Wednesday, December 13, 2017

Reality is Incoming

What is everyone freaking out about...?  We'll just increase tuition another 4%, just like we've done for last couple of decades...

Cross-posted from PrawfsBlawg:
[As] a recent article from Inside Higher Ed points out, a more immediate problem for educational institutions and their students may be the Prosper Act's proposed annual lending limits. The bill would limit federal loans for non-medical graduate and professional students to $28,500 per academic year...
The GradPlus program does one thing really well--it makes graduate school accessible to students regardless of their family wealth. The federal government offers loans up to the full cost of attendance (defined to include both tuition and reasonably living expenses) for graduate and professional programs. Parents do not have to co-sign the loans. Combined with income-driven repayment plans that cap repayments at 10% to 15% percent of a graduate's income, it makes attending graduate school a low-risk proposition...
The Prosper Act would change all of that immediately...there would be an immediate crisis in funding law school--after all, the federal loans would barely cover the cost of living[.]  There would be little to nothing left over to cover tuition. Certainly, some students could rely on family contributions, and some may be able to lessen living expenses by living at home while attending law schools. But not all families are in a position to help, and the legal profession would suffer greatly if only the very privileged could join.  Private loans may step in to fill some of the gap...[but] private loans have decreased so much (declining by more than half) in the years after the introduction of GradPlus that I doubt private lenders could ramp up fast enough to avoid massive disruption in the short term. Finally, any such private loans would probably have more onerous terms[...]
We can sit here and debate where the various forms of concern-trolling are coming from - some say the Prosper Act is nothing more than a thinly-veiled attempt by conservatives to stab at the Heart of Darkness that is American Liberal Education and try to kill the beast.  Others will say that limousine-liberals are merely crying champagne tears for the underrepresented, when in reality all they care about is gettin' that next helping of thick-cut pork with extra gravy.  I don't doubt that some mix of both is going on, as human psychology is rarely, if ever, purely altruistic or unburdened by ulterior motives.
The practical, Aristotelian reality, however, is that if something can't go on forever, it will stop.   Long before the "law school scam," many have warned, argued and decried against the unbridled escalation of educational costs, of which law schools have become the poster-child.  Much hand-wringing took place, summits were held, people shook their heads sadly - but nothing substantive was done.
Well, folks, if you are unwilling to clean up your own mess, then you force someone else to clean it up for you.  See, for example, the Financial Crisis.  And you may not like how the cleaner-uppers choose to handle it, but by then it's Too Late.  And, as per usual, the brunt of it falls on the folks currently mired in the system - yet one way or another, it's coming.
All in all, this is why we can't have Nice Things.  Heckuvajob, lol skool cartel!  Mission Accomplished! 


  1. The scamsters have grown so fat on the unlimited buffet of loan dollars, it makes a $28,500 per year limit look like a starvation diet. Suck it up motherfuckers and do what you gotta do! Fire some people. Reduce salaries. Increase work loads. Get rid of the ridiculous libraries. And for god's sake, stop pouring concrete.

  2. I've favored something like this for years. Some students borrow over $80,000 a year for law school, and I thought a limit of $50,000 per year would be severe but necessary. That figure of $28,500 is so harsh that 100 law schools could be forced to close.

    It couldn't happen to a nicer, more deserving bunch than the current cast of scammers. They really are despicable people, and they never follow their own purported standards of critical thinking when they defend their luxurious, parasitic lifestyle.

    1. It's still a waste of money, but at least these poor suckers might actually be able to pay that debt off and move on. Assuming at least some scholarships are in the mix and caps on interest rate, it's probably going to be about $100k at max and the average will likely start to drop to around $60k after the scholarships and other enticements to actually get people to enroll.

      $60k is bad, but a world different than $150k.

  3. The pigs only cared about getting their bloated paychecks for a few more years, until they could retire. The students and taxpayers were merely "collateral damage" to them.

  4. —— The GradPlus program does one thing really well--it makes graduate school accessible to students regardless of their family wealth.

    Indeed, it also makes graduate school accessible regardless of the student's intelligence or ability. Anyone whom a Cooley will admit—and a Cooley will admit just about anyone—can borrow the full cost at high interest, without regard for such petty concerns as ability to pay and ability to succeed.

    —— the legal profession would suffer greatly if only the very privileged could join

    Already the legal "profession", unlike the law schools, is open primarily to the very privileged.

  5. Cooley was denied the requested restraining order barring the ABA from publishing that letter about Cooley's non-compliance with the requirements of accreditation:

    The judge said that Cooley had harmed its own reputation by drawing attention to the letter. Indeed, had Cooley not stupidly sued the ABA, probably that letter would have attracted little attention outside scam-blog circles.

    1. Should the Streisand Effect be renamed the Cooley Effect?

    2. How about Streisand Effect for the whole rotten thing, all the way to the top? Live long and PROSPER.

  6. Lets hope and pray this reform goes through. The real real problem is our ridiculous overvaluation and overfunding of 'education'; which leads to the ludicrous loans scheme and the bloated overenrolment in law degrees and thieving salaries paid to deans profesors and administrators. We need to attack the fraud of 'education' at every level to wind back the funding of student loans, so that the thieves and pigs who run law schools can finally stop their profiteering from human misery.

  7. Hopin' won't help ya, and prayin' won't do ya no good. This is it. This is an opportunity. Time for action. Anybody out there with ideas? Lead, follow, or get out of the way. Personally, I'll follow any good idea to try to bring this proposal to fruition. What the hell, we're all lawyers. Let's see if we can help midwife a new law that is exactly of the ilk we all been achin' to see.

  8. While I have read nothing about this new act, I can only assume that along with the overly-generous loan cap [why not a price control of tuition????], there will be a healthy dose of fucking over the scammed students as well.

    The blessed Republican Congress currently take the 55 billion each year (that was funded with US sovereign borrowing and is counted in the national debt) in student loan repayments and spend it on bullshit, leaving us the whole freight of ungodly debt to pay again again, while they also fuck the young by protecting the industry from desperately needed deflation, competition, etc.

    At least there's which the industry [non]regulates itself via accrediting agencies!

    But so be it! I don't care. IDGAF. As long as these education scammer pigs **suffer** and are exposed for the scum they are, I'll be fine with more tightening of the screws on me. I've already adapted.

    It's your turn, pigs!!!

  9. I was initially excited about this and wrote accordingly. But here's the problem (IMHO): private loans will remain nondischargeable and securitizable. If we don't put the private lenders at realistic risk, they'll rush in and fill the gap, the whole rotten system will continue to metastasize, and young people will be even worse off (higher interest rates, etc.). Unless the proposal is amended, at a minimum, to make private Ed loans dischargeable, I fear the Prosper Act would only make matters worse.

    1. This is an excellent point, and I think exactly what the Trump administration wants: i.e. re-introduction of the fully private lending (sans bankruptcy protection, etc.) in that gap between what the government will finance and what schools want to charge.

      To counter the concern, I just don't think anyone in the private sector is dumb enough to lend to law students even if their plan is to package the loans into securities (with AAA ratings!) and sell them on to the greater fool, because who is fool enough to buy?

      If 2008 said anything, it bitch slapped everyone back to the reality that putting a couple of layers of dog shit in your asset-backed-security-cake, doesn't magically transform the dog shit. Instead, it's just plain old dog shit you're eating.

      The only magical thing about that dog shit is that the very existence of a dog-shit-masking-medium drives credit availability; drives prices up in the underlying market; causes over-production, and corrodes the value of the collateral.

      Dog shit begets dog shit. Pretty magical.

      Prime loan layers in RMBS defaulted in the crash.

      So whatever, as far as I'm concerned, SLABS away! Let the private market lend too much to support the price of tuition, support over-production of degrees, and destroy the market value of degrees so the SLABS holders don't get paid. Fuck 'em. Can't bleed a turnip.

  10. The bill would be more effective if it also restricted the total number of law school loans based overall on the number of lawyer jobs divided by 35 or 40, for the number of years lawyers would practice in a career, plus say 10% for drop outs from the legal profession.

    As part of this proposal, each law school should be required to limit its enrollment based on the number of students it places in full-time JD required jobs and the overall number of loans that can be made, as a condition of receiving any student loan funding from the federal government.

    Only with these outcome based metrics will the bleeding of federal government loan money for worthless legal educations stop. This would also stop the downward spiral in the median incomes of the 1.3 million and forever increasing numbers of licensed lawyers in the US and eventually reduce the huge lawyer oversupply in the US.