Friday, March 30, 2012

Friday Open Thread: I hate my student loans

I hate my student loan payments with a passion. I also understand that it's mostly my fault that I got myself into this mess. I'm sure most of you are aware that law school tuition is on the rise. The ABA Journal is reporting that the average loan debt for graduates of private law schools is approximately $125,000. The average for graduates of public law schools is around $75,000.

The list of the five schools with the highest average student loan debt looks like this:

1) California Western School of Law, with average debt of $153,145.

2) Thomas Jefferson School of Law in California, with average debt of $153,006.

3) American University in Washington, D.C., with average debt of $151,318.

4) New York Law School, with average debt of $146,230.

5) Phoenix School of Law, with average debt of $145,357.

That sure seems like a lot of debt to me. Especially when you consider the average starting salary at law firms here in Nevada is probably around $70k? Remember, I said "average." So some firms pay more than that, some less.

Now, I'm not sure if any of you were lucky enough to be told this before attending law school, but student loan debt is almost impossible to discharge in bankruptcy. Your chances of winning $640 million in the Mega Millions lottery are probably better.

There's some concern that this is creating a "student loan bubble" that is sure to bust when all those students who can't find jobs start defaulting on all their loans.

Who's to blame for this mess? The law schools for charging such high tuition, knowing that their students will be saddled with crippling debt and a bleak employment outlook? The government for making it so difficult to discharge these debts? The students for being freaking idiots taking out huge loans without any guarantee that they'll be able to pay them back? Or should we just blame The Pentaverate?

- JD

44 comments:

  1. The Gettys, Rothchilds and the Colonel before he went teets up!!!

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  2. I've already got a slightly used AH-1G Cobra attack helicopter on lay-away for when I win the mega millions tonight. I'll be ariving at the RJC like a Boss from now on..

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  3. "Who's to blame for this mess?"

    In order of level of culpability:

    1. Law Students (and, in particular, those law students who choose to borrow so much money to attend third-tier law schools) - for not doing the research and financial math prior to attending the Cal Westerns, et al.

    2. Tha ABA - for accrediting so many shitty law schools.

    3. The Federal government - for making student loan money too damned accessible.

    4. Law schools - for misrepresenting post-graduation employment statitistics.


    You who graduated from third-tier law schools with $100k+ in debt are not victims of anyone or anything other than your own lack of judgment and foresight. You made your own pile of shit and are now complaining that you have to live in it.

    Complaining that student loans are not dischargeable in bankruptcy? Are you fucking serious?

    Perhaps the Federal govenment should discontinue guaranteeing student loans and at the same time change bankruptcy laws to allow discharge of student loans. We'd see then how many lenders would be lined up to make student loans to Thomas Cooley students.

    Fucking whiners.

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  4. ... wow, i feel bad for your dog tonight....

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  5. 12:57 PM = Angry old lawyer

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  6. Let me guess 12:57, your mommy and daddy paid for you to attend law school.

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  7. Since you ask, no, my parents didn't pay a dime for my law school tuition and expenses. Instead, I worked four years after undergrad, saved $75k, went to a California state school, and paid in-state tuition. If my only option had been Cal Western or something similar, I probably wouldn't have gone to laws school.

    Oh, and I worked full-time during law school and graduated in three years.

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  8. Sure 12:57 PM sounds like a dick, but I agree with his (it's a his) analysis. There is culpability all around but no one forced us to go to law school.

    That said, it is entirely bull shit that the government backs these loans. And the problem is far more widespread than just law school student loans - the student loan bubble is going to cause some serious problems for us down the road. Let's face it, most college degrees don't help you get a job but everyone is told to go to college and study what you like. Good luck with your sociology degree and $100k debt.

    (I paid my own way - tiny scholarship, $60k in loans)

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  9. 12:57 is right - even if he is being mean-spirited about it.

    If every law school in America closed its doors today, how many years would it take for the U.S. legal job market to absorb all of the underemployed and unemployed JDs that we have now? Five years? Ten?

    Locally, the State Bar could help by going back to the once-per-year bar exam. It wouldn't solve the student loan bubble; but it would marginally help the local legal job market.

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  10. This is a great thread. The ABA article is downright scary.

    Question: If you are in your first ten years of law practice and reading this - If you could go back to the time you made the decision to go to law school and knew then what you know now, would you still go through with it? Discuss.

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  11. Even though everyone told me -- before I seriously considered law school -- that I'd make a great lawyer, I always knew that I wouldn't pursue it unless I had a most excellent scholarship. In the end, I got a full ride, and thank the gods for that. I know people who went to undergrad on loans, then went straight to law school on loans. Those guys and gals are frakked.

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  12. @2:16 PM: I tell every person I know who is thinking about going to law school not to go. I'm four years out now and I've had a decent job all four years, so I can't complain about that. But I hate being a lawyer.

    I was one of those dumbass college students who didn't know what to do with his life and useless degree at graduation. I had good grades, so naturally law school was the next step, right? So now I'm stuck in a profession I hate, with around $80k in student loan debt and I'm too scared to throw it all away to pursue a new career.

    I'm not blaming anybody but myself. I was a fool and now I'm paying the price.

    What sucks is that my best friends all graduated college with business degrees and have jobs that pay as much as mine or more, without the huge amount of student loan debt.

    Man, that was a depressing comment. But at least it's Friday!

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  13. my family and my sweet scholarship paid for law school...good luck to those with 100k plus in debt. that's gotta suck.

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  14. 3:24 PM - Don't fret. At least you have the ability to be honest with yourself (unlike the crybabies who are blaming everyone except themselves for their predicament). Work hard at your decent job and sacrfice to chunk down that $80k balance. It shouldn't be too difficult to get rid of it in 4-5 years. You'll get it paid off if you're willing to live within your means and budget for a big monthly payment. Use your bonuses to knock down the balance. Then your life options will expand and you can do something that's more fulfilling. Good Luck!

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  15. @ 3:30 - Wow, that's awesome. Congrats for being you.

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  16. I've been in practice 20+ years. My total student loans were under $35,000.00 and I paid them off in under five years. I feel very sorry for new lawyers coming out from mediocre schools with six-figure debt and entering this horrible job market. I agree with those who say that something needs to be done on the front end of law school rather than after all that money has been borrowed and spent. The current increases in student debt are not sustainable.

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  17. @3:55 thank you, i am very lucky...

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  18. Gosh...I have loans and attended a first tier. Suck it up y'all. If you die, at least they die with you. It's Friday...I bought tickets for the Mega Million. Wish me luck! If I win...I would say I would pay off all your debt, but you guys would hold me to it.
    Enjoy the weekend!

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  19. Easy money for student loans = tuition inflation. We saw this in our real estate market and it happens in every market when govt. provides easy money or subsidizes something ... prices go up because the govt. help provides artificial demand.

    So the solution is to curtail the govt. student loan program, and let the system deflated. It won't happen voluntarily though because schools, profs and banks like the perks and nobody likes painful adjustments.

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  20. March 30, 2012 12:57 PM - I would add the consistent refusal of law schools, certainly of Boyd, to cut back on the size of each years class when the economy dips.

    March 30, 2012 1:52 PM - You bring up a good, if highly controversial point that no one wants to talk about - not rationing entry into degree programs with limited market demand.

    March 30, 2012 3:45 PM - Everyone really needs to pay attention to what you said. Before the crash, I had numerous Associates who wouldn't talk to me for less than 15% over what they were making and made no effort to build a book; they just wanted to be paid for showing up and being clever. All this while they had 3 to 4 grand in house payments and another grand in car payments. You can visit them at the Golden Arches now. Those who lived within their means, not their fantasies and practiced a certain fiscal responsibility will whether the storm.

    March 31, 2012 8:19 AM - Good point and add this to the mix: the average work week of an American university professor has actually decreased in the last twenty years while their inflation adjusted compensation has gone up. This is not the sole reason that higher education costs have far outstripped inflation, but it is a major factor.

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  21. Perhaps on a moral level law schools should reduce enrollments in light of market factors. But that's like saying that on a moral level Phillip Morris should reduce production of cigarettes.

    In an efficient market, the responsibility for determining the value of a product rests with the product's consumers. Consider a JD a product and law students the consumers of that product. There is certainly enough data available to assist those considering law school to make a rational decision as to whether they should in fact purchase the product.

    The problem is that the consumers of the law school product are turning a blind eye to the realities of the product. This blindness is only exacerbated by the availability of easy-to-obtain, government-insured student loans. And the availability of those loans creates a scenario where the consumer doesn't realize what he's paying for the product until the student is all in.

    Schools like Cal Western and Golden Gate and Cooley, et al. should be allowed to sell their crappy product to as many suckers as will buy it. From my standpoint, there is no real imperative for manufacturers to reduce production of their lousy product so long as there is demand. However, the purchaser should understand the cost of the product at the time he is making the decision to buy, not afterward.

    Remove the federal governmental guarantee on student loans and allow the market to correct itself.

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  22. I heard the shark pimp on KNPR this a.m. Great job Jordan! You are one articulate dude.

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  23. Thank God my Mom vetoed New York Law School when I wanted to go there!

    I came out of law school with about $85,000 in debt, and that number definitely should've been lower since I had a scholarship and help from my parents, but it was my own damn fault and way, way too easy to continue to take out more loans when I needed them. There definitely needs to be much more done at the front end of law school to explain to students just how long it will take to pay off this debt, so maybe, just maybe, you shouldn't take out that extra $5,000.

    As for the job market, I have only been out about 2.5 years, and I started with a really low salary of $55,000, but I knew I needed a job and had to get my foot in the door. Beggers can't be choosers. Now I am leaving my firm for a new job where I will start at double that salary. There are jobs out there, but they are probably not where new grads want to practice or the specific kind of law they want to practice. But sometimes you have to have a shitty job for a few years in order to move on to a better one, and I think a lot of grads are not willing to do that.

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  24. "sometimes you have to have a shitty job for a few years in order to move on to a better one"

    And sometimes a job that starts shitty ends up being a good job.

    Whatever. If you have a pile of student loans, it's better to begin paying them off with the money from a shitty job than to let the interest capitalize while you wait for a non-existent dream job.

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  25. "f you have a pile of student loans, it's better to begin paying them off with the money from a shitty job than to let the interest capitalize while you wait for a non-existent dream job."

    And on that note, does anyone have any tried-and-true tactics for delaying your creditors while busting your ass at your shitty job which doesn't really pay enough to pay the rent, food, gas (4 m-f-ing dollars a m-f-ing gallon!) and all your debts while at the same time (1) avoiding the knock on the door by Uncle Sam's goons, (2) working towards the not-shitty job, and (3) turning the shitty job into a good job, albeit one that still doesn't quite pay the bills?

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  26. Prioritize - It's far better to pay an extra $600 a month on your student loan balance every month while driving a used car than it is to drive a new car with a $600 per month payment while making minimum student loan payments - even in Las Vegas.

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  27. 11:42 - How did you manage to find six figure salary with 2.5 years of experience? Were you able to build a decent book in such a short period of time?

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  28. Off topic (but perhaps we could start a new thread?), has anybody read their issue of Communique? It strikes me that writing a "fairy tale" that is a thinly veiled retelling of the Judge Jones saga is pretty inappropriate. (not to mention, it's not funny) I don't know any of the people involved but should our local bar magazine be publishing pieces that serve as justifications for Jones/insults at the DAs office? Particularly where there are complaints pending? I mean, i like to insult David Rogers as much as the next person, but it seems like the official bar publication is not the place for it. It might be different if this were a serious piece involving a discussion of the situation and the ethics involved and suggesting practical reforms. But this just seems like spite.

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  29. April 2, 2012 2:15 PM - Without going into excessive detail I agree with your comments that the market should be the ultimate factor. But as long as we have a law school that the taxpayers have to subsidize, I'd like to see it cut back class size during downturns. And I'd very much like to apply your market principle to other degree programs. UNLV has an undergraduate program in Anthropology. Just how many anthropologists does Nevada need each year? It's time to recognize that some academic disciplines will have to be filled by universities from larger states.

    April 2, 2012 5:10 PM - PIMP SEZ: Thank you for your kind comments.

    April 3, 2012 11:42 AM & April 3, 2012 2:09 PM & April 3, 2012 3:40 PM- Responsible comments that promote taking individual responsibility and hard work. Well said.

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  30. "Prioritize" the man says.

    Listen up, chief. I drive a shitty car that's paid off because I don't want to take on any more payments and couldn't afford to if I did. Prestige and pride about ridiculous shit like the kind of ride you have isn't part of my vocabulary. If I had an extra 600 bucks lying around, I'd throw it at my creditors. I don't. My take-home after my insurance company happily rapes my check and Uncle Sam gets his cut ain't that much. Knock off 25% for rent, tack on insurance, gas for the shitty car that gets shitty gas mileage, constant repairs for the shitty car because, well, shitty cars are shitty, etc. and the budget gets eaten up pretty fast. I'm not looking to dodge the blood-suckers forever, just convince 'em to take their turns in line.

    Sometimes Sallie Mae gets paid. Sometimes the credit card that served as a bar loan because I needed to eat back when I took the bar and nobody was interested in lending. Good God Almighty, the Dept. of Education ALWAYS gets paid, because the last thing I want is the DOE goon squad driving up my street, and they're they're the most relaxed when it comes to not calling my house 50x per day.

    I bust my ass trying to build a book of business and a reputation so that someday I won't be driving the shitty car or have to ignore my phone because I recognize the number. In the meantime, I have to deal with people who don't realize that you can't squeeze water from a stone, nor blood from a turnip. "Sir, we didn't lend to a stone..." No shit. You lent to an overworked, overtaxed, underappreciated proto-lawyer whose sole goal was to bust his ass during law school because clearly, grades were the only thing that counted when dealing with future job prospects. I know I made my bed. Just looking for suggestions on how to keep the Freddy Kruegers of debt collection from sucking me even further into the damn bed.

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  31. Can we talk about how Obama, a constitutional law professor, thinks it overturning a law is "unprecedented"?
    http://www.cbsnews.com/8301-504564_162-57408827-504564/appeals-court-fires-back-at-obamas-comments-on-health-care-case/

    Or how this is at least the second time (See comments re: Citizens United) that he thinks it is appropriate to chastise the Supreme Court?

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  32. The interest rate is ridiculous on federal student loans. I know I made my bed, but the interest rate on my loans is nearly double that of my mortgage and the payments are about equal.

    I personally was given assurances that did not come to fruition. I understand that I made my bed, and that I am at fault for trusting my law school and the faculty, staff and administration there. I should have known that they merely wanted my tuition, high LSAT score and GPA to help statistics. Either way, there is never enough money. I make less than $50k a year with more than double that in student loans. It sucks, but as long as I have a job and/or someone needs a person to work harder and longer than everyone else is willing, I am here.

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  33. No offense, 8:22, but did anyone ever teach you how to negotiate?

    Prior to entering law school , did you advertise your high LSAT score and undergrad GPA in order to get schools to compete for you by offering sholarships? If you had the kind of admission credentials which help schools bolster their statistics, you should have been able to have schools make it worth your while. The byproduct of that is that you would have needed to borrow less, maybe nothing, to attend law school. While that information is probably useless to you now, you should at least be aware that this was probably available to you back then, assuming your pre-law credentials were as you say they were.

    Next, you don't say how long you've been out of school, but if you're putting in long hours practicing law even as a newby, you should be earning more than $50k. Figure out the amount of fees your work generates and then go find a firm that will pay you 1/3 of the total pluse benefits. That's what you're worth. If you can generate your own clients, you're worth more. If you really cannot earn more than that, then hike up your skirt, get some high heels, and go serve drinks at the Hard Rock. Those gals make more than $50k.

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  34. Wow, somebody sure taught 8:55 AM how to condescend. While only the second part of his/her comment was helpful, he/she sure was a dick about it.

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  35. The truth sometimes hurts.

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  36. Sometimes, the truth hurts.

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  37. HARDLY. It seems to be picking up some momemtum. What u smoking fool?

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  38. momentum sorry my bad.

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  39. yea, what are you smokin, @12:55?

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  40. Yes. Seriously @12:55. I want to know what you are smoking.

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