Debt

There’s been a lot of talk recently about the value of a law degree, and whether or not it’s actually worth a million dollars, degrees from some law schools are obviously worth more than others. Let’s be real for a moment here: If you’re taking out six figures of debt just for the privilege of attending, your starting salary damn well better be somewhere near the same amount, otherwise you’re going to be underwater for most of, if not all of, your adult life after law school.

Living with debt is scary, and if you want to have a better chance of being able to comfortably do all of the things you thought you’d be able to after getting a law degree, things like owning a home and having a child, you need to choose your law school wisely. You can start evaluating your options — or giving yourself a pat on the back — by checking out the latest U.S. News rankings for the 10 law schools with the biggest return on investment.

Which schools made the list? Not all of them are in the T14, so you may be surprised…

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This weekend, I had the unenviable task of going on Fox News and “defending” Detroit. I wasn’t sure what I was supposed to be defending: poor city government, white flight, crumbling infrastructure… the best thing anybody can say about Detroit right now is that Miguel Cabrera is still sober. My solution was to sell Detroit to Canada. Our neighbors to the north seem to do a better job of providing civic services in a business-friendly environment without the kind of gridlock and recriminations that dominate every “solution” ever offered to Detroit’s long-standing problems.

Understand, this is a city that can’t even file for bankruptcy without getting dragged into legal quicksand. Former Jones Day partner Kevyn Orr was named Detroit’s emergency financial manager just four months ago. Evidently, it doesn’t take long to look at Detroit’s books and cry uncle, but now a judge is trying to block Orr and the city from restoring financial sense.

Don’t worry, as usual there will be people making money in Detroit. It just won’t be the people who actually live there…

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For prospective law students, the promise of merit-based scholarship money amid a broken legal market seems like an incredible deal. So what if there aren’t any jobs? You’re going to go to law school at a significantly discounted rate, or maybe even for free, so you won’t be at any real loss.

Or will you?

What law schools don’t like to tell you with regard to these frequently conditional scholarships is just how difficult it can be to keep them. When you’re banking the terms of your financial future on a law school grading curve, things can get a little tricky. Some might even describe the situation as a big racket. Thankfully, the ABA has started keeping tabs on these programs, and now there’s a wealth of information available on retention rates for scholarships of this kind.

So out of the 140 schools offering conditional scholarships, which ones are most likely to take back your law school funny money? Let’s find out…

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Won’t be long before law schools are getting this guy to sell you legal education.

It really bothers me when law schools resort to “used car salesmen” tactics to try to induce law students to sign up for school. Say what you will about the value of legal education, but it’s not like buying a Sham-Wow. Students can’t be influenced by “special, limited time” offers when trying to decide if and where to invest three years of their time. If nothing else, you’re entering into the lottery to win a legal career, not an iPad Mini.

Law schools that try to exploit “impulse buy” reactions to fill their seats should be ashamed of themselves. They are taking advantage of kids — twenty-somethings who don’t have lawyers or accountants or appraisers representing their interests. Law schools are at a huge informational advantage concerning the true value of their services, value that they try to hide at every turn from independent third parties. Law students are trying to cobble together what they can based on word of mouth, Google, and some published rankings. Turning the screws on these prospective students with offers that “expire in 24 hours” is a good business strategy if you are trying to sell them a toaster, but it’s a disgraceful thing to do for a place that claims to be an “institution of higher learning.”

I can only hope that anybody who received this “hard-sell” email from this law school did the smart thing and just walked away…

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The vast majority of our readers are members of the legal profession in some way — and whether you’re a prospective law student, a current law student, a young associate, or a partner, chances are you’ve all had similar worries about the future and its many uncertainties. Will you be able to find a job? Will you be able to pay off your loans? Will you even enjoy being a lawyer? One thing, however, is for sure: you’d prefer that your children not suffer the same vocational fate as you.

But when it comes to the other members of society, well, they’d just love it if their sons or daughters were to become a lawyer (or marry one). Despite what we know to be true in most cases, it seems that the people who pick up their phones to respond to survey questions have been left in the dark when it comes to the current state of lawyers and their livelihoods.

Take a wild guess at who thinks this career path is still the road to riches….

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Regular readers of this blog know that you cannot discharge student loan obligations through bankruptcy absent a showing of undue hardship. If you go broke borrowing money for expensive cars, houses, and monkeys/butlers, no problem, file for bankruptcy and start over. But if you go broke trying to better yourself through education, the government will make you beg and prove that you are sad and hopeless. Wonderful system we’ve got here.

We’ve also talked about how many people who might be eligible for undue hardship on their student debts don’t even try. The system is daunting and complicated, and I’ve argued that prostrating yourself in front of a bankruptcy court and letting them invade your life to the point of telling you how much you should be spending on your cell phone is not something that comes naturally to people with pride and dignity. This might be hard to understand for people who have never been in this situation, but I’d much rather be a “deadbeat” and have my wages garnished with the discretion on how I spend the rest than have some old judge tell me how much money I should be spending on breakfast.

When trying to get your debts discharged through bankruptcy, there seems to be no limit to what a judge can take into account to see if you are really desperate. But a recent Ninth Circuit opinion upholding a discharge by reversing the district court put one boundary on what a court can look at to determine if you’ve tried to pay your debts in “good faith.”

The court can’t look at your household and suggest that you pimp out your wife. So at least that’s something…

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* NY Attorney General investigating fast food restaurants for shorting their employees. This is a worthwhile cause, but what he should be looking into is who ate the bones? [CNN]

* Two schools, University of Mary Hardin-Baylor and York College of Pennsylvania admit they gave false information to U.S. News resulting in better rankings. Those were their BETTER rankings? [TaxProf Blog]

* To keep “misleading statistics” in perspective, the Department of Education leveled one of its steepest fines on Yale for covering up multiple “forcible sex offenses” to keep its campus safety statistics down. [Chronicle of Higher Education]

* A measure of resource governance finds the U.S. has the second best governance of its oil, gas and mining sectors. Give yourself a hand regulators. And we’re gunning for you Norway! [Breaking Energy]

* The Honorable Felicia Mennin does not grasp how time works. Thinks artist should have been more conscious of the public fear surrounding the Boston bombings… back in February. [New York Times]

* Congratulations readers for helping the profile of a White House petition to reform student loan policy. Here are a couple more if you feel like making more reforms to the process… or at least more suggestions for reforms that will sit on someone’s desk. [Whitehouse.gov and Whitehouse.gov]

* Is political intelligence practice too risky? Is political intelligence an oxymoron? An interview with Robert Walker of Wiley Rein LLP after the jump [Bloomberg Law]

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* A White House petition started by a young lawyer asking that at least student loan interest be tax deductible like interest on a mortgage to help out those folks like, frankly, most lawyers, who make too much money to deduct their student loans. [WhiteHouse.gov]

* Antoinette “Toni” Bush, partner-in-charge of Skadden’s communications group, is leaving the firm to become global head of government affairs for Rupert Murdoch’s News Corp. Free tip: brush up on your hacking law. [Am Law Daily]

* The Department of Energy may adopt a new “commercial maturity test” to get rolling on the backlog of liquid natural gas export license requests. And that, of course, will spur the inevitable lawsuits. [Breaking Energy]

* Apparently, President Obama dreams of “going Bulworth and resents the “Harry Potter theory of the presidency,” that the President can wave a wand and make things happen. So he’s pro Pras, Maya, and ODB, and anti-Hagrid. Who’s anti-Hagrid??? [New York Times]

* Lois Lerner, the manager at the center of the IRS “scandal,” has backed out of delivering the keynote at the WNEU Law commencement. I’m pretty sure Staci would do a better job… of running the IRS. [Boston Herald]

* Overlawyered blasts the Daily Caller for trying to tie Lerner to Obama via her husband, Michael Miles of Sutherland, Asbill & Brennan because the large firm had some ties to Obama. Blerg. Meanwhile, this “partisan scandal” is turning out to be bipartisan entirely based on which IRS office the groups dealt with. [Overlawyered]

* Congratulations to this guy. Must have been a hell of a feast. [WDRB]

‘Another tuition hike? Time for a new car!’

If liberals are to be true to our professed values, we must critically examine our own conduct, however painful and embarrassing it might be. We cannot speak truth to power yet not to ourselves. [P]rogressive law professors, I charge, have profited from a system of legal education with harmful consequences to individuals and society — while claiming (and believing) that they were fighting the system.

– Professor Brian Tamanaha of the Washington University of St. Louis School of Law, criticizing his colleagues for remaining silent while law school tuition has soared. His remarks can be found in a forthcoming essay that will be published in the Stanford Law & Policy Review.

With graduation fast approaching, maybe people are coming to the startling realization (what took you so long?) that they’re going to have to figure out a way to pay off their student loans. Sure, it was fun to have government monopoly money to play with while you were in law school — maybe you had a weekly shoegasm at DSW; maybe you repeatedly blew your wad at Game Stop — but now it’s time to face the music.

Unfortunately, when it comes to debt repayment, the soundtrack that’s playing on an infinite loop in your mind is from the shower scene in Psycho.

Whether or not you’ve got a job lined up, you know for sure that your starting salary is nowhere near high enough to allow you to both live indoors and make monthly payments to your loan servicer. You’re scared that you’re going to have to moonlight in retail, or worse yet, move back in with your parents.

All you know is that you really, really don’t want to default on your loans. Your credit will be shot. Your phone number will be scrawled on the bathroom walls at collections agencies. Your life’s work will be all for naught. What the hell are you going to do?

Don’t worry, friends. Your loan servicer has a secret to share on how to avoid the disaster of default….

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