Well, this is pretty much my worst nightmare. Legal Profession Blog reports on the horrible story of Olufemi Nicol:
The Illinois Administrator has filed a complaint alleging that an attorney failed in bad faith to repay his student loans for a graduate business degree obtained after he graduated from the University of Chicago Law School in 1994. From 2006-2006, the attorney held several positions in business including a stint as president of Gear 7 in Los Angeles. The complaint alleges that the attorney received over $78,000 in loans in 2006 and signed two promissory notes. He allegedly has not made any payments on either note.
Okay, phew. I never took out additional loans for further education while I still owed money on my J.D. And I restarted payments — minimum payments — after I got a new job outside of Biglaw. I’m golden. AVOIDING DEBTOR’S PRISON SECURE!
But this Nicol guy? Yeah, sounds like he’s screwed. Law Shucks picks up the story….
Law Shucks has some additional details on Olufemi Nicol’s debt-dodging ways. Nicol graduated from law school in 1994, but decided to go back to school to get his MBA in 2005. He didn’t complete his degree, and he found himself at DLA Piper by 2007. At the time, DLA Piper wasn’t the most secure place to be. From Law Shucks:
We don’t know what the associate scale [at DLA Piper-Chicago] was back then, but it definitely seems he was put back several class years (remember, he was a 94 grad).
Meanwhile, the forbearances expired, although he did get one extension. Conveniently, he got a raise to $220,000 at the same time the payments started coming due in January 08.
That was short-lived, however. Olufemi Nicol was among the 180 people (80 lawyers, 100 staff) laid off by DLA Piper in February 09 – part of the Valentine’s Day massacre and amid one of the worst weeks in law-firm layoff history.
At that point, Nicol had already ignored the lenders’ collection efforts for 14 months.
Illinois launched an investigation into Nicol, which he of course ignored. Sadly, simply ignoring creditors is only a short-term solution:
Now, he’s facing sanctions. The investigator alleges Nicol enaged in the following malpractice:
1. failure to respond to a lawful demand for information from the Attorney Registration and Disciplinary Commission in violation of Rule 8.1(a)(2) of the Illinois Rules of Professional Conduct;
2. conduct that is prejudicial to the administration of justice in violation of Rule 8.4(a)(5) of the Illinois Rules of Professional Conduct; and
3. conduct which tends to defeat the administration of justice or to bring the courts or the legal profession into disrepute in violation of Supreme Court Rule 770.
Really, this is just another facet of the higher-education bubble that Glenn Reynolds has been talking about over at Instapundit. Just like people are just walking away from their underwater mortgages, people will simply start walking away from their crushing educational debts, so long as schools continue to charge ever-increasing tuition fees.
Not that Nicol is a great poster child for debt relief. At various points, he had the opportunity to pay something. But instead of making a good faith effort to pay off his debts, he just let them sit there until finally he was out of a job that paid enough for him to manage his debt load.
Call it bad financial planning. But if something doesn’t change regarding educational loans, this kind of thing is going to happen to more and more people.
Attorney Charged With Failure To Repay Student Loans [Legal Profession Blog]
Laid-Off DLA Lawyer Facing Sanctions for Not Repaying… B-School Loans [Law Shucks]