Front page NY times: massive app drop; schools in trouble; Forum

[Big Dog]

IMO the problem with saying government should have no business in lending is that it is a complete overhaul of how education has been subsidized here and around the world. Instead, we can take the novelty (high interest rates) and eliminate that. Or the novelty of the surge of TTTs that are just cash grabs for their parent school.

-- The "high" rates subsidize the Pell Grant costs for undergrads. (But that is an aside.)
-- How schooling is funded around the world is not relevant.


To me the better question is whether it is moral for the government to be loaning young adults $200k+ when the government knows with near certainty that xx% will not be able to pay those funds back in their working lifetimes.

[thelawyler]

Morality aside, it is terrible policy.

[LRGhost]

-- How schooling is funded around the world is not relevant.

When the argument is that government has no place in subsidizing education yet other countries do it better, it is absolutely relevant.

actual knowledge of the banking industry. Unsecured debt it extremely risky and future income (depends on what field of study, but still) unsure enough that the risk premium would probably put the loans past the limits of usury laws.

Yeah man, for some reason people think that YHS is above getting fired or laid off and that their career is peachy through to the day they retire to their yacht and house in the Hamptons.

Yes please, let's talk about the implications, rather than trying to solve the law school crisis on a L0 forum, lol.

Do we know for sure that the app numbers numbers are down for t14 schools? It would make sense that the numbers would be down for non-top 30 schools, where the chances of paying off 150k debt are insanely low. But why would they be down hardcore for t6 and t3, where you have LRAP programs and/or much better shot of landing a biglaw job to pay off your loans in several years. Or am I missing something?

We know that apps are down because 170s are down and GULC's statement today mentioned their apps were down 12%. But it doesn't really matter if apps are down. There are barely enough 170s to fill out the T14 this cycle. They will either try to grab every 170 that they can or they will cut class sizes or they will sacrifice LSAT medians or some combination. For most schools, it's not going $150,000 in debt, it's going $250,000 in debt, and it's not something that is paid off quickly regardless of job.

[Big Dog]

When the argument is that government has no place in subsidizing education yet other countries do it better, it is absolutely relevant.

Other countries also have different admissions policies....to make it an apples-to-apples comparison ("relevant"), we'd have to equalize the entrances.

[LRGhost]

When the argument is that government has no place in subsidizing education yet other countries do it better, it is absolutely relevant.

Other countries also have different admissions policies....to make it an apples-to-apples comparison ("relevant"), we'd have to equalize the entrances.

Sure, but this isn't about straight comparison. I'm simply arguing that government can have a place in providing loans.

[dingbat]

When the argument is that government has no place in subsidizing education yet other countries do it better, it is absolutely relevant.

Other countries also have different admissions policies....to make it an apples-to-apples comparison ("relevant"), we'd have to equalize the entrances.

most other countries have other high school standards, too

[Tom Joad]

actual knowledge of the banking industry. Unsecured debt it extremely risky and future income (depends on what field of study, but still) unsure enough that the risk premium would probably put the loans past the limits of usury laws.

Couldn't the lender just sue a student in default for everything they own or get a judgment to garnish their wages forever?

Personally I am in favor of getting the government out of the student loan business and back into the debtor's prison business. Having bad credit is morally reprehensible.

[dingbat]

actual knowledge of the banking industry. Unsecured debt it extremely risky and future income (depends on what field of study, but still) unsure enough that the risk premium would probably put the loans past the limits of usury laws.

Couldn't the lender just sue a student in default for everything they own or get a judgment to garnish their wages forever?

Bankruptcy chapter 7 if s/he can't get a job, Chapter 13 if s/he doesn't earn enough to cover loan repayments

Any time a bank is unsure about the repayment structure, that adds risk premium. That doesn't just include likelihood of repayment, but also the likelihood that expected cash flows will change (e.g. turning a 10 year repayment plan into a 20 year repayment plan) and the likely cost of any kind of litigation and/or restructuring.

edit: this is a curt answer; if needed, I can elaborate

[zebra6777]

Yes please, let's talk about the implications, rather than trying to solve the law school crisis on a L0 forum, lol.

Do we know for sure that the app numbers numbers are down for t14 schools? It would make sense that the numbers would be down for non-top 30 schools, where the chances of paying off 150k debt are insanely low. But why would they be down hardcore for t6 and t3, where you have LRAP programs and/or much better shot of landing a biglaw job to pay off your loans in several years. Or am I missing something?

We know that apps are down because 170s are down and GULC's statement today mentioned their apps were down 12%. But it doesn't really matter if apps are down. There are barely enough 170s to fill out the T14 this cycle. They will either try to grab every 170 that they can or they will cut class sizes or they will sacrifice LSAT medians or some combination. For most schools, it's not going $150,000 in debt, it's going $250,000 in debt, and it's not something that is paid off quickly regardless of job.

Gotcha, thanks for the info.

[Miracle]

I think that no law schools should be cut. Massive layoffs? The elevator to law school prestige is broken? The writers in NYT must have it wrong.

After all, law school deans have
1) shown us that a law school degree can be used for anything like being an astronaut, or Barack Obama
2) by having "dynamic" clinics for 3L that train you how to make a McDouble
3) By Offering "scholarships" that are given to half the class that the other class pays for
4) By defending the right of law school professors to work only 10 hours a week to optimally prepare them for teaching
5) By granting access to poor/disadvantaged people by having special workshops that include amazing employment stats
6) Making time for law professors to write prefigous articles

With this I humbly submit that all law school deans are geniuses and deserve all the fancy watches in the world.

What is your problem with Obama?

[LRGhost]

actual knowledge of the banking industry. Unsecured debt it extremely risky and future income (depends on what field of study, but still) unsure enough that the risk premium would probably put the loans past the limits of usury laws.

Couldn't the lender just sue a student in default for everything they own or get a judgment to garnish their wages forever?

Personally I am in favor of getting the government out of the student loan business and back into the debtor's prison business. Having bad credit is morally reprehensible.

Yeah man, just do sue big law cast off with no money to his name. Great model. Do you wanna call up Citi bank or can I just email them this thread?

[dingbat]

actual knowledge of the banking industry. Unsecured debt it extremely risky and future income (depends on what field of study, but still) unsure enough that the risk premium would probably put the loans past the limits of usury laws.

Couldn't the lender just sue a student in default for everything they own or get a judgment to garnish their wages forever?

Personally I am in favor of getting the government out of the student loan business and back into the debtor's prison business. Having bad credit is morally reprehensible.

Yeah man, just do sue big law cast off with no money to his name. Great model. Do you wanna call up Citi bank or can I just email them this thread?

the term is "judgment proof"

[Keasbey]

It will be pretty interesting to see how this affects the job market in the next 2 - 4 years.

[dingbat]

It will be pretty interesting to see how this affects the job market in the next 2 - 4 years.

how would it?

[Keasbey]

It will be pretty interesting to see how this affects the job market in the next 2 - 4 years.

how would it?

Well, before anyone jumps down my throat, I'm not an econ person. There are less law students in reaction to a shrinking law market, so it will be interesting to see what will happen to the T1/T2 employment rates (will they go up/down/stay) and to see if the TTT/TTTT will start to close their doors.

[LRGhost]

It will be pretty interesting to see how this affects the job market in the next 2 - 4 years.

how would it?

Well, before anyone jumps down my throat, I'm not an econ person. There are less law students in reaction to a shrinking law market, so it will be interesting to see what will happen to the T1/T2 employment rates (will they go up/down/stay) and to see if the TTT/TTTT will start to close their doors.

There aren't going to be more jobs, just less people graduating unemployed.

[dingbat]

It will be pretty interesting to see how this affects the job market in the next 2 - 4 years.

how would it?

Well, before anyone jumps down my throat, I'm not an econ person. There are less law students in reaction to a shrinking law market, so it will be interesting to see what will happen to the T1/T2 employment rates (will they go up/down/stay) and to see if the TTT/TTTT will start to close their doors.

Right now, there are about twice as many law school grads as there are job openings each year.
If a number of law schools close and more shrink their class sizes, reducing the total amount of law school grads by a quarter, there will still be 3 grads for every 2 jobs. Still not good.

[Keasbey]

It will be pretty interesting to see how this affects the job market in the next 2 - 4 years.

how would it?

Well, before anyone jumps down my throat, I'm not an econ person. There are less law students in reaction to a shrinking law market, so it will be interesting to see what will happen to the T1/T2 employment rates (will they go up/down/stay) and to see if the TTT/TTTT will start to close their doors.

There aren't going to be more jobs, just less people graduating unemployed.

Yea, that's what I was thinking, just trying to make sure I wasn't completely off the mark on this.

[rjparson]

Every TLS circlejerktroversy going on in one thread.

[Tom Joad]

actual knowledge of the banking industry. Unsecured debt it extremely risky and future income (depends on what field of study, but still) unsure enough that the risk premium would probably put the loans past the limits of usury laws.

Couldn't the lender just sue a student in default for everything they own or get a judgment to garnish their wages forever?

Personally I am in favor of getting the government out of the student loan business and back into the debtor's prison business. Having bad credit is morally reprehensible.

Yeah man, just do sue big law cast off with no money to his name. Great model. Do you wanna call up Citi bank or can I just email them this thread?

To be fair, if students loans were totally privatized the legal industry would be the land of milk and honey because the bottom 50 law schools would be gone and the survivors would have smaller class sizes and lower tuitions. And demand for legal services wouldn't shrink. So you would actually have to have Asperger's Syndrome or not want to work if you couldn't pay your loans. If it was all privately financed banks wouldn't pay for an unsustainable model.

[dingbat]

If it was all privately financed banks wouldn't pay

fixed

[LRGhost]

To be fair, if students loans were totally privatized the legal industry would be the land of milk and honey because the bottom 50 law schools would be gone and the survivors would have smaller class sizes and lower tuitions. And demand for legal services wouldn't shrink. So you would actually have to have Asperger's Syndrome or not want to work if you couldn't pay your loans. If it was all privately financed banks wouldn't pay for an unsustainable model.

Good thing I'm taking out 200k to miss big law and wind up working for 40k back at home.

And your last statement is patently false. Like, incredibly false.

[gettheledout3372]

Every TLS circlejerktroversy going on in one thread.

Pic + circlejerktroversy = 180. Oh God, after nine pages of it, I'm trying not to lol too hard in my office. Actual tears of laughter are being shed.

[Miracle]

When the argument is that government has no place in subsidizing education yet other countries do it better, it is absolutely relevant.

Other countries also have different admissions policies....to make it an apples-to-apples comparison ("relevant"), we'd have to equalize the entrances.

most other countries have other high school standards, too

Those standards are a lot more challenging than United States standards.

[dingbat]

When the argument is that government has no place in subsidizing education yet other countries do it better, it is absolutely relevant.

Other countries also have different admissions policies....to make it an apples-to-apples comparison ("relevant"), we'd have to equalize the entrances.

most other countries have other high school standards, too

Those standards are a lot more challenging than United States standards.

U.S. high schools have standards?