Student Debt

Arizona State Law School Moving Towards Private Funding Model: Prepare to be Gouged, ASU Law Students

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Earlier this week, a story in the National Law Journal (subscription) reported that the Arizona State University Sandra Day O’Connor College of Law is weaning itself off of public funding and trying to become self-sufficient on private dollars. Towards that end, ASU will be raising tuition and admitting more law students.

I wanted to wait until I calmed down before I posted on it, but it doesn’t look like that is going to happen. So I broke into the Bronx Zoo this morning and stole some elephant tranquilizers. I’m going to shoot up and finish this post, now.

[Mmm... serenity...]

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Someone at the ABA Is Aware That New Law Schools Make No Sense

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A year ago (almost to the day), we learned that Belmont University in Nashville was planning to start a new law school. At the time, I asked: “[H]ow colossally dumb are the people who sign up for a Belmont law degree next year?”

Well, there’s an article in the Tennessean today suggesting that the new dean of Belmont College of Law, Jeff Kinsler, is hoping his new students are so incapable of doing basic research than they’ll be easily distracted by anything that even smells of “math” or “statistics.”

And apparently his faith has been rewarded. With 1,200 inquiries from prospective students, it seems that Belmont is well on its way to handing out potentially useless degrees.

But what’s going on at Belmont is so ridiculous that it has even attracted the attention of the American Bar Association. You read that right. Even the ABA is saying “wait a minute” to students eager to sign up for whatever Belmont is offering….

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Quote of the Day: Well, the Economy Is In the Toilet….

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“Knowledge Economy”

An environment in which a person has run up $150,000 in student loans to pay for a law degree only to see jobs exported to India whose citizens are apparently very knowledgeable about the U.S. legal system.

Example: “The best job in the knowledge economy is plumbing because nobody with an advanced degree knows how to use Drano.”

– a Yahoo! Finance article on office buzzwords to avoid

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National Jurist’s ‘Best Value’ Law School Numerical Rankings and Grades Are Out

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Last month, we reported on the Best Value Law School Rankings produced by National Jurist. The initial list just mentioned the publication’s “honorees,” with a promise of numerical rankings later. That day has arrived, and the magazine is ready to tell us which is the very best value for law school in 2010.

I’ve already highlighted the many problems with this list. Click here for my take.

The National Jurist attempted to address some of these concerns (I think) with the publication of its numerical rankings and grades. You tell me if its arguments are convincing…

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Disgruntled Law Grad Brings Student Loan Woes to Obama’s Attention

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Yesterday President Obama held a town hall meeting with those affected by the terrible economy. But the New York Times reports that the televised meeting “turned into a therapy session for disillusioned Obama supporters.”

A lawyer was among the disillusioned. Thanks to his question, Obama is now on notice that student debt is crushing the hope and change out of many people in this country. Here’s the Washington Post’s summary:

Then a 30-year-old law school graduate said he’s no longer able to make the interest payments on his educational loans, much less able to have a mortgage or a family. He said he had been inspired by Obama’s campaign. But now, “that inspiration is dying away,” he said. “I really want to know: Is the American dream dead?

If Bill Clinton had been asked that question, he would have said “I feel your pain,” molested the questioner, and said “I will not, let, student debt continue to bang you in the ass.”

So what did President Obama say to the debt-laden lawyer?

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Citi Sells Student Loan Division: Can’t You Hear the Bubble Bursting?

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In a couple of years, we might look back on today as the first point where the giant, unsustainable bubble that is the student loan market began to burst. Check out this press release:

The Student Loan Corporation (NYSE:STU – News), a subsidiary of Citibank, N.A., and a leading originator and servicer of student loans, announced that The Student Loan Corporation (“SLC”) and Discover Financial Services (“Discover”) have entered into a definitive agreement for Discover to acquire SLC, and thereby become the owner of its private student loan business as well as $4 billon of its private student loans. Separately and immediately prior to the transaction, (i) SLM Corporation (“Sallie Mae”) will acquire from SLC $28 billion of securitized federal student loans and related assets and (ii) Citi will acquire from SLC certain federal and private student loans and other assets totaling $8.7 billion. Upon the closing of the transactions described above, shareholders of SLC will receive $30 per share.

So Citi is getting out of the student loan origination business (although they’ll still have some existing loans on their books). I guess they don’t want to be the Lehman Brothers of this failing market…

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Quote of the Day: At Least You Don’t Have Chlamydia

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Unfortunately, I have a terrible secret that is making it difficult for me to get close to women: I have $190,000 in student loan debt.

– a correspondent calling himself “Debt Leper,” who wrote in to advice columnist Dear Wendy (via Instapundit). Reading the full question on The Frisky, this guy sure sounds like a lawyer.

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Quote of the Day: Actually, they just want your tuition dollars.

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Law Schools Now Require Applicants To Honestly State Whether They Want To Go To Law School.

– headline for an article in The Onion

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Most Schools Would Like Law School Transparency to Just Go Away

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In July, we profiled the efforts of a group of Vanderbilt law students who are trying to bring more accuracy and transparency to the employment statistics provided by law schools. Their group, Law School Transparency, has requested all ABA-accredited schools to provide useful information to prospective law students — information that neither the ABA nor U.S. News currently collects.

Without the regulatory hammer of ABA (which the organization inexplicably refuses to wield), or the public shaming of U.S News (a for-profit magazine, not an industry watchdog), LST is up against some long odds. They’re trying their best, but their interim report indicates that thus far, 188 law schools have completely ignored their efforts to report simple facts on the employment prospects of law school graduates.

In fact, to this point no school (not even Vanderbilt Law) has agreed to provide the information LST is requesting. Poor Zenovia Evans would have starved to death by now.

But 11 schools did find the time to send out a courtesy letter citing the reasons these schools cooked up to justify keeping people in the dark about employment prospects for law school graduates…

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The Student Loan Racket: Now in One Easy-to-Understand Graphic

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I’ve written a lot about the horrible reality of the student loan industry. I’ve talked about how schools have no incentive to keep costs under control, how student debt is the next “credit bubble,” and how student loans cannot be discharged through bankruptcy (which is ridiculous).

But I’m not good with pictures. Luckily, the people at CollegeScholarships.org are good with pictures. They brilliantly break down the entire student loan racket in one easy to understand graphic.

Look at it; share it with your friends. Send it to parents of kids bound for higher education. If you are wondering why America’s students are in such a bind, here’s all you need to know…

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