Debt Ceiling Deal on Loans

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bk1
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Re: Debt Ceiling Deal on Loans

Postby bk1 » Wed Aug 03, 2011 1:37 pm

romothesavior wrote:1) This really is a pebble on top of a boulder. Most people already take out some amount of unsubsidized loan money for law school, so this whole "How am I supposed to pay interest while I'm in school!?!?" thing is kinda silly.

2) Shared sacrifice. If people are going to lose jobs, benefits, etc. to get the debt under control, then it is only fair that we do too.


+a billion

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kwais
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Re: Debt Ceiling Deal on Loans

Postby kwais » Wed Aug 03, 2011 1:46 pm

romothesavior wrote:1) This really is a pebble on top of a boulder. Most people already take out some amount of unsubsidized loan money for law school, so this whole "How am I supposed to pay interest while I'm in school!?!?" thing is kinda silly.

2) Shared sacrifice. If people are going to lose jobs, benefits, etc. to get the debt under control, then it is only fair that we do too.

This sucks, it really does, but its not the end of the world.


+1. A big part of this circus we just witnessed in DC was due to everyone pressuring their representatives that "if MY program gets touched, you'll pay!"

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romothesavior
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Re: Debt Ceiling Deal on Loans

Postby romothesavior » Wed Aug 03, 2011 2:16 pm

bgdddymtty wrote:I'm with you until the last sentence. Does this really suck? I like money as much as the next guy, but do people in professional programs really need/deserve the government to give them reduced-cost loans? And is an extra <$2000 over the course of law school on top of your loan going to be a big deal one way or another?

This mentality is exactly why we pay huge amounts in tuition every year. Our tuition at WUSTL just went up 1,500 or so. NBD, right? What's another 1,500 when it is already in the 40,000 range? And what's another 1,000 next year? And then the next? Oh shit... all of a sudden tuition is 50,000 in just a few years.

I also disagree with you that the government shouldn't be giving cost-reduced loans. Is it an absolute necessity? Maybe not, and that's why I'm not devastated about the cuts. But cost-reduced loans are absolutely the kind of thing that government should be investing in for the future. What kind of message does this move send, and what kind of affect does this sort of thing have over the long haul? The cost of a graduate degree continues to skyrocket, and rather than intervene to help keep costs down, the government has done the exact opposite. It really isn't rhetoric to say that graduate degrees (and to a lesser degree, college) is starting to only become financially feasible for people with wealth.

So yeah, it sucks. I stand by that. It sucks, it just isn't the end of the world, and I'm not going to be up in arms about it.

areyouinsane
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Re: Debt Ceiling Deal on Loans

Postby areyouinsane » Wed Aug 03, 2011 2:31 pm

Of course the problem with a law degree is that, for those who strike out at Biglaw, the JD has reduced rather than enhanced their income & earnings potential. When you subtract 3 years of lost income + student loan payments+ bar dues & CLE fees from salary, most non Biglaw JD's earn money on par with a GED holder or high school dropout.

For example, if you earn $25 an hour doing NYC doc review 40 hrs a week, but have a $1000 a month student loan payment, you can subtract $6.25 per hour ($1000 divide by 160 hours a month) for a net rate of 18.75 an hour. Factor in the 3 years of lost income + bar dues and such and you're probably around $17 an hour or so- which is what my buddy who quit high school in 10th grade gets paid to drive a fuel oil truck making local deliveries. Let's not get into the whole "you can go solo" schtick, as I've explained numerous times what an unrealistic farce that idea is, to the point of being a complete pipedream fantasy for most non Biglaw JD's.

Of course, most doc review jobs nowadays last only a week or so, w/ a 2 or more week "lag" between projects. Most of my friends still in the doc review game work about two weeks of every month, so they're earning even less an hour- maybe as low as $10 to $12 depending on how many hours they can get work.

Once one decides to walk away from the devlish misery of this industry for good, a law degree becomes the worst sort of "sunk cost"- like paying for barnacle removal on a ship that's lying on bottom of the Atlantic. Therein lies the problem: unlike other business or life ventures, a JD can't simply be discharged in bankruptcy so you can "start over" doing something else.

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NYC Law
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Re: Debt Ceiling Deal on Loans

Postby NYC Law » Wed Aug 03, 2011 2:34 pm

The tax cuts for the rich won't pay for themselves....

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Re: Debt Ceiling Deal on Loans

Postby Sandro » Wed Aug 03, 2011 2:37 pm

NYC Law wrote:The tax cuts for the rich won't pay for themselves....


Or tax loopholes/subsidies ... come on guys, who is a better use of federal money ? Grad students or corporations hoarding cash while cutting jobs ? Duhhhh

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Re: Debt Ceiling Deal on Loans

Postby firemed » Wed Aug 03, 2011 2:42 pm

bgdddymtty wrote:
If you say it is, let me ask you a question: did you scrutinize tuition costs this much when you decided where to go to school? How many of us looked at peer schools and cared much one way or another about tiny differences in COA between each school? Not many, I'd be willing to bet. If small differences in the cost of your legal education didn't matter then, why does this one matter so much now?



I did. I looked at tuition, cost of living, fees, every little part of the cost of law school at each one. It was my second priority- the first being getting into a good school that had good employment prospects.

I might be unusual though.

But I really do care about the extra couple grand I will accrue. And when my wife goes to medical school I am going to care about those thousands too. I am going to have 2 kids to put through college- every penny is going to count... especially since those thousands will have interest charged on them too.

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ahduth
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Re: Debt Ceiling Deal on Loans

Postby ahduth » Wed Aug 03, 2011 6:23 pm

Sandro wrote:
NYC Law wrote:The tax cuts for the rich won't pay for themselves....


Or tax loopholes/subsidies ... come on guys, who is a better use of federal money ? Grad students or corporations hoarding cash while cutting jobs ? Duhhhh


+1. While I realize this isn't a monumental amount of additional debt they're sticking us with, the whole "shared sacrifice" thing is the most ridiculous argument I've ever heard. I don't fly a corporate jet - where's the corporate jet owners' "shared sacrifice"? All I see is a unilateral disinvestment in education at the federal level.

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NYC Law
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Re: Debt Ceiling Deal on Loans

Postby NYC Law » Wed Aug 03, 2011 6:26 pm

ahduth wrote:
Sandro wrote:
NYC Law wrote:The tax cuts for the rich won't pay for themselves....


Or tax loopholes/subsidies ... come on guys, who is a better use of federal money ? Grad students or corporations hoarding cash while cutting jobs ? Duhhhh


+1. While I realize this isn't a monumental amount of additional debt they're sticking us with, the whole "shared sacrifice" thing is the most ridiculous argument I've ever heard. I don't fly a corporate jet - where's the corporate jet owners' "shared sacrifice"? All I see is a unilateral disinvestment in education at the federal level.


Um... I REFUSE to live in a country where students and those in poverty don't pay in order to allow corporate executives to continue an accelerated depreciation model on private jets.

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Re: Debt Ceiling Deal on Loans

Postby firemed » Wed Aug 03, 2011 7:34 pm

NYC Law wrote:
ahduth wrote:
Sandro wrote:
NYC Law wrote:The tax cuts for the rich won't pay for themselves....


Or tax loopholes/subsidies ... come on guys, who is a better use of federal money ? Grad students or corporations hoarding cash while cutting jobs ? Duhhhh


+1. While I realize this isn't a monumental amount of additional debt they're sticking us with, the whole "shared sacrifice" thing is the most ridiculous argument I've ever heard. I don't fly a corporate jet - where's the corporate jet owners' "shared sacrifice"? All I see is a unilateral disinvestment in education at the federal level.


Um... I REFUSE to live in a country where students and those in poverty don't pay in order to allow corporate executives to continue an accelerated depreciation model on private jets.


Luckily I can think of only a few countries where this isn't the case.

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minnbills
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Re: Debt Ceiling Deal on Loans

Postby minnbills » Thu Aug 04, 2011 12:11 am

Sandro wrote:
NYC Law wrote:The tax cuts for the rich won't pay for themselves....


Or tax loopholes/subsidies ... come on guys, who is a better use of federal money ? Grad students or corporations hoarding cash while cutting jobs ? Duhhhh


But if we give them tax cuts they'll give us jobs!!! I mean, they're hardly making any money as it is!!!

:roll:

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Re: Debt Ceiling Deal on Loans

Postby RAB » Thu Aug 04, 2011 10:58 am

Will this do anything to loans you are deferring from undergrad? When I spoke to both my carriers previously they told me those loans would not accrue interest, but what about now?

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Re: Debt Ceiling Deal on Loans

Postby schooner » Thu Aug 04, 2011 11:37 am

RAB wrote:Will this do anything to loans you are deferring from undergrad? When I spoke to both my carriers previously they told me those loans would not accrue interest, but what about now?


The general consensus around here is that the fed govt will keep paying the interest on those deferred subsidized Stafford loans (and thus no interest will accrue). They will be grandfathered in. You just won't be able to get any new subsidized Stafford loans after July 1, 2012.

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sundevil77
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Re: Debt Ceiling Deal on Loans

Postby sundevil77 » Thu Aug 04, 2011 12:02 pm

I think it's funny when people complain about the loss of unsubsidized loans. It's humorous because nearly everyone on this complains about the excess number of law students. "We need to keep down the number of law students," everyone cries. Whether it's because they want to protect wages for lawyers, or whether it's because they don't want kids getting saddled with $200K in loans and no job, it doesn't matter.

Cutting of the flow of unsubsidized loans creates a disincentive to going to law school. It's now more expensive, although only slightly so. It's no fun for those of us who are still in law school or those who will eventually attend law school. I just thought more people would recognize that this might discourage some people from going, and that's a good thing.

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vanwinkle
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Re: Debt Ceiling Deal on Loans

Postby vanwinkle » Thu Aug 04, 2011 12:06 pm

sundevil77 wrote:Cutting of the flow of unsubsidized loans creates a disincentive to going to law school. It's now more expensive, although only slightly so. It's no fun for those of us who are still in law school or those who will eventually attend law school. I just thought more people would recognize that this might discourage some people from going, and that's a good thing.

For many people, this is a smaller increase in costs than the annual tuition hikes they face at their law school. It's not a real disincentive, especially if those tuition hikes already haven't been.

The only way to really disincentivize attendance is to either reduce the incentive for the loans to be given out, or reduce the incentive for schools to accept them. To do that you'd need to do something like cap the amount of GradPlus loans available so that schools can't keep hiking tuition and expecting students to get more federal loans to fit the bill. Or make it harder for people to qualify for federally-backed student loans. Neither of these things will happen anytime soon.

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Re: Debt Ceiling Deal on Loans

Postby schooner » Thu Aug 04, 2011 12:23 pm

sundevil77 wrote:I think it's funny when people complain about the loss of unsubsidized loans. It's humorous because nearly everyone on this complains about the excess number of law students. "We need to keep down the number of law students," everyone cries. Whether it's because they want to protect wages for lawyers, or whether it's because they don't want kids getting saddled with $200K in loans and no job, it doesn't matter.

Cutting of the flow of unsubsidized loans creates a disincentive to going to law school. It's now more expensive, although only slightly so. It's no fun for those of us who are still in law school or those who will eventually attend law school. I just thought more people would recognize that this might discourage some people from going, and that's a good thing.


In all honesty I don't really mind the $2000-3000 costs added to the 150K+ total cost, if it's helping out the country. What pisses me off is that 1) low-income & middle class students took a hit while other, superrich groups made off better (e.g., hedge fund managers and the carried interest tax loophole), and 2) this does nothing to address overly $$ law school costs. So my sacrifice will go to waste and is being extracted from me mostly because I'm part of a politically weak group.

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Re: Debt Ceiling Deal on Loans

Postby anniebelle330 » Thu Aug 04, 2011 1:01 pm

I completely agree with poster above. It is not shared sacrifice when the debt deal included NOTHING about closing tax loopholes for corporations and the wealthy.

Plus, while cutting subsidized loans may generate $18 billion in 10 years, ONLY THREE MONTHS in Afghanistan costs $27 billion! 10 years, 18 billion. 3 months, 27 billion.

This is not shared sacrifice. It's screwing over those who have little power [yet] ... students.

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Re: Debt Ceiling Deal on Loans

Postby bgdddymtty » Thu Aug 04, 2011 1:08 pm

schooner wrote:In all honesty I don't really mind the $2000-3000 costs added to the 150K+ total cost, if it's helping out the country. What pisses me off is that 1) low-income & middle class students took a hit while other, superrich groups made off better (e.g., hedge fund managers and the carried interest tax loophole), and 2) this does nothing to address overly $$ law school costs. So my sacrifice will go to waste and is being extracted from me mostly because I'm part of a politically weak group.

1. You do realize you're comparing subsidies with taxes, right? And that there's a huge difference between the two? The "super-rich" are being allowed to keep as much of their money as they were previously allowed to, while you (we) are no longer going to get a handout. It wasn't your (our) money to begin with. And guess who pays for the bulk of those handouts? Those dastardly rich people.

2. In that vein, the champions of class warfare always pick out folks like hedge fund managers as their foils, asserting that they don't pay their "fair share," whatever that is. The thing is, there is no class of people in America who pay higher taxes than investors. Why? Because they pay their taxes on capital gains and dividend income.

But aren't capital gains taxed at a lower rate than wage income? Nope, because investment income is taxed twice. Any money distributed as dividends, and any additional value represented by capital gains, is taxed as corporate profits (or will be in the future, in the case of companies whose stock price is more a function of future potential than current profitability), and the investor only gets what's left over afterwards. (By the way, our corporate tax rate is the highest in the industrialized world.) It doesn't make any sense to tax that money again once it's returned to the investor, since the corporation is nothing but the group of stockholders. But we do it anyway, and because the first part of the tax was hidden, we complain that investors are getting away with something.

3. If we wanted to seriously fix the tuition/market saturation issues, we'd get the government out of the education financing business altogether. As long as people can borrow virtually unlimited funds without any regard to their likely ability to repay, demand will continue to be artificially inflated. New schools will continue to fill their classrooms, and tuitions will continue to skyrocket. If we put it in the hands of private lenders, with no guarantees, those institutions would find ways to evaluate students' creditworthiness, and I'm willing to bet any amount of money that job prospects would be a significant part of the equation. Some schools would close, and the rest would be faced with the need to provide a genuine value proposition to prospective students. No longer would students be beholden to the "BigLaw or bust" mentality, and that freedom might force BigLaw to rethink its employment model. It would be a huge win for virtually every student (law or otherwise), but there's no way to generate the political will to convince people that government is the scourge rather than the savior in this area.

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Re: Debt Ceiling Deal on Loans

Postby albusdumbledore » Thu Aug 04, 2011 1:35 pm

bgdddymtty wrote:
schooner wrote:In all honesty I don't really mind the $2000-3000 costs added to the 150K+ total cost, if it's helping out the country. What pisses me off is that 1) low-income & middle class students took a hit while other, superrich groups made off better (e.g., hedge fund managers and the carried interest tax loophole), and 2) this does nothing to address overly $$ law school costs. So my sacrifice will go to waste and is being extracted from me mostly because I'm part of a politically weak group.

1. You do realize you're comparing subsidies with taxes, right? And that there's a huge difference between the two? The "super-rich" are being allowed to keep as much of their money as they were previously allowed to, while you (we) are no longer going to get a handout. It wasn't your (our) money to begin with. And guess who pays for the bulk of those handouts? Those dastardly rich people.

2. In that vein, the champions of class warfare always pick out folks like hedge fund managers as their foils, asserting that they don't pay their "fair share," whatever that is. The thing is, there is no class of people in America who pay higher taxes than investors. Why? Because they pay their taxes on capital gains and dividend income.

But aren't capital gains taxed at a lower rate than wage income? Nope, because investment income is taxed twice. Any money distributed as dividends, and any additional value represented by capital gains, is taxed as corporate profits (or will be in the future, in the case of companies whose stock price is more a function of future potential than current profitability), and the investor only gets what's left over afterwards. (By the way, our corporate tax rate is the highest in the industrialized world.) It doesn't make any sense to tax that money again once it's returned to the investor, since the corporation is nothing but the group of stockholders. But we do it anyway, and because the first part of the tax was hidden, we complain that investors are getting away with something.

3. If we wanted to seriously fix the tuition/market saturation issues, we'd get the government out of the education financing business altogether. As long as people can borrow virtually unlimited funds without any regard to their likely ability to repay, demand will continue to be artificially inflated. New schools will continue to fill their classrooms, and tuitions will continue to skyrocket. If we put it in the hands of private lenders, with no guarantees, those institutions would find ways to evaluate students' creditworthiness, and I'm willing to bet any amount of money that job prospects would be a significant part of the equation. Some schools would close, and the rest would be faced with the need to provide a genuine value proposition to prospective students. No longer would students be beholden to the "BigLaw or bust" mentality, and that freedom might force BigLaw to rethink its employment model. It would be a huge win for virtually every student (law or otherwise), but there's no way to generate the political will to convince people that government is the scourge rather than the savior in this area.


I much agree with your third point. Government loans are the source of the problem in the first place. That being said, the rationale behind this was so that Congress could keep and increase its Pell grant contributions. Undergrads actually came out better because of this and at graduate students' expense. The whole "everyone should go to college" ruse has gone a little too far.

schooner
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Re: Debt Ceiling Deal on Loans

Postby schooner » Thu Aug 04, 2011 1:37 pm

bgdddymtty wrote:1. You do realize you're comparing subsidies with taxes, right? And that there's a huge difference between the two? The "super-rich" are being allowed to keep as much of their money as they were previously allowed to, while you (we) are no longer going to get a handout. It wasn't your (our) money to begin with. And guess who pays for the bulk of those handouts? Those dastardly rich people.


Your phrasing here suggests that I'd be picking a fight with a conservative/libertarian ideologue who reflexively thinks in terms of "handouts" and "the govt confiscating the rich's hard-earned money." So I'm going to stick to the basic points for everyone else. Deficit reduction can come from reductions in both tax expenditures and discretionary & mandatory spending cuts. (I hope my catch phrases here too lets you know that yes, I know the difference.) Due to a small but influential group of extremist right-wing lawmakers, who would credibly threaten default on the nation's debt, Democrats had to cave to their demands of no revenue increases in the final deal. Thus we lost an opportunity for those who can contribute more to solve the problem, actually contribute more. If someone in my family needs an expensive surgery, yes, I think my rich older sister should contribute more than my destitute little brother.

2. In that vein, the champions of class warfare always pick out folks like hedge fund managers as their foils, asserting that they don't pay their "fair share," whatever that is. The thing is, there is no class of people in America who pay higher taxes than investors. Why? Because they pay their taxes on capital gains and dividend income.

But aren't capital gains taxed at a lower rate than wage income? Nope, because investment income is taxed twice. Any money distributed as dividends, and any additional value represented by capital gains, is taxed as corporate profits (or will be in the future, in the case of companies whose stock price is more a function of future potential than current profitability), and the investor only gets what's left over afterwards. (By the way, our corporate tax rate is the highest in the industrialized world.) It doesn't make any sense to tax that money again once it's returned to the investor, since the corporation is nothing but the group of stockholders. But we do it anyway, and because the first part of the tax was hidden, we complain that investors are getting away with something.


Bullshit.

Since you were condescending to me, I will ask rhetorically if you know what the carried interest loophole even is. Here is a primer: Private equity's egregious tax loophole and "there is something questionable about a tax provision that makes it possible for individuals with multi-million dollar incomes to pay tax at lower rates than their secretaries." Warren Buffett: “If you believe in taxing people who earn income on their occupation, I think you should tax people on carried interest.”

And your talking points about corporate tax rates are clearly from Republicans, who don't even have their facts straight. Corporate profits are at an all-time high, but corporations are paying lower taxes than ever before -- and some aren't paying any at all.

3. If we wanted to seriously fix the tuition/market saturation issues, we'd get the government out of the education financing business altogether. As long as people can borrow virtually unlimited funds without any regard to their likely ability to repay, demand will continue to be artificially inflated. New schools will continue to fill their classrooms, and tuitions will continue to skyrocket. If we put it in the hands of private lenders, with no guarantees, those institutions would find ways to evaluate students' creditworthiness, and I'm willing to bet any amount of money that job prospects would be a significant part of the equation. Some schools would close, and the rest would be faced with the need to provide a genuine value proposition to prospective students. No longer would students be beholden to the "BigLaw or bust" mentality, and that freedom might force BigLaw to rethink its employment model. It would be a huge win for virtually every student (law or otherwise), but there's no way to generate the political will to convince people that government is the scourge rather than the savior in this area.


I kind of lost interest by this point, and it was hard to pick out your point other than "govt should be out of the education financing business altogether." I do agree there's some kind of a deeply problematic link between govt subsidies and escalating higher education costs.

But let me also say that even conservative (mainstream) economists will concede that it would be irresponsible and unwise of society and government to leave some public policy priorities purely to the market. Market failures happen, and a nation's human capital, and thus the financing of education as a general matter, is arguably one of those public goods. (Now does law school fit into the "public good" picture? That's a whole another debate.)

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ahduth
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Re: Debt Ceiling Deal on Loans

Postby ahduth » Thu Aug 04, 2011 6:11 pm

bgdddymtty wrote:3. If we wanted to seriously fix the tuition/market saturation issues, we'd get the government out of the education financing business altogether. As long as people can borrow virtually unlimited funds without any regard to their likely ability to repay, demand will continue to be artificially inflated. New schools will continue to fill their classrooms, and tuitions will continue to skyrocket. If we put it in the hands of private lenders, with no guarantees, those institutions would find ways to evaluate students' creditworthiness, and I'm willing to bet any amount of money that job prospects would be a significant part of the equation. Some schools would close, and the rest would be faced with the need to provide a genuine value proposition to prospective students. No longer would students be beholden to the "BigLaw or bust" mentality, and that freedom might force BigLaw to rethink its employment model. It would be a huge win for virtually every student (law or otherwise), but there's no way to generate the political will to convince people that government is the scourge rather than the savior in this area.


This is a disturbing vision of America's future. While other countries aggressively seek to educate their workforces, we will seek to shrink ours because demand for education is "artificially inflated." Students will be evaluated on the basis of their creditworthiness, which will largely mean the ability of their parents to repay the loans, not "job prospects" as you put it. (Evaluating job prospects for fresh college graduates seems like a meaningless exercise from a credit evaluation standpoint.) Private lenders will ask themselves why they're in this business in the first place, and we'll start to see things like floating rate educational loans.

I think your view of this is rather blinkered, based on your "biglaw or bust" comments. No one is going to argue that there are too many lawyers. But if you're arguing that there are too many engineers or nurses... not sure where you've been lately. Conservative economics is cute in a vacuum, but your application here seems to only end in an even more deeply unequal society. The Gilded Age may have been great times for the rich, but what came afterwards wasn't fun for anyone.

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Re: Debt Ceiling Deal on Loans

Postby JJDancer » Tue Aug 16, 2011 11:32 pm

I just want to confirm that all previous UG loans (federal, private etc) automatically go into "deferment" upon beginning law school. Yes interest will accrue but I don't have to "apply" for deferment or turn in a form or anything - it's automatic?

areyouinsane
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Re: Debt Ceiling Deal on Loans

Postby areyouinsane » Wed Aug 17, 2011 8:06 pm

This is a disturbing vision of America's future. While other countries aggressively seek to educate their workforces, we will seek to shrink ours because demand for education is "artificially inflated." Students will be evaluated on the basis of their creditworthiness, which will largely mean the ability of their parents to repay the loans, not "job prospects" as you put it. (Evaluating job prospects for fresh college graduates seems like a meaningless exercise from a credit evaluation standpoint.) Private lenders will ask themselves why they're in this business in the first place, and we'll start to see things like floating rate educational loans.


Problem is, the educated workforces in other countries can and do work (and skilled work at that) for pennies on the dollar as opposed to their American counterparts due to drastically lower COL's in those countries. Need 100 engineers for a project? Get 'em in India for $10 an hour. Need a squad of 250 doc review "attorneys" to read corporate emails and other nonsense? India= $6-8 bucks an hour as opposed to $25-$30 an hour here. The result of a "global economy" is that US wages and living standards fall to little above 3rd world levels, and jobs even for highly educated people are few and far between. It's the systemic gutting of what we used to call the "middle class." Income inequality in the US is literally absurd, with CEOs paid tens or hundreds of millions while most of the actual workers barely earn a living wage. Just look at what "Neutron Jack" Welch did at GE re: outsourcing.

Fact is that an ABA lawschool program isn't an "education" in any sense of the word anyway. Mostly it's a manic focus on obscure, irrelevant exceptions to exceptions and crackpot "social policy" nonsense and other garbage. A new JD from ANY ABA lawschool isn't able to handle a fender bender case competently on their own, or make routine court appearances and/or depositions. Law is the only industry I can think of that features an education model which lacks ANY practical experience component.

The sole purpose of an ABA lawschool is to vacuum up loads of easy student loan cash, create cushy, do-nothing jobs for Biglaw washouts (professors) and even higher paying admin jobs for people who do essentially nothing. The students are nothing but middlemen needed to sign the loan paperwork and buy into the bogus pipedream of becoming rich like the lawyers on TV.

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ahduth
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Re: Debt Ceiling Deal on Loans

Postby ahduth » Wed Aug 17, 2011 8:14 pm

areyouinsane wrote:
This is a disturbing vision of America's future. While other countries aggressively seek to educate their workforces, we will seek to shrink ours because demand for education is "artificially inflated." Students will be evaluated on the basis of their creditworthiness, which will largely mean the ability of their parents to repay the loans, not "job prospects" as you put it. (Evaluating job prospects for fresh college graduates seems like a meaningless exercise from a credit evaluation standpoint.) Private lenders will ask themselves why they're in this business in the first place, and we'll start to see things like floating rate educational loans.


Problem is, the educated workforces in other countries can and do work (and skilled work at that) for pennies on the dollar as opposed to their American counterparts due to drastically lower COL's in those countries. Need 100 engineers for a project? Get 'em in India for $10 an hour. Need a squad of 250 doc review "attorneys" to read corporate emails and other nonsense? India= $6-8 bucks an hour as opposed to $25-$30 an hour here. The result of a "global economy" is that US wages and living standards fall to little above 3rd world levels, and jobs even for highly educated people are few and far between. It's the systemic gutting of what we used to call the "middle class." Income inequality in the US is literally absurd, with CEOs paid tens or hundreds of millions while most of the actual workers barely earn a living wage. Just look at what "Neutron Jack" Welch did at GE re: outsourcing.

Fact is that an ABA lawschool program isn't an "education" in any sense of the word anyway. Mostly it's a manic focus on obscure, irrelevant exceptions to exceptions and crackpot "social policy" nonsense and other garbage. A new JD from ANY ABA lawschool isn't able to handle a fender bender case competently on their own, or make routine court appearances and/or depositions. Law is the only industry I can think of that features an education model which lacks ANY practical experience component.

The sole purpose of an ABA lawschool is to vacuum up loads of easy student loan cash, create cushy, do-nothing jobs for Biglaw washouts (professors) and even higher paying admin jobs for people who do essentially nothing. The students are nothing but middlemen needed to sign the loan paperwork and buy into the bogus pipedream of becoming rich like the lawyers on TV.


So the answer is to stop public funding of education? That... kind of feels like giving up. This is the United States of America. I feel like we should be able to have the best engineers in the world. Maybe you're telling me that era is over.

areyouinsane
Posts: 208
Joined: Tue Jun 14, 2011 3:22 pm

Re: Debt Ceiling Deal on Loans

Postby areyouinsane » Wed Aug 17, 2011 8:45 pm

So the answer is to stop public funding of education? That... kind of feels like giving up. This is the United States of America. I feel like we should be able to have the best engineers in the world. Maybe you're telling me that era is over.


It is over, and has been for some time. It started under Reagan and NAFTA sure didn't help. Of course the idea was that we didn't need all these grimy old factories and such- the 3rd world serfs of the world could stich together our Nikes and solder together our radios & TVs for a nickle an hour.

None of it would matter because Americans would all become "educated" via college and grad school and push meaningless, voluminous stacks of shitpaper from one side of a cubicle to another. But now SURPRISE! --- the serfs of the 3rd world also have education now, and will push that same shitpaper for a fraction of what Americans need to survive. This country's best days are simply behind it, and anyone who thinks otherwise is delusional or in deep denial/

With regards to law, it was really only an "elite" profession (as opposed to a dime a dozen, churn n' burn industry) from about the end of WWII to probably the very early 90s. Prior to WWII most lawyers were trained on the job and requirements to practice were pretty lax in most states.

After WWII we saw the rise of the ABA lawschool & bar'zam model, where no one could practice w/out being pretty smart. There weren't many schools, and admission standards were high. Once admitted, upwards of 50% of the class would be flunked out after 1st year. The supply/demand metrics were excellent, and thus most lawyers earned a comfortable upper class living and didn't really have to work terribly hard. Practice involved a lot more common law and drafting original arguments, not cut n' paste slop like we see today in insurance defense and other gutter practice areas.

But that model couldn't last forever. Student loan cash was easy and flowing fast, and the TTT's started popping up all over the place. What was once a true profession with high standards and low supply quickly morphed into an absurd oversupply, with a drastic reduction in the quality of the bar. People who could barely read & write flooded the NYLS, Cooleys, Brooklyns, 'Bozos and such of the world, and why flunk anyone out when that would end the student loan gravy train? The bar exam was likewise dumbed down, since it was too hard on "minorities" and people with learning disabilities, etc.

Now the party is pretty much over. It would take closing down 75% of the current schools and probably almost a generation to cull the oversupply and get the metrics back to a reasonable level. But that's unlikely to happen since the ABA will accredit anyone who opens a law school in the spare bay of his garage. Hell, they just green lighted a Cooley campus in Florida of all places. The Cooleys of the world are run by pretty smart businesspeople who see the massive, risk-free profits out there for the taking. No expensive labs, no equipment, nothing but a few big rooms and a few Biglaw washouts to piss away 3 years with time-wasting Socratic bullshit and a few very easy exams.

By 2020 there will be a Cooley campus in half the US states, and one lawyer for about every 10 citizens. Stop and ask yourself how many lawyers you or your family have needed in your life? Biglaw will always be around in some form, but for everyone else things are grim indeed.




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