Law School Debts

I see debt relief, just over that hill.

Any time the punishment for going to your law school involves a graduate essentially “taking the black” and joining the U.S. Army to escape his crushing debt burdens, you have to be really proud of the value offered by your institution.

The quote from University of St. Thomas Law School graduate Thomas McGregor neatly sums up everything that recent law graduates are facing in this legal economy: “I paid off $108,000 of law school loan debt. All I had to do was put my life on the line.”

Parents, take note of such stories the next time you pressure your kids to go to law school and “get a real job”…

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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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‘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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Amid a jobs and loan debt crisis, the push for legal education to reinvent and remodel itself upon the medical school paradigm continues to grow. From a reduction in years of schooling to legal residency programs, these and a slew of other ideas are looking better and better.

Next up to the plate: monetary incentives to practice in no man’s land. Doctors have been getting loan repayment incentives for four decades in exchange for practicing in underserved rural areas.

Why can’t lawyers do the same thing?

In recent weeks, South Dakota’s innovative plan to keep lawyers in the state and practicing in rural areas has gotten a great deal of media attention. If you’d consider hanging a shingle in a small town for five years in exchange for a yearly sum of $12,000 to pay off your debts, then this is a great idea.

There’s free money waiting for you in flyover country….

Do any of you remember the set up of Northern Exposure? It was a decent enough show where a “city slicker” doctor had to practice in small town Alaska to pay off his student debt. Aidan from Sex in the City was on it.

Anyway, the point was that the state of Alaska paid for Rob Morrow’s medical school. In return, he had to work wherever Alaska sent him for five years.

Subject, of course, to the restrictions outlined in the Thirteenth Amendment, I’ve wondered why this isn’t an actual thing that more states do in order to help underserved communities. Why doesn’t New York pay for a bunch of people to go to medical school, but then they have to practice in poor areas for a term to work off their debts?

One state is giving it a try. And why not? I mean, it’s not really like peonage, is it?

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‘I’d be happier if I weren’t poor.’

A little more than one year ago, Elie and I asked our readers what they would have done if they hadn’t gone to law school. The answers in the comments were varied, but in light of the state of the job market for entry-level lawyers, this was the one that stood out the most to me then, and stands out even more to me now:

“Shoot myself. It would have been quicker and less painful.”

While that may be incredibly depressing, it speaks to the feelings of a new generation of lawyers, many of whom have been languishing in unemployment and drowning under heavy student debt loads for months, and in some cases, years. Now, if you’re lucky enough to be complaining about the size of your Biglaw bonus, these circumstances aren’t applicable to you. But unfortunately, as we all know, money can’t buy happiness. Regardless of your standing in life, law school still might have been a bad decision for you.

Which brings me to this question: all things considered, are you still happy you went to law school?

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