minnbills wrote:I think you're being overly pessimistic about law graduates' lifetime earnings. Even if people never work in law in the long run they will still make quite a bit of money, relative to the rest of the population, of course.
And if Mystal isn't making payments, won't they go after his estate when he dies? Plus, I still think a strong majority of law graduates are going to make payments as well as they can.
Maybe. I won't claim to know for certain that it's a losing bet to loan to students going to low ranked schools. However, I think it's very safe to assume that the federal loans and guarantees have contributed to tuition price inflation.
As to collecting on Mystal's estate, you already have a losing loan at that point. You're not making a positive rate of return. To get a 7% return on a $100,000 loan that you don't collect on for 60 years, you would have to collect about $6 million dollars from the estate. But we're probably getting a bit far afield there.