. Forum

[Robb]

When people consider attending a school, they don't consider the school's employment prospects against the average cost or even the total cost, without a scholarship, of attending a school. They consider the employment prospects against their own cost. So, a perfect ranking from an applicant's perspective wouldn't account for cost at all (unless it did so in a personalized way), because cost is something that needs to be weighed personally, rather than generally. That is, I don't care if Columbia costs, on average, $20,000 more than Chicago if Chicago will cost me $50,000 more than Columbia.

Of course, one might say that by including cost in rankings, you incentivize greater scholarships, or reduced tuition. Of course, there is already an incentive to reduce tuition or increase scholarships, because people will factor that into their own measure of personal costs.

But, if you want to up the incentives, and the goal is to provide a ranking for applicants, total cost, rather than average cost, is the way to go. The incentive remains, just in the form of tuition reduction rather than scholarship increases, and it retains the value to applicants because their personal financial balancing is not skewed by what the scholarships a school offers other applicants (which any individual applicant really doesn't likely care about).

[jenesaislaw]

Tuition reduction can be accomplished with a return to the pre-2006 bankruptcy law. The 2006 changes made student loans almost virtually non-dischargeable debt, thereby greatly reducing lender risk. Under the pre-2006 bankruptcy laws, lenders could lose their principle & interest if the borrower filed Chapter 7 bankruptcy. When lenders stop loaning money freely & tighten credit requirements & make borrowers justify the amount borrowed, many law schools will close & others are likely to shrink class size while also reducing tuition. Very similar to what caused the real estate bubble (easy money & automatic appraisal approval for just about any valuation) which burst in 2007.

Wouldn't work in the post-2010 world without changes to the federal lending system. That said, federal lending is something LST has been working on behind the scenes, with an infrequent public comment. More coming on this this summer, I think.

@Robb, I think that's what the ATL ranking (and the component on our site too) does now already and I agree that it's some incentive, but just how much remains to be seen.

[CanadianWolf]

Why ? Even the President has echoed this sentiment according to a news report within the last few weeks. The change back to the old bankruptcy provisions will affect the federal lending system. I think that you may be starting a step too late for comprehensive student loan reform (if I understand your position).

[CanadianWolf]

The credit card industry was the driving force behind the late 2005/2006 bankruptcy law changes. While focusing on bank lending laws may avoid fighting the credit card industry, it will intrude on banks' lending practices overall which may be too much of a fight as banks have significant clout on Capitol Hill. Changing a tiny portion of the bankruptcy law should be much easier while allowing the credit markets to resolve the rest. This method should be attractive to both political parties, whereas bank reform may end up as a battle between the two main political parties since it may have significant undesirable effects on the economy. In my opinion, reforming bank lending practices to alleviate student loan concerns is overkill that we may all regret as the economy falls into recession.

[jenesaislaw]

Why ? Even the President has echoed this sentiment according to a news report within the last few weeks. The change back to the old bankruptcy provisions will affect the federal lending system. I think that you may be starting a step too late for comprehensive student loan reform (if I understand your position).

Well, we're talking about law schools. You can borrow the full cost of attendance from the Department of Education. Any talk I've seen about restoring bankruptcy protections is only in regard to private loans. Those loans aren't used for law school, so it'd have no impact on law school tuition without changes to the federal program, e.g. limiting borrowing so that private loans become relevant to law school again.

[CanadianWolf]

A distinction between private & public loans for law school tuition with respect to bankruptcy laws ? In the past, one could reaffirm discharged educational loans, but it was not mandatory for a Chapter 7 discharge. Wouldn't dischargeability of student loan indebtedness cover both public & private loans ?

[jenesaislaw]

A distinction between private & public loans for law school tuition with respect to bankruptcy laws ? In the past, one could reaffirm discharged educational loans, but it was not mandatory for a Chapter 7 discharge. Wouldn't dischargeability of student loan indebtedness cover both public & private loans ?

Even if it did apply to publicly and privately held loans, and I doubt it would because PAYE would probably justify excluding govt-held loans, would the government be less inclined to lend? If not, then no impact on tuition prices. Something would need to change to the federal loan decision-process for there to be an impact I think.

[CanadianWolf]

I disagree. Nevertheless, something needs to be done about student loan debt. An analysis of each side needs to be done. The path of least, or lessor, resistance might be wise so that reform doesn't get delayed due to political influences. In my opinion, some relief is better than no relief.

P.S. Why would PAYE result in a bankruptcy exclusion ? If student loans are capable of being discharged in bankruptcy, are you suggesting that PAYE removes student loans from that category ? If so, what category are PAYE loans in that would exclude them from bankruptcy ?

[jenesaislaw]

It's more that the existence of PAYE makes including PAYE-eligible loans in bankruptcy protection very unlikely.

[CanadianWolf]

Again, I do not agree, but there's more than one way to skin a cat.