Debt News hits the fan: Even the Boomers are screwed over now

Two big scam articles have hit the press. They are about graduate education and not law school as much, but it still shows how widespread the mistaken policy of unlimited and unregulated student loan spigotting (and the academic leeches taking advantage of it) have spread. 

The first one is unbelievable:

The Ph.D. Now Comes With Food Stamps

She exacerbated her situation by deciding to have a "baby makes two" family in the midst of total debt servitude. There's a bit of "Slut Scam" to this one, where a girl puts out to Alpha-dude/future deadbeat dad, gets knocked up, and the "playa" disappears, and now we are all paying for the illigitimeeto and Baby Momma. Why a single mother decided that society had a great need for Medieval Historians with 'degrees' from an unknown school is unsaid, but we are all paying for her 'education'. Both she and society have been made the worse, but the school got its Danegeld. Society somehow got stuck paying for this disaster.

'I Fully Expect to Die With This Debt' Baby boomers who went back for graduate degrees struggle to pay back their student loans

. . .

A Good Use for the LSAT

Preston’s post inspired me to reiterate an idea that has been raised tangentially a few times but deserves serious consideration.

Lawprofs, including Campos now, have signed onto a meaningless pledge for incremental reform akin to a long barren path leading nowhere.  I have asked Campos to explain his sudden retreat from the scamblog movement and this pledge for reform that seems to contradict most of what he stood for just a year ago.  Hopefully, he explains his position at some point.

The mess of meaningless reforms reaffirmed my belief that the simplest messages are the only ones that can pierce through the white noise.  Instead of a package of reforms, the scam movement should promote one simple reform to solve a number of problems simultaneously: we should petition the ABA to require a minimum LSAT score for a school to maintain accreditation.  To support such a petition, plenty of statistics and individual stories of misery could help to shame them.

Manifesto of the Menshevik Fake-Reformers

The French Nation, in simultaneous, desperate dead-pull, and as if by miracle of madness, has pulled down the most dread Goliath, huge with the growth of ten centuries; and cannot believe, though his giant bulk, covering acres, lies prostrate, bound with peg and packthread, that he will not rise again, man-devouring; that the victory is not partly a dream. Terror has its scepticism; miraculous victory its rage of vengeance. Then as to criminalty, is the prostrated Giant, who will devour us if he rise, an innocent Giant? —Carlyle

We have reached the point where the systematic failure of law school is simply undeniable, even by the schools themselves. The new question is, what to do about it; should there be deep or shallow efforts at reform? Should we have a Bolshevik revolution in legal education, or merely a Menshevik touch-up?

Recently, a group of law professors wrote a manifesto, more absurd than even the UNABOMER's, filled to the brim with the dregs of ideas to reform law schools. I made no comment then, because—like the time Bill Maher refused to read Woody Harrelson's book, My Brother P!ssed on Me in Ed TV: I didn't read it, because honestly, it looks stupid. Comments were made here earlier disrespecting the usefulness of these proposals, as the "reforms" merely prune the leaves of a twig of a redwood, leaving the gargantuan trunk and roots both untouched and unmentioned. Professors, ya'll ain't no lumberjacks.

The True Cost Runs Deeper Than You Think

So far, much of law school debt is still viewed as monopoly money, to be IBR-ed or PAYE-ed as a "side concern". It seems that many Deans, professors, and members of the establishment (NALP, ABA) seem to endorse this view – that while it is indeed a burden, most law graduates are young, have a lifetime to pay it off, so where is the harm in the final analysis? Isn’t youth wasted on the young, so why not pay some soft-bankruptcy student loan debt while you’re at it?

I’m a 40-something Gen-Xer, and I made the mistake of going back to law school early in my oh-so-vaulted STEM career (which is overrated itself, another story). I graduated in 2005 and have worked in a "JD preferred" career since, and I’m one of the lucky ones – debt was bad but barely manageable, and my interest rates are low. I’m on the 25-year plan, yet still pay a lot every month relative to my salary. The worthwhile ROI vis-à-vis my law diploma and bar license has not been there, as is the case for many similarly situated.

A cost I did not count ten years ago, though, is looking at my daughter today, who came along herself a few years ago. Every month that I write student loan checks, that is substantive money that does not go to my daughter’s education. Or to her extra-curricular activities. Or to clothes, for that matter. 

There are things I will not be able to for her, due to my decision to believe the law school cartel and buy into the law school scam. Things every parent wants to do for their child. Things that are considered very "normal" or "simple", like "ballet lessons for tots" or small vacations, let alone larger concerns such as her own education. The saying "shirtsleeves to shirtsleeves in three generations" takes on a whole new meaning for me, for someone whose grandfather was a farmer and whose father was an engineer.  Paul Campos recently opined on this trend, saying that law school is just for rich kids, now.  Ah, how things come full circle.

http://www.lawyersgunsmoneyblog.com/2013/04/law-school-is-now-for-rich-kids

Meanwhile, the Deans and other professors encourage students to take on even more and more debt and further perpetrate the scam. I’m reminded of Professor Henderson at University of Chicago a couple of years ago, who complained about "high taxes" while being a law professor, having a doctor wife, three kids in private school, and a house in Hyde Park. I see red sometimes thinking that pampered, silver-spooned whiners such as Henderson get to send his kids to Chicago Lab on the nickel of many, many students, K-JDs and non-trads alike, while complaining about his so-called problems. His wife told him to shut up and rightly so, as his own writings on the subject are curiously down (although many commented in the media at the time). At least Chicago seems to turn out good prospects for its students, but that is a rare thing in this legal market with high overproductions of JDs.

http://articles.chicagotribune.com/2010-09-23/business/ct-biz-0924-rich-blog-20100923_1_law-professor-blog-taxes

My own child will have fewer opportunities than Henderson’s, despite his "crushing" tax burden and other "difficulties." I find it hard to shed a tear for the likes of him, whose attitude seems to dominate the upper-eschelons at essentially all law schools. Pay no mind, however, as JDs are "versatile" and legal careers are "valuable," and $200k is a small price to pay for such advantages. ScamDeans and LawProfs have private school tuition and mortgages on very nice houses to pay, you know, so you JD applicants better be stepping up to the plate. They are our Promethian betters, and are deserving of their hard-earned accolades.

I attended a lower-ranked religiously-affiliated law school, and I have certainly learned one thing in my experience – "the sins of the fathers are visited upon the third and fourth generations", so far as legal education is concerned. This blithely glossed-over fact of creating economic harm down the line, while Deans and professors cash fat paychecks while writing articles to each other in the Law School echo chamber, needs to be heard much louder and clearer.  Clearly, the Deans and profs aren't worried, as they have apparently never had to face real or significant economic difficulty in their lives - otherwise, they would not be so cavalier in their assessment of the situation.

By their fruits ye shall know them.

Unlicensed Therapy from Tulsa Tams

Buonaparte knew everything, even to the names of our cadets in the East India service; but he failed in this, that he did not calculate the resistance which barbarism makes to refinement. He thought that the Russians could not burn Moscow, because the Parisians could not burn Paris. —Hazlitt

Awhile back a professor—Wasn't that Tulsa Tams?—said that those other professors who think that law school is a scam should quit, if it bothers them so much. The comment was directed towards "LawProf". I can't remember if it was Tams or another buffo; the shill quotient is too extreme for me to remember individual distinctions in the borg cube of 12,000 law professors out there, each spamming their 'research' and 'theories' to themselves. But her obnoxious "look how smart and mature I am" self-serving comment deserves more scrutiny. 

The point of her comment, which no doubt she felt was genius when she made it, was based on the pretense that she is both morally and intellectual superior. This belief in turn is based on her preschool-level superficial logic: if you are personally bothered by something, then you should just stop doing it and then it won't bother you. It's like telling a woman who is being stalked by a creepazoid, "Hey lady, don't get emotional about it. Just move to a different city!" Wow, what a genius solution! If a couple whistleblowers shut up and quit, the problem will go away! It's magic!

The Debt Slave Class

"American Dream Eluding Under-40s with Student Debt," by Kathleen M. Howley (Business Week)

Money quote #1: "“Buying a home and having a family are the hallmarks of middle-class American life,” said Robert Lawless, a professor at the University of Illinois College of Law in Champaign. “The hope is still alive, but for now a lot of people are being forced to rent because all their money is going to pay off their student loans.”

Money quote #2: "Thwarted would-be homeowners are helping to support rental demand for single-family foreclosed homes, the emerging institutional asset class that investors including Blackstone Group LP (BX), based in New York, and Colony Capital LLC, in Santa Monica, California are accumulating."

So, not only are student loan debt slaves paying a huge amount of money to the investor class in interest, late charges, etc., they are also shut out of the housing market (and the tax advantages thereof) and forced to pay rent to the investor class.

*****

"New GSU Law School to be 'showplace' on key downtown block,"  by Maria Saporta and Doug Sams (Saporta Report)

Money quote: "We are literally out of space," said Steven Kaminshine, dean of Georgia State's College of Law. "We can't add one more faculty member. It's time for a school with our trajectory to have a building that is commensurate with our reputation."

And the law school arms race continues....

Bond Rating Agencies now on the case

"Standard and Poor's Downgrades Albany Law School," by Scott Waldman (Times-Union.com)

Money Quote #1: "The report suggested that Albany Law is more vulnerable to the national trend of enrollment decline because it is not connected to a larger university. Law schools that are part of a larger university or university system were better able to absorb losses of the last few years."

Money Quote #2: "It's also worth noting that higher education enrollments could be on the edge of a bubble. Shifting demographics will drain the pool of potential students soon. The children of the baby boom generation helped swell college attendance, and the next generation of college students will be smaller. That likely means a day of reckoning is near for an industry focused on relentless expansion."

It looks like the ratings agencies are taking an interest in the law schools. Very interesting. The item about connection to a larger university also ties in with Cooley Law School's proposed merger with Western Michigan University.

"Louisiana College Selling Shreveport Building Bought for Proposed Law School," by Leigh Guidry (TheTownTalk.com)

Money Quote: "The Shreveport building Louisiana College purchased to be its law school in 2011 is now for sale."

Looks like less seats for lemmings.

"Obama Budget: Bad News for Investors, Taxpayers and Education Reform," by Hans Bader (OpenMarket.org)

Money Quote "High student debt poses a risk to the economy, notes the Federal Reserve. But the Obama budgetperpetuates perverse federal financial aid policies that encourage colleges to jack up tuition, driving up student loan debt that now exceeds $1 trillion. One such policy is income-based payment plans that do nothing to cut student loan payments of prudent borrowers, but encourage colleges to increase tuition. They do this by effectively capping the lifetime payments of imprudent borrowers who attended low-quality colleges with high tuitions, and writing offtheir loans at the end of 20 years (10 years if they go to work for the government), regardless of how much the colleges increase their tuition, or how few of their students get decent jobs. Taxpayers, many of whom “work in lower-paying jobs than their degreed compatriots,” will pick up the tab for the written-off loans. Even the liberal New America Foundation calls federal programs like Pay As You Earn a “huge giveaway to” undeserving and imprudent borrowers, as its Jason Delisle explained in an interview with Bloomberg Businessweek."

"Law Schools give Labor and Employment Short Shrift, Professor Says." by Carlyn Kolker (Thomson Reuters)

Anyone want to guess the professor?