New England Law|Boston Vs. Suffolk Law Forum

[The Lsat Airbender]

Yeah, "free market" rational actors don't exist in the economics of law school because of how stupid the debt situation has gotten.

It's like getting hooked on opioids—the first hit is often free, even encouraged, and you don't start paying the real costs for months or years afterward. Market economics don't work well when people have 1) bad information and 2) attenuated incentives.

[objctnyrhnr]

I think the reason is that there are policy interests in making higher education widely available, especially in increasing socioeconomic diversity in the various professions and encouraging people to go into lower-paying public interest jobs. Keep in mind that the repayment plans apply to ALL student loan holders, not just law students, and many degrees (undergrad and grad) don't cost $250k+. I've seen arguments that the forgiveness be capped around $50-60k before, which suggests to me that a lot of people on these plans aren't carrying the huge balances that law students do (getting $50-60k of a $75k debt forgiven makes a very big difference, while getting $50-60k of a $250k+ debt forgiven arguably doesn't make that much of a dent), and may indeed pay off their loans or a reasonable chunk thereof under income-based repayment plans.

But even if non-lawyers don't ever pay off these loans either, there's an argument to be made that the social benefits of accessible loans outweigh the economic downside, to ensure that we have enough teachers, nurses, social workers, etc. Lawyers are only a small part of the picture, but you could also argue that the investment in the Suffolk grad who goes into legal aid for 30 years is worth forgiving their loans. (This is arguably less the case as law has become oversaturated and there's more competition for any job, such that legal aid can always get hires, but the flip side is that as tuition has continued to increase, more law grads are foreclosed from legal aid so the assistance may be more necessary than ever.)

So I think your response answered half the question.

But I am still wondering why Uncle Sam doesn’t have a vested interest in cracking down specifically on the law schools that graduate people who so often fail to repay the debt.

Why is it to society’s benefit for taxpayers to foot the bill for these scam institutions? There are plenty of law grads from T1 and TT schools who want to be solo defense attorneys, state prosecutors, PI lawyers, etc. So many of these grads don’t even end up with JD required jobs.

[The Lsat Airbender]

But I am still wondering why Uncle Sam doesn’t have a vested interest in cracking down specifically on the law schools that graduate people who so often fail to repay the debt.

It's politically tricky. Denying loans to students who need them, especially if it's targeting at more "blue-collar", upward-mobility-enhancing schools (which is a bit of an unearned reputation that TTT schools enjoy), is not the optics that either party wants right now. So we have a system where the government writes a blank check to anyone who can get in to an accredited school. Even truly scummy for-profits got to ride the gravy train for a while, and they were subject to a much higher level of social opprobrium than NYLS and its ilk.

[nixy]

So I think your response answered half the question.

But I am still wondering why Uncle Sam doesn’t have a vested interest in cracking down specifically on the law schools that graduate people who so often fail to repay the debt.

Why is it to society’s benefit for taxpayers to foot the bill for these scam institutions? There are plenty of law grads from T1 and TT schools who want to be solo defense attorneys, state prosecutors, PI lawyers, etc. So many of these grads don’t even end up with JD required jobs.

Airbender's point is important here - the TTT/TTTT schools are often most accessible to people from the lowest socioeconomic class (which usually correlates with race, in this country).

But also I don't think the federal loan stuff is broken down that way. Maybe it could/should be, but federal student loans are a really big umbrella covering all fields, and access has never been governed by field of study. How do you break that down to limit loans to law students but not students in other fields? To only law students from particular schools? There are going to be huge disparate impact arguments arising from such practices. Why limit it to law - will it then get extended to fields like art and philosophy? Aren't those fields necessary to the development of society, even if they may not yield lucrative jobs? etc etc. It's a huge can of worms.

Also, define "so often fail to repay the debt"? I don't think "failure to get a JD-required job" necessarily translates to "fail to repay the debt." There's a list here of freestanding law schools and their rates of student loan default https://abovethelaw.com/2019/11/law-sch ... ult-rates/. It doesn't address law schools associated with an undergrad university because those schools fall under their parent institution's information (so can't separate law student rates from undergrads defaulting), but those schools are probably overall higher-ranked and this list has a lot of the most egregious scam schools. I was surprised by how low the default rates are (highest is 5.5%; many are much lower). For context, the rate of default over all student loans is 10.1% (based on the latest data I could find with lazy googling, and that was a decline from 11.5% the previous year). So it's not clear to me that the data about student loans, at a macro level, would support cracking down on law schools specifically, even if on an individual level it looks terrible, and it's entirely possible that law students default on larger amounts (though there are a lot of expensive undergrad schools out there).

I get a lot of the arguments for alternatives - like, make law schools on the hook for some proportion of loans their grads can't pay so they have an incentive to improve students' employment prospects; or tie the loan amount to the average salary outcome from that school; I'm sure there are others. Those inevitably run up against the "access for socioeconomically disadvantaged" policy, though. (Of course, the flip side of that policy is "scam schools perpetuate socioeconomic disadvantage by burdening students with debt and only providing access to jobs that don't let them pay their debt," but I don't think there's any hard data to support one side of that argument over the other.) Law's history of being open to minorities/the socioeconomically disadvantaged is ABYSMAL, which makes it hard to swing back in that direction.

I guess sometimes it feels like student loan debt is the elephant, surrounded by blind lawyers/doctors/teachers who are each grabbing onto one part of the elephant that leads them to think the whole is something else entirely.