The Associated Press reports today that the indebtedness of over 37 million American graduates now tops $1 trillion. That’s more than the total American debt load from credit cards. It’s more than the debt load associated with car purchases. And somewhere there is probably some politician touting how college is now “affordable” for every child.
And, as usual, the plight of law students in debt is a great case study in how debt is crippling a generation’s ability to generate wealth…
Yesterday, we brought our readers some “startling” statistics about law student debt levels. It seems that average indebtedness for law graduates increased by more than $50,000 between 2004 and 2012, with a typical law student saddled by about $140,000 in loans.
In fairness, those statistics probably weren’t all that startling to our readers — many of them are heavily indebted themselves. In fact, we know that many of them are carrying debt loads that surpass even that six-figure number.
Which law school graduates have the most debt of all? U.S. News has a ranking for that…
Some of the study’s more eye-popping statistics pertained to law school students, whose job prospects are famously declining. The level of indebtedness for this group rose by more than $50,000 from 200 to 2012, with the typical law student now owing $140,000, the study found — a jump that’s unprecedented in any other field, including medicine.
Whenever the government gets involved with “helping” students suffering under crushing debt obligations, I wonder if “the government” even partially understands how students think.
There is a new proposal in the budget that would bring significant changes to the student loan forgiveness program. Specifically, the “Public Sector Loan Forgiveness” program. Currently, students with massive amounts of debt can sign up for income-based repayment of their student loans. Their payments are capped at 10% of “discretionary” income. If they work in the public sector or for a designated non-profit, the government forgives the rest of their loans after ten years. For those playing along at home, that means that taxpayers pick up the rest of the bill.
Critics on both sides of the aisle (including me) argue that the current system encourages schools to charge whatever they want for tuition, while discouraging students from making cost-conscious choices about their debt. It’s far from ideal, and this new proposal seeks to do something about it.
But since Congress is involved, the thing they want to do to “fix it” is stupid and will ultimately hurt student borrowers even more….
Senator Marco Rubio (R – Fla.) has often said publicly that he personally still owed more than $100,000 in student loans when he joined the U.S. Senate in 2011. He only paid off his nearly $150,000 in debt after law school with the proceeds of his autobiography in December of 2012. Rubio and fellow senator (and law school graduate) Mike Lee (R – Utah) are young enough to be personally aware of the miasma surrounding higher ed — and especially higher ed funding — in the United States. It makes sense that they would lead the way toward reform. Apparently, they are.
In the past few days, the lawmakers have been popping up in public, touting efforts to reform higher education. Let’s take a look at the reforms they suggest….
I find the term “law school sweetheart” to be gross and vaguely unnatural. You don’t have “sweethearts” in law school. You have people who will bang you when you come back from the library wearing sweatpants, people who will save you a slice of pizza because you always forget to eat while at your clinic, and people you can sleep with after exams are over who won’t mind that you actually just want to sleep.
But really, the question presented isn’t about the sad, “I’m too busy to put on heels to get laid” settlement negotiations that mark the start of most law school relationships. Instead, they’re asking whether these couplings have any legs once people get out into the real world….
* Elizabeth Wurtzel: “I am a lawyer. The first rule of law: All the promises will be broken. Attorneys could not be in business if people did not fail to do what they agreed to do all the time — and lawyers are very busy.” [Nerve.com]
* Laura Ingraham clerked for SCOTUS, so presumably she knows that Puerto Ricans are American citizens — right? [Media Matters]
* Chief Judge Alex Kozinski, known for zerotolerance of prosecutorial misconduct, has written the foreword to a new book on the subject. [Facebook]
* In addition to the one we mentioned yesterday, here’s another petition for the Obama Administration that’s aimed at addressing the student debt crisis. [WhiteHouse.gov]
We know the new economics for middle-tier law schools. Applications are down, so to convince students with good test scores to come to your school, you have to offer them money. It’s the market, imperfect though it may be, at work.
So when a law school offers “full scholarships” to a number of students with strong academic credentials, don’t think that it’s doing you a favor. They’re trying to fill their seats, not trying to address the fundamental cost problem of law school. If a law school is offering “scholarships” to high-performing students, that means that the low-performing students who are paying full price are subsidizing the people in their class who are most likely to bust up the curve. Addressing the value proposition of law school involves lowering tuition for all students, not making law school free for the kids with potentially better options.
That said, there’s nothing wrong with a little price competition among law schools for those good students. If you can go to law school for free, what do you care if some of your classmates are being price-gouged?
And if you go to this law school, you might legitimately be getting an education more tailored to the real legal job market than at other schools, thus making your free education even more valuable…
Earlier this week, we mentioned the ridiculous argument from a University of Tennessee law professor, Lucy Jewel, that law degrees confer non-economic benefits like “cultural cachet,” which make a law degree valuable to people who risk financial ruin to get it.
Professor Jewel writes: “Every graduation, when I see the beaming smiles from my students’ family members, I do not think about the fact that they are getting a degree from a so-called fourth-tier toilet law school; I see people who have achieved a dream (albeit at great financial expense) and obtained a credential that signifies membership in a powerful profession.”
Guys… I just can’t. I can’t keep beating back every stupid argument that any law professor can come up with to defend the systemic price-gouging of American law students. I am just one man and they are many. I have never in my life confronted a group of educated people so eager to justify the precise manner in which they economically take advantage of students — kids, really — too stupid to know any better. At this point, if a law professor took candy from a baby she’d say she did it to help the kid save on dental bills.
You want talk about the non-economic benefits of going to law school? FINE! Let’s talk about the social and cultural “cachet” you’ll get, and see if it’s worth all the CASH you won’t ever be seeing again…
Ed. note: The Asia Chronicles column is authored by Kinney Recruiting. Kinney has made more placements of U.S. associates, counsels and partners in Asia than any other recruiting firm in each of the past seven years. You can reach them by email: firstname.lastname@example.org.
It’s that time of year again when JDs are starting to apply for 2L summer jobs and 2L summers are deciding which practice area to focus on.
For those JDs with an interest in potentially lateraling to or transferring to Asia in the future, please feel free to reach out to Kinney for advice on firm choices, interviewing and practice choices, relating to future marketability in Asia, or for a general discussion on your particular Asia markets of interest. This is of course a free of cost service for those who some years in the future may be our future industry contacts or perhaps even clients.
For some years now Kinney’s Asia head, Evan Jowers, has been formally advising Harvard Law students with such questions, as the Asia expert in Harvard Law’s “Ask The Experts Market Program” each summer and fall, with podcasts and scheduled phone calls. This has been an enjoyable and productive experience for all involved.
Whether you’re fresh off the bar exam or hitting your stride after hanging a shingle a few years ago, one thing’s for certain: independent attorneys who start a solo or small-law practice live with a certain amount of stress.
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