Top 6 Underreported Changes to the ABA Accreditation Standards

(That should read “proposed” changes, but I wanted to keep this parody listicle under 71 characters.)

I’ve seen some of the reporting on the changes to the ABA’s accreditation standards that the Council of the Section of Legal Education proposed on June 6. The ABA’s House of Delegates will decide on them in August; you can read here about the intricate procedural shenanigans that ensue if the house chooses not to concur with the council.

That page also contains the link to the pdf of the revised standards, which I read through, and frankly I think others commenting on the proposed changes should have as well, for there are some juicy nuggets there that have gone unreported and underreported. Just about all of the coverage has been on two topics: (a) the council’s decision to disallow course credit for paid externships, and (b) the rule allowing up to 10 percent of a law school’s entering class to forgo the LSAT under certain circumstances. I have nothing to add about the paid externship rule, but the LSAT requirement will be number one on the list. So…

(1)  The 10 percent LSAT rule is not open ended.

Really, this topic was badly underreported, and anyone who didn’t read the actual proposed change was led to believe that law schools would be able to admit up to 10 percent of a class without an LSAT score for just about any reason whatsoever. Not even close. The new Interpretation 503-3 only allows applicants to forgo the LSAT if either (a) they’re undergraduates at the same institution to which they’re applying to law school, or (b) they’re seeking a dual-degree at that institution. The benefits will go primarily to law schools putting together 4-2/3-3/3-2 (for masochists) undergrad-J.D. programs and those touting their dual-degree offerings.

Even then, applicants in both circumstances must still take a standardized test. They must have scored in the 85th percentile or higher on the ACT or SAT if they’re undergrads at the same institution. If they’re seeking a dual-degree, they must have scored at the 85th percentile or higher in the GMAT or GRE. No one gets into law school without taking a standardized test and doing very well on it. Applicants must also have either ranked in the top 10 percent of their undergraduate classes “through” six semesters (I’m unsure if this means six semesters total or six consecutive semesters) or achieved a cumulative GPA of 3.5 or greater.

Bottom line: Very few applicants will benefit from this interpretation, and in no way is it watering down the aptitude requirement because only very sharp people will be able to use it. If anything, I doubt even those who are qualified would even know about it. At best it excuses a bunch of would-be elite law school students who would’ve crushed the LSAT anyway.

(2)  Death to the full-time faculty calculation!

Interpretations 402-1 and 402-2, which set out the convoluted rules for calculating full-time-equivalent faculty has been crossed out. No longer shall full-time legal writing instructors be treated as seven-tenths of a full-time teacher.

(3)  Goodbye dusty reporters in the library…

Standard 606 and Interpretation 606-2 have added the language “reliable access” to describe the “core collection” law school libraries must provide their students. “Reliable access” can include subscription and publicly available databases as well as “formal resource-sharing arrangements.” Anyone talking about onerous library requirements will have nothing to complain about now. (Okay, maybe less.)

(4)  …And hello office-sharing for professors.

Yup, Standard 702(3) (now 702(4)) has been modified from “an office for each full-time faculty member” to “office space for full-time faculty members.” Now deans can retaliate against petulant faculty by making them share offices with their ill-mannered colleagues.

(5)  No more taxation without documentation.

The new Standard 202(b) requires law schools that are attached to parent universities to obtain an annual “accounting and explanation for all charges and costs assessed against resources generated by the law school and for any use of resources generated by the law school to support non-law school activities and central university services.” Those of you with longish memories remember in 2011 when the University of Baltimore ousted its law school’s dean, Phillip Closius, allegedly for disclosing that the parent university confiscated all but $81,000 out of a $1.4 million tuition hike. After the ABA’s regular inspection, it asked for (read: demanded) such an accounting by the parent university. If this standard goes into effect—and this one absolutely certainly will—a lot of universities will have to confess the extent to which they’ve been looting their law schools. This might lead to more awkward conversations between ABA accreditors and university administrators. Who knows, maybe students will get more of their money’s worth or even a tuition cut?

(6)  Dishonor before death?

In a cryptic pair of new standards, 202(c) and 202(d), law schools will be deemed not in compliance with the standards if their “current financial conditions” and even their “anticipated financial conditions” (whatever that means) has—or is reasonably expected to have—”a negative and material effect on the law school’s ability to operate in compliance with the standards or to carry out its program of legal education.” 202(c) is a modified version of Interpretation 201-1, but 202(d), the “anticipated financial condition” appears new but ported from the original 201(a).

I’m not sure what conditions would trigger a non-compliance situation due to anticipated financial problems, or its consequences, so I don’t know what this means or how it’d be enforced. I include it because law schools are in tough times, so I can imagine a central university shutting down its law school if it reasonably believes it won’t be in compliance with the standards in the future. I seriously doubt a law school would lose its accreditation due to anticipated financial reasons before being shut down.

This concludes the listicle. Take care folks.

PAYE for All!

From the Associated Press, “Obama to Announce Expansion of Student Loan Repayment Program.”

Obama on Monday will announce he’s expanding his “Pay As You Earn” program that lets borrowers pay no more than 10 percent of their monthly income in loan payments, the White House said. Currently, the program is only available to those who started borrowing after October 2007 and kept borrowing after October 2011. Obama plans to start allowing those who borrowed earlier to participate, potentially extending the benefit to millions more borrowers.

I didn’t realize Obama could do this via executive action, but there you have it. In fact, IBR was planned to transform into PAYE by 2014 by law all along. IBR as you’ve known it will be gone for good. RIP I guess.

“At a time when college has never been more important, it’s also never been more expensive,” Obama said in his weekly radio and Internet address released Saturday.

We can also expect a larger aggregate amount of student debt to be written off in the next couple of decades.

Obama also plans to announce he’s directing the government to renegotiate contracts with federal student loan servicers to encourage them to make it easier for borrowers to avoid defaulting on their loans. And he will ask the Treasury and Education departments to work with major tax preparers, including H&R Block and the makers of TurboTax, to increase awareness about tuition tax credits and flexible repayment options available to borrowers.

This is unobjectionable. Beyond that, though, the president voiced his support for Sen. Elizabeth Warren’s proposed student loan refinancing scheme, which would allow debtors to take advantage of the low overnight rates the Fed offers banks. Yes, it’s apples-to-oranges because student debts are paid within 10 years or more and not overnight, but it’s a little strange because the reason Congress abolished the guaranteed loan program under the Affordable Care Act was that it would use student loan repayments to pay for health care. With easily refinanced interest rates, that’s unlikely to happen.

The president will continue the push Tuesday in an online question-and-answer session hosted by Tumblr.

Maybe you can ask him how much student debt the OMB expects to be forgiven. I doubt it’s even pondered the question.

Senate Republican leader Mitch McConnell of Kentucky in a statement criticized the Democratic bill for failing to address college costs.

“This bill doesn’t make college more affordable, reduce the amount of money students will have to borrow, or do anything about the lack of jobs grads face in the Obama economy,” he said.

Pretty much.

Fed Household Survey Finds Rampant Student Loan Illiteracy

And you’re surprised because?…

Liberty Street Economics brings us, “What Americans (Don’t) Know About Student Loan Collections,” in which the authors report on the impact of an added question on student loans to the Fed’s Survey of Consumer Expectations. Its first chief finding is that only 35 percent of the households surveyed correctly answered this question:

If a borrower is unable to repay her federal student loan, what steps can the government take to collect the debt?

A. Report that the student debt is past due to the credit bureaus.

B. Garnish wages until the debt, plus any interest and fees, is repaid.

C. Retain tax refunds and Social Security payments until the debt, plus any interest and fees, is repaid.

The correct answer is all of the above. (You did know that, right? If not, don’t worry, fewer than half of all respondents who had student loans got it right too.) Alarmingly, 28 percent thought it was none of the above.

The survey’s second question was to rate on a scale of one to five how likely it is that a student loan can be discharged in bankruptcy, with one being “extremely unlikely” and five being “extremely likely.” Here, the authors’ findings are confusing because their chart says that 37 percent gave a 5, but the text says those 37 percent marked 1. It’s the type of mild error that is both understandable yet deeply annoying. The average response was 2.4, suggesting that “U.S. households overestimate the ease with which student loans may be expunged from their balance sheets.”

Oh God.

It gets worse: In a parenthetical, the authors state that “reported federal recovery rates on defaulted direct student loans exceed [pdf] 70 percent.” (Emphasis original) The link is to ED’s student loan overview in its budget proposal for FY2014, which began in October 2013. On page S-32, it provides a table estimating that for all the subsidized Stafford loans disbursed in 2014, nearly a quarter will go into default (so much for those subsidies), and up to 9 percent of all PLUS loans will do so as well. I’m guessing this already takes IBR into account without estimating substantial future enrollments, which I think are likely. The net present recovery of subsidized Stafford loans that’s also net of collection costs is predicted to be nearly 90 percent.

FY2014 Estimated Recovery Rates

So the bad news is that American households don’t know the full extent of the consequences of defaulting on student loans. The good news is the government is going to be paid vastly more than it would if these were credit cards. Oh, that’s bad news for the student-loan-illiterate debtors. Oops.

Dear Leftists, Please Get Your Facts Right

Signed,

LSTB

Yesterday, Salon ran an article with as many as three titles.

“Help Us Thomas Piketty: The 1%’s Sick and Twisted New Scheme” [??]

“The Revolt of the Caring Class” [Okay…]

“David Graeber: ‘Spotlight on the Financial Sector Did Make Apparent Just How Bizarrely Skewed Our Economy Is in Terms of Who Gets Rewarded’” [??]

Like, I hesitate linking to it for fear that the title will change again. (Okay, link here)

Anyway, it’s really just an interview of David Graeber by Thomas Frank. I’ve enjoyed Frank’s recent Sunday contributions to Salon, even when the titles are poorly rewritten to click-bait readers into thinking it’s about Piketty when neither his name nor his work (thankfully) ever appears in the article.

As you can imagine, Frank’s questions focus on Graeber’s August 2013 article on “bullshit jobs,” which mainstream economists criticized because it rejected marginal utility theory—and frankly I think they’re mostly right. Just because some jobs don’t seem “useful” doesn’t mean that “useful” jobs that pay McWages should be high-paying. Likewise, although Graeber’s examples of people who wrote to him about their pointless jobs were entertaining, it’s not a scientifically valid survey. Maybe some people work for incompetent, if generous, managers.

At one point, Frank asks and Graeber answers:

Today productivity continues to increase, but Americans work more hours per week than they used to, not fewer. Also, more than workers in other countries. Correct?

The U.S., even under the New Deal, was always a lot stingier than most wealthy countries when it comes to time off: whether it’s maternity or paternity leave, or vacations and the like. But since the ‘70s, things have definitely been getting worse.

Uh huh. Like David Leonhardt last week, it appears Frank and Graeber need to learn how to use FRED. If they did, they’d know that average hours worked per week in the United States has declined over the decades.

As always, there might be compositional problems with this average: Maybe workers in some industries are now tasting the lash while others aren’t, but if that’s true it’s up to the Franks and Graebers of the world to research those facts. Instead, we keep hearing that employers are cutting workers’ hours so that they don’t have to buy them health care or other benefits.

And if you think people are piecing together multiple part-time jobs to get by, that’s true but no less common than in the mid 1990s.

In general though, I think the proportion of multiple job holders is shifting toward multiple part-timers rather than one full-time plus one part-time, or variable-hour jobs. Still, it’s lower in general and probably overwhelmingly due to cyclical reasons rather than structural ones like bullshit jobbery. Perhaps poorer households work more hours than wealthier ones, but I’d have to see evidence of that.

The interview continues:

Do economists have an explanation for this combination of greater productivity with increased work hours? What is it and what do you think of it?

Curiously, economists don’t tend to find much interest in such questions—really fundamental things about values, for instance, or broader political or social questions about what people’s lives are actually like. They rarely have much to say about them if left to their own devices. It’s only when some non-economist begins proposing social or political explanations for the rise of apparently meaningless administrative and managerial positions, that they jump in and say “No, no, we could have explained that perfectly well in economic terms,” and make something up.

Funny, BLS economist Shawn Sprague found so much interest in such questions that he published an article on May 29th titled, “What Can Labor Productivity Tell Us About the U.S. Economy?” The answer is, quite surprisingly, that even though Lesser Depression-era American workers manned the lines for as many hours as they did in 1998, they produced 42 percent more stuff.

You can ask why these productivity gains aren’t benefitting workers, which economists have been blathering about since the robots-are-taking-our-jobs fear began bubbling over a few years ago. You can also ask why some workers are paid beyond the value of what they produce, i.e. they receive rents. And as always, you can criticize how output is calculated before dividing it by workers or worker hours. You cannot, however, say that economists don’t ask these questions, even though Graeber does.

Japan’s Legal Profession Doesn’t Need Law Schools

…Is really all I have to say in response to the May 30th Yomiuri Shinbun editorial titled, “Law School Reform Urgently Needed, Essential for Profession’s Future.” I discussed the striking data underlying this topic last week. The newspaper that owns the indomitable the Tokyo Giants baseball team writes:

The primary cause of this situation [people qualifying for the bar exam by taking the preliminary test rather than blowing ~$16,000-$45,000 on two to three years of law school] lies in the fact that law schools have failed to perform their function of nurturing the legal profession.

Launched in 2004, law schools aim to foster work-ready legal professionals. Therefore, their curricula emphasize practical business skills, and essentially exclude preparation for the bar exam. The result is low pass rates. It could be said that law schools fail to fulfill the original purpose for their establishment.

It is, of course, necessary to cultivate practical business capabilities. But, first and foremost, it is essential to help students acquire the abilities needed to pass the bar exam. Reconsideration of curricula is essential in this regard.

What nonsense. Prospective lawyers are behaving rationally. If it’s less risky to take the preliminary test than be nurtured into a “work-ready legal professional” at law school at their cost, then that’s what people will do. The fact that the bar exam is the necessary condition to becoming a lawyer in Japan means that the law schools’ purpose is frivolous. If the state thinks the exam is more important than learning professionalism or whatever, then concerned newspapers should be lobbying to either change the test to cover practical skills or reduce its impact altogether. It sounds to me like Japan’s legal profession’s future doesn’t need law schools. The government’s failed policy has pretty much said as much.

Someone Needs to Teach the NYT How to Use the Internet

…Okay, not the Internet (I hope), just FRED, but it’s an unfortunate performance by David Leonhardt, who was the star of an outing earlier this week.

In “The Jobless Rate for Community-College Graduates Is Also Low,” he teaches us:

The federal government’s main educational-attainment categories are fairly blunt. In particular, the “some college” category includes a wide array of people: Those who have dropped out of college without earning any degree, those who have earned a two-year degree meant to lead directly to a job (such as in nursing) and those who have earned an academic two-year degree that is often a first step toward a bachelor’s degree.

[T]he Bureau of Labor Statistics does distinguish among the different versions of “some college.” (It would be even better if the bureau made this data easily available to the public.)

I get the feeling Leonhardt does not use government data much. For one, I’ve never seen “some college” include associate’s degrees in any dataset. For another, the data series Leonhardt refers to are in fact easily available to the public and can be found on FRED (Federal Reserve Economic Data).

Here’s Leonhardt’s chart:

Unemployment Rates by Educational Attainment

Here’s my version from FRED (just “some college” and “associate degrees” types):

 

(Click to view source data)

See? Now we can replace him with a robot?

Okay, I’m just being a meanie. Leonhardt’s ignorance is an honest mistake and I’m sure if he spent a couple weekends learning how to use FRED he wouldn’t be wasting his readers’ time telling them information is unavailable when it is. However, his ignorance is a thin end of a wedge. It may seem trivial, but FRED represents one of the great advances of this decade: easy access to government information. Instead of trying to find Brazil’s GDP in an encyclopedia, one can look on Fred or the IMF’s or World Bank’s Web site. FRED doesn’t have all datasets yet, but journalists should be turning to it first when researching government data. I’m sure they will be within a decade, but ones like Leonhardt really need to familiarize themselves with it.

But since we’re on the topic of the unemployment of the educated, I thought I’d take another crack at it. Leonhardt compares unemployment rates by education to conclude that, as the title of his article suggests, two-year colleges are a good bet too—so long as students get the degrees.

Comparing these unemployment rates doesn’t sit well with me because they all use different denominators. The high unemployment rate for those who have less than a high school diploma might be less significant if there aren’t that many non-high-schoolers in the labor force. Likewise, a low unemployment rate for college graduates might be problematic if there’s a large number of them. So, using FRED, I gathered the unemployment level (not the rate) by education for the 25 to 34 age bracket (yes, FRED now has that), and I decided to do a cross-sectional analysis of the unemployed by their educational attainment.

The data only go back to 2000, but here you are:

Cross-Section of Unemployment Level by Education

The results are slight but the trends are clear: The educational attainment of the young unemployed is rising. As of last April, for the first time, half of them had at least some college education. In May 2007, about 22 percent of the young unemployed had an associate’s degree or bachelor’s degree; now it’s 28 percent. Meanwhile the percent of the unemployed who haven’t finished high school, whose 11.5 percent unemployment rate typically alarms Leonhardt and his peers, has fallen from 24 percent to 15 percent of the total.

You might be tempted to say that the unemployment level doesn’t include people who drop out of the labor force. True, but (a) that’s not Leonhardt’s argument, and (b) the labor-force dropouts might be more educated too. Go ahead, prove me wrong.

The point is, if Leonhardt et al. are right about how crucial education is, then we would expect the proportion of educated unemployed to be declining. On the contrary, we see that as we educate more people, it just substitutes the uneducated unemployed with the educated. It calls into question the mantra that “college graduates are less likely to be unemployed.”

**********

UPDATE: Allow me to clarify my thoughts here. Nothing I’ve written here should be interpreted as saying that, for example, people shouldn’t finish high school because they’re a smaller proportion of the unemployed. The unemployment rate by education does matter for the obvious reasons we read about, like employers not wanting to hire uneducated people. However, my point is to draw attention to the evidence that if the more education people attain, the better-educated the unemployed become. Irrespective of the unemployment rate by education, this phenomenon supports the signaling theory because we’d expect the unemployed to be less educated over time.

Law School Applicant Collapse: Japan Edition

Readers might recall last month when UC-Irvine’s law school defenders took to The New York Times‘ op-ed pages and told us that America’s legal education is so amazing that even Japan was emulating it. Well, The Yomiuri Shinbun tells us how that experiment turned out:

Number of Law School Applicants (Japan)

Ouch. In 2007, law schools received more than 40,000 applicants, but this year they’ve managed to haul in 11,450. Most of the applicant collapse is due to news getting out about graduates’ low bar passage rates. And all this without any scamblogs! (to my knowledge)

Apparently Japan created a “preliminary test” in 2011 as an alternative to law school, and this year it beat out regular schooling to the alarm of some officials who now want to limit the number of people who can take the test. Good luck with that. It’s time to admit the Americanization of legal education didn’t work and shut the schools down.

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