Author Page for Paul Campos

Faculty buyouts and the fascinating world of law school finances

This is the first in a series of posts.

Over the past few months, it’s been revealed that several law schools are trying to buy out the contracts of significant numbers of their tenured faculty, and it’s likely that quite a few more are doing so on the down low. The terms of these buyouts naturally vary by institution, but after having looked into this at a number of schools I can say that a fairly standard package is something like two years of salary in return for an immediate resignation (this sum is sometimes paid all at once, but more commonly it’s disbursed over two to five years).

From a game theoretical perspective, rational maximizers of their utility at law schools that are under some sort of fiscal stress — a category that is coming to include the large majority of schools — will no doubt make a number of calculations.

First, senior faculty who were mulling imminent retirement before the wave of buyouts struck are now perversely incentivized not to quit, since it “makes sense” for them to try to wait out their employer until it offers a golden handshake.

Second, some people are no doubt considering the possibilities of double dipping, by retiring from a their current faculty and then taking a job at another school (of course the spread of the fiscal crisis across legal academia is making it harder to pull off this particular move).

Third, some faculty are now consulting employment lawyers, since attempts to procure putatively voluntary buyouts can end up violating age discrimination laws.

I’ll have more to say about these factors in another post, but here I’m going to offer a glimpse into the remarkably diverse world of the finances of contemporary American law schools.

You can learn a lot about the fiscal structure of a law school by dividing the school’s total effective tuition by its total full time faculty. Calculating total effective tuition within a tolerable degree of accuracy isn’t very difficult, given the information schools now must reveal in the ABA 509 disclosures. The 509 forms now require schools to disclose what percentage of their JD students get discounts on sticker tuition, and what the median, 75th percentile, and 25th percentile discount is. In addition, the ABA is now publishing data on how many non-JD students each school enrolls in post-JD (LLM) and post-BA (these are the various new “masters of law” degrees) programs.

The 509 forms also list current totals of full-time faculty, including administrators and visitors. Using these data, I’ve calculated the total tuition revenue per full-time faculty member for 40 schools. The results are startling to say the least.

For example, here are the numbers for Yale Law School and the New England School of Law respectively (all figures are for the 2012-13 academic year):

Yale

Sticker tuition revenue: $14.3 million
Discounted tuition revenue: $10.6 million
Non-JD tuition revenue: $2.0 million
Total tuition revenue: $26.9 million
Total tuition revenue per full-time faculty member: $283,157

New England

Full time sticker tuition revenue: $16.26 million
Full-time discounted tuition revenue: $11.33 million
Part-time sticker tuition revenue: $6.77 million
Part-time discounted tuition revenue: $1.8 million
Non-JD tuition revenue: 0
Total tuition revenue: $36.16 million
Total tuition revenue per full-time faculty member: $1,063,529

Needless to say YLS is not attempting to operate on the penurious sums generated by the school’s $54,650 annual tuition: it also gets about $40,000,000 per year in expendable revenue from the law school’s approximately one billion dollar endowment. This sum increases the school’s effective operating revenue per full time faculty member to nearly $700,000, which according to my understanding of basic free market principles means that the quality of education being provided to law students in New Haven is 64.9% as good as that bequeathed upon students at the Boston institution helmed by the legendary John O’Brien. (Remarkably, generating more than one million dollars per year in tuition per full time faculty member in 2012-13 wasn’t enough to keep O’Brien from threatening last fall to summarily fire faculty if 35% to 40% of the current faculty didn’t accept buyouts).

Much more to come . . .

Victims and victimizers

Updated below

Six weeks ago Ray Rice allegedly hit his fiancee hard enough to render her unconscious.

Subsequently:

On Thursday, Ravens running back Ray Rice was indicted for aggravated assault of his fiancee. On Friday, he married her.

According to Adam Schefter of ESPN, Janay Palmer and Rice exchanged vows last night, in a ceremony that had been scheduled for weeks.

The conscious coupling could insulate Palmer from having to testify against the man who allegedly rendered her unconscious. But the niceties of New Jersey law won’t matter. Since the incident happened in a casino, chances are that the only evidence needed will be the videotape of the alleged punch that knocked her out.

The video reportedly exists, and it will go a long way toward proving beyond a reasonable doubt that assault was committed, regardless of whether Palmer takes the stand.

Rice faces three to five years in prison on the felony charge. In the wake of his indictment, the Ravens have expressed support for the veteran running back.

The temptation in this situation is to plunge straight into victim-blaming — a temptation which will prove even more difficult to resist in the not-unlikely event that Janay Palmer eventually ends up getting murdered by Ray Rice.

It’s possible to have sympathy for everyone in this situation: for Palmer, who has grown up in a culture in which it’s totally normal and to a great degree socially acceptable for a woman to marry a man who severely beat her last month; for the law enforcement officials who understandably get sick of trying to prosecute cases featuring victims who do everything they can to interfere with prosecuting their victimizers; and even with Rice, who after all has been rewarded richly for engaging in an ultra-violent profession, that in turn expects him to leave that ultra-violence at the office, so that he can live a nicely compartmentalized life.

All of which is to say that structural problems need structural solutions, rather than emotionally satifisfying moralizing.

Update: Some of the comments in this thread are reprehensible. Brien Jackson in particular seems to think that alluding to the ways in which the violent world of professional football intersect with what appears to be the very high rate of domestic violence committed by NFL football players is some sort of crypto-racism. Others go to the other extreme, arguing that any attempt to place what appears to be a fairly severe act of violence (a very muscular man hitting a woman literally half his size hard enough to knock her unconscious) within a larger cultural context is some sort of excuse-making for that violence.

Rice is due his day in court, and perhaps the facts in the case are less damning than they seem to be on the basis of the publicly available evidence. It’s too bad that trying to talk about the complex cultural forces at work in this sort of context triggers these sorts of comments.

There goes my ONE BILLION dollars

JoePa and Coach K share life lessons

Q: How many times in the last ten NCAA tournaments has Duke seriously underperformed relative to its seeding?

A: Eight.

Blaming men for failing to acquire imaginary jobs

Updated below

I have a piece in The Week about one aspect of Paul Ryan’s “culture of work” remarks that hasn’t gotten much attention:

Ryan’s inner city men, who have never “learned the value and the culture of work,” are therefore not merely failing, but failing specifically as men, by failing to provide for their families.

The problem with this neat little morality tale is captured by what ought to be some startling statistics. Note that another unstated assumption behind comments such as Ryan’s is that the American economy actually produces enough decent-paying jobs to allow a reasonable number of Americans to have such jobs, as long as they embrace “the culture of work.”

To say this isn’t the case is an understatement. What is a “good” job, financially speaking? One which pays $50,000 per year? $40,000? $30,000? The latter figure, which represents take-home pay of less than $2000 per month, and which is only twice the minimum wage (which itself has declined sharply in real terms since the 1960s), is an extremely generous definition of what constitutes a decent-paying job.

But let’s use it anyway, to determine how many Americans of working age have such jobs. If we make a couple more unrealistically optimistic assumptions — that nobody under 18 or over 69 is working, and that no one has more than one job — the answer is: three out of 10.

Nearly 70 percent of American working-age adults do not have jobs that pay at least $30,000 per year, because there are only three such jobs for every 10 American adults between the ages of 18 and 69. In other words, the vast majority of working age Americans cannot possibly acquire decent-paying jobs, even if one defines a decent-paying job extremely broadly, because there aren’t nearly enough such jobs, not because people fail to embrace “the culture of work.”

Update: Some correspondence included for its potential sociological interest:

19 March 2014

Prof Paul F. Campos
University of Colorado
School of Law

Dear Prof. Campos,

Your criticism of Rep. Paul Ryan was a bit harsh to say the least. He does have a point regardless of you voluminous statistical presentation. Permit me to reflect upon certain demographic of the Black population. Why is it that, since the lack of jobs seems to be an equalizer and issue for everyone, Blacks have a far higher unemployment rate then non-Blacks? Why do Blacks have an astronomically higher crime/illegitimacy rate then non-Blacks? Why is it that Blacks are far more prone to create slums then non-Blacks? Why is it that Haiti, which has been under Black rule for over 200 years,is the economic basket case of the Western Hemisphere? Why is it that Black Africa is the most economically backward region of the world? Despite the false media hype of Blacks, why is it that rarely does one see Blacks in elite military units? The Special Ops unit that killed Bin Ladin did not have one single Black in it and most don’t. We’ve had decades of multi-$trillion minority programs and all sorts of preferential accommodations for Blacks and I might add Hispanics and the results are, to say the least, dismal! It is quite obvious that Blacks are not up to the job of constructively participating in a civilized society without a plethora of costly assistance programs;that American society can do without! The Black population, over the decades, has sufficiently demonstrated that it is more of a burden then an asset and clearly of no redeeming value! None! It is time to admit reality,as Rep. Ryan has done,and stop pretending!

Sincerely,

Roderick Spode*

*Name changed to protect the guilty

Flight 370 and Occam’s razor

Given the continuing absence of any evidence for more esoteric/sinister theories 11 days after the disappearance of FL370, this account seems increasingly plausible:

The left turn is the key here. Zaharie Ahmad Shah1 was a very experienced senior captain with 18,000 hours of flight time. We old pilots were drilled to know what is the closest airport of safe harbor while in cruise. Airports behind us, airports abeam us, and airports ahead of us. They’re always in our head. Always. If something happens, you don’t want to be thinking about what are you going to do–you already know what you are going to do. When I saw that left turn with a direct heading, I instinctively knew he was heading for an airport. He was taking a direct route to Palau Langkawi, a 13,000-foot airstrip with an approach over water and no obstacles. The captain did not turn back to Kuala Lampur because he knew he had 8,000-foot ridges to cross. He knew the terrain was friendlier toward Langkawi, which also was closer.

Take a look at this airport on Google Earth. The pilot did all the right things. He was confronted by some major event onboard that made him make an immediate turn to the closest, safest airport.

For me, the loss of transponders and communications makes perfect sense in a fire. And there most likely was an electrical fire. In the case of a fire, the first response is to pull the main busses and restore circuits one by one until you have isolated the bad one. If they pulled the busses, the plane would go silent. It probably was a serious event and the flight crew was occupied with controlling the plane and trying to fight the fire. Aviate, navigate, and lastly, communicate is the mantra in such situations.

There are two types of fires. An electrical fire might not be as fast and furious, and there may or may not be incapacitating smoke. However there is the possibility, given the timeline, that there was an overheat on one of the front landing gear tires, it blew on takeoff and started slowly burning. Yes, this happens with underinflated tires. Remember: Heavy plane, hot night, sea level, long-run takeoff. There was a well known accident in Nigeria of a DC8 that had a landing gear fire on takeoff. Once going, a tire fire would produce horrific, incapacitating smoke. Yes, pilots have access to oxygen masks, but this is a no-no with fire. Most have access to a smoke hood with a filter, but this will last only a few minutes depending on the smoke level. (I used to carry one in my flight bag, and I still carry one in my briefcase when I fly.)

What I think happened is the flight crew was overcome by smoke and the plane continued on the heading, probably on George (autopilot), until it ran out of fuel or the fire destroyed the control surfaces and it crashed. You will find it along that route–looking elsewhere is pointless.

If this theory is correct, it seems unlikely that the plane and its flight data recorder will ever be found. The search for Air France 447 suggests that it’s basically impossible to find the fuselage of a plane in the deep ocean unless searchers know almost exactly where the plane went down (Flight 447 was found 6.5 miles from its last known location two years later, after three previous failed searches). Any debris spotted at this point will be hundreds of miles from the crash site. Reconstructing the path of such debris along ocean currents might confirm or dis-confirm the autopilot theory, however.

New law school graduate debt figures

US News has just published data on class of 2013 law school graduate debt. Matt Leichter points out that an unusually large number of ABA schools — 14 out of 201 — chose not to reveal this figure to US News (Schools are required to report these numbers to the ABA Section of Legal Education, but as of now the Section only publishes aggregate debt figures. In a typical year around four schools don’t report to US News). Also Barry, a Florida bottom feeder, obviously only reported debt incurred by graduates during their third year. They made the same mistake in 2011, got called out for it, gave the correct figure for the class of 2012, and then misreported again in 2013.

The schools that didn’t report were mostly places that would be shut down instantly if the federal government could bestir itself to apply even the most minimal regulatory controls to the money it shovels into law school coffers in the form of student loans that aren’t going to be paid back (Cooley, one of the John Marshalls, Touro etc.). But the list also included Cornell, which happens to have the highest tuition of any law school in the country (And hopefully the universe: $59,550, including mandatory fees).

Anyway, the figures published by US News are seriously understated, for several reasons:

(1) They only represent the total sum of federal educational loans issued to students while in school. This omits the interest accrued on these loans, as well as origination fees, which are absurdly high (4% in the case of GRADPLUS, which applies to all loans beyond the first $20,500 taken out in any year). Interest accrued and origination fees can be calculated readily, so I’ve included them in the figures below.

(2) It also omits debt that doesn’t run through a school’s financial aid conduits, such as private loans — these are rare as of post-2010 among professional students, since they can borrow an unlimited amount from the feds, but they still exist.

(3) More significantly it omits family loans, such as when parents tap HELOCs to pay for their child’s Very Prestigious Symbol of Prestige.

(4) It also doesn’t include student credit card debt incurred to cover expenses during law school, or loans taken out after graduation and prior to the bar (usually taken three months after graduation) to cover living expenses and bar preparation and administration costs.

(5) It doesn’t include other educational debt. Average undergraduate debt among college graduates with debt (around two thirds) is now running at nearly $30,000 per year, apparently because Kids Today drive fancier cars than their professors and insist on squandering money on frivolous gadgets like cell phones and ipods that play so-called “rap” music.

I’ve calculated the average total owed on federal loans when the first payment came due, that is, in November 2013, for the graduates of the ten schools with the highest reported graduate debt. Note that the figures below only include (1) above, and that the actual educational debt carried by graduates of these schools is considerably higher (The list includes Arizona Summit, fka Phoenix School of Law, which didn’t report to US News but did put the relevant figures on its web site. It doesn’t include any of the other 13 schools that didn’t report, a few of which probably would have made it into the top ten).

The number after the debt figure is the number of 2012 graduates of these schools who got jobs with large law firms, or federal judicial clerkships (This number is a good proxy for the number of graduates who got jobs that hold out some reasonable prospect of careers which will allow graduates to service six-figure debt loads).

Arizona Summit: $225,321 (1 of 181)

Thomas Jefferson: $219,734 (1 of 260)

New York Law School: $200,046 (34 of 601)

American: $192,688 (58 of 463)

California Western: $191,347 (3 of 283)

Northwestern: $188,851 (164 of 295)

Whittier: $187,301 (1 of 170)

Chicago: $186,474 (152 of 215)

Florida Coastal: $182,266 (5 of 510)

St. Thomas (Miami): $182,057 (0 of 216)

True lies

I have a piece in The Week about True Detective.

What sort of moral responsibility do artists have not to exploit, and thereby perhaps propagate, moral panics? The aesthetic power of The Birth of a Nation and Triumph of the Will has not absolved their creators for choosing to exploit racist and anti-Semitic beliefs. Our shameful history of panics and persecutions over the imaginary satanic ritual abuse of children should have been treated by artists as talented as the makers of True Detective as a cautionary tale, rather than as an opportunity for further invidious myth-making.

Keep slinging crack rock

One of the most predictable responses to any criticism of a heretofore socially respectable entity is that the critics have hidden and disreputable motives. The critics, it’s said, want to sell something, and/or get publicity for themselves, and/or advance their careers via perverse contrarianism, or what have you.

There are two problems with this charge: it’s too easy to make, and it’s almost always irrelevant.

Nothing illustrates the ease with which it can be made better than how easy it is to level the exact same charge on the critics of the critics.

Consider this especially ludicrous example: a professor at an 11th-tier law school, featuring sky-high tuition, a per se open admissions policy (the school admitted 83% of its applicants last year, which probably represents close to 100% of the pool of functionally literate applicants not sporting serious criminal records), catastrophic employment outcomes for graduates, and plunging enrollments (the student body has shrunk by a third over the past three years, from 525 to 350) — that is, someone employed by exactly the kind of law school that has no business staying in business if critics who claim there is a crisis in legal education in America are correct — begins an article contesting that claim by questioning the motives of the New York Times for publishing stories about the struggles of recent law graduates.

The Times, per Prof. Reich-Grafe, only published these stories because it was trying to attract readers. It should be unnecessary to point out that the explanatory power of this startling insight is somewhat undermined by the fact that the exact same claim could be made about literally any and every story the Times (or for that matter any other publication) decides is fit to print. It should also be unnecessary to point out that the Times’ purported motives in this matter would not be considered by any halfway sane person to be nearly as questionable as Prof. Reich-Grafe’s own, given his “positionality” in regard to what he refers to as the “supposed” crisis in American legal education.

In any case, the charge of disreputable motivations is not only all too easy to make, it’s also irrelevant to the merits. Law school critics and defenders may or may not be greedy self-interested publicity whores, but whether they are or not has no relevance on the extent to which their various arguments are correct. Those arguments should be evaluated not on the basis of the supposed motivations of those who make them, but on the basis of whether they’re good arguments on their own terms.

On this score, Prof. Reich-Grafe’s piece is frankly embarrassing — a series of egregiously assumed can openers, tied together with pseudo-empirical guesswork, and injected with enough optimism bias to float a Madoff-sized Ponzi scheme — in sum an argument so flimsy that it can be (and was) demolished immediately by an anonymous scam blogger, on a site normally dedicated to pointing out to prospective law students that Legally Blonde does not provide a sound basis for the decision to spend $250,000 to get a law degree.

Legal education, we are told over and over again, is so expensive in large part because law faculty must have the leisure to produce “scholarship.” In theory, that means the million law graduates extruded by American law schools over the past 25 years have been subsidizing the production of what in the academy are termed “valuable contributions to the literature.” In practice that means those graduates paid their professors to write and publish things like Prof. Reich-Grafe’s article.

But a million law graduates is merely a statistic. Here is a glimpse into the life of a single one of them: someone who could have been one of Prof. Reich-Grafe’s own students (he attended a very similar law school):

I graduated from [ ] in 2010. I am approximately $215,000.00 in debt; I’m currently looking for work and have been struggling with Major Depression and Generalized Anxiety as a result of this ordeal. After passing the bar in 2011 I tried to start a solo practice and did a little bit of lawyering during that brief endeavor, but very minimal. I helped another attorney out at one point, too, but just in a very limited way. I have not been able to find a lawyer job or any professional employment since graduation in 2010. My last job was as a cashier at a supermarket making $12/hr.

For more than a year I have been applying for various non-legal jobs, in an attempt to take advantage of my “versatile” JD. In particular I’ve applied for a broad range of HR positions I’ve seen advertised, and have even employed a recruiting agency to help with this search. Such positions range from entry level on up. During law school I took employment law and also clerked for two summers and during a regular semester for an employment law firm; I therefore have a lot of direct HR related knowledge. Here’s some correspondence I just had with the agency:

“Hi Emily – I know Gwen is handling the HR area, but I never heard back from her about those jobs that I mentioned to you I thought I’d be a strong fit for. I know I would be great in the HR arena, and am interested in this listing now on the BW site: [ ]. It notes that “We are looking for talent at every level…”; it also says: “…we are on the hunt for talented candidates with experience in a range of HR functions to fill those needs.” I have a wide spectrum of direct and detailed knowledge of HR related laws, both state and federal, and therefor I believe I’m a great candidate for one of the Human Resource Contractor positions.

Thank you.”

“Hi [ ],

I apologize that you and Gwen weren’t able to connect. I appreciate you reaching out and inquiring about the HR contract roles. Since our clients are paying us fees to fill these positions, they tend to be very picky in the experience they are looking for. Although I’m sure you are more than capable to handle many HR tasks and issues, they will be wanting to see direct HR assistant, HR manager, HR coordinator, etc. type experience in your background and resume. It is tough to make a strong argument for candidates who do not have those direct titles in their backgrounds for these positions.

I understand your goal of wanting to find work and we want to help in any way we can but we are not a great resource for someone looking to move industries, for example from Legal to Human Resources. Our clients are coming to us because they are looking for that direct experience, and although I am sure you are qualified for the roles, they are wanting that direct industry experience. Our clients have proven reluctant to hire JD candidates into non-attorney roles.

I hope my correspondent (I regularly get emails of this sort) can take some solace in the knowledge that the most advanced forms of legal scholarship have concluded that “the legal profession market is moving into the direction of close-to-guaranteed legal employment for all law school graduates over the course of the next two decades.”

60 years ago this week

)

Three months later to the

day:

)

Malaysia Air

I know nothing about aviation, but how is it possible in this day and age for a huge commercial jetliner to disappear over a very heavily trafficked body of water like the Gulf of Thailand, with still no clue regarding what happened 80 hours later?

The only rough parallel seems to be Air France 447, but per wiki:

An Air France spokesperson stated on 3 June that “the aircraft sent a series of electronic messages over a three-minute period, which represented about a minute of information. “[32][33][Note 2] These messages, sent from an onboard monitoring system via the Aircraft Communication Addressing and Reporting System (ACARS), were made public on 4 June 2009.[34] The transcripts indicate that between 02:10 UTC and 02:14 UTC, 6 failure reports (FLR) and 19 warnings (WRN) were transmitted.[35] The messages resulted from equipment failure data, captured by a built-in system for testing and reporting, and cockpit warnings also posted to ACARS.

Isn’t Major Kong a commercial pilot? Other LGMers?

Loans that can’t be repaid won’t be

This guy is enrolling at the University of Miami’s law school this fall:

So I will be taking out student loans to finance my legal education. I believe I am setting myself up well to get a p[ublic] s[ervice] l[oan] f[orgiveness] eligible job as I have been interning at a government agency (that has already offered an internship after 1L) and I plan to structure the courses I take around that 2L and 3L while keeping the connections I’ve made and eventually doing my CLI there. If I take out the maximum amount possible in loans, I would seem to have $5k-$7k more than I need because I will be living with my gf which make COL a little lower and my parents will be helping out with living expenses. With my dedicated interest to public service and looking at a job that offers ibr/pslf, should I invest with the extra money on hand?

Miami’s current annual cost of attendance is nearly $70K, which means that if he’s paying sticker he’s going to owe, with interest, around $240K when he graduates. His plan to pay this money back is to not pay it back:

Unfortunately, my school doesn’t offer a l[oan]a[ssistance]r[epayment]p[rogram] program so I would have to pay the minimum $300 a month on my P[ublic]I[nterest] salary for ten years. Still not a bad deal. I really just don’t want to work in the private sector. Yes the pay is much better than working in PI but there’s so much more to being an attorney than just money contrary to typical Top Law Schools rationale. I really want to be able to make an impact in my community with the agency I’m working with now.

A few points:

(1) Getting an unpaid internship with a government/non-profit legal employer is relatively easy (although getting harder all the time). Getting an actual job that pays a salary is exponentially more difficult.

(2) (1) is a function of the fact that federal, state, and local governments are all struggling with budgetary constraints, while at the same time law schools are graduating about 15,000 people a year who are getting the same bright idea as this public-spirited fellow: rack up hundreds of thousands in loans, pay $300 per month on PSLF for ten years — which will only pay off a fraction of the interest and none of the principal — and let Uncle Sugar handle the rest.

(3) Graduate school loans now have floating interest rates, but will probably average between 6% and 9% while this guy is in law school. Good luck arbitraging that. Where do kids these days get these ideas? The Wolf of Wall Street? (Haven’t seen it but I gather it’s the new generation’s version of Gordon Gekko.)

(4) This is all going to end badly.

Obama administration moves against higher ed lobby

Over the last few years a bunch of law schools figured out that they could exploit various changes in the federal funding of education in a way that would allow them to jack up tuition radically, while selling this price rise to potential students as a proverbial free lunch at taxpayer expense. The thought leader in this regard was Georgetown, which was so aggressive in pitching the idea that Congress had “solved” the problem of spending nearly $300,000 to get a GULC degree that the school ended up in the pages of the Washington Post last August, as an exemplar of Michael Kinsley’s dictum that the scandal is what’s legal:

Delisle and Holt found a video of Charles Pruett, assistant dean for financial aid at Georgetown Law, explaining to students that he doesn’t worry about the Feds figuring out what’s going on, since they aren’t going to dare force former law students to pay big loan bills that they were promised they never had to pay.

There’s also video of Pruett encouraging students to (legally) shelter income from the federal government so as to lower the loan payments that Georgetown Law has to make on their behalf through income-based repayment . . .

To be clear, what Georgetown Law is doing is perfectly legal. The question is whether it’s appropriate for the federal government to be paying almost $160,000 to students at an elite law school.

GULC professor Philip Schrag has also played a leading role in promoting the idea that law students need not worry their pretty little heads that it costs $80,000 per year to attend that fine institution:

“In 2007, however,” Schrag announces, “the United States Congress solved [hypothetical law student with a low-paying job and high debt] Sarah’s problem,” by creating IBR . . .

Is IBR a good deal for Sarah? That, as we shall see, is far from clear. What is clear is that it’s an unbelievably fantastic deal for law schools. You don’t need a Nobel prize in economics to figure out what will happen to the cost of law school if that cost no longer bears any relationship whatsoever to what a significant portion — indeed quite possibly a majority — of law graduates actually end up paying for their degrees. (As Matt Leichter recently pointed out, a huge percentage of law graduates going forward are going to be IBR-eligible. He also quotes the rather Zen-like economic aphorism that “debts which can’t be repaid, won’t be.”)

But let’s leave behind the world of law school administrators, who are no doubt fantasizing even now about opening taxpayer-subsidized International Environmental Space Law summer programs in Ravenna, and return to Sarah. Does IBR make law school a good idea for her? [tl;dr: no]

Law professors love to believe that their work is affecting public policy. Most of the time this is belief is pure fantasy, but in this case, it appears the Obama administration has been paying heed:

The Budget proposes additional changes to PAYE to include:

• Eliminating the standard payment cap under PAYE so that high income, high balance
borrowers pay an equitable share of their earnings as their income rises;
• Calculating payments for married borrowers filing separately on the combined household
Adjusted Gross Income;
• Capping Public Sector Loan Forgiveness (PSLF) at the aggregate loan limit for independent undergraduate students [currently $57,500] to protect against institutional practices that may further increase student indebtedness, [emphasis added] while ensuring the program provides sufficient relief for students committed to public service;
• Establishing a 25 year forgiveness period for borrowers with balances above the aggregate loan limit for independent undergraduate students.

Now this is just the administration’s proposal, and it’s very unlikely to be adopted in this precise form by Congress, but what it signals is that powerful actors all across the political spectrum are catching on to how higher ed in general, and law schools in particular, have been engaged in egregious rent-seeking in the name of improving “access” and encouraging “public service.”

Or, in less technical terms: