Friday, July 8, 2016

Department of Education proposes rule that could help grads escape law school debt

Over the years, law schools have used a clever assortment of tricks and schemes to separate students from around $120,000 a piece. If you've read this site over the past three years, you know that most law schools are a scam. The law school administrators and professors get comfortable upper middle class lives; their students get trapped in debt slavery for at least 25 years after graduating. For students, there may be a reprieve on the horizon.

The Department of Education has proposed expanding debt forgiveness in a very expansive way. the rule, called "borrower defense to repayment", allows Federal student loans to be discharged if "that school committed fraud by doing something or failing to do something, misrepresented its services, or otherwise violated applicable state law related to your loans or the educational services you paid for." If someone can prove that their law school did in fact defraud them, the Federal loans may be forgiven. I am not certain if this forgiven debt is treated as taxable income like with IBR, but it is unlikely. There are also the public policy considerations of allowing the taxpayers to get saddled with this toxic debt; I personally would like to see the Department of Education work with the Department of Justice to recover the forgiven money from the law schools. Shams like TJSL and Cooley will probably close soon if the aforementioned scenario ever occurs. In addition, it may be possible to recover monies from formerly respectable schools that have drastically lowered their standards and trade on their name recognition to peddle worthless degrees to grads (e.g. George Washington) Only time will tell.

This rule is not a slam dunk for law school graduates. It has been well documented how resistant the judiciary is to ruling against law schools in suits brought by aggrieved graduates. In the same vein, I doubt that the Department of Education will be eager to forgive law school debts on a grand scale. However, as this Buzzfeed News article states, "lawsuits could provide significant fodder for law school students in their defense to repayment claims." 

Friends, I would like to think that the tide is finally turning against law schools. We need to keep the pressure on until only the truly reputable institutions remain and the supply of law grads is decreased to an acceptable level.

5 comments:

  1. If a single shithole--Santa Clara, Seton Hall, Ohio Northern, Valparaiso, Southwestern--were to close down, then other schools in the same markets would find they have to do less lying to attract enough students to pay the bills. The single biggest step to eliminating the hardship and heartbreak of the law school scam would be to close down a major school in a major market.

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  2. Maybe a huge number of applications from law graduate under this rule, if it becomes final, would convince the DOE to remove the ABA as the accreditor,

    The ABA will respond to the DOE's existing one year ban by saying that the ABA cannot do what the DOE is asking on antitrust grounds. The ABA will say that the antitrust laws do not permit the ABA to monitor law schools at all and that the antitrust laws require admission of students regardless of job outcomes. The ABA will also say that the antitrust laws do not permit the ABA to audit law schools' data. The ABA will say that every American has a right to attend law school, regardless of abilities and that the antitrust laws prevent any regulation of law schools by the DOE that will limit or regulate enrollment.

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    Replies
    1. Captain Hruska Carswell, Continuance KingJuly 9, 2016 at 5:27 PM

      The American Dental Association closed down dental schools during the 90s due to an oversaturated market and ballooning expenses. Loyola dental school closed for instance.

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    2. The ABA is run by and for the law schools and the largest law firms in America. They do not care about the interests of the masses of lawyers.

      The ABA's pledge of allegiance to antitrust and flooding the legal profession with more than twice the number of workers than can be absorbed is self interest and not based on any sound application of law.

      In about the year 2000, large law firms started throwing lawyers out on the street and into a career of in and out joblessness. Entry level lawyer hiring had to also have become the bloodbath it is today. Older lawyers from double Harvards and comparable schools were becoming unemployed and seriously underemployed in large numbers by the year 2000.

      Until accreditation is taken out of the hands of self interested lawyers and moved to lawyers who are representative of the legal profession, the carnage of lawyers will continue.

      The ABA actually needs to fund substantial numbers of solos and small firm lawyers for ABA membership and attendance at meetings to get an accrediting body that represents the legal profession. Lawyers who are struggling to earn $40,000 a year cannot afford to be active in the ABA.

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  3. Link to current ABA dues. It is over $500 a year to join the ABA plus a section for a particular type of legal work if you graduated before 2006. Solos pay less, but still too much, since the membership alone gets you very little. This is the link:

    http://www.americanbar.org/membership/dues_eligibility.html

    Rates to attend ABA annual meeting of business law section in Boston in September of 2016, are hundreds of dollars, without hotel or travel costs:

    http://www.americanbar.org/groups/business_law/events_cle/annual_2016/registration.html


    The ABA Council on Accreditation is almost all old people, heavily in legal education and some judges, with no unemployed recent graduates and no solos - surely not representative of the legal profession today:


    http://www.americanbar.org/groups/legal_education/about_us/leadership.html

    The ABA is heavily out of touch. They need to bring the meetings to the lawyers to make this organization cost effective, and not rely on the lawyers having to come to the meetings because most lawyers cannot afford to come. They need to make the Council on Accreditation issues representative of the profession, and may need to split it in two. One portion should set numbers of law students, numbers of law schools, outcome standards and cost guidelines. The other, requiring expertise in legal education, would implement the guidelines set by the representative portion of the council

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