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Haggling over price

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One of the disappointments of my professional life is that no one has yet tried to bribe me. Around the time The Obesity Myth came out I did dozens of interviews, and to the best of my recollection I was only asked once if I had accepted money from any interested parties in the course of researching and publishing my views. I had to report regretfully that no one had thought it worthwhile to attempt to purchase my good opinion.

Happily, it appears that Michael Simkovic, a young and energetic Seton Hall law professor, has already avoided at least this species of disappointment. Simkovic co-published a study last year, purporting to show that the average present value of a generic “law degree” is just shy of one million dollars, and he and his co-author have just published a draft of another paper, claiming that this impressive figure is hardly affected by business cycle fluctuations, and that therefore “the best time to go to law school is the earliest point possible after which you make the decision that you’d eventually like to go. By waiting, you’re spending more of your limited working life working for lower wages.”

It goes without saying that these conclusions are exactly what the legal academic establishment would like to hear. So great is their enthusiasm for these findings that they are, as the intrepid scamblogger Dybbuk reveals, generously funding their further propagation:

Simkovic is a junior law professor at a second-tier law school, and therefore a finding that a law degree is an extremely risky proposition would be adverse to his employer’s interests, and his own — it doesn’t take an econometrics study to deduce a causal connection between the decline in tuition-paying lemmings and the decline in cushy lawprof jobs. But perhaps even more saliently, Simkovic has received grants totaling $220,000 from the Access Group and Law School Admissions Council (LSAC) to fund his ongoing studies of the great value of a law degree. Simkovic collected $120,000 from the Access Group and $100,000 from the LSAC. . .

The Access Group is a nonprofit membership organization comprised of 196 ABA-approved law schools. It touts itself, on its website, as a “leading provider” of student loans for aspiring professionals. As such, it has served as a national originator, holder and servicer of federally guaranteed and private, credit-based loans, funding more than $18 billion of education loans since 2001. On its IRS Form 990, Access Group lists its “primary activity” as being to “support. . . the organization’s student loan borrowers in facilitating timely repayment.” It also seeks to “promote access to higher education through lending programs offered.” . . .

The Law School Admissions Council is the nonprofit that administers the LSAT and facilitates the law school application process on behalf of its 200+ member law schools. According to its Form 990, LSAC exists to “provide services” to member law schools. These services include staging “national forums” to acquaint students with their “legal education alternatives” and holding training and educational programs for law school admissions professionals. LSAC’s gross receipts in fiscal 2013 totaled about 49 million dollars.

One of the many complaints made about legal academic scholarship is that, unlike most research in the social sciences, nobody is interested in paying for it via grants. It’s nice to see Prof. Simkovic demolishing this myth as well.

Unemployed Northeastern, indefatigable chronicler of the griftier aspects of contemporary higher ed, has some choice words about a particularly grotesque aspect of all this:

Michael Simkovic himself has gone on the warpath multiple times about how funding from the Lumina Foundation, which Sallie Mae cofounded and gave $700 million in funding, drives think tanks like Brookings and New America Foundation to create neoliberal studies that recommend federal lending be curtailed, PSLF be repealed, and PAYE be jettisoned in favor of old IBR. See, for instance:

1. ““It’s hard to make sense of a lot of what Lumina is advocating on student loans unless you think of how it would benefit Sallie Mae,” says Michael Simkovic, an associate professor at Seton Hall.” http://www.buzzfeed.com/mollyhensleyclancy/how-a-private-foundation-with-deep-ties-to-the-student-loan#.oqnVbMa1nn [the linked article relates how Lumina, which was cofounded and solely funded by Sallie Mae, gave New America $3 million and now NA rails against PSLF and federal student lending]

2. “Michael Simkovic, a visiting associate professor of law at the University of North Carolina at Chapel Hill and an expert on lending issues, said that if Brookings’s reports on student debt were to dictate policy, they would “boost the profits of the student lenders like Sallie Mae.”” http://www.washingtonpost.com/politics/at-fast-growing-brookings-donors-help-set-agenda/2014/10/30/a4ba4e8e-48ef-11e4-891d-713f052086a0_story.html [article relates how Lumina gave Brookings $1.9 million and now Brookings claims there is no student loan crisis]

And here he is, taking in hundreds of thousands of dollars from entities with direct stakes in the law school revenue game and writing studies that claim that law school graduates are immune to the laws of supply and demand, wage suppression, bear markets, elitism, etc. As if. To spell it out really clearly for anyone still confused about Access Group, it was a student lender. Back in the dark ages before GradPLUS (2006, I think), a law student could only borrow about $60,000 in federal loans for law school. Access Group competed with Sallie Mae, Nelnet, Citibank, etc. for the ability to extend $80,000 or $100,000 in private student loans to make up the difference. They would bundle those loans into Student Loan Asset-Backed Securities and sell them on Wall Street, of course. Yes, the law schools jointly own a student lending company, albeit a non-profit one (that sits on about $300 million in cash, if I am reading their 990s correctly). As far as I can tell, they haven’t lent money in years, have outsourced their loan administration to third parties, and seem to exist only to provide salaries for their executives.

April Fools!

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