Failure is not an option (Campos)

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Re: Failure is not an option (Campos)

Postby haus » Sun Aug 25, 2013 11:44 pm

kappycaft1 wrote:
twentypercentmore wrote:Keep in mind that IBR and PAYE are like very long parole sentences -- you screw up, and the party's over. If qualifying for, obtaining, and keeping biglaw is like a tight-rope walk; a borrower keeping IBR/PAYE for 20 years is like a 5-person trapeze act.

Not really... almost everyone who borrows any amount near sticker will become eligible for PAYE (even if they start off with an income of $200,000), and once you're in PAYE you will never be disqualified from it even if you start making $3,000,000 a year later in your career. The only really big stipulation is that you cannot have borrowed any federal loans before October 1st, 2007 (but even this stipulation will likely eventually be done away with). :|

With PAYE, even if you get booted out of biglaw and end up working at McDonald's (or never make it into biglaw and start off working at McDonald's), the program will generously cover you from year 1 through 20 no matter what your salary is.

I have heard that my local McDonald's will consider starting out those with a JD in the more prestigious drive through window slots.

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Re: Failure is not an option (Campos)

Postby jbagelboy » Mon Aug 26, 2013 12:15 am

kappycaft1 wrote:
Big Dog wrote:Not me; I don;t have to come up with anything. Instead, I strongly support mandated transparency by the ABA on outcomes, particularly wrt jobs. Then, if stupid people want to waste their financial future on TT, then PT Barnum was right: a sucker is born every minute. OTOH, if I was to "sort", I'd eliminate all federal grad loans. Voila -- less law schools and fewer lawyers.

Eliminating (or at least making stricter rules for borrowing) federal graduate loans would be an ideal way to quickly countermeasure the oversupply of JDs. However, until this happens, it is irresponsible to say that transparency alone is enough. As long as the low-hanging fruit of federal loans is there for every idiot to easily pluck from the tree of tax-payers' money, we are all going to continue funding poor career choices and the devaluation of the legal market. This isn't just an issue of stupid people wasting their own money; thanks to programs like IBR and PAYE, it is now an issue of stupid people wasting tax-payers' money.


Federal loan structure needs to be seriously re-evaluated (I would support a risk/investment/employment based criterion) and law school tuition should be forced to take a huge hit. No one can dispute these points.

Eliminating ALL interest-bearing federal loans, however, for law/med/ect students is not only a terrible financial idea for the gov't its a morally bankrupt one. Who are we kidding -- first of all, private lending is risky and unsound with variable rates, and moreover, banks arent going to write $200,000 checks to broke BAs: elite education would become strictly the purvue of the extremely wealthy (and the occasional full scholarship savant) as it was 50 years ago. There needs to be a balance between the utter irresponsibility of the current loan structure (and corrupt gov't profit margin on students) and a reactionay reversal to Mad Men and aristocracy.

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Re: Failure is not an option (Campos)

Postby cinephile » Mon Aug 26, 2013 12:17 am

kappycaft1 wrote:
twentypercentmore wrote:Keep in mind that IBR and PAYE are like very long parole sentences -- you screw up, and the party's over. If qualifying for, obtaining, and keeping biglaw is like a tight-rope walk; a borrower keeping IBR/PAYE for 20 years is like a 5-person trapeze act.

Not really... almost everyone who borrows any amount near sticker will become eligible for PAYE (even if they start off with an income of $200,000), and once you're in PAYE you will never be disqualified from it even if you start making $3,000,000 a year later in your career. The only really big stipulation is that you cannot have borrowed any federal loans before October 1st, 2007 (but even this stipulation will likely eventually be done away with). :|

With PAYE, even if you get booted out of biglaw and end up working at McDonald's (or never make it into biglaw and start off working at McDonald's), the program will generously cover you from year 1 through 20 no matter what your salary is.


But how does this make sense? If you're making 3 million a year, 10% of your income is more than your normal monthly payment would be under the regular 10 year repayment plan. But if your point is that it's not horrible and you can always fall back on it, then yeah, that sounds right.

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Re: Failure is not an option (Campos)

Postby 20141023 » Mon Aug 26, 2013 12:34 am

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Last edited by 20141023 on Sun Feb 15, 2015 10:22 pm, edited 1 time in total.

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Re: Failure is not an option (Campos)

Postby twenty » Mon Aug 26, 2013 2:57 am

Yeah; though you kind of have to be employed to be able to take advantage of IBR/PAYE. I'm sure in a lot of places, finding full time employment isn't that big of an issue with a JD, but there's always those few that 9 months after graduation are still unemployed.

If you go under and have to start forbearance on future payments though... that'd suck lots. :|

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Re: Failure is not an option (Campos)

Postby A. Nony Mouse » Mon Aug 26, 2013 7:47 am

twentypercentmore wrote:Yeah; though you kind of have to be employed to be able to take advantage of IBR/PAYE. I'm sure in a lot of places, finding full time employment isn't that big of an issue with a JD, but there's always those few that 9 months after graduation are still unemployed.

If you go under and have to start forbearance on future payments though... that'd suck lots. :|

I'm not sure why you'd have to be employed. IBR/PAYE are tied to income; if your income is low enough, your payment is 0, but it still counts as a payment. It doesn't require going into forbearance.

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Re: Failure is not an option (Campos)

Postby zman » Mon Aug 26, 2013 8:57 am

jbagelboy wrote:
kappycaft1 wrote:
Big Dog wrote:Not me; I don;t have to come up with anything. Instead, I strongly support mandated transparency by the ABA on outcomes, particularly wrt jobs. Then, if stupid people want to waste their financial future on TT, then PT Barnum was right: a sucker is born every minute. OTOH, if I was to "sort", I'd eliminate all federal grad loans. Voila -- less law schools and fewer lawyers.

Eliminating (or at least making stricter rules for borrowing) federal graduate loans would be an ideal way to quickly countermeasure the oversupply of JDs. However, until this happens, it is irresponsible to say that transparency alone is enough. As long as the low-hanging fruit of federal loans is there for every idiot to easily pluck from the tree of tax-payers' money, we are all going to continue funding poor career choices and the devaluation of the legal market. This isn't just an issue of stupid people wasting their own money; thanks to programs like IBR and PAYE, it is now an issue of stupid people wasting tax-payers' money.


Federal loan structure needs to be seriously re-evaluated (I would support a risk/investment/employment based criterion) and law school tuition should be forced to take a huge hit. No one can dispute these points.

Eliminating ALL interest-bearing federal loans, however, for law/med/ect students is not only a terrible financial idea for the gov't its a morally bankrupt one. Who are we kidding -- first of all, private lending is risky and unsound with variable rates, and moreover, banks arent going to write $200,000 checks to broke BAs: elite education would become strictly the purvue of the extremely wealthy (and the occasional full scholarship savant) as it was 50 years ago. There needs to be a balance between the utter irresponsibility of the current loan structure (and corrupt gov't profit margin on students) and a reactionay reversal to Mad Men and aristocracy.


This guy is CLUELESS. Private lending WITHOUT goverment insured loans would collapse college tuitions.. IT would cost less than 2 thousand a year WITHOUT federally insured loans.

"elite education would become strictly the purvue of the extremely wealthy (and the occasional full scholarship savant) as it was 50 years ago."

ahahah what an idiotic statement. College was CHEAP 50 years ago, anyone could get a summer job and PAY for college. The reason so few went to college 50 years ago is because you could get almost 95% of the jobs out of high school. The quality of education at the high level was MUCH better 50 years ago. In fact the average high school grad was far more educated than the average college grad today.

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Re: Failure is not an option (Campos)

Postby FKASunny » Mon Aug 26, 2013 9:04 am

JusticeHarlan wrote:
jselson wrote:From an equity standpoint, how would a lack of fed funding work for those who can't afford law school? Would schools have to team up with private lenders, and possibly the better schools would be able to offer lower rates?

Presumably, private lenders would be willing to extend credit to students who attend schools that would be good investments and would decline to do so to attend schools that are not good investments, factoring the credit worthiness of the particular student. So, most people would be able to get a loan to go to Harvard, even if they're not able to pay out of pocket, but not so to attend Cooley, so Cooley would either have to charge less for tuition or close up. What exactly this does to the schools in between would be interesting.

I don't know the specifics, but I'd hazard a guess that this is not how the student loan market worked before the feds started backing them. A better solution might be splitting the difference and having loan caps in place that reflect a school's "value," however the government decides to define that. It wouldn't be perfect, but it'd be better than the current system of blank checks and the most likely free market alternative where smart-but-not-poor-enough students can't pay tuition at Penn or NYU even though they got in.

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Re: Failure is not an option (Campos)

Postby IAFG » Mon Aug 26, 2013 9:11 am

zman wrote:
jbagelboy wrote:
kappycaft1 wrote:
Big Dog wrote:Not me; I don;t have to come up with anything. Instead, I strongly support mandated transparency by the ABA on outcomes, particularly wrt jobs. Then, if stupid people want to waste their financial future on TT, then PT Barnum was right: a sucker is born every minute. OTOH, if I was to "sort", I'd eliminate all federal grad loans. Voila -- less law schools and fewer lawyers.

Eliminating (or at least making stricter rules for borrowing) federal graduate loans would be an ideal way to quickly countermeasure the oversupply of JDs. However, until this happens, it is irresponsible to say that transparency alone is enough. As long as the low-hanging fruit of federal loans is there for every idiot to easily pluck from the tree of tax-payers' money, we are all going to continue funding poor career choices and the devaluation of the legal market. This isn't just an issue of stupid people wasting their own money; thanks to programs like IBR and PAYE, it is now an issue of stupid people wasting tax-payers' money.


Federal loan structure needs to be seriously re-evaluated (I would support a risk/investment/employment based criterion) and law school tuition should be forced to take a huge hit. No one can dispute these points.

Eliminating ALL interest-bearing federal loans, however, for law/med/ect students is not only a terrible financial idea for the gov't its a morally bankrupt one. Who are we kidding -- first of all, private lending is risky and unsound with variable rates, and moreover, banks arent going to write $200,000 checks to broke BAs: elite education would become strictly the purvue of the extremely wealthy (and the occasional full scholarship savant) as it was 50 years ago. There needs to be a balance between the utter irresponsibility of the current loan structure (and corrupt gov't profit margin on students) and a reactionay reversal to Mad Men and aristocracy.


This guy is CLUELESS. Private lending WITHOUT goverment insured loans would collapse college tuitions.. IT would cost less than 2 thousand a year WITHOUT federally insured loans.

"elite education would become strictly the purvue of the extremely wealthy (and the occasional full scholarship savant) as it was 50 years ago."

ahahah what an idiotic statement. College was CHEAP 50 years ago, anyone could get a summer job and PAY for college. The reason so few went to college 50 years ago is because you could get almost 95% of the jobs out of high school. The quality of education at the high level was MUCH better 50 years ago. In fact the average high school grad was far more educated than the average college grad today.

In 1964 an Ivy League education cost ~$1600 and minimum wage was $1.15/hr. If you worked full time all summer you'd have what, not even 1/3 of JUST tuition?

As long as we're accusing people of idiotic statements...

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Re: Failure is not an option (Campos)

Postby Monochromatic Oeuvre » Mon Aug 26, 2013 10:00 am

I think the analogy to 50 years ago is a little misguided. Interestingly enough, the percentage of college students from non-wealthy families has been highly correlated with tuition, rather than the other way around as you might expect in non-loan climates. This suggests such a factor to be non-controlling and that other factors are more in play.

Case in point: 100 years ago (or a little more--roughly 1900 to 1915 is the important period) is essentially the cheapest college ever was, even when accounting for tuition and productivity gains. Even Ivy league schools had tuitions of around $200, which would have been somewhere in the vicinity of 25% of a typical income at the time. The reason why only around 5% of the country (most of whom were wealthy) graduated college was not that a dedicated middle income family couldn't afford it. If school were a comparable cost today--say, $13,000 a year--middle-income families would be able to send students to school without needing to resort to exorbitant loans. The reason so few students went to college was that, with the exception of medicine, law or academia, college was not expected. It wouldn't have helped in getting a job the typical middle-income kid would have been targeting. The assumption was that if you wanted to learn a skill, you worked in a place to develop that skill. College was, in a sense, a luxury rather than a necessity--it wasn't that only wealthy families could afford tuition, it was more than only wealthy families thought it a worthwhile exercise to send their kids to school for four years when, with few exceptions, it wouldn't have changed their job prospects at all. The notion that education is a ticket to employment is quite a recent construct.

But to the point at hand: The notion of whether the elimination of federal loans is a market-based correction mechanism or a ticket to the return of an aristocracy is one that could be reasonably debated by both sides. But it is clear that in the absence of ABA action, market dynamics would do quite well to stop funding students to go to TTTs--which is exactly what should happen. See if anybody with some skin in the game will find it worthwhile to send you to TJSL for $250k.

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Re: Failure is not an option (Campos)

Postby Big Dog » Mon Aug 26, 2013 10:04 am

This isn't just an issue of stupid people wasting their own money; thanks to programs like IBR and PAYE, it is now an issue of stupid people wasting tax-payers' money.


Then taxpayers are stupid because they (indirectly) support such policies by constantly re-electing the same Congresspersons who enact such laws. They/we have a choice; we just fail to use it.

He argued that there'd be a risk that schools will just increase their class size, but if schools like Cooley and those Campos mentions below are already letting in pretty much everyone they can, failing out students won't raise the size of their first year class because they're grabbing as many tuition paying people already.


I dont see it that way. Paul specifically used Colorado as an example. His blog was suggesting tht UC-Boulder start flunking out law students, for no other reason than they can. If his argument is that the state of Colorado has too many lawyers, then he should argue for Colorado to just reduce class size across the board, and thus shrink the school size. There is no reason to just start flunking 1L's -- taking their money for just one year, just to pay the professoriate is immoral, IMO.

Eliminating ALL interest-bearing federal loans, however, for law/med/ect students is not only a terrible financial idea for the gov't its a morally bankrupt one. Who are we kidding -- first of all, private lending is risky and unsound with variable rates, and moreover, banks arent going to write $200,000 checks to broke BAs: elite education would become strictly the purvue of the extremely wealthy (and the occasional full scholarship savant) as it was 50 years ago. There needs to be a balance between the utter irresponsibility of the current loan structure (and corrupt gov't profit margin on students) and a reactionay reversal to Mad Men and aristocracy.


That's a strawman argument. Med students would be able to find funding, likely rather easily. Wrt to LS: clearly HYS has the endowment to give full rides to every law student, or at least they could give full rides to poor kids if they chose to do so. Some/many publics could do the same, absent federal largesse. But those law schools at the bottom of the food chain, which rely exclusively on federal loans, would disappear overnight. (And quite frankly, I'm not that swayed by the poor going to LS: how moral is it to saddle folks with $250k in debt, with a slight chance at a good outcome, and a average chance at a job which doesn't pay much more than a barista.)

btw: that "corrupt gov't profit margin" is primarily used to subsidize the Pell grant program for undergrads. In essence, the grads pay high rates so the undergrads receive more free money. (Again, we vote for those Congresspersons who put these policies in place.)

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Re: Failure is not an option (Campos)

Postby jbagelboy » Mon Aug 26, 2013 11:25 am

zman wrote:
jbagelboy wrote:
kappycaft1 wrote:
Big Dog wrote:Not me; I don;t have to come up with anything. Instead, I strongly support mandated transparency by the ABA on outcomes, particularly wrt jobs. Then, if stupid people want to waste their financial future on TT, then PT Barnum was right: a sucker is born every minute. OTOH, if I was to "sort", I'd eliminate all federal grad loans. Voila -- less law schools and fewer lawyers.

Eliminating (or at least making stricter rules for borrowing) federal graduate loans would be an ideal way to quickly countermeasure the oversupply of JDs. However, until this happens, it is irresponsible to say that transparency alone is enough. As long as the low-hanging fruit of federal loans is there for every idiot to easily pluck from the tree of tax-payers' money, we are all going to continue funding poor career choices and the devaluation of the legal market. This isn't just an issue of stupid people wasting their own money; thanks to programs like IBR and PAYE, it is now an issue of stupid people wasting tax-payers' money.


Federal loan structure needs to be seriously re-evaluated (I would support a risk/investment/employment based criterion) and law school tuition should be forced to take a huge hit. No one can dispute these points.

Eliminating ALL interest-bearing federal loans, however, for law/med/ect students is not only a terrible financial idea for the gov't its a morally bankrupt one. Who are we kidding -- first of all, private lending is risky and unsound with variable rates, and moreover, banks arent going to write $200,000 checks to broke BAs: elite education would become strictly the purvue of the extremely wealthy (and the occasional full scholarship savant) as it was 50 years ago. There needs to be a balance between the utter irresponsibility of the current loan structure (and corrupt gov't profit margin on students) and a reactionay reversal to Mad Men and aristocracy.


This guy is CLUELESS. Private lending WITHOUT goverment insured loans would collapse college tuitions.. IT would cost less than 2 thousand a year WITHOUT federally insured loans.

"elite education would become strictly the purvue of the extremely wealthy (and the occasional full scholarship savant) as it was 50 years ago."

ahahah what an idiotic statement. College was CHEAP 50 years ago, anyone could get a summer job and PAY for college. The reason so few went to college 50 years ago is because you could get almost 95% of the jobs out of high school. The quality of education at the high level was MUCH better 50 years ago. In fact the average high school grad was far more educated than the average college grad today.


Your statements do not reflect the history of private university education in the states, and you display substantial flaws in comparative reasoning. I won't resort (as you seem to have no qualms with) to name calling, but here are a few points to consider in addition to IAGF's:

1) The origins of guaranteed federal loans (as opposed to "direct") were to encourage private lenders to support low-income college and graduate education by virtually ensuring the debt with fed cash. Prior to 1965, outside of a select few merit and need scholarships, it would be impossible as a lower middle income or working class family to attend a school like Yale or Columbia. Bright students had no recourse but to choose local public institutions over private colleges, even if they were offered admission, due to tuition and living cost, since no lending system was in place, and no, you couldn't just "save up" for it (see Robert McNamara's biography where he explains why he had to attend Berkeley since Stanford would have cost several times one year of his family income in the 1930's). The impetus for the 1958 defense act and 1965 student loan bill were to alleviate some class stratification in education for talented students (and conveniently advance american science/education to compete with the soviets, which is why the first fed loans were "defense").

2) When the federal gov't switched to offering Direct loans (ford) as a primary mechanism in the early 1990's under GHW Bush because it would make the administration more money AND satisfy the requests of universities for more funding than the guarantee system -- republicans nearly killed the bill in 1994 but direct loans survived -- however, their use declined by students UNTIL 2007-2008, when guess what? All private money dried up, and the guarantors were no longer able to support college and graduate education. Now of course many private institutions have generous finaid policies, but even so the trend reversed back to higher direct loans as a result in the past few yrs. Millions of students wouldn't be able to attend university in 2009 if it weren't for the feds -- the TLS phillistine brigade could argue with some practical legitimacy that the "liberal arts" majors among these millions shouldn't have taken loans in the first place but that's a debate to itself -- and Financial instutitions aren't in the business of investing tens or hundreds of thousands into multiple low asset individuals. Nor could they be forced to.

I could not attend Columbia law this year without federal loans, nor could many of my peers - and even if all fed loans dried up tomorrow, tuition would certainly plummet down by market forces, but nowhere near quickly enough to allow for me to afford it. For the record, I did go to a private lender -- Wells Fargo -- and the best they could offer me was 20K in total at 9%. Thank god for Stafford and Perkins loans in my case!

3) Switching gears, your statement that "high schools grads in the 1950s were better educated than college grads now".. I mean.. Does that dignify a response? What does that even mean and how are you quantifying it? You are pulling that completely out of your ass. I'm sorry if your college education sucked, but mine was definitely substantive. If you are basing this off employment rates in the post-war book economy, that grads with GEDs could work at Ford plants and make a living wage, thats an erroneous comparison since the current problem lies in the globalized economic structure of the planet (wholly different from the 50s and 60s), the US population and demographic, ect ect (read some basic economic geography and history), not the quality of college instruction vis a vis our grandparents secondary schools -- moreover, today's high schools suffer from crippling demographic issues that have much less to do with "quality of education" than zoning laws and race, federal and state funding initiatives throwing money in the wrong places, income inequality, and other issues which again involve extensive separate conversations. And those jobs in your fake 5% unobtainable to high school grads just happen to be physicians, professors, attorneys, the future congressmen, CEOs, all positions of power and influence who hailed most frequently from those elite institutions of higher learning federal loan and scholarship programs opened up to large unrepresented segments of he population -- an effort that persists today. The fact that most jobs were available does not equate EQUAL jobs being available (your logical flaw) and hence, as higher education is even more essential now to procuring the best careers, providing funds for education lies at the core of the equal opportunity provisions this country claims to so virtuously represent. Suffice to say, your last paragraph is ahistorical and entirely unsubstantiated.

Lastly, federal loans made billions of dollars in revenue for the Obama administration last year. THIS is the criminal and immoral element of the loans -- the high interest and the capitalization of the interest -- but its also why they aren't going away any time soon.

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Re: Failure is not an option (Campos)

Postby jbagelboy » Mon Aug 26, 2013 11:35 am

Monochromatic Oeuvre wrote:I think the analogy to 50 years ago is a little misguided. Interestingly enough, the percentage of college students from non-wealthy families has been highly correlated with tuition, rather than the other way around as you might expect in non-loan climates. This suggests such a factor to be non-controlling and that other factors are more in play.

Case in point: 100 years ago (or a little more--roughly 1900 to 1915 is the important period) is essentially the cheapest college ever was, even when accounting for tuition and productivity gains. Even Ivy league schools had tuitions of around $200, which would have been somewhere in the vicinity of 25% of a typical income at the time. The reason why only around 5% of the country (most of whom were wealthy) graduated college was not that a dedicated middle income family couldn't afford it. If school were a comparable cost today--say, $13,000 a year--middle-income families would be able to send students to school without needing to resort to exorbitant loans. The reason so few students went to college was that, with the exception of medicine, law or academia, college was not expected. It wouldn't have helped in getting a job the typical middle-income kid would have been targeting. The assumption was that if you wanted to learn a skill, you worked in a place to develop that skill. College was, in a sense, a luxury rather than a necessity--it wasn't that only wealthy families could afford tuition, it was more than only wealthy families thought it a worthwhile exercise to send their kids to school for four years when, with few exceptions, it wouldn't have changed their job prospects at all. The notion that education is a ticket to employment is quite a recent construct.

But to the point at hand: The notion of whether the elimination of federal loans is a market-based correction mechanism or a ticket to the return of an aristocracy is one that could be reasonably debated by both sides. But it is clear that in the absence of ABA action, market dynamics would do quite well to stop funding students to go to TTTs--which is exactly what should happen. See if anybody with some skin in the game will find it worthwhile to send you to TJSL for $250k.


I agree (as we discussed the other night) that the increase in tuition WAY over the increases in comparable income are disgusting and completely throw off the analogous circumstances. Thats an interesting statistic. And if we based federal loans on a risk model of employment, it would effectually close the shitty overpriced law schools overnight -- this, as I said initially, I strongly support. Having worked in risk analytics, I know however that theory and models only stretch so far, and private lenders in todays economy COULD NOT afford or be willing to fill the gap, even just at the T14 level.

The historical argument can go both ways as you said. Im sure zman can debate my points if he/she wants to. Ultimately, its a theoretical exercise at best.

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Re: Failure is not an option (Campos)

Postby zman » Mon Aug 26, 2013 11:46 am

1. Ok.. What's your point? Yale and Columbia are two ELITE schools. They are not meant for everyone. Just like ferraris are out of reach for me because they are too expensive, hot supermodels are out of my reach too because I'm not Brad pitt.. Yale and Columbia were out of reach for most 50 years ago as they are today. You are talking about two ELITE schools that target a very specific group of people just like certain luxury goods are made for rich people.

2. More BS here. College costs started rising in the late 60s(when federal loans started), there was no policy that changed any of that one way or the other in the 90s.

3. You have a point here about the screwed up economy here but sending more money to bloated schools isn't going to change of that. There is no doubt in my mind that the average high school grad back in the 50s was more educated than the average college grad today. It's probably not even close, high school was HARD in those days. Everyone can graduate college today..

It's not the goverment that benefits from this scam, it's the colleges.

I think you hit on something when you talked about the flaws of the globalized economic system, that's the real problem. As far as your theory into college costs and so on you are way off.

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Re: Failure is not an option (Campos)

Postby jbagelboy » Mon Aug 26, 2013 11:57 am

zman wrote:1. Ok.. What's your point? Yale and Columbia are two ELITE schools. They are not meant for everyone. Just like ferraris are out of reach for me because they are too expensive, hot supermodels are out of my reach too because I'm not Brad pitt.. Yale and Columbia were out of reach for most 50 years ago as they are today. You are talking about two ELITE schools that target a very specific group of people just like certain luxury goods are made for rich people.

2. More BS here. College costs started rising in the late 60s(when federal loans started), there was no policy that changed any of that one way or the other in the 90s.

3. You have a point here about the screwed up economy here but sending more money to bloated schools isn't going to change of that. There is no doubt in my mind that the average high school grad back in the 50s was more educated than the average college grad today. It's probably not even close, high school was HARD in those days. Everyone can graduate college today..

It's not the goverment that benefits from this scam, it's the colleges.

I think you hit on something when you talked about the flaws of the globalized economic system, that's the real problem. As far as your theory into college costs and so on you are way off.


I suppose our core disagreement lies in what you articulated in 1).. I believe these schools should be accessible to anyone intelligent and hard working enough to be admitted, and the ability to attend should not depend on financial factors -- unlike strictly extraneous consumer goods like luxury cars. Thats a philosophical point not an economic one.

We can agree tuition skyrocketed beyond reasonable bounds, as Mono further pointed to, and careless loaning contributed to this. The government and colleges have both profited. Hopefully we will contribute to important changes to this structure once the shitboomers are out of government

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Re: Failure is not an option (Campos)

Postby haus » Mon Aug 26, 2013 12:09 pm

jbagelboy wrote:Lastly, federal loans made billions of dollars in revenue for the Obama administration last year. THIS is the criminal and immoral element of the loans -- the high interest and the capitalization of the interest -- but its also why they aren't going away any time soon.

I agree with almost everything in your comment, but I want to take a moment on the concept of profit being made by the government on student loans. Here I think we need to be just a bit cautious, as the numbers being reported can be deceptive. As I understand it, the profit is being booked as interest is accumulating on loans, not when they are paid.

I suspect that the combination of loans that never get fully paid back (be it from long term default, or IBR/PAYE type programs) will be larger than is officially estimated. Thus the 'profiting' may well turn out to be less than it no appears.

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Re: Failure is not an option (Campos)

Postby Big Dog » Mon Aug 26, 2013 12:10 pm

I suppose our core disagreement lies in what you articulated in 1).. I believe these schools should be accessible to anyone intelligent and hard working enough to be admitted, and the ability to attend should not depend on financial factors


Fair enough, but the point of Campos's argument is that xx% of those "intelligent and hard working enough to be admitted" should be de-admitted after 1L. Let 'em in, give 'em all the loans that they want, then kick 'em to the gutter with no job. Does that really make sense from a societal pov?

zman
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Re: Failure is not an option (Campos)

Postby zman » Mon Aug 26, 2013 12:25 pm

plenty of poor people went to Yale and columbia in the 50s. I don't think the quality of education is that much better at yale/Columbia or a state school. It's about even.

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DrStudMuffin
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Re: Failure is not an option (Campos)

Postby DrStudMuffin » Mon Aug 26, 2013 12:35 pm

zman wrote:plenty of poor people went to Yale and columbia in the 50s. I don't think the quality of education is that much better at yale/Columbia or a state school. It's about even.


You have bad/misinformed opinions.

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Re: Failure is not an option (Campos)

Postby jbagelboy » Mon Aug 26, 2013 12:40 pm

haus wrote:
jbagelboy wrote:Lastly, federal loans made billions of dollars in revenue for the Obama administration last year. THIS is the criminal and immoral element of the loans -- the high interest and the capitalization of the interest -- but its also why they aren't going away any time soon.

I agree with almost everything in your comment, but I want to take a moment on the concept of profit being made by the government on student loans. Here I think we need to be just a bit cautious, as the numbers being reported can be deceptive. As I understand it, the profit is being booked as interest is accumulating on loans, not when they are paid.

I suspect that the combination of loans that never get fully paid back (be it from long term default, or IBR/PAYE type programs) will be larger than is officially estimated. Thus the 'profiting' may well turn out to be less than it no appears.


This is not a field in which I claim to be an expert. On the one side, you have the CBO claiming $17 Billion in profit over the next decade, and the news reports which post this gov generated data. On the other, you have editorials like this:
http://m.washingtonpost.com/blogs/wonkb ... ent-loans/,
upon which your statements above appear to be based. I find this editorial flawed in certain key respects (the 4-5% delta between student repayment stability and treasury stability doesnt convince me of the dilution of the entire CBO estimate) and in fact, if you scroll down all the way to "Update II", I am not alone in these criticisms: even the author of this article acknowledges that Obama will make a real profit in 2013 on student loans.

So you're right it can go both way. From a publicity and game of politics point of view, its interesting how various administrations might present students loans -- are they claimed as samaritan funds in the public interest, a source of government revenue in addition to taxes.. both? We cant know exactly how much money the feds will make over the next decade since its dependent in part on the rate of student default and forgiveness, but the consensus seems to be at least for this year that they will yield a real profit.

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jbagelboy
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Re: Failure is not an option (Campos)

Postby jbagelboy » Mon Aug 26, 2013 12:41 pm

DrStudMuffin wrote:
zman wrote:plenty of poor people went to Yale and columbia in the 50s. I don't think the quality of education is that much better at yale/Columbia or a state school. It's about even.


You have bad/misinformed opinions.


And he just contradicted himself.

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Re: Failure is not an option (Campos)

Postby NYstate » Mon Aug 26, 2013 12:46 pm

zman wrote:plenty of poor people went to Yale and columbia in the 50s. I don't think the quality of education is that much better at yale/Columbia or a state school. It's about even.

Where are your stats on this? I do not believe it to be true, though maybe you include people who had the GI bill because they were WWII veterans? That is a different government program instead of loans to pay for school.

And by people I assume you mean men ( white.) Columbia didn't accept women in the 1950s. Not sure about Yale.

Of course the education is better at a small private school than an overcrowded state school. That doesn't mean you can't get the basics from a state school.

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twenty
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Re: Failure is not an option (Campos)

Postby twenty » Mon Aug 26, 2013 1:00 pm

A. Nony Mouse wrote:
twentypercentmore wrote:Yeah; though you kind of have to be employed to be able to take advantage of IBR/PAYE. I'm sure in a lot of places, finding full time employment isn't that big of an issue with a JD, but there's always those few that 9 months after graduation are still unemployed.

If you go under and have to start forbearance on future payments though... that'd suck lots. :|

I'm not sure why you'd have to be employed. IBR/PAYE are tied to income; if your income is low enough, your payment is 0, but it still counts as a payment. It doesn't require going into forbearance.


Well shut my mouth; if that's actually the case that does change a lot of things. I knew you had to be employed full time in a public service spot for PSLF, but hey, maybe not for PAYE's 20yr forgiveness. I emailed DoED to confirm.

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Re: Failure is not an option (Campos)

Postby zman » Mon Aug 26, 2013 1:32 pm

jbagelboy wrote:
DrStudMuffin wrote:
zman wrote:plenty of poor people went to Yale and columbia in the 50s. I don't think the quality of education is that much better at yale/Columbia or a state school. It's about even.


You have bad/misinformed opinions.


And he just contradicted himself.


How so? There were some poor people who to yale. It wasn't expensive..

zman
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Re: Failure is not an option (Campos)

Postby zman » Mon Aug 26, 2013 1:34 pm

NYstate wrote:
zman wrote:plenty of poor people went to Yale and columbia in the 50s. I don't think the quality of education is that much better at yale/Columbia or a state school. It's about even.

Where are your stats on this? I do not believe it to be true, though maybe you include people who had the GI bill because they were WWII veterans? That is a different government program instead of loans to pay for school.

And by people I assume you mean men ( white.) Columbia didn't accept women in the 1950s. Not sure about Yale.

Of course the education is better at a small private school than an overcrowded state school. That doesn't mean you can't get the basics from a state school.


"Of course the education is better at a small private school" Just barely maybe. Does it really matter? WIth all the advanced tech, you can access information very easily and educate yourself.




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