Monday, December 29, 2014

A "Guest Post" by Professor John C. Kunich

A recent comment by Law Professor John C. Kunich on another OTLSS article deserves a post of its own. While we here at OTLSS were not that thrilled with Kunich's critique of David Frakt's critique of Florida Costal School of Law (nor with FCSL's unprofessional treatment of Frakt for daring to suggest necessary change), Kunich does bring up a separate point worth repeating:  

The comments on this thread are indicative of a much broader and more dangerous trend within legal academe than any of the allegations that have been made about the few law schools specifically singled out herein. I will keep my remarks brief, but this is a complex issue with serious implications.

During the past four years, I have been an invited guest speaker/debater at roughly half of the law schools in this nation. My speaking engagements have brought me to law schools at every point along the putative prestige spectrum. As just a few examples, I’ve spoken at Yale, Stanford, Columbia, U. of Chicago, Boalt Hall, Georgetown, Duke, Northwestern, NYU, Vanderbilt, U. of Michigan, Boston U., BYU, George Washington, Widener, U. of Missouri, Lewis & Clark, Vermont, Elon, FIU, U. of Denver, DePaul, LSU, Regent, and Appalachian.


As I visit these and many other law schools, I chat with students and professors. One message I have consistently heard from students is that there are major problems in legal education today. Students, even from supposedly top-25 law schools, are often worried that they will not be able to find employment sufficiently lucrative to allow them to repay their loans and make the years of foregone opportunities worthwhile. A sentiment I’ve heard repeatedly is that “I’ve done everything right. I played by all the rules. It’s not fair that I can’t even give my work away as an unpaid intern. How am I going to climb out of this deep pit I’ve dug for myself?”

I emphasize that I’ve heard this type of message from students at some of the oldest and most highly ranked law schools in America. These are students with LSAT and UGPA credentials that, according to the statistics-driven paradigm of admissions standards, should have predicted smooth sailing. Yet there are rough waters and storm clouds even for them. What went wrong?

It is probably comforting for professors working at long-established law schools with above-average admissions credentials to deride the challenges facing younger, more diverse institutions. But this ignores a far more ubiquitous problem. There are formidable challenges confronting the students at all but the most elite law schools today, and these challenges may well be here to stay.

The relatively easy availability of federal loan money has enabled undergraduate and graduate institutions of all types to raise tuition at rates considerably above inflation for many, many years. The allure of plentiful money with attractive interest rates has pulled many young people into colleges and graduate schools who might have been better off pursuing technical/trade schools or just beginning their careers early. But as student debt continues to expand, a huge bubble is reaching critical mass. We are creating many more new, expensively educated graduates in a wide range of fields than the job market can accommodate at acceptable remuneration[emphasis added]. 

High rates of unemployment and underemployment, increased use of down-sizing, self-help, and off-shoring, immense numbers of people unable to make payments on their student loans, idealistic young graduates forced to work for the highest-paying employers rather than in public interest jobs, and growing unrest within the millennial generation…all of these are symptoms of real problems within higher education today. I think we need to focus more on these big-picture issues than on the challenges facing a tiny percentage of law schools. If we continue to ignore the broader, endemic difficulties, we will only guarantee that the solutions will remain unrealized.

Respectfully submitted,

John C. Kunich


http://outsidethelawschoolscam.blogspot.com/2014/11/getting-infilawled-florida-coastal.html



Well said, Professor Kunich.  Unfortunately, if history is any indication, these warnings will go unheeded by the Law School Cartel as real change affects their pocketbooks in a negative way.    This would be especially true where Infilaw's investors and those similarly-situated are concerned.

36 comments:

  1. No one who went to law school in the past 3 years can say they "played their cards right."

    ReplyDelete
    Replies
    1. Agreed. I'll go even further by saying in the past 7 years. Unless you have something guaranteed (i.e. your father or mother is a judge) then you are taking a risk, and an unacceptable one at that with the price of law school today.

      Delete
    2. I enrolled in 2006; graduated in 2009. Worked sh!tlaw until 2012 and nonlaw now. My career tracks the decline quite well, actually. I'll give the suckers who signed up in 2010 some slack because they were brainwashed by the education cult to think more school is always good, and the economy sucked, but if you enrolled in 2011 or later, screw you. The data was easily available and you have no excuse. I went to law school because I was a loser with a little academic skill, and I thought I could use the latter to balance out the former, so I won't be that harsh to those similarly situated. But now the evidence is overwhelming that law school is a graveyard for human aspiration.

      Delete
    3. 5:40 PM is right on the mark. I had a master's degree and was working two part time jobs in this shitty post-modern failed wasteland of a country and decided to go to law school to at least maybe have a shot of having a living standard above a 3rd world country. Enrolled in 2010 with a 28k scholarship at a 4T, lost it after two years and now I'm 110k in debt, broke and living with my parents and unemployed. Suicide is my top career choice, probably going to go to Golden Gate Bridge and just jump like so many others.

      Delete
    4. Sorry, the Golden Gate Bridge is now reserved for all the Golden Gate University law students committing suicide. You think you've got it bad? How about a JD from GGU along with $225,000 in lifelong debt?

      Delete
    5. 8:40, I was venting and would never do anything crazy. I will eventually figure out what to do next and be okay. Without nonprofit forgiveness, however, I'm in trouble.

      Delete
    6. @ 2:28 PM

      For whatever it is worth, I imagine that just about everyone who finds himself in an untenable financial situation with no clear solution in sight entertains the idea of suicide at one time or another. Actually, I do not have to imagine the temptation because I too experience it. It is dangerous to express it (in one sense) but do we really get anywhere if we are all silent about the toll that carrying impossible debts exacts?

      Scream it from the rooftops. The 'system' can only exact so much punishment. A person can only be pushed so far and no further.

      Corpses do not repay student loans. Do the 'powers that be' get that?

      To hell with the shaming of student debtors. How many great, American companies have declared bankruptcy multiple times? How many now-wealthy Americans have? How many banks would have gone bust but for a bail out?

      Why should a fictional person possess more economic rights than a real person?

      You and I and a whole lot of other ordinary people are getting screwed, crushed, discriminated against so that we suffer *all* losses and someone else profits obscenely. We suffer all risks. The risk the job market tanks, the risk interest rates are zero, the risk median wages fall, the risk of becoming disabled, the risk of getting hit by a mack truck and remaining alive.

      So, do not do it, but do tell anyone and everyone about the toll it takes on you; about the despair, about the exhaustion, about the struggle, about the myriad deprivations from the ordinary purposes and goals of life that you have to suffer as a result of being discriminated against.

      That is it. Every other person and corporation gets to make a bad investment and have that bad investment adjudicated as a loss to the lender in the near-term...except student debtors.

      There is zero rational basis for discrimination. Other forms of unsecured debt are discharegable. What the federal government claims to make in an annual profit from student lending, it gives away every year in foreign aid - i.e. about 50 billion.

      If some pig boomers et al call you the entitlement generation for demanding a write-off on a bad investment, remind those generations that the average medicare benefit in ***excess*** of the average lifetime contribution to medicare is 160k for the ladies and 116 for the men.

      So, I guess if you had 160k in student loans outright forgiven you'd only be breaking even with the goddamn old folks in terms of 'taking.'

      And since these programs will not exist for you, maybe the old leeches should get the fuck off our backs? Hmm...go tell that to Mitch McConnell and Lamar Alexander.

      Do not take any shit.

      Delete
  2. All this hand-wringing and gesticulation suggests 'the problem' is complicated when it is not.

    Change one line in the Code of Federal Regulations so that IBR / PAYE and income-based repayment are counted as 'defaults' against the institutions...Boom.

    The overwhelming majority of higher educational institutions could not take one more dime from the federal lending system, because their default rates would exceed the generous thresholds. That is called risk-sharing on employment market conditions.

    Of course, if Congress does not feel like changing the rule, the last 3 graduating classes could always collectively and intentionally allow their loans in IBR, etc. etc. to default. That would shut down a school in the blink of an eye. Maybe we should do that...

    Repeal a few lines in the bankruptcy code and restore equal rights to student debtors...Boom. DOE lending is not profitable, not even solvent, and becomes very unattractive to the taxpayer.

    I think John is wrong.

    We should focus on law schools as they provide the most egregious and clear example of intentional, needless, greedy, price inflation enabled by uncapped federal loans known as the GradPLUS loan. The law schools are engaged in fraud. Similar fraud uncovered at Corinthian and ITT Tech is being prosecuted presently by the CFPB.

    What academics really want is a 'solution' that does not skin them and their bond-debt-ridden institutions alive. It is too late for that.

    Y'all have had decades and have made your choice. There is no solution now that does not involve the "Boom" of a popping credit bubble that rips apart your industry. Hopefully, it never gets remade. Raze it and salt the earth.

    ReplyDelete
    Replies
    1. "The overwhelming majority of higher educational institutions could not take one more dime from the federal lending system"

      As a commentator on Prof Campos's blog pointed out a few months ago, its possible if this were to occur private lenders might step in to fill the gap. At the moment GradPlus is just so easy and convenient to get it has largely suppressed demand for private graduate student loans.

      But if GradPlus were limited, financially naive graduate students (and it seems most are) would look to private lenders. In theory private lenders are more likely to properly assess the ability of borrowers to repay their loans. In practice debt securitization might make them more prone to reckless lending. And it doesn't help that student debt is outside regular bankruptcy laws.

      Delete
    2. ^this^

      Especially "restore equal rights to student debtors".

      If student loans were dischargable in bankruptcy (as they should be) the scam would end - not only would young people's lives no longer be ruined by mountains of non-dischargable debt, but the evil corporatist law school pigs' doors would close by the dozens - because no private sector lender would EVER make a dischargable loan for law school tuition.

      Delete
    3. @2:45 PM

      I do not think private "securitization" (aka bundling loans to hide the bad ones and selling it on to stupid money) would be a problem, because there is no collateral on a student loan, and because when tuition increases so much, the loans are all bad.

      In any case, as 4:00 PM noted, if private loans were dischargeable in bankruptcy, SLABS would go away.

      Student loan asset backed securities are a result of discrimination against us in the bankruptcy code.

      The discrimination is actually invidious, just as it would be if the federal government decided that one who sector of the population was not allowed to equally participate in the economy by law.

      What would be the outcry if the federal government wrote a law that said: "No one under the age 35 is allowed to buy a house?"

      We are being put through the meat grinder of economic discrimination just as many other minority groups have been.

      So, where are our learned academics on this?

      They know if means they go down if we get equal legal rights, so they shut their tight lips about it and talk about any and all "reform" that does not involve legal equality. Sick really.

      Delete
    4. "I do not think private "securitization" (aka bundling loans to hide the bad ones and selling it on to stupid money) would be a problem, because there is no collateral on a student loan"

      Unfortunately as we've seen with the GFC securitization makes lenders and investors very very stupid and very greedy. All they have to do is look at the past performance of student debt packages, such as SLABS, and see these have been very solid to date. That's all the proof they need to pour money into student debt. Lack of collateria? Risk? Irrelevent. Even reinstating bankruptcy protection would barely give them pause. Housing has always had this, yet it didn't stop the mortgage crisis.

      Delete
    5. @ 4:57 PM

      I hear you. However, SLABS came of age when bankruptcy was gone. Bankruptcy changes the risk picture and it changes the rating on a security.

      Obviously, you're right, all sorts of people and institutional investors bought RMBS that were in fact full of worse-than-subprime garbage. However, as we learned this mostly had to do with there being a AAA rating on the securities. That AAA rating was not complicated, but was achieved through modeling an assumption that housing prices would increase forever (an impossibility given there's limited dollars in the world). Fraud, in a word.

      Where is the equivalent opportunity for fraud in SLABS? An assumption wages go up forever and at a given pace? Not many people would buy that assumption.

      Also, get read to gag, SLABS got bailed-out in the TARP program. There would have been serious losses otherwise. Those threatened losses happened even in the absence of bankruptcy. What would bankruptcy do to existing SLABS??? I smile at the thought.

      At the end of the day, perhaps you're right. Perhaps if federal loans went away, tuition would not fall precipitously because privately securitized lending would fill the gap. Still, I'll take that bet. The DOE supports price. Period.

      I know full well that there are lying asshats - the New America Foundation funded by Lumina funded by Sallie Mae - that take a nominally similar stance with respect to GradPLUS. Those people are evil. They want private lending without bankruptcy protection.

      Still, we need, we must have, we deserve and are entitled to equal legal rights. That means both bankruptcy and capping, or fully repealing the subsidies without which tuition cannot rise. I mean hell, Congress could tell institutions that they cannot take federal money unless they do not charge in excess of the federal loan eligibility in all expenses of attendance. They could truly price-fix the market, and fix it low. They do not do this, because they do not give a shit and you are profit center.

      Personally, I am so radical that I do not think law school should exist as a barrier to entry to the profession. The filthy guild will never let that happen. Who needs a loan when you do not need a degree?

      Delete
    6. @4:57, mortgages are different because the lenders can foreclose and recover, in most cases, some or all of their money. In the case of educational loans you cannot take back the education and resell it. Best you could do is let defaulting law student borrrowers work off their loans suing other defaulting borroers.

      Delete
  3. I won't knock the guy for saying this. But as everyone here knows, the same things were being said by Campos, Nando, and a few others years ago--which is how the progress up to this point was achieved.

    Don't let the perfect be the enemy of the good. Shrinking applicant pools, faculty lay-offs, and ultimately school closures are all achievable goals worth working for.

    ReplyDelete
  4. We have some relatives who got very strong out of college jobs, but they spent months unemployed, temping and going in and out of a few short-term jobs before it worked out for them.

    The legal profession has a barren job market compared to the number of lawyers out there with top records from the best law schools. The top law schools are relying on large numbers of short-term big firm jobs for placement. There are not 6,500 jobs with mid or even low six figure salaries cropping up each year for the those leaving big firms. That is an estimate of the number of lawyers forced out of big law firms each year-6,500.

    One of the insidious practices is of having experience limits on associate jobs in large law firms. Just look at the website gobiglaw.com. That means that the students from top schools do not qualify for the bulk of high paying legal jobs after a few years of work. It means in many cases that there is not a job right after big law, or a few years after big law that would make the decision to attend law school an economically sound decision.

    So aside from graduating too many students and saddling them with too much debt, you have a system that does not allow most students from good law schools to continue working as lawyers in six figure jobs after a few or several years, long before they hit any type of age at which it would be economical to retire, let alone to have made the decision to attend an expensive law school be an economical one.

    You need to read the scam blogs to know what is going on, and even then a student does not know whether what they are reading can be believed.

    ReplyDelete
  5. It's nice to see the law school pigs finally feel the effects of their unmitigated greed. What's beyond pathetic is that these bitches and hags - who have grown fat on the bones and carcasses of lemmings and the taxpayer - are now acting as victims.

    ReplyDelete
    Replies
    1. Amen to a real human being who has stood up for decency. Fuck law school. I can't wait to default on my loans. I have no choice. There are no jobs.

      Delete
  6. At this point legal education has two questions that it needs to answer.

    First, should schools serve as adjutants to Big Law and the rich; or should they benefit their students, the people, justice, and whatever else they say they benefit?
    If the former then they should continue to charge what they are charging students. The tuitions are unreasonable by any measure but less unreasonable for the salaries of big law. Students regardless of what they want to do with their law degree will continue to be forced to try to get big law jobs to have some semblance of a chance to pay their loans and everything will work as intended. The rich will be able to do what they want undeterred by high prices they can easily pay and the poor will continue to be ruined fiscally by law school.
    If the latter then schools will have to bring tuition down to a reasonable level so that students can work in the public interest while still being able to pay their student loans without being rich. Whether the money to do this comes from cost cutting or from endowments or from charitable giving doesn't matter that much, It just can't come from the students as loan conduits anymore.

    Second, should the number of law schools be pruned to reflect the new reality or should every toilet be saved at the expense of prestige and capability?
    There are twice as many law graduates as there are jobs for lawyers. This simply cannot continue so it won't. The only thing the legal academy can control is whether the students will attend 200 law schools almost all of which have been made miserable toilets eviscerated by the drop in demand for their services. Toilets on the brink of bankruptcy or even pushed beyond and surviving only via artful dodges like surrendering their buildings to creditors and leasing them back because their buildings are only good for a forth tier law school. Shitters that have forgotten what it means to have standards and will admit any lemming regardless of stupidity who can get a student loan.
    Or will law students attend 100 law schools that are strong. Schools that can survive with the reduced enrollment without having to fluff the classes with idiots. Schools that are good choices because the supply of law grads is equal to demand rather than much greater.

    ReplyDelete
    Replies
    1. Look at the percentage of the class borrowing to attend even at the 'best law schools' in the country. There are not enough "rich" to sustain this industry, or her institutions bloated budgets, tenure obligations, bond debts.

      Get rid of the subsidies for tuition to law schools and 'the market' as it were will decide how many there should be. This half-assed "regulation" of the industry, by the industry and for the industry will never act against in the interest of the industry (money).

      Does your federal government currently act in the best interests of the taxpayer, the prospective student, the borrower? No.

      She seeks to profit just like Sallie Mae. She allows costs to inflate unchecked, even though for all intents and purposes she is the single-payer. She allows a captured entity, the ABA, to "regulate" the industry. She designed the removal of bankruptcy protection from student loans and simultaneous institution of soft-default programs to keep the bubble growing by masking defaults.

      Do not look to some governmental, regulatory, or damn trade association (ABA) to do something that needs to be done. It will never happen.

      Demand equal, legal rights. Minorities need to get in the street, get loud and not go away. Let the industry implode on bad debts.

      Delete
  7. I commend this style of honesty and frankness. Professor Kunich should be praised for his forthrightness. However, he has merely outlined the "issue". We are prepared to hear proposals and recommendatiosn for a solution -- as an academic and educator. While academic institutions are subsidizing their lifestyles with student loans (an observation) and firms are separating associates while enlarging gross revenues, the larger question remains, "how do we fix it?" How should the legal industry -- law firms, oratores, laboratores, educators, etc -- "make whole" those students who have assumed vast amounts of ruinous debt?

    ReplyDelete
  8. There is something really appalling about the idea that in the United States, a person's life can be ruined by higher education. I have seen many smart, ambitious young people who are being crushed by the burden of student-loan debt. I realize that life isn't fair, and that people may work hard to earn degrees which they realize -- too late -- are unmarketable. But that person shouldn't then be condemned to a lifetime of poverty and misery just because he/she chose to earn an advanced degree. Are these situations totally unique to America? Are there other places where higher education is so costly that people can incur debt that lasts for decades? My instinct says no, but if anyone here is an expert on comparative higher education, I would be fascinated to know whether this sort of scam exists anywhere else in the world.

    ReplyDelete
    Replies
    1. I teach law in Western Europe (to both undergrad and master's-level students) and at least in my country, the answer is no--law school here is not a life-ruining proposition. The job situation for new lawyers is pretty much as bad here as it is in the United States. The difference is that the undergrads pay something like 100 Euros/year in tuition, and the graduate students pay 200-300. So arguably they have an opportunity cost caused by being out of the workforce during their years of study, but realistically (given our high unemployment rate), they are probably not losing that much. In addition, the vast majority of the students I teach (at a well-regarded, but non-elite public university) are from the local area and live with family. Student loans are unheard of. And because the undergraduate program (and even the master's program, to a certain extent) is basically just a law "major," there isn't really a stigma when they get out. It's very common for law graduates (at least ones who weren't on the judge track or following another extremely litigation-oriented course of study) to go to work in business here after finishing university.

      How do we do it? Well, we are a welfare state, of course, with all the positives and negatives that implies. And our buildings are falling down around our ears: no fancy U Oregon or TJSL type palaces here. Which is fine: all you need to teach law is a CLASSROOM. And professors here get paid what professors in the US would consider to be poverty wages: law professors (all of whom have Ph.Ds) make something like 1800 Euros net a month to start, which doubles after they are promoted to a full professorship (which requires one to write a couple of books and many articles, it's basically a tenure review with teeth). In addition, there is none of this "I teach 2 classes a year" nonsense: most of the professors here have real teaching loads. There are a decent number of adjuncts, but the pay is extremely low. Part-time teachers are also used, but there is a limit on the number of years that a part-time person can be used.

      Delete
  9. There have always been storm clouds in the legal profession. Now it happens to many more people than in the past.

    Law was always risky, even for top law school graduates. The risk is just much greater now.

    What is hard to understand is how the scam can continue with so many law students playing ball and taking on so much debt. Who does this today and thinks it is a good idea?

    ReplyDelete
    Replies
    1. The prestige and glamour attached to law is still very great. Although its diminished surprisingly fast. I mean, despite most schools moving to de facto open admissions the number of matriculants is at a 40 year low. So despite admitting nearly anyone who can sign a loan application, most schools can barely attract enough suckers to keep themselves in operation. That's progress.

      Delete
    2. "There have always been storm clouds in the legal profession. Now it happens to many more people than in the past. "

      The first sentence is a strawman. It's pretty clear that the situation is far, far worse than (likely) the Great Depression). I've seen a lot of people assert that it's 'cyclic', but none have posted statistics to back that.

      Delete
    3. All of this is true--for decades the law schools have flooded the market with more graduates than the attorney job market could absorb. The difference is that it is now much harder to recover from law school and move on with one's life because (1) the economy is shitty and getting a decent non-legal job is a lot harder (JD used to be less of a scarlet letter on one's resume) and (2) tuition has increased outrageously, whereas many people used to graduate from law school with little or no debt, which made it easier to move on.

      Delete
    4. @ 7:23 narrowing it down a bit, the "prestige" attached to lawyers is mostly present in biglaw or federal government jobs, and a few other niche areas. I don't think the general public views the local divorce or ambulance chasing PI lawyers as "prestigious." If anything, the stereotype about them is that they are slimeballs.

      The problem for the schools is that most of them place only a handful of students in these prestigious jobs, and the employment stats show that now.

      Delete
  10. If you go to law school today, even the best law school, you still potentially face a losing battle against unemployment and underemployment for much of what should be your career. It is the law of supply and demand. It doesn't help to have a degree from a prestige school if the demand is not there for your services. People don't get that the prestige of Harvard or Columbia or Penn or Michigan Law School does not make for demand. Sure you are in a prince or princess-like environment when you go to one of these schools and can lord it over the masses. It just doesn't work long-term for most people because of insufficient demand.

    It is just craziness to take on huge debt for one of these schools because of uncertain career prospects. It is even crazier to attend a low ranked law school and take on debt. The risk of failure is huge.

    People are figuring out, that outside of big law, the opportunities to make money or get a good job are not so great. There are just very limited numbers of high paying legal jobs out there.

    Surely a lot of law grads are not able to even make a start. However, many of those who make a good start do not end up well.

    Buyer, beware, for even the best law schools.

    ReplyDelete
    Replies
    1. Thank you for your candor. Even after following this blog since May 2013, I can STILL cultivate fantasies of attending Virginia at sticker. I don't know what's wrong with me.

      Delete
    2. You might be okay for long enough to make it more than worthwhile. You also might not be. If you are going to take on that much debt and forgo the opportunity cost of working for three years, there needs to be a pretty good chance of career success.

      For single women, there is also a chance of meeting a good mate who may be successful.

      Go into education where you get tenure and there will always be steady demand, or health care where the demand is strong and growing. Or look at tech, and whether there is enough demand so you have some type of career stability. The name of the game is a relatively stable career, and you may be better off as a stable teacher, than as an unstable lawyer. At least you will not be banging your head against a wall again and again in your career because paying work is not available for you.

      Delete
    3. One other thing: the prestige of your law school dissipates the longer you practice. So after 15 years, the Harvard degree won't open the same doors it once did immediately after graduation.

      Delete
    4. Uh, @9:30, what kind of education are we talking about? Higher education? The glut of Ph.D.'s is even worse than the glut of J.D.s.

      Public schools? Look at the demographics. Birth rates have collapsed in the states where teachers are well-paid. The population is shifting to the south where salaries are lower. The overall birth rate is at the replacemet level - zero population growth. America's population only grows through immigration. We seem to be headed toward where almost all of Europe is - declining population. I wouldn't bank on steady demand for education.

      Delete
  11. Fuck you 2015.

    And >Fuck You< law school for making 2015 another debt-infused cunt of a year full of self-loathing and hatred for myself for getting duped by your absolute bullshit. Yeah I was scammed. You got me. Well done, you pieces of shit "professors". Enjoy that $120,000 I handed over to you. I hope you fucking choke on it.

    There's a special place in hell for law "professors". They know what they're doing and they have no shame.

    ReplyDelete
  12. http://www.wsj.com/articles/jason-delisle-the-hidden-student-debt-bomb-1419983516

    http://www.elliottwave.com/freeupdates/archives/2014/12/31/A-Looming-Debt-Implosion-in-U.S.-Student-Loans.aspx#axzz3NWWzLd33

    http://beforeitsnews.com/opinion-conservative/2014/12/the-student-debt-bomb-were-all-on-the-hook-for-2952884.html

    ReplyDelete
    Replies
    1. Jason Delisle works for the New America Foundation, which is basically a lobbying group for private educational loans. New America is funded by Lumina Foundation which is a group funded by...Sallie Mae.

      What these people want is private lending in which the borrower is not allowed bankruptcy. They want a cut of the slavery action. They want private securitization - student loan asset backed securities. They want your first fucking born.

      Mr. Delisle gives no indication that he is in the least bit interested in the restoration of bankruptcy protection to ALL student loans, nor in regulation that would force schools to share risk when taking money from the public.

      Notice his tone: the problem with student loan policy is that it is too generous to borrowers under the belief that loans are burdensome.

      No offense, but what a stupid ass, and what a worthless article.

      We, who are effected, are all perfectly well aware that forbearance and alternative repayment programs (IBR, PAYE) keep the official default rate down. No duh.

      Masking defaults through IBR/PAYE/forbearance primarily benefits the schools who are under a regulation that would deprive them of student loan funds if their default rates exceed certain thresholds. See, 34 Code of Federal Regulations 668.

      This is just one big intentional fraudulent scheme courtesy of your government to make sure that the only people who suffer, and suffer, and suffer for the bubble it created are student borrowers.

      Delete