Most know about the six for-profit law schools that currently exist under American Bar Association-accreditation. They’ve been accepting students by the truckload at a time when most respectable schools are figuring out how to get more qualified candidates to apply. They are jacking up tuition dollars and pumping out graduates unlikely to ever become lawyers. They’re feeding on the federal loans many of the students use to pay for their degrees they’ll likely never use.
But you’d never expect that from legitimate schools, right? The nonprofit schools that are supposed to be producing lawyers the right way would never engage in such activities, right?
The schools are also feeding on the Direct PLUS Loan program, established in 2006 to allow professional or graduate students the ability to borrow the entire cost of their tuition plus living expenses.
Sometimes, government tries to do the right thing and people take advantage of that. The idea was to give anyone—regardless of socio-economic status—access to graduate education. But now greedy schools have caught on and are taking advantage—upping tuition amounts to unreal levels for degrees that will unlikely cover the debt incurred.
And law schools are at the center where average debt has skyrocketed to $140,000 for 2014 graduates—59% higher than when the Direct PLUS program was established in 2006. In an effort to curb the problem, the Obama administration created the ‘gainful employment rule’ in July. The rule connects a school’s eligibility to receive federal student loans to its ability to produce graduates likely to pay off the loans (Read: Get good paying jobs).
The rule applies to all for-profit institutions. However, nonprofit schools remain exempt. In an editorial report this week, The New York Times claims at least 50 nonprofit law schools could currently fail based on a measure of student debt-to-income-ratio. The authors also suggest the federal government create loan caps for either schools or individuals or both.
Indeed, something does need to happen to try to curb the growing law school debt crisis. And as recent history shows, the schools are unlikely to solve the issue.
Source: The New York Times
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