Subsidized student loans in the crosshairs. Is IBR far behind?

Amongst the hubbub the past couple of weeks over the deficit commission's report, one proposal that hasn't gotten nearly as much press is the elimination of in-school interest subsidies for federal student loans. This is obviously less attention-worthy than some of the proposals, but for starving, jobless students and graduates, it's a big deal. Bigger still, the proposal to end interest-subsidized student loans suggests that a much newer and less-established program, Income Based Repayment (IBR), could be next to fall under the ax man's gaze.

Subsidized student loans have been taken as a given by students. IBR is a much newer program that is only fully available to those folks who are coming out of school after 2008. There are a number of formulas based on your income and ability to pay, and it only applies to federal loans. Basically, it works out that if you have a really shitty salary (or none), like many law graduates since 2008, you get a monthly repayment much lower than you would be looking at under a standard repayment plan. Also, by electing IBR, your outstanding debt is forgiven after 25 years, or 10 years if you work for a state/local government or qualified public interest organization. It's an okay program, and is helpful for unemployed, debt-pwnd students coming out of school during the Great Recession.

From what I can tell, the idea behind IBR was for graduates of expensive law and other postgrad programs who wanted to "pursue the common good" in public interest, to be given a break on their monthly payments in exchange for their selfless service. In the new reality of 50%+ graduating law classes being unemployed, it's more than likely going to become a catch-all for all of us with six-figure federal debt and no way to pay it back. All the while, the government will be eating the remaining interest on the loans, and if you make it to the 10 or 25 year mark, hey, forgiven! With so many unemployed graduates, the government is likely to be left holding a much heavier bag than they figured on when they were crafting IBR. For those un-and-underemployed recent grads relying on IBR, who's to say what will happen in 10 years, to say nothing of 25, as Erskine "Bowels" and his crew look for crafty new ways to close the deficit gap?

Personally, I don't care that the government is going to be saddled with more unpaid debt. It's not like it's "real" money; they just transferred some digits from their printing presses to the law school dean's office and our tuition showed up as "paid." The school pisses it away and modifies its ledger accordingly, but we're fooling ourselves if any real value is changing hands. That's another issue, though. The federal government created this student loan mess by guaranteeing tens of thousands a year in free money to prospective law students, thereby allowing schools to uniformly jack up their prices to around $50,000 a year. I have no sympathy for the feds if they are going to whine about the unintended consequences of IBR. I do, however, worry about their willingness to repeal the program and leave all of us debtors out in the cold.

Our one saving grace may be that, on the whole, the number of unemployable debtor law students is relatively small (compared to other federal obligations). In any given year, the number of people running up red ink for the feds via subsidized, low IBR payments or total discharge should be quite low. However, experience makes me wary. So many unfortunate law students have at least six figures in debt, particularly those who entered in 2008 and after and would be eligible for IBR, in the era where law school COA is almost uniformly ~$50k a year. It's not just law students, either. Every day we see more and more unemployed undergrads with six figure debt, and soon the crop of economic refugees who went for MBAs or other advanced degrees to try and dodge the bad economy of 2008 will be emerging, jobless. There are a hell of a lot of unemployed recent grads of all degree-stripes out there with six figures of debt and nowhere to go but back to school or onto the IBR rolls. If the in-school interest subsidy is on the chopping block, how long can it be before the IBR payment subsidy and eventual discharge are also scrapped?

Career services steps up to the plate

Career Services counselors nationwide finally seem to be waking up to the reality that they have sat idly by while 50% or more of their recent classes graduated jobless. I was initially interested to see that someone in my school's office still has a pulse and is doing some flailing about to broaden the “opportunities” available to law student paupers.

While the bulk of a career services counselor’s time is spent trolling non-exclusive, publicly-available job boards and copying and pasting the postings to the school’s own job board, I was intrigued to note that my school’s office has given up on offering students a position within the law. Just look at a recent smattering of re-posted job listings from the school’s board:

Congressional campaign filed intern:

Field interns will work alongside staff on a fast-paced, high-energy campaign. Interns will be assigned leadership roles in all of the campaign’s field operations. You’ll have the opportunity to learn about field strategy development and implementation, and communicate directly with voters. As a field intern, you’ll gain valuable professional experience by working directly with staff to identify and mobilize voters to ensure victory on Election Day.

Responsibilities include, but are not limited to:

• Organizing and managing voter contact events.
• Taking an active role in volunteer recruitment, management, and retention.
• Helping maintain voter database.

Qualifications:

Ideal candidates will be hard-working and possess strong communication skills. Candidates should be outgoing, have a positive attitude, and the ability to work effectively in a fast-paced environment. Proficiency with Microsoft Office is highly desired.

Where’s the J.D. requirement? Where’s there even the requirement of ANY degree, period? Where’s the validation for my three years’ worth of invested time and $100,000 tuition? Most importantly, where’s the pay? Oh, wait, not only are law grads still being pushed into unpaid internships, but now the search for some kind of “employment” for students has become so desperate that students are encouraged to do volunteer door-knocking for political campaigns as a way of finding “work.”

More on those "whiny" scambloggers

It’s been rather quiet here at ScammedHard! for the past few weeks. As I mentioned in earlier posts, I've been a bit distracted trying to get some non-legal stuff off the ground that may one day allow me to feed myself, but that in no way has dulled the pain of having been swindled out of $100,000 and set out with the trash upon graduation. In these couple weeks, there's been no shortage of joyous drum-beating and tambourine-banging among the pro-law-school cheerleaders. The law school bandwagon goes marching along, as always.

There is always going to be blowback against those who would dare to question the law school industrial cartel, as a quick glance at the comment section of any mainstream news article on the law school scam will show. So many people, both the general public and even many lawyers, are still operating under the delusion that law students went into this with their eyes open and were fully informed of all the risks.

This particular post over at the Minnesota Lawyer’s latest spinoff blog, the unfortunately-named "J.D.s Rising,” attempts to strike back at all of the “whiny scambloggers” and makes the oft-repeated point that “they knew what they were getting into.”

Our blog author makes the following point:

“I did not know the first-year private attorney’s average starting salary, but I could have discovered that with a little research on my part. While I sympathize with the recent grads on the job hunt and agree with the criticism against law schools’ admittance and career service practices - law school was my choice, every loan I took out was my choice, and the job market….well, it is tight in nearly every field. I cannot blame the schools for failing to put a warning label on their applications stating: “Likely to cause debt and unemployment.”

Jobless grads thrown a bone, manipulated

Back in April, the Class of 2010 at my fancypants, first tier toilet law school received an email that read something like this:

3Ls: Graduate Employment Survey

We already have 100+ Graduate Employment Surveys in. Thank you to all of you that have completed your survey.

If you have not yet completed your survey, please log on to Symplicityand visit the Shortcut on the homepage for the Graduate Employment Survey. If you prefer, you may complete a paper version of the survey in the CPDC.

* Your grad survey data is only reported in the aggregate and is required by organizations including the ABA, NALP, and US News & World Report. Please provide complete data and help us advise current students and prospective students about employment options.

Only ~100 out of 303 students in the class bothered to return the employment survey! That sounds awfully close to the class members' own estimates that 2/3 of them have no jobs. I'm sure this small sector of students reporting will have no impact on how the school reports this data to US News and to prospective students. The law is a profession built on honesty, justice, and integrity, which certainly means the school will be forthcoming and let 0Ls know that only 33% of them are going to find gainful employment.

Things must have gone particularly well for these jobless recent graduates over the summer. Having buried their heads in their bar review books, many could probably pretend to ignore looming unemployment and student loan collection monster that was lurking in the corner. Well, the bar exam is over, and now it's back to reality. Time for the school to pull out all the stops before those 200 unemployed grads start getting antsy and making a fuss. Maybe they can even "employ" some of them, for statistical reporting purposes, in the meantime!

PROGRAM DESCRIPTION: The University of Minnesota Law School proudly introduces the Post Graduate Fellowships: Judicial Law Clerks. Up to 5 Fellows will work as judicial law clerks for the Fourth Judicial District for a total of 400 hours at 30 hours a week. The Fellows will receive a total of $5,000, less applicable taxes. Fellowships are for 2010 graduates of the University of Minnesota Law School who have taken the July 2010 Bar Exam. Fellows will be paid with the employees of the Fourth Judicial District. Fellows will receive paychecks with proper withholdings according to the Judicial Districts regularly scheduled payroll process. Fellows will start positions between Sept 1 and Oct 31, 2010.

The University of Minnesota Law School proudly introduces the Post Graduate Fellowships. Fellows will be funded to work in a legal role at a nonprofit or government agency for total of 400 hours (15-30 hours a week); fellows will receive $5000, less applicable taxes. The University will award a limited number of Fellowships. Fellowship money can be used domestically or internationally.

Throwing desperate, starving grads a few thousand bucks and having them work is nothing new. We've seen Duke, SMU, and other law schools unveil similar programs. The motives behind these programs are shady at best. While the schools will defend them as "giving our grads an opportunity in a tough job market," it's no coincidence that these "fellowships" are being tossed out to jobless grads right around the time "employed-at-x-months" data needs to be collected. While Minnesota owned up for the latest round of US News rankings and reported its "employed at graduation" as 83.8% for 2008 grads, we've since suffered through two years of horrible recession. As 2010 graduates themselves would be quick to note, honest reporting of an "employed at graduation" figure in coming issues had better be below 50%.

It's common knowledge that schools game the US News rankings, usually deliberately, but sometimes through what can be written off as sheer incompetence. Thanks to clever ideas like this "fellowship" program, which will move a graduate into the "employed" category, give him a few thousand bucks (after he gave the school $100,000), and then have him out on his ass in another thirteen weeks. The pay is also atrocious during that time ($12.50/hour for licensed attorneys who've passed the bar). And lest an ambitious graduate think that the connections they will make in the state court system will provide a one-way ticket to full-time employment, nasty budget constraints are causing the courts to scale back. Why do you think they are only hiring you as a "fellow," for $5,000 that is paid by the school, and not as a full-time, salaried clerk?

Many hopeless recent graduates will doubtlessly take the school's 30 pieces of silver and sign up for these fellowships. Scammed students can be bought off with enough money to buy a few cases of ramen noodles, and the school gets to continue to fudge its employment numbers in order to rope in the next class of suckers who will turn over $100,000 apiece to the law school. When these 13-week fellowships end, the data will be collected and reported, the graduates will have had plenty of time to "network," and jobless, suffering, scammed graduates are no longer the law school's problem. They have already moved on to swindle the next batch of students. Win-win!

First Tier Toilet Apologists

The NYT mustered half an ounce of courage and published a letter with a sprinkling of law school criticism in it. This tepid letter to the editor is a smidgen more critical of the law school scam than the Times' own article.

Re “In Law Schools, Grades Go Up, Just Like That” (front page, June 22):

Raising the mandatory grading average is a disingenuous measure taken by law schools to appease students, many of whom are growing increasingly unhappy with the fact that they are graduating with crushing debt and meager job prospects.

Raising grades does no more than slapping a Band-Aid on the sliced jugular of the grim employment situation. Class rank relative to other students remains the same, and employers need only ask for a student’s class percentile to circumvent grade inflation.

Here's an admission that employment sucks, and schools are doing nothing about it. There's even a scamblog-worthy line about the "sliced jugular of the grim employment situation." Bravo, letter writer! Now that we've thrown that out there, it's time to hit them hard!

If schools are sincerely concerned about the well-being of their graduates, perhaps they should devote more of their resources to assisting students with finding clerkships and jobs, and even subsidizing them, as mine does.

At the very least, schools should address other factors within their control, like limiting the number of students enrolled so they can actually expect to find employment, or reining in skyrocketing law school tuition.

Nathan Rogers
Dallas, June 22, 2010

The writer attends SMU Dedman School of Law.

I had high hopes for this letter until we got to "schools should subsidize their students, like mine does." Would that I could sell my soul for a $3500 stipend, fend off unemployment for six months, and allow the school to count me as "employed." Other than that, the letter made some good points...apart from that, Mrs. Lincoln, how was the play?

Let's not encourage this kind of gamesmanship, Mr. Rogers! As long as there is support for half-baked schemes like SMU Dedman's "Test Drive" program, schools will continue to use such trickery to cook the books and deceive unwitting 0Ls.

SMU Dedman...is that supposed to refer to your employment prospects as a graduate? Dedman...Dead Man Walking? The test drive program is $3500, or thirty pieces of silver, that the school will throw its unemployed grads to keep them busy and out of the "unemployed" category. For a school that reports a whopping 97% of its class of 2009 as employed, they've got to keep those fake numbers up for the class of 2010. This program is not about helping students, it's about boosting SMU Dead-man's US News ranking and pulling a fast one on prospective students.

Despite what the dean claims, when the employment survey comes out, we can expect to see these "test driven" students listed as "employed." Really, it's a good deal for DeadMan...$3500 a head seems a small price to pay if you can put up good fake employment data because of it. For every student that they shell out 3500 bucks for now, they can be sure to get more suckers in the door come fall, paying a cool $38,406 a year in tuition alone.

Let's see where a "test drive" will land alums of this presTTTigious institution!

* 2:59 pm May 18, 2010
* Anonymous wrote:
I graduated from SMU in 2009 – they are disingenuous about their graduate employment statistics. I can name six peers that are employed outside the legal field and/or still looking for work. Another five are doing contract labor (i.e. document review). One of my friend’s was working at Toys-R-Us when these statistics were compiled. One was “employed” by the career services office. At least another five are working in the Barnett Shale doing door-to-door oil & gas leasing and/or title checks for Chesapeake Energy’s subcontractors (along-side college drop-outs). And one that became so frustrated with career prospects that he is studying to be a pharmacist.

Talk about a first-tier toilet! Mr. Rogers, don't tarnish an otherwise accurate letter to the editor about the perils of law school with a shill for the latest brand of law school scammery!

NYT tiptoes around law school scam

Yesterday brought another mainstream media piece about some of the shenanigans going on in legal education. Grade inflation is not exactly a great way to give students a leg-up in a horrible job market, especially when more and more schools are doing it. Additionally, as the article notes, employers are hip to the jive and are thus unlikely to care that a student's GPA is .333 higher.

It's good to see the paper give a skeptical glance to this grade-meddling. However, the NYT dropped the ball by failing to mention the larger problems that cause schools to come up with half-assed schemes like a GPA boost. The utter lack of legal jobs and the unemployment massacre that J.D. grads are entering after school is the root cause of these limpwristed efforts to aid students. As the article notes, how much of a boon these schemes will provide is quite debatable.

In an article that casts a suspicious eye on grade inflation and efforts by schools to pay employers to "test drive" their grads, more ought to have been said about what a bloody, suicidal clusterfuck law school has become. Instead, readers are given a few lines that passively reference the boiling cauldron of excrement that is the law school scam.

Once able to practically guarantee gainful employment to thousands of students every year, the schools are now fielding complaints from more and more unemployed graduates, frequently drowning in student debt.

"Fielding complaints" from "more and more" (read: tens of thousands) of graduates sounds a lot like the righteous anger of the law school scambloggers and other scammed grads. Yet a mere reference to "complaints" makes the whole backlash against law school seem wholly insignificant and whiny. There is a whole lot more going on than just a few complaints being filed!

As long as mainstream media outlets temper their reporting about the problems in legal education with an overall positive assessment, casual readers (like 0Ls and their parents) are not going to get the message. They might come away with some inkling that all is not well in law school land, but will just write it off. After all, it definitely isn't going to happen to THEM! As long as the plight of the tens of thousands of scammed grads is characterized as "a few complaints," or an aberration on the road to $160k salaries, unknowing students will continue to matriculate. I'm not expecting the NYT or any other respectable paper to adopt the tone of a scambuster, but it would be nice to see them give a harder look to the problems facing law grads.

A new low in faking employment numbers

During a bit of self-reflection that inspired another post, I made my way back to my school’s “Prospective Students” page to see just what salary data and employment numbers they were currently baiting 0Ls with. Salary data has since been removed, although it was definitely there a few years ago (as I relied on it). Who knows why it’s been removed…I can even see how it might benefit 0Ls by not tantalizing them with dreams of fat salaries upon graduation. (Although I’m sure they will be told by other sources about the “huge” salaries they can expect.)

What really caught my attention was an insidious new way of calculating employment statistics. Instead of “employed at six months,” or “of those reporting back,” we have this new level of depravity from law school shills:



96.59% of graduates employed, out of those seeking employment. What the fuck is this shit?!?!?

How do you determine who is seeking employment? How do you gauge whether a grad is seeking employment? Isn't EVERYONE presumably seeking employment? How do you accurately represent what this metric means to a prospective student? Do you rule out students unemployed at graduation, and just shunt them off into the “not seeking employment category, to boost your numbers? (Yes.)

I can see the discussion down at career services now!
Dean: We need a way to boost our sagging employment numbers! I want to see this fall’s incoming class packed to the gills!
Shill: Well, dean, students are getting wise to our previous statistical shenanigans like “employed at six months” and “only those who returned the survey.” With 66% of the class graduating with no job, it’s becoming harder and harder to conceal this from naïve 0Ls!
Dean: Well if 2/3 of the class couldn’t get a job, it must be because they aren’t trying hard enough! They probably aren’t even looking for employment! I know…we’ll change our reporting to reflect only those students who WANTED a job and FOUND one. Something about “only those seeking employment were employed.” That sounds like a tautological mindfuck that ought to throw 0Ls and USNews for a loop!
Shill: *Awed, respectful silence at dean’s mastery of the scam.*

Watch out for this new level of scumbucketry and deception, gang. Count on the law schools to leave no stone unturned in their search for novel ways to assuage your fears about the economy and to get your tuition dollars. Matriculate at your own peril; odds are you’ll be one of those “not seeking employment” in a few years.