A Quick Link–Student Debts and Walking Away from Law School

Here are five Labor Day goodies:

(1) Ryan D. Caldwell, “The Private Student Loan Discharge?” in Omaha Bankruptcy Attorney

Updates on legislation to discharge student loans in bankruptcy, The Fairness for Struggling Students Act (Senate) or 2010 Bankruptcy Fairness Act (House).

(2) Walter Russell Mead, “Back to School,” in The American Interest (Online)

An article on higher education’s value in the future labor market.

Most of your elders know very little about the world into which you are headed.

(3) Elie Mystal, “The Student Loan Racket: Now in One Easy to Understand Graphic,” in Above the Law

READ THIS!

(4) David Lat & Elie Mystal, “Cut Your Losses, or Finish Law School? An ATL Debate,” in Above the Law

A 2L wrote in to ATL about whether he (I’m guessing) should walk away from a top 8 law school and mediocre grades.  Mystal says yes, Lat says that the letter-writer’s high quality school and the hope of a student loan bailout is a good enough reason to stay.

Missing from the debate is what kind of summer work this 2L did, which is another indicator of future opportunities.  Aside from that, the law school’s rank is double-edged.  In times of plenty, it would be gold, but these days, top-tier law students are facing unemployment.  This is a problem for three reasons:

  1. Top-tier schools are very expensive and require a damn good job to make the investment worthwhile.
  2. A J.D.’s value deteriorates over time, even from a good school.  Employers find subsequent experience far more useful.
  3. Similarly, the legal sector faces structural unemployment.  Cyclically unemployed people become structurally unemployed in the long run.  This is very bad for graduates from top-tier schools with top-tier debt.

Consequently, I side slightly with Mystal over Lat, mainly because a student loan bailout is nice, but it won’t help if the legal sector doesn’t recover.  Angel from But I Did Everything Right has more specific criteria worth considering.

(5) Josh Wright, “Attention Economists and Grad Students: Thought about Law School?” in Truth on the Market

George Mason is offering free law school rides plus stipends (!) to its econ graduate students.  These are favorable circumstances in which to go to law school.

Enjoy your long weekend!

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