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tl;dr: structural adjustments are hard, transition costs suck. It's easy to judge the author for feeling "entitled" to a high-paying post-law-school job, and -
by kgrin 16y ago
tl;dr: structural adjustments are hard, transition costs suck.
It's easy to judge the author for feeling "entitled" to a high-paying post-law-school job, and - just to get this out of the way - obviously he isn't (entitled). Yes, he made his own choices, and just like he would have been screwed getting his telegraph-repairman certificate circa 1900, there's always a certain amount of risk one takes choosing a career.
That said, the way many law schools - particularly top-50 schools like BC - market themselves is indeed as pathways to high-paying Big Law jobs, and indeed is the only way they can justify the tuition. His complaint (which I obviously have no way to really evaluate) about BC Career Services being less-than-helpful is very relevant here.
All that said, the underlying problem is more complex than "BC is greedy" or "the author made a boneheaded career choice" - there's a structural shift in the market for lawyers (there were too many, market was oversaturated), and a bunch of people who made choices based on market conditions in 2007 are pretty screwed. Yes, they all bear some responsibility; what now, though - does this guy go back to teaching and have $100K+ in debt while pulling down "normal-person" wages? Law school tuition, to a large extent, reflects expected earnings. You radically change half of that equation, and things start to break (and yes, you can declare personal bankruptcy... except that student loan debt is among the most difficult to dispose of, even via bankruptcy).
Over time, I suspect (though who really knows?) that either salaries or tuitions or both will adjust, if not in nominal than in real (inflation-adjusted) terms. But what about the several "lost generations" of JD's with mountains of debt but no jobs? I don't have an easy answer - "universal JD loan amnesty" doesn't sound like a great idea either, and who would fund such a thing anyway? - but it's a problem worth considering.
This is actually somewhat similar (though of course not identical) to the structural problem confounding many health care reformers. Medicine in the US is really expensive; part (though by no means all) of the problem is that doctors, especially specialists, are paid a lot. A big part of the reason why (though maybe it's more accurate to say it's a correlation - I'm not really sure what the causal direction is) is that after a really long time in school, you graduate with ~$500K of loans, and then (in most cases) live in penury during your residency. You sort of have to be able to cash out at the end of the rainbow, otherwise it's not just unattractive but borderline impossible for anyone who isn't otherwise independently wealthy.
So what do you do? It's straightforward and simple to say, "doctors should just make less, and tuition should be correspondingly lower." But of course we're not in a giant central planning system, and even if we were, it's not like that's a switch you can flip overnight. If you suddenly started paying all doctors less, how would the class of 2010, with that half-mil in loans, make good on those? Everyone (or at least a great many people) realize that there's a structural problem, and the vague outlines of a better equilibrium... but how you get from A to B is a lot less clear.
(Disclaimers: there's all sorts of other reasons why medicine isn't really a proper perfect market, etc. It's not a perfect analogy, etc.)
Fun exercise for the reader: why are new minted MBAs not in the same boat? Anecdotally, many are, but not as many as new lawyers.
- bradleyland 16y agoIMO, the best solution to resolving the tuition pricing/lending issue is to strip away bankruptcy protection from the lender's side of the student loan equation. I worked for a bankruptcy trustee for a couple of years, and it was an enlightening experience. Generally speaking, the greater the security, the higher the dollar amount you will be loaned. An example: A bank will loan you hundreds of thousands of dollars for a home, but only $10k in credit cards. Why? Because they mortgage security is the house. The bank has something to take. With credit cards, the debtor simply has to file for bankruptcy in order escape the debt. This introduces a level of accountability on the behalf of the lender. Rewind to student loans. There is no accountability to the lender. You cannot escape student loan debt. Period. As a student lender, rather than evaluating the risk of default, I am left to focus on the debtor's ability to service the debt. I may even loan them more money than I think they can realistically pay back. Why? Because I'm able to borrow money at such low rates that I can generate a tremendous cash churn at a rate that is many times my borrowing rate. Even if I have to write off a portion of the loan value at the end of the term (the debtor dies or flat defaults and goes to jail), I'm still ahead of the game because I've been compounding my earnings for years. It's a sick system with no escape for student debtors. The system was created to incentivize higher education, but the unintended consequence is that an entire market has sprung forth from a custom tailored opportunity for predator lending. Big surprise.
- kgrin 16y ago"flat defaults and goes to jail" - the following isn't a joke question: do you actually mean that people go to prison for defaulting on a loan? I thought debtors' prisons were... a concept we got past around the Victorian era?
- bradleyland 16y agoSorry, no. That was hyperbole. You're not in jail in a traditional sense, but there are a laundry list of bad things that will happen, making it seem like you are. I'm talking things like wage garnishment and draining bank accounts. It's difficult to live a life based on cash (as in green paper), so at some point, the banks will catch up with you and drain your accounts. It's next to impossible to lead a normal life when you can't even save up enough money to pay cash for a $5000 car. The impact of wage garnishment on employment are significant as well. How motivated would you feel to show up to work, knowing that you'll never see the majority of your wages. This drives a lot of people to do stupid things like commit fraud, which can result in jail time if you repeatedly break the law. You literally end up on the run from your debt. That's not a life you want to live.