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Only 22 people elect to cash million-dollar admission ticket

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Here’s a puzzler for econometric analysis: Why are only 22 prospective students scheduled to enroll in Indiana Tech’s inaugural law school class next month, when social science has proven that getting a law degree is equivalent to being handed one million dollars in cash?

Speaking of the Simkovic paper, Matt Leichter makes an intriguing suggestion:

(1) On page 44, it says,

Thus, on average and ignoring obvious behavioral changes, the federal government would hypothetically profit from legal education even if it provided legal education free at the point of service.

This is about the moment that I opened to the possibility that “Economic Value” was a hoax like Alan Sokal’s famous “Transgressing the Boundaries: Toward a Transformative Hermeneutics of Quantum Gravity,” because it’s the exact kind of absurd policy proposal that a satirist would put into an article claiming law school is worth the money. Just hedging my bets. (Please be a hoax. Please be hoax. Please be hoax.)

(2) Otherwise, “Economic Value” is the “Reinhart and Rogoff” of legal education. I’m surprised I haven’t seen the parallel made elsewhere, and we really should have seen it coming. Sure, it’s probably not going to contain any MS Excel errors or strange weightings, but it’s causal theory is equally nonsensical and should not be taken any more seriously than “Growth in a Time of Debt” is taken today.

Leichter’s more polite criticisms are here.

Seriously, is it necessary to point out the logical fallacies and associated pseudo-empirical leaps of faith at the core of these sorts of arguments?

Those holding bachelor’s degrees earn about $2.27 million over their lifetime . . . earn vastly more than counterparts with some college ($1.55 million in lifetime earnings) or a high school diploma ($1.30 million lifetime), indicating that no matter the level of attainment or the field of study, simply earning a four-year degree is often integral to financial success later in life.

“The payoff from getting a college degree is huge and is actually increasing,” says Jamie Merisotis, president and CEO of Lumina Foundation, a nonprofit focused on boosting America’s number of college graduates. “For people wondering [if] a college degree [is] worth it: Not only is it worth it, but the premium is growing.”

Ah yes, the good folks at Lumina want everyone in America to enjoy the extra million dollars a college degree bestows on its owner:

“Lumina Foundation is a conversion foundation created in mid-2000 as USA Group, Inc., the nation’s largest private guarantor and administrator of education loans, sold most of its operating assets to Sallie Mae. Proceeds from the sale established the USA Group Foundation with an endowment of $770M. The Foundation was renamed Lumina Foundation for Education in February, 2001.”

It should be mentioned that with $1.5B in endowment, they give out no scholarships and seem to exist solely to propogate “we need many millions more college graduates” studies, with a particular emphasis on higher matriculation rates from the lower socioeconomic classes. Now, what do the lower classes need to get through college? That’s right: student loans – both private (which Sallie turns into SLABS) and federal (which Sallie still administers and collects).

Funding source: Sallie Mae

Sponsors/operators: Sallie Mae, USA Group [erstwhile SL guarantor that was in danger of losing its non-profit status when Sallie bought its assets and turned it into Lumina]

Public Agenda: double the percentage of college grads in the US, even though college grads have sported 50% un/underemployment for the better part of a decade now.

Other possible agendas: to ensure the financial health of Sallie Mae by decrying our supposed lack of college grads and getting everyone and their dog to enroll in college, especially if they need student loans. There has been a lot of media coverage on the burgeoning student loan crisis: the 1 in 4 in delinquency, with only 1 in 2 in active repayment (per NY Fed Reserve). The law school crisis. The biz school crisis. The humanities grad school crisis. The liberal arts crisis. The supposed STEM shortage. One can go on and on and on. I have collected north of 300 articles, studies, papers, etc on these trends over just the last two years. Lumina, despite being the largest higher ed foundation in the country, is very careful to…. not say anything about these horrendous outcomes. Nope, all that is needed to solve the country’s ills is to double the percentage of college grads, even though we already have twice as many college grads as the country can absorb. Any correlation between this goal and continued prosperity and revenue growth at Sallie is purely coincidental, of course…

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