If private student debt can be discharged in bankruptcy, that creates risk, and the result will increase the cost of tuition,' says Scott Talbott, chief lobbyist for the Financial Services Roundtable."

call BS on that.

first-they were bankrupt able prior to 1994-aznd private ones were prior to 1998. the only thing tuition has done since then is increased faster than inflation.

second-increasing the risk of bankruptcy actually DECREASES the price of tuition. With the risk of default increasing-lenders will stop lending to students to go to school-thereby causing a decrease in demand for school-thereby causing a FALL in price of tuition.

the risk free lending of banks to students causes easy access to credit causing artificaql INFALATION.

dumbass-or more likely a liar.

This thread was probably the most useful one I've seen on here. I can't believe it hasn't devolved into racists, sexists, homophobic tripe.

Well played, commenters.

Not only is the bank lobby powerful enough to keep loans from becoming dischargeable, but also the 200 or so law schools that would be doomed by the hyper-tightening of student loan standards.

Nobody is going to lend you $150,000 to go to [non-T14] on the hope that you'll be one of the lucky few to get great grades, get a great job, and decide to repay.

#12 has it right.

easy money (i.e. loans) is what allowed the schools to keep raising their rates at many multiples of the rate of inflation over the last 20 years.

we need to starve the beast!!!

loan forgiveness will just be (even) more of a burden on the taxpayers....

NO MORE BAILOUTS! Frankly, I am sick and tired of my tax dollars going to pay off other people's debts.

NO MORE BAILOUTS! Frankly, I am sick and tired of my tax dollars going to pay off other people's debts.

Scott Talbot is interviewed on the public radio show Marketplace this week. It's about the current move in Congress on credit card reform. Suffice it to say he sounds like a jerk.

All of these supposedly brilliant people go to law school and they don't understand a simple cost/benefit analysis? An intelligent person would do an analysis on what would occur if they were at the bottom of their law school class, look at the incomes available for people in that situation and look at whether loans could be repaid on that income.

If someone is dumb enough to do an analysis like that based on them being at the top of their class and earning over $140K in Biglaw, they are foolish.

Once the economy took a dump, the smart people who had realistically planned for the worst will be fine.

Those who charged up their credit cards, went to private schools and took as many loans as possible without working during undergrad to defray the cost deserve whatever they get.

I don't want my tax dollars paying for someone else's poor planning. This isn't the same as uneducated people falling for subprime mortgages. These are people who should know better.

The reason they stopped allowing discharges of student loans in 1998 is that so many people were doing it, and then turning around 2 years later and ending up in jobs that paid big bucks. I am very liberal, and even I think that discharges for student loans without some kind of medical hardship is ridiculous.

Grow up, get rid of your cable and high speed internet, stop going to the damn nail salon and pay your bills.

This is not difficult. For anyone who is facing insurmountable student loan debt:

1. Set up an offshore shell corporation.
2. Secure equity.
3. Consolidate those student loans into a private loan.
4. Sell that loan to your newly created corporation.
5. If the corporation folds, walk away; if it doesn't, even better.

This would presumably work for the ever popular rims and plasma debt as well.

289, 291: I'm not asking someone to pay back my loans for me. I was addressing those who graduated say 2000-2007 or so and were commenting that recent law grads needed to "suck it up" live simply and pay off their loans like they had done. My point was that what allowed those individuals who were fortunate to get a $120k plus job straight out of law to pay back their loans in short order was the $120k job available when they entered the legal market.

If those same individuals had come out in this economy, the six figure job would not be available to them. You can't just say "I did it, why can't you morons do it." There are bright individuals, who did well in law school, got the sweet paying gig, and then lost their job in short order. You were fortunate enough to graduate at a better time and have the opportunity to prove your worth to your firm - and thus maintain your high salary and be in a position to throw $40k of your annual income at student loans.

Suggesting that its simply recent grads not wanting to "suck it up," live modestly, and pay off their loans completely mischaracterizes the situation.

303

please stop advising people to commit fraud.

thank you.

I already have my law school loan bailout plan. It's called Aruba.

9--

You really need to study for your bankruptcy final or retake the class. There's nothing worse than calling Elie out and then demonstrating you don't have the first fucking clue as to what you're talking about. You can wipe it out, but you gotta give up the house.

HTH

I am a top 10% student at a Tier 2 school who had a 2/3 scholarship all three years. My total debt is about 110K b/c of undergrad. I am working in the fall for a gov't internship that doesn't pay, and I am PRAYING that it turns into a paying full time job after I pass the bar.

I don't want a bailout, but I think recent graduates should get longer deferrals for unemployment. This would ensure that loans get paid eventually and people aren't forced to default while the economy gets back on track. But regardless I will pay my loans no matter what. Even if that means me or my husband have to get restaurant jobs at night. People who are not willing to work non-legal jobs to pay off their loans are really being full of themselves. People in America struggle everyday to pay their bills - it is called LIFE. And they don't have the luxury to look down on any paying job to pay their bills, so why should we?

I'm with 308. I just got my pay slashed, but (1) it beats not having a paycheck at all, and (2) I still intend to pay my debt in full. Most people aren't asking for a bailout, what they want is a bit of flexibility in terms of repayment plans to reflect the fact that the job market has changed dramatically from the government and the financial institutions that have been given carte blanche for mistakes those bodies are WAY more responsible for in terms of impact on their own situations than students unlucky enough to be in the classes of 07/08 than 03/04. Don't count on it though - I'm no Republican by any stretch, but Obama knows who writes the checks that got him elected, and no Chicago politician is going to cross the bosses when there's another election to be on.

171 - your point is well taken. However, I have no idea where you are going with the Chapter 7 filing hypo. Are you making a "means test" argument? If you are you should realize that having a house and car with voluntary liens on them actually makes it easier to file Chapter 7. And you can still then assume the mortgage and the car payments. While there may be a bad faith filing argument, its still technically allowed.

192 - 171 was responding to the idea of rolling your student loan debt into credit card debt. It is definitely fraud if you do that right before bankruptcy. If you pay the loans on a regular basis with your credit cards to get the points or just live off of the cards then you are probably fine (assuming that none of the transfers can be avoided for other reasons).

Discharging student loan debt is a bad idea. It will simply raise the cost of lending. I do not go to a T-14 school, but I do understand the decision to take on the enormous debt load. Your job opportunities are better (though your options may be limited to Big Law because of the debt). For the rest of us, most of the other schools offer a lot of scholarships. I had options when I went into OCI (my total lack of interviewing ability probably limited these a bit), but I wanted a mid-size and got one. I will stake make well over 6 figures and not have to worry about my debt. However, many of my classmates, a few who did very well and could get Big Law, have full scholarships and chose to go the public interest route. Not having debt opens these options. My advice is to take the most money you can get, or at least do some cost benefit analysis, when choosing schools. Simply going by the US News rankings and going to the "best" school (again I do not include the T14 unless you are dead-set on becoming an ADA or something similar) is just a good way to end up with a ton of debt you may have trouble repaying.

By the way the recession will eventually end and people will get jobs. Try to look long term.

305,
I think you are a bit presumptuous here.

Taking your position to what I suppose is its logical conclusion would suggest that financial guarantee insurance corporations and credit protection products are inherently fraudulent. Is this what you argue?

It is disappointing that you resort to reductive fallacy and oversimplification to advance your social agenda and/or mask your apparent lack of knowledge.

207:

You will very likely get a job in big law at some point if you really want one. If you are top half of your class at a T20 school and you get some real experience in an area of law that a big firm is in need of additional help you can get a big law job. You will very likely not get a big law job right out of school unless you have additional qualifications other than a JD. If you take a mid law job and get in an area of law that is in need of workers in a few years, you can lateral into big law as a third year. Pick something and get good at it and good luck.

303, the creditor is the one able to "sell" loans. The debtor cannot "sell" his loan onto someone else. You might be thinking of the debtor assigning his loan to the corporation, but that requires creditor approval. Good luck with that. I also don't think "consolidate" means what you think it means.

You really should only talk about matters that you know something about.

275,
you totally miss the fucking point. Those without jobs are screwed. Biglaw firms are seriously considering dropping salaries to 2000 levels (Read: when you graduated), yet the cost of law school tuition and related expenses is leaving recent graduated with 1.5 - 2x the debt you had, and rents, though dropping, certainly arent at 2000 levels. Congratulations on paying off your debt in three years, but really, congratulations on being born 10 years before me, you stupid fuck.

314, so you'll have to pay off your loans by age 40 instead of age 36, and you might have to move from your $2700 studio to a $1800 studio. Boohoo.
Median New York City _household_ income is $50k pre-tax. Come back to me when your after-tax take home pay minus student loan payments is $40k.

315 - well, unfortunately, I don't qualify for public housing fuckface.

but, my takehome will be about 87500, and my debt service with a 15 year repayment plan will be 1750 --> 21k per year (this is the *minimum payment* remember)

Rent at 1800 (though actually I will live in the South Bronx so I only have to pay 1000, despite the increased risk of asthma) --> 21,600

Nice metric to use, 315.
"New York City has a high degree of income disparity. In 2005 the median household income in the wealthiest census tract was $188,697, while in the poorest it was $9,320. The disparity is driven by wage growth in high income brackets, while wages have stagnated for middle and lower income brackets."

I'm not seeing any argument against allowing anyone to fully deduct their student loan interest payments from their taxes. If the tax code is going to favor certain parties, and it currently stacks the deck in favor of homeowners, why not students as well?

Obviously students face a collective action problem; but why don't schools and loan providers lobby for this?

316, so by your calculations, you have an after-tax take-home pay of $66,500. If we subtract the rent, you're still better than the median household with its pre-tax income of $50k, even if we assume that they pay $0 in rent. The median households also have children.
P.S. Public housing is generally not free and the median NYC household doesn't qualify for it anyway, fuckface.

317, what's your point? You expect to live in the wealthiest census tract? The great income disparity means a significant number of New Yorkers live on much much less than $50k. Boohoo that you can't live like everyone else.

Let me play the world's smallest violin for you two.

319 - there is no *median* household - that is my point. Median is not a good measure to use when salaries follow a bimodal distribution. See "the legal profession."

319 - after working my ass off in seven years of school, and being in the top quarter of CLS - yes, I expect a higher standard of living than the paralegal from SUNY Cobleskill I am delegating tasks to -- even post debt service.

I am totally for a student loan bailout. I graduated in the middle of my class from a top 30 law school and can't find a paying job. I am currently doing exactly what I want to do with my law degree at a not-for-profit, but am not getting paid. Having examined the legal landscape-- it appears that not having made BigLaw and being too "elite" (their assessment, not mine) for small law firms and solos, and government not hiring, etc., etc.--- I have accepted that I will never earn money. In law or any other field. The very good are not hired. That is the domain of the excellent. And I have not been able to bump myself up to excellent in any area.
I have taken my very good skills where they are appreciated, and I could work in the area of law where I am working for life.
My parents will simply have to support me until they die, and then hopefully there will be money left over in the estate. I could also marry rich, although I have not done much to make myself gold-digger-hot.
Certainly, this was not the life any of us had planned--- but there are simply not enough paying jobs to go around.
I am lucky that I have a cause to champion, substantive legal work to do each day, an education, and a family to support me.
The one big issue is that my student loans, now in deferral are going to be huge-- and if I cannot repay one cent, I am super-fucked (you know, on the off chance that people with my credentials start getting paying jobs one of these days-- I am anticipating at least a decade wait for that).
When I took out the loans, people who were at least good were getting paying jobs-- so my assessment of the risk was based on that, and not 2009 standards. So bail me out, so I can continue to work for my cause and maintain cordial relations with my father the wallet.
It's weird how Zen I am...
Of course, if things do pick up-- I am getting a paying job and paying off my loans.

I am totally for a student loan bailout. I graduated in the middle of my class from a top 30 law school and can't find a paying job. I am currently doing exactly what I want to do with my law degree at a not-for-profit, but am not getting paid. Having examined the legal landscape-- it appears that not having made BigLaw and being too "elite" (their assessment, not mine) for small law firms and solos, and government not hiring, etc., etc.--- I have accepted that I will never earn money. In law or any other field. The very good are not hired. That is the domain of the excellent. And I have not been able to bump myself up to excellent in any area.
I have taken my very good skills where they are appreciated, and I could work in the area of law where I am working for life.
My parents will simply have to support me until they die, and then hopefully there will be money left over in the estate. I could also marry rich, although I have not done much to make myself gold-digger-hot.
Certainly, this was not the life any of us had planned--- but there are simply not enough paying jobs to go around.
I am lucky that I have a cause to champion, substantive legal work to do each day, an education, and a family to support me.
The one big issue is that my student loans, now in deferral are going to be huge-- and if I cannot repay one cent, I am super-fucked (you know, on the off chance that people with my credentials start getting paying jobs one of these days-- I am anticipating at least a decade wait for that).
When I took out the loans, people who were at least good were getting paying jobs-- so my assessment of the risk was based on that, and not 2009 standards. So bail me out, so I can continue to work for my cause and maintain cordial relations with my father the wallet.
It's weird how Zen I am...
Of course, if things do pick up-- I am getting a paying job and paying off my loans.

This is from a lawyer who graduated in the early 90s from a public school when tuition wasn't as bad.

One idea is to let the free market work -- by which I mean those who can't pay without hardship stop paying. The lenders will sue and in most states will be limited in how much they can collect outside bankruptcy (25 percent of net income where I live but less in other states). That will undoubtedly cause some lenders to fail, but that will also cause lenders and schools to consider more carefully who to give loans to.

I am certain that Duncan Idaho did not bitch about his student loans to the swordmasters at Ginaz for his recondite skills.

I am an M.S.W. graduate with a 90,000.00 student loan debt that increases every year. Currently, I can't find a full-time job, if there is an employer out there reading this, please contact me regarding a full-time job!