Are fewer people applying to law school? Forum

[MistakenGenius]

Post removed.

[roranoa]

He is the all seeing eye

How much credit does he have? 'Cause I want to believe him. I want to believe that applications are going down.

500 posts and you don't know Spivey? Who are you? Mike and his partner Karen likely have the most credibility of anyone on this site. If he says, apps are going down, they're going down.

Whoa, ok, geeze....

[Skump]

I guess my big question is: What's the end game for all of this?

Is there any evidence that the powers that be have a plan, or any hope of contriving a plan, to prevent a catastrophic collapse of the higher ed. industry?

Would anyone argue the point that education costs are on an unsustainabile inflationary curve? It's all made possible by no standards, blank check federal lending. The key point is that the current "system" depends on this largess.

But think of the sheer scale of this problem - not only in terms of abstract dollars involved, but in terms of misallocation of physical capital. There are approximately 4600 Title IV eligible, degree granting institutions in the United States (about 7,000 if you include non-degree granting, btw!). That's an average of 92 degree granting institutions eligible for federal loan money per state. Thousands upon thousands of offices, theatres, laboratories, stadiums... the lights in many of these facilities are kept on to a substantial extent by irrational federal loan policy.

What is going to happen when the spigot finally gets turned off? What the hell is going to happen to all of this crap? Are we going to see the educational equivalent of chinese "ghost cities?"

Or will the "plan" simply be to cap fed loans at some preposterous level (presumably inflation adjusted!) and keep the plebs as debt slaves for all enternity so that the majority of "Center for Hermeneutical Studies" and diploma mill law schools can stay open?

[NYSprague]

I guess my big question is: What's the end game for all of this?

Is there any evidence that the powers that be have a plan, or any hope of contriving a plan, to prevent a catastrophic collapse of the higher ed. industry?

Would anyone argue the point that education costs are on an unsustainabile inflationary curve? It's all made possible by no standards, blank check federal lending. The key point is that the current "system" depends on this largess.

But think of the sheer scale of this problem - not only in terms of abstract dollars involved, but in terms of misallocation of physical capital. There are approximately 4600 Title IV eligible, degree granting institutions in the United States (about 7,000 if you include non-degree granting, btw!). That's an average of 92 degree granting institutions eligible for federal loan money per state. Thousands upon thousands of offices, theatres, laboratories, stadiums... the lights in many of these facilities are kept on to a substantial extent by irrational federal loan policy.

What is going to happen when the spigot finally gets turned off? What the hell is going to happen to all of this crap? Are we going to see the educational equivalent of chinese "ghost cities?"

Or will the "plan" simply be to cap fed loans at some preposterous level (presumably inflation adjusted!) and keep the plebs as debt slaves for all enternity so that the majority of "Center for Hermeneutical Studies" and diploma mill law schools can stay open?

As far as law goes, the powers that be seem to be hoping that this decrease in students is just temporary. No major structural changes have been seriously considered. If you want to see how out of touch law professors are, read some of the posts on the faculty lounge about the drop in LSAT takers.

[roranoa]

I guess my big question is: What's the end game for all of this?

Is there any evidence that the powers that be have a plan, or any hope of contriving a plan, to prevent a catastrophic collapse of the higher ed. industry?

Would anyone argue the point that education costs are on an unsustainabile inflationary curve? It's all made possible by no standards, blank check federal lending. The key point is that the current "system" depends on this largess.

But think of the sheer scale of this problem - not only in terms of abstract dollars involved, but in terms of misallocation of physical capital. There are approximately 4600 Title IV eligible, degree granting institutions in the United States (about 7,000 if you include non-degree granting, btw!). That's an average of 92 degree granting institutions eligible for federal loan money per state. Thousands upon thousands of offices, theatres, laboratories, stadiums... the lights in many of these facilities are kept on to a substantial extent by irrational federal loan policy.

What is going to happen when the spigot finally gets turned off? What the hell is going to happen to all of this crap? Are we going to see the educational equivalent of chinese "ghost cities?"

Or will the "plan" simply be to cap fed loans at some preposterous level (presumably inflation adjusted!) and keep the plebs as debt slaves for all enternity so that the majority of "Center for Hermeneutical Studies" and diploma mill law schools can stay open?

What are you talking about????

[NYSprague]

^^^^
A large factor is that law school costs way beyond what it should cost, has outpaced the increase in tuition of other professional schools and the majority of jobs don't allow you to repay tuition.

[Skump]

What are you talking about????

The fact that we have an absurdly overgrown higher ed sector financed by irrational government loans whose principals continue on an unsustainable inflationary path.

It's a way bigger problem than law school. The question is, what happens once the Fed puts an end to this nonsense? There are a whole lot of jobs and a whole lot of stuff that depends on current fed loan policy, so it's now very questionable how graceful the landing can be for higher ed.

[RCSOB657]

What are you talking about????

The fact that we have an absurdly overgrown higher ed sector financed by irrational government loans whose principals continue on an unsustainable inflationary path.

You mean like the federal government as a whole? Gotcha.

[JCougar]

What are you talking about????

The fact that we have an absurdly overgrown higher ed sector financed by irrational government loans whose principals continue on an unsustainable inflationary path.

It's a way bigger problem than law school. The question is, what happens once the Fed puts an end to this nonsense? There are a whole lot of jobs and a whole lot of stuff that depends on current fed loan policy, so it's now very questionable how graceful the landing can be for higher ed.

It's not the government that's causing inflation. It wasn't more than a few years ago that there were limits on how much the government would lend. Guess what? That didn't stop inflation, because private lenders stepped in.

It's the consumers of education that aren't acting rationally--and it's partially because schools were and still are actively misleading people about career placement, and it's because cultural myths persist that any money spent on education is a good idea. Having infinity loan money available without having any constraints on tuition isn't helping matters, but if the government got completely out of the loan business, we'd still be seeing inflation due to private lending--like we saw before.

[Danger Zone]

What are you talking about????

The fact that we have an absurdly overgrown higher ed sector financed by irrational government loans whose principals continue on an unsustainable inflationary path.

It's a way bigger problem than law school. The question is, what happens once the Fed puts an end to this nonsense? There are a whole lot of jobs and a whole lot of stuff that depends on current fed loan policy, so it's now very questionable how graceful the landing can be for higher ed.

You know the Fed (meaning Federal Reserve Bank, which is how "the Fed" is used colloquially) has nothing to do with the growth of student loan debt, right? They have no way of "put[ting] an end to this nonsense."

[JCougar]

And it's also because the higher education market is one of those quirky markets where competition actually drives UP costs. With each school engaged in a prestige race, and with prestige being more valuable than price in the eyes of consumers, the market rewards those who raise prices.

One of the biggest myths of neoclassical economics is that competition always lowers prices. It doesn't.

[MikeJD]

And it's also because the higher education market is one of those quirky markets where competition actually drives UP costs. With each school engaged in a prestige race, and with prestige being more valuable than price in the eyes of consumers, the market rewards those who raise prices.

One of the biggest myths of neoclassical economics is that competition always lowers prices. It doesn't.

What drives up cost is federally insured/provided student loans that take risk(market) out of the equation.. If the government stopped insuring/providing loans no one could borrow any money tuitions would plunge..

[MikeJD]

We are going to see a significant drop this cycle.

Do you see this applying to the t14 too Mike?

I think it is highly, highly likely applications will be down to a number of t14 schools this cycle, yes. We will know a bit more in about a month when the June data in full comes out.

As far as long-term, that is must more difficult to predict. We are going to hit a bottom at some point, as there will always be a critical mass of people who want to go to law school. I personally think we are not very far from said bottom, but I've also been saying that for two years now. So long-term, anyone's guess is as good as the other. This cycle, down, down down!

Most t-14 schools had a pretty significant increase for 2013/2014 so a decrease for 2014/2015 may not be too bad.

[NYSprague]

^^^^
Increase in what, applications? Many T14 schools have smaller class sizes. An increase in applications can be from more fee waivers, it doesn't mean much except they can claim high selectivity.

[JCougar]

What drives up cost is federally insured/provided student loans that take risk(market) out of the equation.. If the government stopped insuring/providing loans no one could borrow any money tuitions would plunge..

Not necessarily. There's two ways the market could react--one is not giving out so much loan money. But banks don't want that because you can't make a profit on loans you don't give out.

The second way is to simply raise interest rates to cover your risk. Which actually happens a lot. How do you think those payday loan stores survive?

Leaving this to the "free market" would not limit tuition inflation, but it would also open the door to usurious loan terms.

The government should just set a cap on tuition and say you don't get any federal loans at all if you go over this cap.

[Skump]

What are you talking about????

The fact that we have an absurdly overgrown higher ed sector financed by irrational government loans whose principals continue on an unsustainable inflationary path.

It's a way bigger problem than law school. The question is, what happens once the Fed puts an end to this nonsense? There are a whole lot of jobs and a whole lot of stuff that depends on current fed loan policy, so it's now very questionable how graceful the landing can be for higher ed.

You know the Fed (meaning Federal Reserve Bank, which is how "the Fed" is used colloquially) has nothing to do with the growth of student loan debt, right? They have no way of "put[ting] an end to this nonsense."

That was probably confusing - I was just referring to the Fed as in the "feds" or just the Federal government. Not speaking about the Federal Reserve in this case.

[Dafaq]

As long as applicants with mediocre GPAs and 165 LSATs are willing to sign up, the drop will not be significant. It is up to the candidate to walk away.

Of course this is harder than it looks given the school’s polished sales pitch that intentionally skirts their poor employment record. Our grads are partners, state judges, community leaders, etc. Megyn Kelly graduated from a tier3 school and look at her success says the dean with a twinkle in his eye….these starry-eyed kids don’t stand a chance.

[MikeJD]

What drives up cost is federally insured/provided student loans that take risk(market) out of the equation.. If the government stopped insuring/providing loans no one could borrow any money tuitions would plunge..

Not necessarily. There's two ways the market could react--one is not giving out so much loan money. But banks don't want that because you can't make a profit on loans you don't give out.

The second way is to simply raise interest rates to cover your risk. Which actually happens a lot. How do you think those payday loan stores survive?

Leaving this to the "free market" would not limit tuition inflation, but it would also open the door to usurious loan terms.

The government should just set a cap on tuition and say you don't get any federal loans at all if you go over this cap.

banks are lending because there is no risk to them because the government is giving them the money if the student cant pay.. The loans don't get made as soon as the government doesn't guarantee the debt to the lender..

[JCougar]

banks are lending because there is no risk to them because the government is giving them the money if the student cant pay.. The loans don't get made as soon as the government doesn't guarantee the debt to the lender..

Historically, this hasn't happened. Banks simply raise interest rates on everyone to cover the risk and still make loans anyway.

[lawhopeful10]

banks are lending because there is no risk to them because the government is giving them the money if the student cant pay.. The loans don't get made as soon as the government doesn't guarantee the debt to the lender..

Historically, this hasn't happened. Banks simply raise interest rates on everyone to cover the risk and still make loans anyway.

It would just shift the costs slightly. If the loans were private people could discharge them in bankruptcy. The lenders would factor this in as they do in say the payday lending industry and they would charge a higher interest rate. On the other hand though the availability of the bankruptcy option might help out certain people that really need it although I don't know enough about bankruptcy law to say that with certainty but that seems like why we have bankruptcy. People are terrible at factoring in the interest in the future which is why industries like banking are often heavily regulated, to protect people. People have suggested before that the Government could try and make it somehow that people who likely could never pay off a student loan amount not be allowed to take it out (think sticker at Cooley) but that seems like it would be difficult and messy to implement.

Edit: There could be an argument though that maybe forcing people to work with private lenders for education will cause them to act more rationally when it comes to responsible borrowing. I don't know if that premise is true though.

[MikeJD]

banks are lending because there is no risk to them because the government is giving them the money if the student cant pay.. The loans don't get made as soon as the government doesn't guarantee the debt to the lender..

Historically, this hasn't happened. Banks simply raise interest rates on everyone to cover the risk and still make loans anyway.

Before the Higher Education Act of 1965(start of federally insured student loans) no one borrowed money to go to college because you couldn't.. it's only when federally insured loans began colleges started increasing costs because obviously they knew students could now borrow money.

[JCougar]

Before the Higher Education Act of 1965(start of federally insured student loans) no one borrowed money to go to college because you couldn't.. it's only when federally insured loans began colleges started increasing costs because obviously they knew students could now borrow money.

Is that what you think we should go back to?

[First Offense]

Before the Higher Education Act of 1965(start of federally insured student loans) no one borrowed money to go to college because you couldn't.. it's only when federally insured loans began colleges started increasing costs because obviously they knew students could now borrow money.

Is that what you think we should go back to?

It would keep those pesky poor people out of college.

Seriously - all the fed gov. needs to do is to enforce certain standards (graduation rate, employment prospects, etc.) as a string attached to that sweet federal teet.

[JCougar]

Before the Higher Education Act of 1965(start of federally insured student loans) no one borrowed money to go to college because you couldn't.. it's only when federally insured loans began colleges started increasing costs because obviously they knew students could now borrow money.

Is that what you think we should go back to?

It would keep those pesky poor people out of college.

Seriously - all the fed gov. needs to do is to enforce certain standards (graduation rate, employment prospects, etc.) as a string attached to that sweet federal teet.

Right. There's no reason why we have to use this situation to try and score cheap political points. There's absolutely no reason why we can't have both government loans combined with some sort of standards other than "we'll give you infinity money for anyone you can find that can so much as fog a mirror and scribble something on a FAFSA document." Just say federal loans simply aren't available to schools that charge too much, or that graduate too many un- or under-employed people.

[MikeJD]

Before the Higher Education Act of 1965(start of federally insured student loans) no one borrowed money to go to college because you couldn't.. it's only when federally insured loans began colleges started increasing costs because obviously they knew students could now borrow money.

Is that what you think we should go back to?

yeah.. we should go back to when college was cheap like 100 dollars a year and you didn't really need it to get 95% of the jobs..