Stafford Loan Limits and Law School Tuition

I wish I could say Hurricane Sandy has kept me from blogging, but in truth, work has been the culprit.

In my last article for the Am Law Daily, I wrote something like:

[L]aw school tuition increases regardless of changes to loan availability (Grad PLUS Loans displacing private loans, 2006; elimination of Subsidized Stafford Loans, 2012), loan borrowing limits (annual and aggregate), new repayment options (IBR, 2009) and even bankruptcy protections (1990, 1998 for federal loans; 2005 for private loans).

I thought it was a good zinger, but I’m returning to it because the decision to take Grad PLUS Loans came up in a conversation I had with some recent law school grads last weekend (I don’t think any of them took them), and I don’t think I’ve ever looked through all the changes to the Stafford Loan program over the years. It’s an important historical exercise because “increasing the loan limits” was the ABA’s mantra for dealing with over-indebted, under-incomed law school graduates, as this line from former ABA president Carolyn Lamm in “Law School Education Debt Has a Manageable Solution” attests:

Now is the time for modest changes in current federal student loan programs to increase the amount that law students may borrow, and to bring existing private loans into the federal student loan system.

This was published in November 2009, well after the advent of Grad PLUS loans and mere months after IBR went into effect, but it embraces a pre-2006 thinking: What the government won’t give you in Subsidized and Unsubsidized Staffords, you must get from your parents via a PLUS loan or private lenders. Thanks to the diligence of FinAid.org, here’re the Stafford Loan limits (both Sub’d and Unsub’d) charted over time against median law school tuition.

Why median and not mean tuition? I was hoping that medians would weaken the effects public law schools that have gone off the state dole have on mean public law school tuition. Instead, it appears the ABA’s median non-resident public law school tuition is just plain wrong for 2009 and 2010. Both years appear to be using Wisconsin’s non-resident tuition, but Wisconsin was the 16^th and 17^th highest in those two years, certainly not, you know, number 40 as one would expect with a median. The correct numbers should be $30,519 (Missouri-Columbia) and $32,882 (Northern Kentucky), before adjusting for inflation, of course. So, it’s just another lesson in distrusting the numbers the ABA puts into its publications.

Since the mid-1990s, the likelihood that private law school students would have to go beyond Staffords has steadily increased due to both tuition inflation and regular inflation melting away the annual Stafford limits. You can see why the ABA was so keen on increasing the limits, not that it would’ve made legal education any cheaper, which the ABA is not serious about. What’s really surprising, I guess, is that private lenders would be so eager to make these loans back when they were readily dischargeable in a Chapter 7 bankruptcy. Maybe it was because things were so much better in the late 90s that lenders didn’t care, but as the Lamm quote above implies, don’t expect anyone at the ABA to endorse Congressional efforts to repeal that odious section of the BAPCPA.

For those interested here are the aggregate debt limits against three years of median law school tuition. I don’t think it’s ever been a problem, but some part-time students may’ve run into them.

I’m not going to look into changes in interest rates today, but the point, though, is similar to why I bother listing all those tuition numbers going back nearly a decade: The deal changes for each incoming class with the asymmetry very much in law schools’ favor, and Grad PLUS Loans plus IBR aside, in strict dollar terms prior classes usually got a better deal.

On the Am Law Daily: ‘Who Knew Law Students Were Scamming the Government All Along?’

Who Knew Law Students Were Scamming the Government All Along?

Same title, different content and better researched, e.g. California Western is a nonprofit and not a for-profit (confused it with Western State).

I didn’t feel like including it, but here’s an animation of the differences between the current IBR and the revisions that will go into effect in 2014 or earlier. I’m pretty diddly-doodley darned sure that I got the math right on this. No idea why I confused the annual Stafford limit ($20,500) with the aggregate, which is b’ween $42,500 and $65,500 depending on what one borrows as an undergrad. This animation assumes the minimum $42,500.

Isn’t this so much more lucid than a repayment calculator?

Bradley University to Upstage Indiana Tech with America’s Latest Frivolous Law School

Phil Luciano, “Judge Shares a Vision of a Bradley Law School,” Peoria Journal Star

Not to be outdone by Indiana Tech, Wilkes-Barre, Delaware, Alaska, Louisiana College, UMass Dartmouth, North Texas, the Midwestern School of Law, and the Roger B. Taney Law Center—and please forgive me if I’ve forgotten any others—Bradley University may be the site of the latest pointless law school propelled by parochial luminaries, which in this case is the Chief Judge for the U.S. District Court for the District of Central Illinois, James Shadid.

Okay, I made up Midwestern and Taney, but at the rate we’re going with these law schools life will eventually imitate art.

Bradley University College of Law.

Sound intriguing? Some people – including a federal judge, a law school dean and the BU provost – think so. Moreover, a group of [ten] legal experts concluded in a hush-hush study – never revealed publicly until now – that central Illinois boasts a market for a law school.

A secret study by “legal experts,” eh? Here, I’m a legal expert: According to the Illinois Department of Employment Security, Economic Information and Analysis Division (PDF), Illinois will add 1,092 lawyer jobs (392 from growth and 700 from replacement) per year between 2010 and 2020. In 2011, 2,183 people graduated from Illinois’ law schools. See, no need to keep it secret!

File those numbers away in case this secret study comes to light so we can compare it to Indiana Tech’s outrageously irresponsible conclusions, which I nostalgically recall the erstwhile Restoring Dignity to the Law sublimely characterizing as “assume-the-conclusion Soviet-style planning.”

Proponents say a Bradley law school could be conceived with niche studies and new-model curricula that would better position graduates for employment, especially in this area.

Ri~ght.

Almost a decade ago, Shadid made a few informal suggestions to the Bradley administration about the lack of law schools in the Peoria area or western Illinois. But he found no eager ear until Joanne Glasser became the school’s president in 2007.

Shortly after she arrived on campus, Shadid asked to meet for coffee. After pleasant chit-chat, Shadid launched into a grand vision regarding a law school. He found an intrigued audience in Glasser: as a child in Baltimore, she dreamed of becoming an attorney after reading “To Kill a Mockingbird.”

Folks, I’ve been doing this for more than two years, but I still can’t believe how common it is for academic administrators to drink the law school-flavored Kool-Aid.

A main issue regarding a law school: Is there a market and need? To a person, Shadid categorized team members’ analyses as mostly positive, though interlaced with some uncertainty … [C]ritics point to a traditional focus that relies too much on classroom instruction and – aside from summer work – allows students little real-life exposure. That’s where a Bradley law school could be innovative, says Bradley Provost David Glassman.

This could involve no mere tweaking, but – pending American Bar Association approval – drastic curriculum revolution. The main change: Instead of taking classes during the third and last year, students would be placed in legal settings – with private attorneys, with county prosecutors and public defenders, or with corporations’ legal teams – to assist on real cases.

Didn’t NYU say it was going to do this, like, last week? Anyway…

That type of hands-on experience could give graduates an advantage at job interviews. In turn, that lure eventually could help establish solid enrollment at a Bradley law school.

Something tells me that employers would prefer to hire graduates from U Chicago.

Despite a national glut of attorneys, a Bradley school could push its curriculum toward areas of expertise. For instance, Shadid says, as computer technology continues to expand, the industry demands attorneys well versed in intellectual property and other related issues.

“That could be a niche,” Shadid says.

Medical law continues to grow as a phenomenal need, Shadid says. That makes for a great tie-in for Peoria, with its huge medical community and the University of Illinois College of Medicine at Peoria.

“Maybe there’s a relationship in some (educational) fashion,” Shadid says.

Why not add an LL.M. in corn law?

[Team member Gary Roberts] says the absence of a law school in Peoria means not just inconvenience for local would-be students, but added expense in that they have to pay room and board to study law. And whereas wage-earners in other, bigger cities can earn law degrees at night, that’s impossible in Peoria.

“There’s this large lacuna in the middle of Illinois where people can’t afford law school,” Roberts says.

Because a force field prevents NIU and SIU grads from moving to central Illinois.

Then the closer you knew was coming: law school as an engine of urban renewal:

Moreover, [Shadid] says, the school would be a good fit for Peoria’s Downtown. Shadid envisions the school located somewhere between Downtown and the Warehouse District, as a way to further the city’s aim to revamp that area.

“Can you imagine 300 young people, ages 23 to 28, filling apartments Downtown, living near the school, going to coffee shops and other places like that?” he asks.

Can you imagine Bradley Law School graduates paying 10 percent of their discretionary income on law degrees they’re not using?

Neither can Chief Judge Shadid.

Who Knew That Law Students Were Scamming the Government All Along?

[UPDATE: My mistake, California Western is a non-profit law school. Western State, on the other hand is.]

Andrew Martin, “Well-Off Will Benefit Most From Change to Student Debt Relief Plan, Study Says,” New York Times

Before I get started, there were two errors in my discussion of IBR last week.

One: Unpaid interest on IBR loans is not capitalized onto principal but it isn’t eliminated (except for the first three years for Subsidized Stafford Loans—not an issue for law school debt anymore). Unpaid interest accrues and is counted separately from principal, which I’ve never heard of before. Thus, the growth in debt is linear (unpaid principal plus unpaid interest) and not exponential (interest capitalized onto principal). Interest is capitalized when the debtor is no longer eligible for IBR, so don’t make a lot of money all of sudden after being on IBR for a while. As a result, large unpaid professional school debts can leave large tax burdens for debtors when the loan is forgiven.

Two: Readers will recall last week that I posted a chart showing the minimum income necessary to stay on IBR for a given debt level. That was based on the belief that the average interest rate IBR uses is not weighted. I think it is, in fact, so it looks something like this instead:

The difference is actually quite minor between the strict and weighted averages, but today’s post exists because I wasn’t the only one surprised by the gains debtors made by reducing the discretionary income percentage from 15 percent to 10 percent. The New America Foundation, via the New York Times, just released a report criticizing the changes to IBR—for unusual reasons.

“[T]he changes would provide big benefits to middle- and high-income borrowers, particularly for those seeking a graduate degree, the authors found. The report says that at least one financial planning company is telling law school students that the changes could allow them to write off $100,000 in student debt.

‘If left unchanged, the program is set to provide huge financial windfalls to people who, far from being in need, are among the most financially well-off graduates in today’s job market,’ the report says.”

Good news all you lawyers! You’ll make massive salaries even on IBR!

Law grads are a very bad example, and it’s unfortunate that the New America Foundation chose America’s most expensive and least lucrative professional degree to show how the rich are getting more benefits under the new rules. It’s one thing if Ben Bernanke’s son gets to be a doctor with $400,000+ of student loan debt, but it’s not like he went to the umpteenth tier trash pit Roger B. Taney Law Center in Annapolis, MD and couldn’t get a job, which is much more common than the New America Foundation cared to research.

Worse, the Times drew the wrong conclusion from the study: The problem isn’t that high-income law grads can write off large amounts of debts after 20 years instead of 25; rather, it’s that law schools are enticing applicants into doing so because it helps their bottom line, not because the educations they sell are needed or will produce the kinds of incomes necessary to pay off the loans.

Wait a sec, just which “financial planning company” is the Times referring to?

Why, the one that owns California Western Law School, one of the four for-profit law schools that are facing disproportionate scrutiny due to the newly enacted (and watered-down) “Gainful Employment Rule” that might limit the amount of Direct Loans their students can access.

The New America Foundation’s report has a few good suggestions for revising IBR that would help poorer debtors, and it’s right that the proposed changes to the program will benefit high-debt/high-income debtors, but that’s primarily because IBR’s debt-to-income ratios already scale upward.

The more significant criticism is that there aren’t that many high-debt/high-income debtors out there (I don’t think the report gives an actual number of high income debtors or their share of the total on IBR), which makes the New America Foundation’s arguments like those for means testing Social Security. Sure, we could reduce the amount that Warren Buffet gets when he retires (if he does), but the savings that come from specifically sculpting the policy to ensure that he doesn’t get any Social Security don’t outweigh the costs of implementing them.

Likewise, IBR doesn’t recognize that high-income debtors benefit from scaling effects of their incomes on their living standards. $80,000 in discretionary income is plenty to live on no matter what debts you have. The problems are why that much debt came into being in the first place, whether it’s payable in the long term, and how big the shortfalls will be. The aforementioned Bernanke fils might be doing just fine for himself, but he’s probably not better off than a doctor who graduated from his same med school in 1992. That’s the problem.

The fact that a few high-income grads benefit from a change a law that’s already generous to low-income debtors isn’t that big a deal. I stand by my conclusion that IBR shouldn’t be a protracted, bureaucratic, Chapter 13 bankruptcy. Just give debtors the real thing and eliminate the Direct Loan Program.

I’d like to stop there, but I have to set the record straight: California Western is a terrible example of IBR free-booting. The New America Foundation writes:

“Sure, having $100,000 in debt forgiven while you earn $70,000 a year sounds like a get-rich-quick scam. After all, the most the federal government will provide college students is $22,200 over four years through the Pell Grant program, which is targeted to only the neediest undergraduate students. Surely the federal government doesn’t have a program that would give over four times as much aid to law school graduates with starting annual salaries of $70,000 who go on to earn much more over their careers? Except, this turns out to be true.” (1)

FALSE.

Law school graduates do not have $70,000 starting salaries. Even NALP says that’s a distorted figure. The median starting lawyer salary (not just JD-holders, guys) in 2011 was $61,500 for 15,999 of 45,495 graduates reporting (PDF).

Speaking of graduate outcomes, just what happened to California Western’s?

Last year 26.7 percent of its graduates were either unemployed or didn’t even bother returning their employment surveys. Only 60 percent were “Employed Bar Passage Required,” and 21.8 percent reported working in solo to 10-firm positions full-time/long term. Only 8.4 percent landed in larger firms.

This is not a graduating class that’s “having $100,000 in debt forgiven while earning $70,000 in a get-rich-quick scam.” It’s a graduating class with an average of $153,145 in debt that requires more than $80,000 annually to reduce its loan principal under the current IBR, an income few of California Western’s 285 graduates will have any time soon. Implying that these law grads are scamming the government based on advertising from a for-profit law school is shoddy research, and the “Narrated Borrower Example” of Robert the Law School Grad is unreasonably unindicative of the majority of outcomes California Western Law School students can expect. Many of them will be paying 10 percent of their discretionary incomes for 20-25 years for degrees they will never use, and the government will end up canceling large amounts of their law school debts.

On the bright side, at least California Western pays for a fraction of that in corporate income tax.

IBR Formula ‘Cracked’ on the Am Law Daily

It’s actually really easy, just required a trip to the Dept. of Health and Human Services’ Web site. However, I learned quite a bit in the process, especially how much income debtors need to avoid loan cancelation (answer: more than most law grads make). Check it out:

“Income-Based Repayment: Lifeline for Law Graduates, Certain Loser for Government“

One important mea culpa: Unpaid interest on IBR loans does not capitalize onto loan principal as I’ve stated elsewhere, so very few people will be paying hundreds of thousands of dollars in income tax 20 years into repayment, unless they borrowed, like, more than $500,000 and didn’t pay any of it back.

Another tidbit I learned is that a fraction of debtors might have lower monthly payments on a 25-year repayment plan than IBR, provided they don’t get laid off or suffer a wage loss.

Now, you must trip to this sugarlump.

Private Law School Tuition Projections for 2016, 2021

If you weren’t looking, you missed it: I finished redoing the law school tuition page on October 3. I meant to finish the private law school tuition projections first, but sometimes it’s just easier to mindlessly key in 2,217 tuition figures than to redo a table.

So, how does one project law school tuition? I just extended the linear regression of each law school’s tuition based on its Official Guide entries going back to 2004. The basis is that past tuition increases are a predictor of future ones. The alternatives are making exponential projections based on previous tuition, using the average annualized growth rate for the last several years (5.32 percent), and arbitrarily knocking two percentage points off the average annualized growth rate (3.32 percent). None of these is particularly satisfactory, but when I tested methodologies recently by using the 2004-2010 tuition figures to predict law schools’ 2011 tuition, which we already have, I found that linear regression was the least precise in absolute terms but it was also the most likely to low-ball a law school’s actual 2011 tuition. I think this relative inaccuracy is important because no one seriously expects tuition to grow as quickly as it did even a few years ago.

As with last time, I’m excluding the two Puerto Rico private law schools and Brigham Young’s LDS tuition. The handful of public law schools that are clearly not taking any state subsidies is listed separately. The criteria for joining this ignominious class of public schools is having an in-state tuition that’s higher than the average private law school that’s outside of Puerto Rico. It’s possible that some public schools aren’t being subsidized but are still cheaper than the average private law school, e.g. Penn State, which charges resident and non-resident students the same. Lucky them.

The only addition for this year is that I’m adding a column on the right side giving the “relative variance,” which is a measure of how (in)accurate the linear regression test was when comparing projected tuition to their 2011 outcomes. I think the lower the better, but anything below -3.0 percent or so is probably too low. The idea is to give readers a measure of how reliable the estimate is, given that some law school engaged in serious expansions in recent years that I hope they couldn’t get away with now, especially Faulkner University, which doubled its tuition in the span of a few years.

These are ranked according to their 2021-22 projected tuition, enjoy:

#	SCHOOL	TUITION: 2011-2012	TUITION: 2016-2017	TUITION: 2021-2022	RELATIVE VARIANCE
1.	Cornell Law School	53,226	66,800	79,800	1.7%
2.	Yale Law School	52,525	64,600	76,300	1.1%
3.	Columbia University	52,902	63,800	75,000	-0.9%
4.	Northwestern University	51,920	63,400	74,800	0.4%
5.	University of Pennsylvania	50,718	62,200	73,500	0.4%
6.	New England School of Law	40,984	57,300	72,300	5.1%
7.	Seton Hall University	46,840	59,900	72,200	2.8%
8.	Cardozo	48,370	60,600	72,200	2.3%
9.	Vermont Law School	43,993	58,400	72,000	3.2%
10.	Duke University	49,617	60,500	71,400	0.2%
11.	University of Southern California	50,591	61,000	71,300	0.0%
12.	Brooklyn Law School	48,441	60,000	71,200	1.0%
13.	Fordham University	47,986	59,600	70,700	2.1%
14.	St. John’s University	46,450	58,700	70,700	1.3%
15.	Baylor University	43,573	57,000	70,200	0.7%
16.	Stanford Law School	49,179	59,400	70,100	-1.6%
17.	Syracuse University	45,647	59,000	70,100	8.8%
18.	New York University	50,336	59,900	69,700	-0.6%
19.	Harvard Law School	48,786	59,100	69,400	0.2%
20.	Vanderbilt University	46,148	58,200	68,900	5.2%
21.	Touro College	41,890	55,600	67,900	5.7%
22.	Faulkner University	32,187	51,300	67,800	17.1%
23.	University of Chicago	47,786	58,000	67,800	1.5%
24.	Georgetown	46,865	57,400	67,500	1.7%
25.	Quinnipiac University	45,050	55,700	66,500	-0.4%
26.	Hofstra University	45,600	56,000	66,400	0.4%
27.	Washington and Lee University	41,947	54,200	65,900	2.6%
28.	American University	45,096	55,500	65,700	0.9%
29.	George Washington University	45,750	55,300	64,800	0.2%
30.	Washington University	46,042	55,200	64,500	-0.2%
31.	New York Law School	47,800	56,000	63,900	1.0%
32.	Loyola Marymount	43,060	53,800	63,700	3.0%
33.	Tulane University	43,684	53,800	63,400	1.6%
34.	California Western	42,700	52,500	62,500	-0.5%
35.	DePaul University	41,690	52,100	62,500	-0.2%
36.	Illinois Institute of Technology	42,030	52,200	62,500	0.2%
37.	Emory University	45,098	53,600	62,100	-0.2%
38.	Pepperdine University	42,840	52,400	61,900	0.9%
39.	Case Western Reserve University	42,564	52,200	61,700	0.0%
40.	Roger Williams University	39,550	50,900	61,700	2.3%
41.	Suffolk University	42,660	52,300	61,600	1.9%
42.	Seattle University	39,282	50,500	61,600	1.0%
43.	Chapman University	41,873	51,800	61,400	1.0%
44.	Notre Dame	43,335	52,100	61,200	-1.2%
45.	University of New Hampshire	39,990	50,400	61,000	-0.5%
46.	Phoenix School of Law	37,764	49,600	60,900	2.9%
47.	Thomas Jefferson	41,000	50,600	60,600	-2.2%
48.	University of La Verne	40,732	50,500	60,500	-1.2%
49.	Golden Gate University	40,515	50,500	60,400	0.5%
50.	Southwestern University	42,200	50,700	60,100	-3.8%
51.	Charlotte	36,916	48,500	59,800	2.2%
52.	University of the Pacific	41,393	50,600	59,400	1.4%
53.	University of San Diego	42,574	51,300	59,300	2.8%
54.	Southern Methodist University	42,057	50,400	59,200	-1.9%
55.	Northeastern University	42,296	50,900	59,000	2.1%
56.	Catholic University of America	41,995	50,200	58,800	-1.4%
57.	University of Denver	38,502	49,000	58,500	4.2%
58.	Union University	41,845	50,500	58,500	2.9%
59.	Boston University	42,654	50,400	58,100	0.2%
60.	Wake Forest University	38,756	48,600	57,900	2.3%
61.	Valparaiso University	38,086	48,100	57,600	2.4%
62.	Boston College	41,818	49,900	57,400	2.4%
63.	University of San Francisco	40,544	48,800	57,100	0.2%
64.	Santa Clara University	41,790	49,000	56,700	-1.9%
65.	Whittier Law School	39,140	48,000	56,500	1.3%
66.	John Marshall (Chicago)	38,180	47,400	56,200	1.8%
67.	Florida Coastal	36,968	46,300	56,000	-1.4%
68.	Marquette University	37,570	46,300	55,600	-2.1%
69.	Western State University	37,284	46,200	55,500	-1.6%
70.	Loyola University Chicago	39,496	47,600	55,500	1.0%
71.	Villanova University	37,780	46,800	55,400	1.9%
72.	University of Miami	39,848	47,700	55,100	2.0%
73.	University of St. Thomas	34,898	45,900	54,800	10.0%
74.	Western New England College	38,240	46,600	54,700	1.6%
75.	Pace University	40,978	48,200	54,700	2.7%
76.	Charleston Law School	36,774	45,500	53,600	3.0%
77.	Michigan State University	35,840	44,900	53,500	2.5%
78.	Mercer University	36,860	45,500	53,400	3.0%
79.	Loyola University New Orleans	38,266	45,500	53,400	-3.4%
80.	John Marshall (Atlanta)	34,810	44,000	53,100	1.1%
81.	Elon University	34,550	43,800	53,000	-0.6%
82.	Lewis & Clark College	36,412	44,000	52,100	-2.2%
83.	Oklahoma City University	35,470	43,500	51,600	0.0%
84.	William Mitchell	35,710	43,400	51,400	-0.8%
85.	Campbell University	33,910	42,700	51,400	0.6%
86.	University of Detroit	36,050	43,400	51,300	-3.0%
87.	Samford University	34,848	43,000	51,200	-0.3%
88.	Drexel University	36,051	43,600	51,200	-0.6%
89.	Ave Maria	36,448	44,300	51,100	5.2%
90.	Drake University	34,006	42,400	50,600	1.2%
91.	Hamline	34,555	42,800	50,600	1.7%
92.	Saint Louis University	36,175	43,400	49,900	2.8%
93.	Widener University	36,450	43,000	49,800	-0.8%
94.	Widener University (Harrisburg)	36,450	43,000	49,800	-0.8%
95.	Duquesne University	33,752	41,800	49,700	0.3%
96.	University of Richmond	35,430	42,500	49,500	0.3%
97.	Stetson University	35,466	42,200	49,400	-2.5%
98.	St. Thomas University	34,618	41,800	49,100	-0.9%
99.	Cooley	34,340	40,900	49,100	-8.2%
100.	Barry University	33,630	41,200	48,200	3.0%
101.	Creighton University	32,494	40,500	48,200	1.5%
102.	Capital University	32,683	40,900	48,200	4.9%
103.	Nova Southeastern University	33,250	40,800	47,500	3.9%
104.	Gonzaga University	34,105	40,700	47,200	0.3%
105.	Regent University	32,780	39,900	47,000	0.0%
106.	Mississippi College	29,150	38,200	46,700	2.7%
107.	Ohio Northern University	32,750	39,300	46,400	-2.7%
108.	Howard University	29,131	37,200	46,000	-4.5%
109.	University of Dayton	31,598	40,100	45,900	14.2%
110.	University of Tulsa	32,056	38,400	45,100	-1.6%
111.	Willamette University	32,540	38,000	43,800	-1.5%
112.	Appalachian School of Law	29,825	36,600	43,500	-0.7%
113.	Liberty University	30,604	37,000	43,500	-0.7%
114.	St. Mary’s University	29,406	36,500	43,000	3.4%
115.	Texas Wesleyan University	28,790	35,500	42,300	-0.3%
116.	Brigham Young University	21,200	30,300	38,100	10.4%
117.	South Texas	26,850	32,700	38,000	4.1%
118.	Pontifical Catholic University of PR	14,446
119.	Interamerican University of PR	14,403
120.	Brigham Young University	10,600
	MEDIAN	39,550	49,000	58,100	0.9%
	MEAN	39,697	49,060	58,175	1.2%
	AVG DEVIATION	5,050	6,168	75,24	2.1%

For the handful of public law schools, here you go:

#	NAME	RESIDENT TUITION: 2011-2011	RESIDENT TUITION: 2016-2017	RESIDENT TUITION: 2021-2022
1.	CA-Berkeley	50,163
2.	Michigan	46,830	60,010	72,302
3.	CA-Davis	46,485
4.	CA-Los Angeles	44,922
5.	Virginia	44,600	58,924	72,995
6.	CA-Irvine	43,280
7.	CA-Hastings	40,836	50,486	60,136

That’s all I’ve got. Peace.

NY Fed Thinks There’s a Shortage of College-Educated Workers

Michael S. Derby, “Middle-Skill Jobs Are Lagging,” Wall Street Journal, Real Time Economics.

Our buddies at the New York Fed issued a report that the WSJ’s Real Time Economics blog commented on, titled, “Job Polarization and Rising Inequality in the Nation and the New York-Northern New Jersey Region” (PDF), by Jaison R. Abel and Richard Deitz. “Job polarization” is apparently the term economists use to describe how factory workers’ jobs can get outsourced or automated while H&R Block accountants’ and restaurant servers’ jobs stay at home. The accountant reaps a fortune from computer programs that make tax preparation easier, and the server is paid a pittance but is nevertheless irreplaceable because waiting tables can’t be automated.

Derby summarizes the Fed report:

“‘The strong wage growth for high-skill workers reflects their increased productivity as technological advances and globalization have served as a complement to the tasks they perform,’ the report said. High-skill workers also have benefited from a shortage of college-educated workers, further boosting wages.”

I have no idea where economists get this idea of a shortage of college-educated workers from. Actually, I do—I meant figuratively—it’s footnote five on page four of the report, which is prefaced with:

“[T]he supply of college graduates—perhaps the most skilled group of workers—has failed to keep pace with the growing demand for them, a trend that began in the early 1980s.”

(Sources: BLS, Census Bureau (P28-P31) [Edit: The age range is 18 and up])

If you can’t find college grads for your business, you’re not looking very hard. They’re easier to find than ever before and are more common in the workforce than any other education class (for brevity I excluded Associate’s Degrees (~15 percent)).

However, I have to give the Fed researchers some credit for preventing people from going to college and choosing unmarketable majors, and for telling corporate America to get more involved.

“The effectiveness of educational institutions and workforce training programs can be enhanced through close ties with employers. Partnerships of this nature allow firms to communicate their needs to those who are helping people develop the necessary skills to qualify for available jobs. In turn, these collaborations can help educational institutions design relevant programs and identify opportunities for the people they train.” (7)

Other than formalizing higher educators’ roles as job-placement middlemen (no “job polarization” in that field, apparently), the problem with this quote is that employers have no incentive to change the system as it is. They like using the university system as a job-qualifying pyramid and do not want any part in paying to train their workers any more than they already do.

Incidentally, this “job-qualifying pyramid” is echoed by that recent Dealbook article on why there should be vet school scam blogs:

“The problem of law school is one that is ubiquitous to higher education — the current model is inherently expensive but even today, lower-priced alternatives don’t seem to meet the standards or be desired by many students.”

Wrong. So wrong. Applicants want j-o-b-s. Corporate law firms in California can practically mint lawyers out of high school graduates with degrees from online law schools, but they seem to prefer Stanford, Berkeley, UCLA, and USC grads even though there’s no reason to believe that law school improves their ability to pass bar exams beyond their already high LSAT scores. Thus, would-be lawyers sort themselves accordingly. If law firms, judges, and government units changed their hiring practices to cut out the ABA, the system would start failing for real, but firms have no incentive to displace the ABA middlemen, hence the job-qualifying pyramid.

As it is, our Fed researchers are stuck. Not only is the shortage of college-educated workers a fiction, but there’s also no reason to believe their claim that “high-skill workers” are paid because of their educations. Their methodology of looking at the handful of occupations that dominate the top of the income distribution doesn’t mean that:

(a)   everyone in those occupations typically earns those kinds of wages (e.g. small practice lawyers),

(b)  education alone caused the high wages (physicians’ incomes are influenced by a practitioner shortage; middle-income jobs are deliberately off-shored because of the trade deficit not “globalization”), and

(c)   everyone with the same education as high-skill workers are working in high-skill fields (presumably our online law school grads, who are not in biglaw).

Instead, the researchers made the following ideological commitments:

• The trade deficit is good (it’s not, but we’re not done yet).
• Productivity gains are good, but such gains are divided between producers and consumers, not workers, who are cut out.
• Taxing productivity (capital gains) to relieve the income losses of displaced workers is bad because productivity is good.
• It’s harder to retrain older workers anew than to train them for career jobs from which they are never laid off to begin with.

The ineluctable conclusion? Faced with a future world populated by Eloi lawyers and Morlock maintenance men, the absolute best we can do is try to train as many Eloi lawyers as we can (and deny the existence of any Morlock maintenance men who happen to be law grads). Sorry Morlocks, we tried, but your collective failure to simultaneously beat one another on the SAT is why you’re all poor.

Thus, the problems inherent to the nexus of “globalization,” productivity, poverty, and education are not so neatly solved, and they’re going to worsen without some kind of unredistributionist mechanism. Unfortunately our Fed buddies lack both the willingness to tax capital gains and the imagination from preventing the tax code from becoming more porous going forward. We’ve already been given a taste of these difficulties with how to tax Internet sales, or that one Facebook founder who relinquished his U.S. citizenship to avoid paying income tax. The simple solution is to recognize that one thing that can’t be off-shored, outsourced, or tax-sheltered is the land under our feet, which doesn’t diminish if taxed, almost magically, raises wages and encourages more productivity.

So there’s your choice: pessimistic Fed economists who believe that only higher education can solve the problem of income inequality, or optimists like Henry George who believe that equalizing incomes solves the problem of higher education.