Top Law Schools

http://bucks.blogs.nytimes.com/2013/04/ ... dent-debt/

They've got 20 years to pass it. Start planning as if it doesn't exist.

This was said in the other thread that DF started, but it just seems like there is significant political risk that after they fix the tax bomb they also fix the "Wall Street lawyers using PAYE" bomb. I suppose if you save (rather than spend) the money you would otherwise be putting toward the loan payments, then this risk is limited to the foregone opportunity to have put the money toward its best use: paying down your high-interest loans.

Still, something about it makes me uncomfortable. Is it moral? It seems like it might be immoral. Aren't you putting the cost of your loans to taxpayers even though you have the ability to service the loans? (Obviously this doesn't apply to people earning less than big law money, so I might be going on a tangent here.)

yes!

Bronte wrote:
Still, something about it makes me uncomfortable. Is it moral? It seems like it might be immoral. Aren't you putting the cost of your loans to taxpayers even though you have the ability to service the loans? (Obviously this doesn't apply to people earning less than big law money, so I might be going on a tangent here.)

Who's you? If you is the institution you attended, then yes, that's true. If you is the student, then in a way, yes, that's what's happening, but so what? If Harvard, Yale, and Stanford don't care that they're engaging in rent seeking as a business model, why should your average student who's in it as a one-time deal?

You guys seem to be missing something. Before the tax bomb hits the studednt has been paying for 20-25 years. Unless you are flipping burgers for 20 years, you will have been making substantial payments during that time.

Some of what has been "forgiven" is interest that has accrued at the inflated rate of 6.9% or more. The feds were making money off that rate. (I think interest accrual is capped at 10% of principal under PAYE, can someone confirm that?)

The point is that the benefit is real, but the penalty for using the benefit is unreal. Those who take the most advantage (and lets assume that these are people who relly did not make big bucks at any point in the 20 years) are now hit with a tax penalty they cannot afford and cannot discharge in bankruptcy.

At the risk of incurring the wrath of the TLSers, a fairer solution would be to lower the interest rates to reflect the true "cost of funds" to the feds for loaning money that is a non dischargeable debt (more like .5%) instead of using the money to subsidze undergrads. That would bring down the amount of accrued interst, prompt faster paydown, and reduce the amount of "forgiveness. Then they could keep some level of taxation, maybe at 20% capital gain rates since the loan goes to build "human capital", and let the amount forgiven be paid over time- like another 5 years to avoid the "bomb". As it is now, the big number will get tacked onto income in the highest earnming years, pushing the taxpayer into higher brackets, which means the amount will be taxed at an even higher marginal rate than usual.

Whoever said that someone will complain that this is a bailout for hi paid lawyers will be partly right, but the really high paid ones will not benefit from PAYE in later years and will pay off their loans. Those who got snookered by the Law Schools into thinking they had a real chance at a high paying career will be bailed out. But if they know that, they won't have this hanging over their heads for 20 years, they might actually go on to do somethig creative and productive with their lives.

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Bronte wrote:Is it moral?

First rule of contracts: there is no crying in contracts.

thesealocust wrote:

Bronte wrote:Is it moral?

First rule of contracts: there is no crying in contracts.

I consider it a tax deduction. It's bullshit I cannot write off 100% of my tuition as a business expense.

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The worst thing about this is that it will continue to prop up all these parasites in the education industry

I feel bad for the generation after ours. Youth unemployment in the future is going to be nuts. Also curious to see when the "sticker price" of law school crosses the million dollar barrier.

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One solution to high tuitions is for the gov’t to limit loans to a school’s 2000 tuition price (plus inflation). If that 2014 tuition rate turned out to be $20,000, but the school was charging $30,000 today, the school would have to decide whether to accept the $20K or pass on it. At some point accepting the $20K would be a much better choice than closing the doors.

The analogy: The gov’t is loaning everyone the money to buy a car. Suddenly Ford raises their price to $30K, but the gov’t is only loaning $20K. Would Ford take the $20K (and make a smaller profit) or keep a car lot overflowing with unsold cars at $30K?

Have Pride anytown USA
This is what is wrong with this country now days. Where does all of this entitlement come from. What ever happened to being responsible for yourself and your actions. If you want to go to college, great. I commend you for wanting to further your education.

However, nothing is "FREE". So what makes it right for others (the tax payers of this country) to pay for your college education instead of you?

I came from a small town, had a modest childhood, and went to college after highschool. My parents could not afford to pay, so I took out loans and worked two jobs to pay for college. I know, crazy huh?

NEVER did I ever feel it was absurb that I would be the actual one responsible for the debt.

NEVER did I feel the debt I accumulated was terribly unjust.

I knew going in that I would be the ONLY one responsible for paying the debt.

I felt this way then and feel this way today because my parents raised me to be RESPONSIBLE and ACCOUNTABLE.

Maybe it's not your fault you feel this country owes you something for nothing. Maybe it's your parents fault for not raising you to feel proud about being to accomplish on your own.

AMAZING

From the comments. It's amazing how consistently idiots like this capitalize random words. It's only missing long strings of "!!!!!!!!" to be the perfect example.

TTRansfer wrote:

Have Pride anytown USA
This is what is wrong with this country now days. Where does all of this entitlement come from. What ever happened to being responsible for yourself and your actions. If you want to go to college, great. I commend you for wanting to further your education.

However, nothing is "FREE". So what makes it right for others (the tax payers of this country) to pay for your college education instead of you?

I came from a small town, had a modest childhood, and went to college after highschool. My parents could not afford to pay, so I took out loans and worked two jobs to pay for college. I know, crazy huh?

NEVER did I ever feel it was absurb that I would be the actual one responsible for the debt.

NEVER did I feel the debt I accumulated was terribly unjust.

I knew going in that I would be the ONLY one responsible for paying the debt.

I felt this way then and feel this way today because my parents raised me to be RESPONSIBLE and ACCOUNTABLE.

Maybe it's not your fault you feel this country owes you something for nothing. Maybe it's your parents fault for not raising you to feel proud about being to accomplish on your own.

AMAZING

From the comments. It's amazing how consistently idiots like this capitalize random words. It's only missing long strings of "!!!!!!!!" to be the perfect example.

God, boomers like this need to be shot.

It always is some crusty, old, tea party boomer that types like that. Without fail, too. My family members in that category do the same thing.

Of course. Because anybody who types like that is obviously too stupid to realize that what "personal responsibility" requires might change when the underlying circumstances of higher education drastically change. It's also entirely hypocritical that they're objecting to taxpayers paying for loan forgiveness when their generation caused this fucked up situation. Regardless of whether loan forgiveness is a good idea, boomers definitely do not have standing to object if they're going to preach "personal responsibility."

TTRansfer wrote:

Have Pride anytown USA
This is what is wrong with this country now days. Where does all of this entitlement come from. What ever happened to being responsible for yourself and your actions. If you want to go to college, great. I commend you for wanting to further your education.

However, nothing is "FREE". So what makes it right for others (the tax payers of this country) to pay for your college education instead of you?

I came from a small town, had a modest childhood, and went to college after highschool. My parents could not afford to pay, so I took out loans and worked two jobs to pay for college. I know, crazy huh?

NEVER did I ever feel it was absurb that I would be the actual one responsible for the debt.

NEVER did I feel the debt I accumulated was terribly unjust.

I knew going in that I would be the ONLY one responsible for paying the debt.

I felt this way then and feel this way today because my parents raised me to be RESPONSIBLE and ACCOUNTABLE.

Maybe it's not your fault you feel this country owes you something for nothing. Maybe it's your parents fault for not raising you to feel proud about being to accomplish on your own.

AMAZING

From the comments. It's amazing how consistently idiots like this capitalize random words. It's only missing long strings of "!!!!!!!!" to be the perfect example.

I agree with the boomer. We shouldn't subsidize bad decisions. Succeeding in investing requires appropriate risk assessment. Those that ended up with huge amounts of nondischargeable debt are facing up to the risk they took on. If the information available wasn't adequate, then there should be a fraud cause of action against schools which distorted information in the market (can you imagine if an issuer of securities did what law schools do with information).

Your friend who graduated high school, apprenticed as an electrician or plumber or welder, worked hard for several years to earn a living wage without debt and probably had to sacrifice having nice things for a time should not be subsidizing your attempt to leverage your abilities to make more than him. You may look down on him, but he should be rewarded in the economy for the risks he took on.

can we get an outtting up in heah

Anonymous User wrote:I agree with the boomer. We shouldn't subsidize bad decisions. Succeeding in investing requires appropriate risk assessment. Those that ended up with huge amounts of nondischargeable debt are facing up to the risk they took on. If the information available wasn't adequate, then there should be a fraud cause of action against schools which distorted information in the market (can you imagine if an issuer of securities did what law schools do with information).

Your friend who graduated high school, apprenticed as an electrician or plumber or welder, worked hard for several years to earn a living wage without debt and probably had to sacrifice having nice things for a time should not be subsidizing your attempt to leverage your abilities to make more than him. You may look down on him, but he should be rewarded in the economy for the risks he took on.

I think you're looking at this too narrowly. A reasonable society doesn't need to eliminate all risks associated with pursuing higher education, but a reasonable society can't impose a gigantic risk on *every single student* who decides to pursue higher education.

nevdash wrote:

Anonymous User wrote:I agree with the boomer. We shouldn't subsidize bad decisions. Succeeding in investing requires appropriate risk assessment. Those that ended up with huge amounts of nondischargeable debt are facing up to the risk they took on. If the information available wasn't adequate, then there should be a fraud cause of action against schools which distorted information in the market (can you imagine if an issuer of securities did what law schools do with information).

Your friend who graduated high school, apprenticed as an electrician or plumber or welder, worked hard for several years to earn a living wage without debt and probably had to sacrifice having nice things for a time should not be subsidizing your attempt to leverage your abilities to make more than him. You may look down on him, but he should be rewarded in the economy for the risks he took on.

I think you're looking at this too narrowly. A reasonable society doesn't need to eliminate all risks associated with pursuing higher education, but a reasonable society can't impose a gigantic risk on *every single student* who decides to pursue higher education.

Sorry, didn't mean to anon before. I don't know. What if society gave out SBA loans of 250k to whoever wanted them, even if not qualified to be business people. Similar stips to our current student loans. Would you want to subsidize the person who used the loan to start some stupid business, like a cat clothing store or something? I think that situation is pretty analogous to the current situation with law student debt.

TaipeiMort wrote:

nevdash wrote:

Anonymous User wrote:I agree with the boomer. We shouldn't subsidize bad decisions. Succeeding in investing requires appropriate risk assessment. Those that ended up with huge amounts of nondischargeable debt are facing up to the risk they took on. If the information available wasn't adequate, then there should be a fraud cause of action against schools which distorted information in the market (can you imagine if an issuer of securities did what law schools do with information).

Your friend who graduated high school, apprenticed as an electrician or plumber or welder, worked hard for several years to earn a living wage without debt and probably had to sacrifice having nice things for a time should not be subsidizing your attempt to leverage your abilities to make more than him. You may look down on him, but he should be rewarded in the economy for the risks he took on.

I think you're looking at this too narrowly. A reasonable society doesn't need to eliminate all risks associated with pursuing higher education, but a reasonable society can't impose a gigantic risk on *every single student* who decides to pursue higher education.

Sorry, didn't mean to anon before. I don't know. What if society gave out SBA loans of 250k to whoever wanted them, even if not qualified to be business people. Similar stips to our current student loans. Would you want to subsidize the person who used the loan to start some stupid business, like a cat clothing store or something? I think that situation is pretty analogous to the current situation with law student debt.

I don't think it's analogous, though. An analogous situation would be if there was some private licensing board that had to license a business before it could operate, and the board could charge any amount it wanted when selling a license. At that point, it mirrors higher education, specifically legal education: there's a broad category of livelihood where, if you want to enter, you have to do so on terms that require you to take a huge risk in virtually every case. That might not be as bad if the category were narrow. But the broader and broader that category becomes, the more the fault shifts from the person who took the risk to society as a whole, even if the person knew about the risk before he took it.