PSLF revisions: New budget proposal screws anyone in PI. Forum

[The Dark Shepard]

There's a new thread on this article, but I thought I should add it here. I'm feeling worse and worse about the future of IBR/PAYE/PSLF, especially after looking at the comments. Most people have no sympathy for us and think we should pay back what we borrowed without any government programs. I'm still very worried about retroactive changes.

http://finance.yahoo.com/news/federal-p ... 00861.html

Yahoo comments are filled with conservative Boomer jackasses. I wouldn't put too much stock in them

[patogordo]

School tuition was priced under the assumption that loan forgiveness programs would available to law graduates. Making these changes retroactive would be manifestly unfair. They want to bring down costs, not screw a specific set of graduates.

lololol

[cotiger]

There's a new thread on this article, but I thought I should add it here. I'm feeling worse and worse about the future of IBR/PAYE/PSLF, especially after looking at the comments. Most people have no sympathy for us and think we should pay back what we borrowed without any government programs. I'm still very worried about retroactive changes.

http://finance.yahoo.com/news/federal-p ... 00861.html

Oh relax. There won't be retroactive changes. School tuition was priced under the assumption that loan forgiveness programs would available to law graduates. Making these changes retroactive would be manifestly unfair. They want to bring down costs, not screw a specific set of graduates.

Hopefully you're not under the impression that tuition would be lower were there no PSLF. That's quite a stretch.

[InTheHouse]

There's a new thread on this article, but I thought I should add it here. I'm feeling worse and worse about the future of IBR/PAYE/PSLF, especially after looking at the comments. Most people have no sympathy for us and think we should pay back what we borrowed without any government programs. I'm still very worried about retroactive changes.

http://finance.yahoo.com/news/federal-p ... 00861.html

Oh relax. There won't be retroactive changes. School tuition was priced under the assumption that loan forgiveness programs would available to law graduates. Making these changes retroactive would be manifestly unfair. They want to bring down costs, not screw a specific set of graduates.

Hopefully you're not under the impression that tuition would be lower were there no PSLF. That's quite a stretch.

Yes, I am. Either nominal tuition would have been lower or people would have felt more pressure to take a larger scholly at a lower ranked school (and the effective tuition rate would have been lower).

[cinephile]

Yes, I am. Either nominal tuition would have been lower or people would have felt more pressure to take a larger scholly at a lower ranked school (and the effective tuition rate would have been lower).

Most of my peers, who have taken out 6 figures of debt at a non-elite school, didn't know what PSLF was at all until they did exit counseling this year. So I very much doubt this.

[A. Nony Mouse]

There's a new thread on this article, but I thought I should add it here. I'm feeling worse and worse about the future of IBR/PAYE/PSLF, especially after looking at the comments. Most people have no sympathy for us and think we should pay back what we borrowed without any government programs. I'm still very worried about retroactive changes.

http://finance.yahoo.com/news/federal-p ... 00861.html

Oh relax. There won't be retroactive changes. School tuition was priced under the assumption that loan forgiveness programs would available to law graduates. Making these changes retroactive would be manifestly unfair. They want to bring down costs, not screw a specific set of graduates.

Hopefully you're not under the impression that tuition would be lower were there no PSLF. That's quite a stretch.

Yes, I am. Either nominal tuition would have been lower or people would have felt more pressure to take a larger scholly at a lower ranked school (and the effective tuition rate would have been lower).

PSLF has only been around since 2007, no one has yet had any debt forgiven on it, a lot of people who go to school thinking they'll do PI end up in firms because it's easier, and the top schools at least already had LRAPs in place to cover people doing low-paid public interest legal work. I think IBR and PAYE have a much bigger impact on law school tuition than PSLF.

[InTheHouse]

Yes, I am. Either nominal tuition would have been lower or people would have felt more pressure to take a larger scholly at a lower ranked school (and the effective tuition rate would have been lower).

Most of my peers, who have taken out 6 figures of debt at a non-elite school, didn't know what PSLF was at all until they did exit counseling this year. So I very much doubt this.

Based on what you've said, I'm not terribly surprised they hadn't heard of PSLF. There are always going to be people insensitive to price. Not sure there's anything I can do about that (On an unrelated note, the law school in question should fire the people tasked with promoting the school. PSLF is decent marketing device).

Regardless of what your peers' choices, I don't know how you can argue that PSLF doesn't play into people's decision making process. Do you also believe the scope of schools' LRAP programs doesn't factor into students' decisions?

[kay2016]

Many people just don't realize LRAP or PSLF exist; therefore, they can't factor that in when making their decisions on where to attend at what price. Only the top schools have LRAP programs, and people who either previously did not work in the public sector, didn't take out loans, or are K-JDs likely haven't really looked into repayment options. Don't believe me? There have been at least 2 threads this month asking "why are loans bad." People don't get how crushing debt can be they just want to go to the best school. A lot of people don't even try to negotiate scholarships, they are just excited to be getting one.

For SOME students, it totally makes a difference. But given how new the programs are, relatively speaking, I can't see that being a majority.

This also assumes that everyone who would end up on PSLF knew before they entered law school that they would end up in a PSLF type job..

[InTheHouse]

PSLF has only been around since 2007, no one has yet had any debt forgiven on it, a lot of people who go to school thinking they'll do PI end up in firms because it's easier, and the top schools at least already had LRAPs in place to cover people doing low-paid public interest legal work. I think IBR and PAYE have a much bigger impact on law school tuition than PSLF.

Many people just don't realize LRAP or PSLF exist; therefore, they can't factor that in when making their decisions on where to attend at what price. Only the top schools have LRAP programs, and people who either previously did not work in the public sector, didn't take out loans, or are K-JDs likely haven't really looked into repayment options. Don't believe me? There have been at least 2 threads this month asking "why are loans bad." People don't get how crushing debt can be they just want to go to the best school. A lot of people don't even try to negotiate scholarships, they are just excited to be getting one.

For SOME students, it totally makes a difference. But given how new the programs are, relatively speaking, I can't see that being a majority.

This also assumes that everyone who would end up on PSLF knew before they entered law school that they would end up in a PSLF type job..

I don't know that anything I said is inconsistent with this. PSLF probably has a tiny overall impact on tuition, but for the fraction of people who factored PSLF into their decision to attend school X, I would guess the impact on their loan burdens wasn't trivial. I just have a hard time seeing the feds going out of their way screw these people.

[A. Nony Mouse]

PSLF has only been around since 2007, no one has yet had any debt forgiven on it, a lot of people who go to school thinking they'll do PI end up in firms because it's easier, and the top schools at least already had LRAPs in place to cover people doing low-paid public interest legal work. I think IBR and PAYE have a much bigger impact on law school tuition than PSLF.

Many people just don't realize LRAP or PSLF exist; therefore, they can't factor that in when making their decisions on where to attend at what price. Only the top schools have LRAP programs, and people who either previously did not work in the public sector, didn't take out loans, or are K-JDs likely haven't really looked into repayment options. Don't believe me? There have been at least 2 threads this month asking "why are loans bad." People don't get how crushing debt can be they just want to go to the best school. A lot of people don't even try to negotiate scholarships, they are just excited to be getting one.

For SOME students, it totally makes a difference. But given how new the programs are, relatively speaking, I can't see that being a majority.

This also assumes that everyone who would end up on PSLF knew before they entered law school that they would end up in a PSLF type job..

I don't know that anything I said is inconsistent with this. PSLF probably has a tiny overall impact on tuition, but for the fraction of people who factored PSLF into their decision to attend school X, I would guess the impact on their loan burdens wasn't trivial. I just have a hard time seeing the feds going out of their way screw these people.

Personally, I was disagreeing with your argument that tuition would be lower if there was no PSLF. That doesn't have anything to do with whether the feds will or won't screw people who are relying on PSLF.

[cotiger]

Hopefully you're not under the impression that tuition would be lower were there no PSLF. That's quite a stretch.

Yes, I am. Either nominal tuition would have been lower or people would have felt more pressure to take a larger scholly at a lower ranked school (and the effective tuition rate would have been lower).

PSLF has only been around since 2007, no one has yet had any debt forgiven on it, a lot of people who go to school thinking they'll do PI end up in firms because it's easier, and the top schools at least already had LRAPs in place to cover people doing low-paid public interest legal work. I think IBR and PAYE have a much bigger impact on law school tuition than PSLF.

Tuition has been consistently increasing for the last forty years, and there hasn't been a particular spike in the last seven. Law schools do not price sticker based on how many of the small number of PI aspirants they can grab.

Here's a graph of the last 25 years: http://lawschooltuitionbubble.wordpress ... ojections/

[InTheHouse]

Tuition has been consistently increasing for the last forty years, and there hasn't been a particular spike in the last seven. Law schools do not price sticker based on how many of the small number of PI aspirants they can grab.

Here's a graph of the last 25 years: http://lawschooltuitionbubble.wordpress ... ojections/

How do law schools price tuition?

[cotiger]

Tuition has been consistently increasing for the last forty years, and there hasn't been a particular spike in the last seven. Law schools do not price sticker based on how many of the small number of PI aspirants they can grab.

Here's a graph of the last 25 years: http://lawschooltuitionbubble.wordpress ... ojections/

How do law schools price tuition?

MR=MC?




(joke)

(..maybe?)

[cotiger]

Law students are (mostly) fungible. If a couple of PI people bow out bc the price is too high, there are plenty of other students who can and will take their place. Yes, top schools have been competing a bit more these last few years for top students, but that's not going to affect the sticker price. If anything, it would tend to further increase sticker to offset that tuition reduction for high scorers.

Sticker will increase so long as there are people who are willing and able to pay more. Government loans for all takes care of the ability to pay, and the (assumed) prestige/$$$ of the profession drives the willingness to pay.

Excluding TTTs, law schools have not been having difficulty finding people who will pay sticker. Look at NYU, which maintains some of the highest entry standards, where 63% of all students are paying full sticker. Or take a random mid-level like Fordham, where 60% of all students pay sticker.

Tuition increases aren't affected by PSLF, and they aren't going to stop anytime soon.

[InTheHouse]

Law students are (mostly) fungible. If a couple of PI people bow out bc the price is too high, there are plenty of other students who can and will take their place. Yes, top schools have been competing a bit more these last few years for top students, but that's not going to affect the sticker price. If anything, it would tend to further increase sticker to offset that tuition reduction for high scorers.

Sticker will increase so long as there are people who are willing and able to pay more. Government loans for all takes care of the ability to pay, and the (assumed) prestige/$$$ of the profession drives the willingness to pay.

Excluding TTTs, law schools have not been having difficulty finding people who will pay sticker. Look at NYU, which maintains some of the highest entry standards, where 63% of all students are paying full sticker. Or take a random mid-level like Fordham, where 60% of all students pay sticker.

Tuition increases aren't affected by PSLF, and they aren't going to stop anytime soon.

This was cute. But sure, price has no effect on demand.

[A. Nony Mouse]

So you really think that tuition increases have been caused in any meaningful way by PSLF as opposed to by other factors, like decrease in support for higher ed (leading to law schools being cash cows for universities) and especially the easy access to federal loans?

[InTheHouse]

So you really think that tuition increases have been caused in any meaningful way by PSLF as opposed to by other factors, like decrease in support for higher ed (leading to law schools being cash cows for universities) and especially the easy access to federal loans?

Nope.

[cotiger]

This was cute. But sure, price has no effect on demand.

Lol this isn't some idealized commodities market from principles of micro.

Yes, price has an effect on quantity demanded, especially on the market as a whole. However, these schools are highly differentiated (and most importantly, ordered) products, not commodities. On a purely economic level, reduced demand only affects TTTs, which is why they are the ones lowering prices.

Also, schools' ability to practice nearly perfect price discrimination means that sticker won't be coming down due to economic reasons (as opposed to moral or political reasons) until they literally can't find anyone who will pay it.

[Big Dog]

On a purely economic level, reduced demand only affects TTTs, which is why they are the ones lowering prices.

All but need-only HYS are also lowering net prices (to protect their medians).

[buffalo_]

. ETA: Misread quote from above. Analysis below still stands.


PSLF probably matters but only marginally. It is likely insignificant relative to other factors.

I agree that IBR/PAYE probably do have an impact on demand and price. An even larger contributor is the terms of the loans. Virtually everyone is approved up to any amount, thus making demand extremely inelastic because people do not comprehend the debt they are incurring, and IBR and PAYE further distance repayment and the actual cost of money from the individual. And the debt is non-chargeable giving lenders no incentive to refuse loans to anyone or encourage the government to change student lending policies. In fact your lender wants IBR/PAYE/PSLF more than anyone because it is basically a free insurance policy against their loan. If you are a wonderful success you pay your loan back with interest and they win. If you are a deadbeat, the government pays the loan back and they win. They don't lose under the current system.

[InTheHouse]

. ETA: Misread quote from above. Analysis below still stands.


PSLF probably matters but only marginally. It is likely insignificant relative to other factors.

I agree that IBR/PAYE probably do have an impact on demand and price. An even larger contributor is the terms of the loans. Virtually everyone is approved up to any amount, thus making demand extremely inelastic because people do not comprehend the debt they are incurring, and IBR and PAYE further distance repayment and the actual cost of money from the individual. And the debt is non-chargeable giving lenders no incentive to refuse loans to anyone or encourage the government to change student lending policies. In fact your lender wants IBR/PAYE/PSLF more than anyone because it is basically a free insurance policy against their loan. If you are a wonderful success you pay your loan back with interest and they win. If you are a deadbeat, the government pays the loan back and they win. They don't lose under the current system.

Is this the long version of what Nony Mouse said?

[cotiger]

On a purely economic level, reduced demand only affects TTTs, which is why they are the ones lowering prices.

All but need-only HYS are also lowering net prices (to protect their medians).

Source?

I've heard that effective tuition over all schools has gone down, but I imagine that is concentrated in lower-tier schools.

If NYU (for instance) actually cared about medians, they would have more than a quarter of their class with greater than a 30k scholarship (which was sticker for c/o 2009). 63% are paying full sticker. All of those people are paying more money than previous classes, which can fund a few more scholarships for those at the top without reducing net tuition. At least another 10% are paying sticker or more compared to c/o 2009.

All the while they've been maintaining class size while their medians have dropped the last two years. They give like .2 fucks about their medians dropping, especially when everyone else's are too. Just like other top schools, they care enough to prioritize it in admissions and in scholarship distributions, but not enough to take a big monetary hit.

Regardless, net tuition reduction wouldn't affect the sticker price.

[Big Dog]

Source?

I've heard that effective tuition over all schools has gone down, but I imagine that is concentrated in lower-tier schools.

Perhaps "concentrated" on lower-ranked schools, but that doesn't meant the the T4-14 are not discounting as well.

ABA Reports

Cornell ABA reports.

2010:

25% receiving <half+ tuition discount
12% receiving half+ discount
37% receive discount

http://www.lsac.org/docs/default-source ... ba2098.pdf

2013:

37% receiving <half+ tuition discount
8% receiving half+ discount
45% receive discount

Duke has increased from 73% receiving a discount to close to 80%.

NYU has increased the number receiving discounts from 38% to 47%. (nearly half the matriculating class)

Penn: 40% to 44%

I just looked up these at random.

[cotiger]

Source?

I've heard that effective tuition over all schools has gone down, but I imagine that is concentrated in lower-tier schools.

Perhaps "concentrated" on lower-ranked schools, but that doesn't meant the the T4-14 are not discounting as well.

ABA Reports

Cornell ABA reports.

2010:

25% receiving <half+ tuition discount
12% receiving half+ discount
37% receive discount

http://www.lsac.org/docs/default-source ... ba2098.pdf

2013:

37% receiving <half+ tuition discount
8% receiving half+ discount
45% receive discount

Duke has increased from 73% receiving a discount to close to 80%.

NYU has increased the number receiving discounts from 38% to 47%. (nearly half the matriculating class)

Penn: 40% to 44%

I just looked up these at random.

I'll be interested in looking up tonight whether these discounts overcome increases in sticker.

[cotiger]

My instinct is that they do not. Cornell reduced their legit scholarships from 12% to 8%. On top of that, a half tuition scholarship is more expensive in 2013 than in 2010. All the while they still have around 60% taking on like a $6k tuition bump. I'm doubtful that a few more students being offered a pittance is enough to overcome those things.