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Data trove reveals scope of law schools' hiring of their own graduates
May 4, 2012 3:50 AM   Subscribe

A report by the ABA shows that some law schools hire as many as 15% of new graduates in an effort to boost employment numbers.
posted by reenum (78 comments total) 9 users marked this as a favorite

 
Higher Education has become a scam in the USA. The schools are in bed with the banks, financing massive student loans, and piling on debt. All done to line their own pockets. The university system is not guided by principles of education - it is guided by greed.

People rail against the lack of ethics on Wall St and in the American corporate world. Where do you think they learned it?
posted by Flood at 4:37 AM on May 4, 2012 [6 favorites]


Yeah! Even all of those non-profit state schools where tuition is 1/4 of what you pay at a private school are greedy profit-driven bastards! And those professors using their bonuses to buy houses, they're just like Wall St. traders! Crooks, the lot of them.

Careful, with that broad brush.
posted by oddman at 4:59 AM on May 4, 2012 [15 favorites]


Higher Education has become a scam in the USA. The schools are in bed with the banks, financing massive student loans, and piling on debt. All done to line their own pockets. The university system is not guided by principles of education - it is guided by greed.

This is a nice story, but not true for the bulk of Higher Ed. I am a professor, and lately I have been working closely with the administration on a bunch of projects, and we aren't "in bed with the banks" nor are we "guided by greed." We are, in general, guided by a desire to perform our function -- mostly educating students but also performing research (and doing other things (e.g. various community partnerships), but let's leave those lie for simplicity's sake). While there are for-profit colleges and universities, where the main purpose is to generate income, most private and all public HE institutions exist for education and research.

Obviously, the institution also exists to exist, so there are plenty of angles where you can see the institution doing things to perpetuate itself that may or may not conflict with the primary missions -- building nice student facilities which make the campus more attractive to potential students is a good example of something unnecessary for education but that helps the institution survive. Universities don't get enormous kickbacks from the banking industry to artificially inflate tuition, and there usually aren't skeevy individuals with suitcases full of cash sneaking around the campuses (well, outside of the athletics department, at any rate). There really is no collusion.

Now, as I have said frequently before, the major portion of the problem is the systematic government disinvestment from higher education. 20-30 years ago, state schools got much much higher percentages of their operating budgets from the state and federal governments. That percentage has dropped continuously over the last few decades. What this means is that what we used to pay for collectively, for the collective good (believing that an educated population was a benefit to everyone), we now require individuals to pay for individually for their own purposes (apparently believing that the purpose of a degree is always to get a job, which is only a benefit to the job-getter). The results? Immense student debt, which is immensely destructive in an economy that is not awash in high-paying jobs. There are additional issues, such as the college degree being a basic degree for a great many jobs that used to merely require a high school education, but the lack of public support is the real driver here.

The situation described in the article is a little different, however. It looks like an effort for the schools to maintain high enrollment (which they need to survive) by making sure that graduates have "some sort of job" to bolster the idea that a high percentage of their alumni are hired quickly. In this, it's a bit like the situation that many PhD candidates find themselves in extended programs, teaching courses as per-course lecturers, to delay emergence into a weak job market, giving the impression of higher employability, but also doing damage to the job environment within higher education (and, ironically, further weakening the market into which they would like to graduate). I guess the practice is neither evil nor particularly sleazy assuming that the job situation rebounds. If it doesn't, lawyers will end up in much the same situation as those PhDs, since the schools can't continue to hire 10-15% of their graduating classes for long....
posted by GenjiandProust at 5:09 AM on May 4, 2012 [31 favorites]


Universities don't get enormous kickbacks from the banking industry to artificially inflate tuition

So who gets the inflated tuition then?
posted by ryanrs at 5:11 AM on May 4, 2012 [2 favorites]


Interesting it's the top-tier schools, not the bottom, that seem to be doing it most. UNC's Bernie Burk, quoted in the second link, has been blogging about this stuff for the last few months and suggests it's probably that the top schools have more money to spend:

What is striking about this breakdown is how strongly school-funded bridge positions are associated with greater school prestige. Fully 72% of the US News top 50 fund non-negligible numbers of these positions, while only 50% of the next 50 do, and just 31% of the 46 after that. 86% of the least-prestigious, unranked schools fund no or negligible numbers of bridge positions for their unemployed graduates....The most plausible explanation for the association between greater numbers of school-funded bridge positions and school prestige is simply money—more prestigious schools likely have access to more funding for these positions than less prestigious ones.

In his first post he pointed out that "Percentages of the next-to-last graduating class employed at graduation and nine months after graduation currently comprise 18% of the basis for the much-maligned US News rankings."
posted by mediareport at 5:11 AM on May 4, 2012 [1 favorite]


I liked this bit from Burk, too:

Another thing these data show beyond serious question is that US News has screwed the pooch again. Since we can all agree that any rational decisionmaker would consider the prospects for a temporary school-subsidized job to be much less valuable than the prospects for a permanent full-time law job, US News’s investiture of 18% of its entire ranking in a statistic that fails to distinguish between the two when the former will sometimes be 20% or more of the latter inevitably results in some pretty serious distortions.
posted by mediareport at 5:14 AM on May 4, 2012


Oh, man. Not another one. Can't we throttle back law school doom threads until finals are over?
posted by snuffleupagus at 5:17 AM on May 4, 2012 [2 favorites]


So who gets the inflated tuition then?

I work at a medium-sized 4 year college that is part of our state system. Tuition has exploded here over the past ~15 years almost entirely to make up for losses in state funding.

I should say "tuition and fees have exploded" because it's the fees charged to students that have gone up the most, helping to make the "rise in tuition" statistic seem less onerous.

And as an aside, trust me, the "inflated tuition" is NOT going to professors.
posted by cyclopticgaze at 5:20 AM on May 4, 2012 [7 favorites]


I think one big issue is that a huge pool of cheap credit was created, and now higher ed is figuring out a way to siphon as much as possible off.

I work at a 'not-for-profit' university that supposedly has a good rep, and the drive over the past few years has consistently been to recruit more and more students as 'customers' who then have to have a good 'customer experience.' The marketing is out of control.

So who gets the inflated tuition then?

I know you;re asking rhetorically - but anyway, middle managers, marketing departments, the higher up admins and deans and presidents (who decide that they have 'performed' well), anybody with a fancy job title with some buzzwords in it. There has to be somewhere for all the unemployed MBAs to go ...
posted by carter at 5:21 AM on May 4, 2012 [1 favorite]


I am a professor, and lately I have been working closely with the administration on a bunch of projects, and we aren't "in bed with the banks" nor are we "guided by greed." We are, in general, guided by a desire to perform our function -- mostly educating students but also performing research (and doing other things (e.g. various community partnerships), but let's leave those lie for simplicity's sake). While there are for-profit colleges and universities, where the main purpose is to generate income, most private and all public HE institutions exist for education and research.

G&P, I'm guessing you're not a law prof. Law schools are (supposed to be) professional schools, first and foremost. In other disciplines—humanities, sciences—the research done by universities advances the field. In the law, lawyers and courts do that. For the most part, legal academia sits on the sidelines and offers commentary and prognostication. Which isn't to say it isn't necessary and important, because it is. But not nearly as much. And the 'clinical' side of legal academia (skills profs) is still generally shit upon from a great height by the traditional 'law' camp, who have the money, power, and least interest in actual education.
posted by snuffleupagus at 5:26 AM on May 4, 2012 [2 favorites]


*'which has.' grar coffee.
posted by snuffleupagus at 5:27 AM on May 4, 2012


Careful, with that broad brush.

Not everyone who works at a bank is a crook. Same with a university.
And not every bank is part of the problem with Wall St. Same with universities.

But you are crazy if you think that the top state schools are infected with greed.
See college football.
posted by Flood at 5:28 AM on May 4, 2012


Will they change their mind? Because I'm next in line. Law schools: I'm still free! Take a chance on me!
posted by griphus at 5:30 AM on May 4, 2012 [2 favorites]


Universities don't get enormous kickbacks from the banking industry to artificially inflate tuition

So who gets the inflated tuition then?


Inflation of various sorts coupled with government funding not only not keeping pace but receding at a brisk clip can account for much of it. Remember -- price increases on 7% will double prices in 10 years.

G&P, I'm guessing you're not a law prof. Law schools are (supposed to be) professional schools, first and foremost.

Indeed I am at a traditional state school. I would count that professional training as "education" in the "education and research" equation. "Education and research" make make up the core purpose of pretty much any legitimate school, but some schools and programs do no (or almost no) research. I was just trying to cast my net as broadly as possible.
posted by GenjiandProust at 5:36 AM on May 4, 2012


Now, as I have said frequently before, the major portion of the problem is the systematic government disinvestment from higher education.

I wonder how big a factor this is for the top-tier public law schools? Were they ever heavily publicly subsidized, or did they always exist as cash cows?

Law schools seem to have developed a business model based on endless job market expansion, and right now that particular ponzi scheme is looking pretty shaky. They can prop it up temporarily by hiring their own graduates or cooking the books, but that can't work for long.
posted by Forktine at 5:37 AM on May 4, 2012 [2 favorites]


How sharply things will be brought into focus will depend on how soft a landing can be engineered for the coming debt crash. Certainly, things would be different if law schools had to take a haircut on loans to students who qualified for some kind of income-to-debt metered relief program. (Speaking in vague hand-wavey terms here because I don't think it'll happen anyway.)
posted by snuffleupagus at 5:44 AM on May 4, 2012


The tendency to move from these stories to a generalised 'higher education is all a scam!' is depressing. Sure, there is lots of ways that higher education could be improved but it's not a monolith. Throwing in community colleges with state schools and ivy leagues doesn't help any one, and imagining that professors run their hands with glee and plan to start picking pockets the moment another student enrols is not based on any reality that I have experience of. I don't know if people have any sense for how hard funding cuts across the US have hit universities, but when they start yanking the phones put of offices in Berkeley, you know it's bad, especially as the top tier state schools are the protected ones and will experience generally less drastic cuts than less prestigious state schools. The exceptions in the US appear to be for profit schools which are getting a huge chunk of government money in the form of federal student loans with remarkably little oversight and to the cheers of increasing numbers of legislators despite their gruesome stats in graduating people.

As for pointing to athletic departments...well, they've made sure that in a lot of US universities they operate as largely independent entities, so they can keep any money they raise while still clawing money off the institution, all while being frequently economic drains on those institutions. The top few program's make money, the rest don't. (I'm on a mobile device otherwise I'd link to the reports showing this.)

As for law school, some of them are scams, but some of them provide very valuable programs for poorer people to access lawyers and justice, which is where some of these students are employed. Not all law professors are not just abstract thinkers - many lead these programs or are otherwise active in legal causes. I write this as someone in the humanities too, and someone who is frequently irked by the fact that law schools are privileged way beyond most other faculties and always get the nicest, shiniest buildings. And don't have to claw for resources for their libraries and students. So I'm not exactly their biggest fan.

Still, going to law school is a bad idea at this point, unless you're incredibly rich, get funding, or go to a top ten school.
posted by lesbiassparrow at 5:44 AM on May 4, 2012 [3 favorites]


(Beyond the current IBR options.)
posted by snuffleupagus at 5:45 AM on May 4, 2012


Now, as I have said frequently before, the major portion of the problem is the systematic government disinvestment from higher education.

My alma mater, Pitt, is getting so little funding from the commonwealth at this point that they are seriously talking about going back to being a private school again.
posted by octothorpe at 5:48 AM on May 4, 2012 [2 favorites]


Yeah! Even all of those non-profit state schools where tuition is 1/4 of what you pay at a private school are greedy profit-driven bastards! And those professors using their bonuses to buy houses, they're just like Wall St. traders! Crooks, the lot of them.

In-state public law school tuition is cheaper than at a private school, but I don't think it's that much cheaper anywhere these days. Public institutions realized that they could use law schools (and other professional) schools as ATMs since they don't need to provide funding for the grad students. This practice of hiring their own graduates is a desparate attempt to keep the cash flowing. Think about how much money these programs must be making if the schools are willing to pay their own graduates just to keep up the charade of success.
posted by stopgap at 5:49 AM on May 4, 2012 [1 favorite]


Yeah, law school tuition inflation is really a different ballgame than tuition rises to account for insurance rate hikes/inflation/loss of funding/etc. The system doesn't really encourage students to work part-time either to cover it, as far as I can tell by an informal poll of my (many) friends in lawschool-- not that there are many low-level legal jobs that would be up for grabs by current 1Ls or 2Ls. One of my parents made enough working during the day at a law firm to cover most of his tuition and housing costs for their first two years of night law school. Today, that job would require making something like 60 or 70 grand a year, which is just insane.

As far as I know, there really aren't too many lawyers, either. Think of all those AskMeFi questions that end in a lightning round of "IAAL, IAANYL" and "Please see a real lawyer in your jurisdiction, here are some numbers for some maybe free legal pointers that may or may not be applicable for your situation and area." But newly minted lawyers struggling with 100-200,000 of loans can't afford to work on small cases or pro bono work, can they? They can't usually afford to help out in non-profit or free immigration legal cases. They haven't been trained, for the most part, in how to manage a business and have no experience in a variety of quotidian domestic cases, so sticking a shingle out with their name on it probably won't work. How would they get the investment credit to start? I would actually have liked to have follow the family footsteps and taken at least a few courses in a specialized law field that relates to exciting developments in my primary research interests. But the number of unemployed and depressed lawyers keeps rising in my Facebook feed, and stories like this keep coming out (and getting emailed to me by parents who will do anything to keep me out of law school.) At least those in the 15% have jobs, and at least they're presumably learning something, rather than doing document review for $20 bucks an hour and no benefits.
posted by jetlagaddict at 6:02 AM on May 4, 2012


This is a nice story, but not true for the bulk of Higher Ed. I am a professor, and lately I have been working closely with the administration on a bunch of projects, and we aren't "in bed with the banks" nor are we "guided by greed."

There doesn't have to be a cabal of people at the top with a specific conspiracy for warped incentives to trickle through the system (although with law schools, the ABA is exactly that). Compare law professor salaries at even the lowest ranked school to the average salary of the bottom 90% of the graduating class of 2011. Or the explosion of administrative personnel and salaries across the broader university. Or the construction boom of brand new buildings stuffed with 60in plasma TVs to show powerpoint slides on at some universities.

And in the case of law schools, this type of deception is far worse, as within the hall of the school, you're sure to find endless hours of droning on about ethical duties, standards of care, etc. Meanwhile, the school administrations are actively concealing true employment numbers in an effort to keep their mouths around the student loan fire hose as long as possible, no matter how many unemployed graduates they squeeze out the other side. Not to mention the ethical quandry of the law school operating as university cash cows, 1 professor salary lecturing to a 100 seat auditorium 3 hours a week at 40k a head can generate a lot of revenue to plug other holes in the university budget.

And the discussion about law schools doesn't even come close to the real scam down in the netherworld of the for-profits. At least with law schools, the "but they're supposed to be sophisticated consumers" arguement holds some water. When a for-profit preys on marginal English speakers and borderline functioning individuals who think they're getting grants when they're actually signing on for loans, or steals away GI bill funds from returning troops for a useless degree, that's a scam almost too sad to think about.
posted by T.D. Strange at 6:04 AM on May 4, 2012 [8 favorites]


The system doesn't really encourage students to work part-time either to cover it, as far as I can tell by an informal poll of my (many) friends in lawschool-- not that there are many low-level legal jobs that would be up for grabs by current 1Ls or 2Ls.

I believe there is even an ABA accreditation requirement that law schools are not allowed to give work-study positions to 1Ls.
posted by stopgap at 6:04 AM on May 4, 2012


from the article "Three schools hired more than 15 percent of their classes... "

THREE schools out of how many, 200 or so? That would be..hmmmm, let's do the math, 1.5% of the schools.

I also noted that some of these jobs are university "supported", which may be different than "hiring" in some cases.

Not sure this is the falling sky that we are being presented with.
posted by HuronBob at 6:05 AM on May 4, 2012


Today, that job would require making something like 60 or 70 grand a year, which is just insane.
The accreditation rules won't let law students in a full time program work that much. If you want to actually work while in school you typically have to attend a night program— 5 years with a nice helping of post-graduation stigma.

Think about how much money these programs must be making if the schools are willing to pay their own graduates just to keep up the charade of success.

Right. In most instances, law schools get the shiny building because they're a profit center for the university. The official numbers are hazy where I am, but its a school that's been singled out occasionally in the 'scamblogging' scene and there is little doubt that a big chunk of our tuition is beamed across town to the Mothership.

And, all things being equal, if the aim is helping the underserved there are probably better ways to do that than throwing money at law schools so they can add a few seats to their aid clinic. Not that adding students or increasing tuition will necessarily expand those programs. Also, see the recent discussion of Congressional cuts in funding for the Legal Services Corporation in this thread.….when there's no Legal Aid, you can't go intern for Legal Aid. A school might run one or two clinics on its own, but law schools and law professors, by and large, are not interested in practicing law. Both for institutional and personal reasons.

As to the education bit: the school I attend claims to favor clinical education, and I am in a clinical sub-program. But really, the whole thing is kind of haphazard mess of small, special clinics run one-off by professors who make them a private fiefdom, on-campus affiliate programs reliant on outside orgs, competitive externships, etc. There's not any standard way of approaching clinical legal education for law students, except for trial advocacy (and that was largely stood up in the 70s and not taken seriously for a while therafter) and maybe a bit of elementary counseling. (The same kind of active listening skills you'd be taught in a peer mediation class, with a glaze of professional responsibility rules.)

Mean while the "law" side of law school is basically frozen in time in terms of its methods and core curriculum, but is still the controlling faction with such a vast power differential that the idea of it changing simply because of silly things like looming economic externalities of meteoric proportions somehow seems hopelessly naive…but maybe that's what happens after two years in the tank. (And a couple decades of watching a family member fight it out in that arena.)
posted by snuffleupagus at 6:05 AM on May 4, 2012 [1 favorite]


Everything I learned about being a litigator, I learned at summer internships, clinical externships, or by walking into court and getting my eyebrows burned. Imagine a medical school where the only anatomy you learn is the brittle-star and the echidna and you'll have some idea of the state of American legal education. Law school teaches you how to be a law academic, an entirely pointless endeavor when no one who's not enrolled at a top-25 program will ever get even an adjunct position at a 3rd-tier school.

My law school did this, and to my knowledge still is. It's a disgrace, and the real solution is to stop enrolling so many damned students.
posted by 1adam12 at 6:13 AM on May 4, 2012 [7 favorites]


People rail against the lack of ethics on Wall St and in the American corporate world. Where do you think they learned it?

Are you kidding? What, you think they learned it in English 101? Wherever they learned their lack of ethics, it almost certainly wasn't in English 101. It was more likely in B school, where they were taught by other bankers.

But let's never talk about how state funding to state universities has been brutally slashed by legislators who have swallowed the "no tax hikes EVAR" koolaid, even as those same pols line their pockets with lobbyist cash. They must have learned their lack of ethics in college, too.
posted by rtha at 6:15 AM on May 4, 2012 [3 favorites]


I'm not sure why we keep talking about undergrad humanities here but I will say this—it's become too easy to completely sleep through a B.A. at the kind of universities that feed law schools under, say, the top 15 (that top 15, not top 15%), which has sadly made the traditional model even less effective. It's not like The Paper Chase anymore. Even the anal kids on law review spend more time in class checking Facebook than taking notes.

It kinda burns me up. But then they end up outperforming me, because they are more focused and are undistracted when it comes time to memorizing and barfing up their outlines at exam time.

OK, now maybe too much coffee.
posted by snuffleupagus at 6:20 AM on May 4, 2012


I think people vastly underestimate the effect that student loans have had on price. Unlimited lending through GradPlus at the graduate level has increased law school tuition dramatically, even at state schools. See here for an explanation of the current loan problem.

The UC Hastings law school, which just cut the size of its entering class dramatically, released a financial report that demonstrates how things have changed. Some highlights of the report: in-state tuition at the school is $46,575 a year in 2012 (out-of-state tuition $52,575). The school took in $63 million in revenue in 2011. Of that amount, $43 million was received in the form of federal student loans ($23 million in Stafford/Perkins, $20 million in GradPlus). It's a state school, but only $8 million can from state funds. And federal loans constitute the vast majority of tuition payments: after the school paid $13 million in "scholarship" money (i.e. discounted tuition to those with higher credentials), it was left with $33 million in net revenue--suggesting that only $3 million of the student tuition funds came in the form of a non-student-loan cash payment. At graduation in 2011, Hastings students had $102,000 in law school debt--which is about average. But this number will grow: when the 2011 grads started law school, tuition was only $26,003 a year. This is a dramatic and unsustainable increase, and it is being replicated at many other law schools and professional graduate programs.
posted by Emera Gratia at 6:28 AM on May 4, 2012 [2 favorites]


Right. Thus my suggestion that we need some kind of expanded IBR, in which the school has to take a haircut too. That'd have them putting away the shrimp forks and busting out the pocket calculators.
posted by snuffleupagus at 6:33 AM on May 4, 2012 [1 favorite]


It's all a scam, yes sir. All of it. You can learn anything you want online.

I teach at an ivy league school where kids from middle class families (that make under about $80K) pay no tuition at all, and most of our students wind up significantly recouping their educational investments. Just yesterday I met with a Native American advisee who is doing very well (on a full ride), who comes from a very modest reservation background, and is the first in his family to pursue any kind of higher education at all.

We were discussing his options for PhD study, which are numerous.

Don't tell me this is a scam.
posted by spitbull at 6:44 AM on May 4, 2012 [4 favorites]


Another thing these data show beyond serious question is that US News has screwed the pooch again. Since we can all agree that any rational decisionmaker would consider the prospects for a temporary school-subsidized job to be much less valuable than the prospects for a permanent full-time law job, US News’s investiture of 18% of its entire ranking in a statistic that fails to distinguish between the two when the former will sometimes be 20% or more of the latter inevitably results in some pretty serious distortions.

Quoted for truth. Certain schools strongly favor clinical programs over these makework programs, and they get burned when US News skews the rankings the other way around. Once a significant number of schools start gaming the system, they ruin it for everyone: not just for their prospective students, but also for other schools in their peer group and for all prospective students within that peer group. Worse, these system-gaming makework programs are expensive even when they are modest, and that money would be either better spent elsewhere or simply not spent at all. However, perverse incentives arise to make these expenditures a practical necessity.

Recently, one T100 law school school's dean was lamenting having to take money away from his exciting menagerie of new clinics and academic centers in order to put them into these kinds of programs, just so that his school could stay in the T100. You could hear the hidden sighs and see the hidden eye-rolling as he cheerily announced having to put ~$250,000 into a 9-month makework program, just so that his school could compete against other schools which were, in his opinion, spending more to produce less.

Staying in the T100 would be a quixotic goal, except for the fact that prospective students place considerable weight onto law school rankings. Too much weight: rankings mean very little outside of the T14, and even within the T14, all that matters is that you're in there. Students are under the mistaken belief that there's a vast gulf separating number 40 from number 60 from number 80, which is simply not the case. Sadly, this misplaced faith leads to the stronger candidates flocking to the number 40s over the number 80s, despite the fact that the quality of education itself will never be appreciably better at one place or another merely by dint of its ranking. Neither are the employment prospects tied all that tightly to the rankings, outside of the elite schools: concrete connections between various schools and various firms and departments matter much more than who's 57 this year and 87 that year.

Regardless of the reality, prospective students do care about this kind of stuff, so law schools have to respond in kind, or else they'll attract weaker and weaker candidates. This puts law schools in the annoying position of having to play the rankings game in order to get the more attractive candidates, despite the fact that the rankings themselves are largely meaningless.

The only other people who care about rankings are faculty and faculty candidates, many of whom also place too much personal and professional emphasis on law schools' rankings. Again, law schools wind up playing the game in order to attract and retain the more attractive candidates, despite the fact that the rankings themselves mean very little.

The absolute worst part of all is that a truly efficient law school, one which focussed on practical skills and future lawyering, would be crushed under the weight of USN&WR's rankings system and, to a lesser extent, the ABA's requirements. There are too many perverse incentives to spend money, time, and energy on fluff and waste.

The bottom line is that the rankings system, the accreditation system, and the culture of legal education are all screwed up in interrelated ways, and there's no quick fix.
posted by Sticherbeast at 6:52 AM on May 4, 2012 [5 favorites]


What?

kids from middle class families (that make under about $80K) pay no tuition at all, and most of our students wind up significantly recouping their educational investments

Just yesterday I met with a Native American advisee who is doing very well (on a full ride)

Well....it doesn't take much to earn out when your debt burden is 0.

Did I miss something here?
posted by snuffleupagus at 6:52 AM on May 4, 2012


I wonder if we could chart lawyer employment/unemployment and underemployment by looking at comment frequency on legal posts to metafilter?
posted by srboisvert at 6:54 AM on May 4, 2012 [4 favorites]


Don't tell me this is a scam.

You sound like a banker defending Wall St.
Armies of kids graduating with crushing debt and no marketable skills - and you deny there is problem.
posted by Flood at 6:57 AM on May 4, 2012 [4 favorites]


I teach at an ivy league school where kids from middle class families (that make under about $80K) pay no tuition at all ... Don't tell me this is a scam.

Is it your impression that what you have just described is in some way the default scenario for consumers of higher education in America?

Out of the total number of college students per year, how many of them do you think come out of school with a) no debt, and b) an ivy league degree?
posted by gauche at 7:00 AM on May 4, 2012 [6 favorites]


And the discussion about law schools doesn't even come close to the real scam down in the netherworld of the for-profits. At least with law schools, the "but they're supposed to be sophisticated consumers" arguement holds some water. When a for-profit preys on marginal English speakers and borderline functioning individuals who think they're getting grants when they're actually signing on for loans, or steals away GI bill funds from returning troops for a useless degree, that's a scam almost too sad to think about.

God yes. I don't want to derail this into an argument about Obama, but I will note that his administration is trying to deal with this issue by copyrighting the term "GI Bill", among other things. AP
posted by the young rope-rider at 7:03 AM on May 4, 2012 [1 favorite]


Great. Copyright. How about, I dunno, the Department of Education? Or Justice, for that matter.
posted by snuffleupagus at 7:08 AM on May 4, 2012


Higher education isn't a scam, it's just systematically screwed up. Calling it a scam implies a level of criminal intentionality that simply isn't there. This characterization is inaccurate, and it also both unfairly implicates honest operators in higher education and unfairly acquits the screwed up system itself.

The problem is that it's too easy to give too much easy, non-dischargeable credit to students so that they can receive degrees which are worth much less than the sum of their internship experiences, and that these internships in turn are too frequently unpaid and not nearly educational enough themselves. This creates an army of bitter, educated, underemployed debtors, as well exacerbating institutional bloat.
posted by Sticherbeast at 7:10 AM on May 4, 2012 [1 favorite]


We were discussing his options for PhD study, which are numerous. Don't tell me this is a scam.

Law programs are not like PhD programs. PhD programs typically provide funding for their students, and students are well-advised not to enroll if they don't have a grant or teaching fellowship. Professional schools, on the other hand, stand to earn the full tuition from nearly all of their students, who must take out loans. Even at the Ivy League schools that have generous aid packages for undergrads.
posted by stopgap at 7:11 AM on May 4, 2012 [2 favorites]


Well, this is splitting hairs, but I guess we can do that here—you could have an enterprise worth of being labeled a 'scam' in the sense of running afoul of regulation on lending (especially, I would think, under the GI bill and other special programs) without a truly criminal mens rea.
posted by snuffleupagus at 7:12 AM on May 4, 2012


(thus, I suppose, the 'scambloggers')
posted by snuffleupagus at 7:13 AM on May 4, 2012


And by copyright I mean trademark.
posted by the young rope-rider at 7:14 AM on May 4, 2012


Well, this is splitting hairs, but I guess we can do that here—you could have an enterprise worth of being labeled a 'scam' in the sense of running afoul of regulation on lending (especially, I would think, under the GI bill and other special programs) without a truly criminal mens rea.

I was referring to higher education in general, and not the for-profit institutions, which I agree are indeed largely scams.
posted by Sticherbeast at 7:15 AM on May 4, 2012


A scam is generally defined as "a dishonest scheme"
These schools tell the students that taking on the debt will be worth while, that their standard of living will be higher, that the degree will help them get a job. How exactly is this NOT a dishonest scheme?
posted by Flood at 7:19 AM on May 4, 2012 [1 favorite]


I know I'm just a law student musing in his PJs, but I'd think that some Federal entity would have the standing to at least try to go after 'scamming' private for-profit schools preying on GI bill students and the like for disgorgement or restitution. If the DoE (DoD?) is the lender, then they might be able to step into their borrower's shoes and sue? Sadly, I haven't returned to that area of the law since first year.

I did see an alarming instance (at a clinic) in which a disabled vet's compensation benefits were being garnished to pay a loan (or, more accurately, usurious assignment fees on a loan) that he had taken out through the VA (or so he said) to attend a vocational program at a for profit academy that turned out to be a useless scam. If those facts are correct, that garnishment should not have been possible. But, so far as I know the vet didn't follow up by returning with documents....

But this is all a bit off-topic. Sorry.
posted by snuffleupagus at 7:22 AM on May 4, 2012 [2 favorites]


Calling it a scam implies a level of criminal intentionality that simply isn't there.

Disagree. Saddling a 23 year old with $200,000 debt at usurious 6.8% interest with full knowledge that that individual is most likely to end up unemployed or making $50-80k/yr is criminally reckless. The schools have full capability of calculating out the expected net present value of their degrees. It is obvious these values are wildly incommensurate with the costs of attending these institutions, hence the mass reluctance to publish accurate employment data. Institutional diffusion of responsibility is how the higher-ups in these groups sleep at night. At the very least the fact that enrolling in one of these law schools represents a life-altering financial risk should be a federally mandated communication to prospective students, much like the required warnings from financial advisers and the like. The fact that this data gathering and reporting has to be done by some rag tag third party and not e.g. the fucking ABA just demonstrates how heartless institutionally entrenched older generations are to younger ones and how greed-blinded America is.
posted by norabarnacl3 at 7:34 AM on May 4, 2012 [5 favorites]


Meanwhile, one of the largest legal firms in the country is melting down.
posted by backseatpilot at 7:39 AM on May 4, 2012


Yeah, 25% of the partners gone in year. BOOM! You can't run a law firm like a financial firm. Duh.

The "Dewey" part is pretty storied.
Oh well.
posted by snuffleupagus at 7:43 AM on May 4, 2012


The fact that this data gathering and reporting has to be done by some rag tag third party and not e.g. the fucking ABA just demonstrates how heartless institutionally entrenched older generations are to younger ones and how greed-blinded America is.

plus ça change
posted by snuffleupagus at 7:46 AM on May 4, 2012


So who gets the inflated tuition then?

Mainly the athletics programs at my alma mater. YAY RAH FOOTBALL! (And no, they're not good enough to make money on their own.)
posted by chundo at 7:49 AM on May 4, 2012


The fact that this data gathering and reporting has to be done by some rag tag third party and not e.g. the fucking ABA just demonstrates how heartless institutionally entrenched older generations are to younger ones and how greed-blinded America is.

plus ça change

link fixed
posted by snuffleupagus at 7:49 AM on May 4, 2012


The other thing about law school is that there's a whole meme out there about "go to the top x schools or get a full ride". Well, the top X schools aren't all doing so hot employment-wise, and the "full ride" is often bullshit, too. I got into multiple schools with full rides for Fall of 2008. Great, that's the full ride everyone talks about, right?

When I got the offer letters, they all required me to stay in the top, say, 30% of my class. They grade on a curve and give scholarships to more than 30% of the incoming class. You do the math. There is no way everyone can keep their scholarships. There are rumors that schools put all their scholarship students together so that the curve itself ensures that some of them will do poorly and lose their funding.

Law school admissions is one of the most cynical things I've ever been involved in.
posted by the young rope-rider at 7:52 AM on May 4, 2012 [3 favorites]


These schools tell the students that taking on the debt will be worth while, that their standard of living will be higher, that the degree will help them get a job. How exactly is this NOT a dishonest scheme?

Here's how.

The unemployment rate for people with a high-school diploma is 9.4%. For people with a bachelor's degree, 4.9%. For people with a professional degree, 2.4%.

Median weekly earnings with a high school degree, $638. With a bachelor's degree, $1,053. With a professional degree, $1,665.

Now obviously there are huge selection effects here. And lots of people think that there are many jobs that shouldn't demand a college diploma, but do.

And lots of other people think that the future job market will in general depend a lot less on credentials, and we'll all be little Me,Incs building our freelance brand in the cloud.

But it's crazy to say that there's no return to investment on going to college in 2012.
posted by escabeche at 7:52 AM on May 4, 2012 [1 favorite]


There are rumors that schools put all their scholarship students together so that the curve itself ensures that some of them will do poorly and lose their funding.

Yes, this happens. It's called scholarship stacking. I'd think non-disclosure of something like that might qualify for breach of the implied covenant of good faith and fair dealing, at least in California. Courts, unsurprisingly, have not been receptive to such suits. So far, the complainers can be passed off as disgruntled riff-raff. That won't last.
posted by snuffleupagus at 7:55 AM on May 4, 2012


For people with a professional degree, 2.4%.

A law degree is not a medical degree. The job markets are completely different. Putting them together for a statistic like this is misleading.

Using "employment" as a metric is also misleading. The amount of salary when compared to the amount of debt is a much better metric for determining the value of the degree.
posted by the young rope-rider at 7:58 AM on May 4, 2012 [2 favorites]


A law degree is not a medical degree. The job markets are completely different. Putting them together for a statistic like this is misleading.

Definitely. There's also a problem with not breaking this data out by age. Going to law school in 1975 and then practicing for 37 years was a great decision that seems to have worked out for a lot of people, but it has nothing whatsoever to do with whether it was worthwhile to go to law school in 2005, or whether it will be to go in 2012.
posted by gauche at 8:03 AM on May 4, 2012 [2 favorites]


Going to law school in 1975 and then practicing for 37 years was a great decision that seems to have worked out for a lot of people, but it has nothing whatsoever to do with whether it was worthwhile to go to law school in 2005, or whether it will be to go in 2012.

Yes. This.

I'm in law school for better reasons than many—I tried other things first, etc. But, undeniably, part of it is motivated by having grown up with it. My parents went to a better school than I'm attending, and in the 70's. Even so, neither is entirely happy with their choices. They nevertheless encouraged me to go to law school, under today's conditions, because we all agree I'm fairly well cut out for it, didn't rush into it, etc. (The irony being that if I had hurried a bit more, I might have managed to be out in time to get hired on before the bubble burst.) Their view is somewhat skewed, but even they admit it's not going to be the same for me as it was for them. My old man is getting to be outright resentful of the way the profession and the way in which people practice has changed. More and more, he's looking forward to getting out.

I am increasingly unnerved. But I actually enjoy the law, I don't need to make a million dollars a year to be happy, my debt will be significant but well below what most students borrow, so I'm hoping for the best.
posted by snuffleupagus at 8:17 AM on May 4, 2012


Median weekly earnings with a high school degree, $638. With a bachelor's degree, $1,053. With a professional degree, $1,665.

...

But it's crazy to say that there's no return to investment on going to college in 2012.


Maybe it is, but those numbers alone don't tell us anything one way or the other.

In addition to the problems pointed out above with taking numbers based largely on people who got their degrees in previous decades and using them to talk about the return on investment of a vintage-2012 degree, you need to at the very least be using net numbers (and you need to use net numbers that take into account the actual repayment cost of the loan, not just the sticker price of tuition—at the rate many recent graduates are repaying their student loans they will easily end up paying twice the principal or more in the end).
posted by enn at 8:39 AM on May 4, 2012 [3 favorites]


Some law schools are trying to be good about disclosure. Michigan, for example, has detailed information (down to the firm level) of where their graduates are employed and puts it on their web site. Note at the very bottom the detailing of nonlegal employment, which includes 'professional poker,' 'polo coach,' and 'sheep farmer.'

I tend to think things would be better if the ABA required this kind of disclosure, but I doubt it would fix the problem entirely. If someone's dead set on a profession, they will find some way to rationalize their decisions - nobody who goes into law school expects to be the 15% that can't find a job. (Or that they won't be able to find a decent tenure-track position, or writing for a successful publication, or a job at a good engineering firm, or...)
posted by dismas at 8:42 AM on May 4, 2012 [3 favorites]


to talk about the return on investment of a vintage-2012 degree, you need to at the very least be using net numbers (and you need to use net numbers that take into account the actual repayment cost of the loan, not just the sticker price of tuition—at the rate many recent graduates are repaying their student loans they will easily end up paying twice the principal or more in the end).

Yes, that's what makes it scary. You need to confine your borrowing to what you can pay off within a few years, at realistic salary levels, and start paying it down quickly, to make the burden acceptable in any sane view. But it's the lesser schools that are most aggressive in recruiting and promoting borrowing, and most parsimonious in terms of scholarships (giving, but moreover keeping.)

The 3.4% rate cap for direct loans that's been proposed would help, but that bill isn't going to be passed as is. It's funded by defense offsets.
posted by snuffleupagus at 8:46 AM on May 4, 2012


We were discussing his options for PhD study, which are numerous.

Then what?
posted by The Bellman at 8:48 AM on May 4, 2012


These schools tell the students that taking on the debt will be worth while, that their standard of living will be higher, that the degree will help them get a job. How exactly is this NOT a dishonest scheme?

Their parents have been telling them this for years. So have their teachers and coaches and guidance counselors. So have employers who won't look at a resume for a ditch-digging job unless it's got a BA on it.

How is this suddenly, solely the fault of colleges and universities?
posted by rtha at 9:34 AM on May 4, 2012


How is this suddenly, solely the fault of colleges and universities?

Because they're the ones who made money off of it, because they're the ones who are in the best position to know the truth, and because they're the ones who actually entered into a binding agreement with the students.
posted by jedicus at 10:00 AM on May 4, 2012


How is this suddenly, solely the fault of colleges and universities?

I'm not trying to be facile, but it doesn't suddenly become true just because other people said it too.

It's also definitely the case that, out of all of the parties you mentioned, universities are the ones that appear to be benefiting most directly from the insistence on a college education.

I don't think it's actually actionable fraud, but this isn't a good argument.
posted by gauche at 10:04 AM on May 4, 2012


Dammit, jedicus.
posted by gauche at 10:04 AM on May 4, 2012


Most student loans are funded by the government, which probably doesn't make much of a profit and right now is taking a loss by giving people a big discount on interest rates. The private banks are mostly side players.

There was an industry recently of private lenders taking government money and lending, directly to students and then taking a cut. That ended, oddly enough, with the healthcare bill "patch". Those companies are out of business.

But there is a huge problem with runaway price inflation. When i was a student tuition jumped 19%. The next year it jumped 19% again, then 9%. It's totally out of control. One of the big issues is that state funding has dried up. But one of the huge drivers is the fact students can get all the loans they need, regardless of their future ability to pay them back.
posted by delmoi at 11:32 AM on May 4, 2012 [2 favorites]


Median weekly earnings with a high school degree, $638. With a bachelor's degree, $1,053.
The BLS has tons of good data. It's probably possible to drill down to specific degrees. But the thing is, if you're making less then, say $400/mo more then someone without a college degree, you'll actually end up having less money then them, because they won't have to pay student loans, and you will.
posted by delmoi at 11:35 AM on May 4, 2012


Oh and I was going to add, someone with a degree in Computer Engineering is going to be making a lot more then someone with a degree in psychology or English or something.
posted by delmoi at 11:38 AM on May 4, 2012 [1 favorite]


Their parents have been telling them this for years. So have their teachers and coaches and guidance counselors. So have employers who won't look at a resume for a ditch-digging job unless it's got a BA on it.

How is this suddenly, solely the fault of colleges and universities?


I'm talking about a JD here, and law schools have been systematically lying to prospective students. Hiring their own students to make employment prospects seem brighter is obviously, purposefully deceptive.
posted by the young rope-rider at 11:39 AM on May 4, 2012


Extrapolating the outrageousness of the law-school "fellowship" skullduggery to higher education as a whole misses the point.

Before the latest transparency push, law schools were publishing numbers which suggested that a very high number of their graduates were "employed" at a good salary several months following graduation. The scambloggers have asserted that this was an outright lie, because, among other things "employed" included employment "in industry", which meant things like being a barista at Starbucks.

"But wait," some law schools said. "Here are our numbers for 'employed in the legal profession'." And it turns out that, after further inquiry, "employed in the legal profession" meant that the students were actually in law-school funded "fellowships" which were being used to artificially inflate the numbers.

The further outrage comes from the salary figures. I remember seeing some schools publish "median salary" figures for recent classes, based on a paltry (like 10%) response rate.

The value proposition of a law degree in 2012 is vastly different than that of other graduate and professional education, or even undergraduate education. Partly because of the amazingly horrible job market for new lawyers, but also because of the total lack of practical training conferred by most law school education (a new law school graduate is likely to be totally useless in the actual practice of law) and because of the rising costs of law school (which has increased at a greater rate than other types of higher education).

So, unlike a med school graduate, a recent law school graduate is very likely to be stuck with a shit-ton of non-dischargeable debt, very few job prospects, and without the practical experience to actually, you know, practice law. Plus, to the extent they want to get a job that doesn't require a law degree, their law degree may actually be a hindrance to getting that job (in other words, the very expensive law degree confers negative value to its holder).
posted by QuantumMeruit at 11:53 AM on May 4, 2012 [3 favorites]


The BLS has tons of good data. It's probably possible to drill down to specific degrees. But the thing is, if you're making less then, say $400/mo more then someone without a college degree, you'll actually end up having less money then them, because they won't have to pay student loans, and you will.

Look at those numbers again. Those are weekly earnings, so the college degree is worth about $1600/month, which will cover student loan payments with a lot left over
posted by Forktine at 1:19 PM on May 4, 2012


Maybe in 1987 it would've. Earning $1600 per month will not help you make a dent in even moderate student loan payments anymore (unless you have no other expenses in your life, and sometimes not even then).
posted by blucevalo at 1:33 PM on May 4, 2012


Those are weekly earnings, so the college degree is worth about $1600/month, which will cover student loan payments with a lot left over

Depends on the student loans and the individual. Let's look at actual income and debt figures for recent law grads.

In 2011, the average law student graduated with $100,584 of law school debt (we'll ignore undergraduate debt since we're comparing law school to a terminal bachelor's). The bimodal distribution of law school graduate income means that the mean and even the median aren't particularly helpful numbers, especially since the right-side peak is probably overrepresented due to self-reporting bias among successful graduates. And those numbers are also subject to self-reporting bias because people who are unemployed or underemployed are less likely to respond to salary surveys. So let's look at a typical law school graduate in the middle of the left-side peak making $50,000 per year, or about $961/week.

Assuming a blended interest rate of 6.8%, servicing their law school debt on a 30 year plan will cost $652/month, so we can slice off another $150/week. That leaves our typical law school graduate with a net pre-tax income of $811/week.

That's actually $242/week less than the median earnings for someone with a bachelor's degree alone, plus the opportunity cost of spending three years in law school rather than spending three years starting a career.

Law school simply does not make economic sense for anyone who has to incur debt, is not guaranteed a six-figure job on graduation, or cannot guarantee they will be in the top 10% of their class. A law degree has significant negative value compared to a terminal bachelor's for most people in law school today.
posted by jedicus at 1:59 PM on May 4, 2012 [7 favorites]


Thank you, jedicus! In 2009, an ABA commission noted that law school was an investment with negative expected value for at least 40% of students. More recently, detailed analysis by a Vanderbilt professor suggests that law school may have a lifetime negative value for more than two-thirds of students.

Legal education is broken.
posted by stopgap at 3:51 PM on May 4, 2012 [3 favorites]


So I can knock off this obsessive studying for the June LSAT, then? Because logic games suuuuuck.
posted by Snarl Furillo at 4:47 PM on May 4, 2012


Snarl Furillo: I'll link to my previous advice about when it's a good idea to go to law school. It's not a terrible idea, provided that you can meet most or all of the conditions, and you should look at whether you can meet them with a pretty hard eye.

Find out what kind of debt you will graduate with, and ask yourself this: if you had that amount of money, and no more, in your bank account, would you lend it to somebody to go to law school, as an investment in their future earnings? What sort of fundamentals would you want to know about the business they were getting into?

Like I said, it's not always a bad idea to go to law school, just like it's not always a bad idea to open a restaurant, or to start an internet company, or to quit your job, or to move to L.A. and try to sell your screenplay. You want to learn the circumstances when it is a good idea to do those things, and decide whether those circumstances apply to you. The persistent myth that new lawyers tend to make a lot of money will probably put its thumb on your decision-making apparatus: really, do your best to disregard giving this idea any real weight as it hasn't been true for a good while now.
posted by gauche at 10:36 AM on May 5, 2012


We had a job opening recently (free legal services, low pay), and got 200 applications. A few years ago, 70-80 was typical. It's depressing as hell. We're interviewing bright, committed people who are just screwed. And the number of people willing to be volunteer attorneys had just skyrocketed. We interviewed a couple of people who were being paid by their schools as described in the post. If those "jobs" weren't being reported as real jobs, and if law schools did a remotely decent job of training people to be lawyers, I wouldn't have a problem with these post-graduate "fellowships." They're providing a genuine service to the grads in allowing them to learn actual legal skills and get their foot in the door, but it's all kinds of screwed up that they don't often get that training in law school. And I have little doubt about the schools' motivation--they're not doing it to rectify the skills void that they themselves are responsible for creating.
posted by Mavri at 12:44 PM on May 5, 2012


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