Wednesday, January 12, 2011

The Need for Law Student Financial Counseling

Yet more fallout from the story last Sunday in the NY Times - Is Law School a Losing Game? - by David Segal.

The article highlights the sad story of one Michael Wallerstein. This student (with what Segal calls a "surfer dude" mentality) appears to have been more than slightly irresponsible in his excellent law school adventure. He attended a for profit stand alone law school that charges high tuition - Thomas Jefferson School of Law in San Diego. Here's the profile. The Top-Law-School profile shows that -
The average TJSL law student graduates with an overwhelming $131,800 in law-school-related debt, giving the school the honor of saddling its graduates the highest debt load in the nation. Thomas Jefferson School of Law does not offer its students a loan repayment assistance program.
Segal describes how Wallerstein chose this school -

WHEN he started in 2006, Michael Wallerstein knew little about the Thomas Jefferson School of Law, other than that it was in San Diego, which seemed like a fine place to spend three years.

“I looked at schools in Pennsylvania and Long Island,” he says, “but I thought, why not go somewhere I’ll enjoy?”

Segal goes on to detail some of the debt that Wallerstein proceeded to incur while a student. Apparently, Wallerstein was not in the mood for "austerity" during his education -

... Mr. Wallerstein rented a spacious apartment. He also spent a month studying in the South of France and a month in Prague — all on borrowed money. There were cost-of-living loans, and tuition of about $33,000 a year. Later came a $15,000 loan to cover months of studying for the bar.
In the end it appears that Wallerstein owes about $250,000 for his legal education. The figure is approximate because, as Wallerstein admits, “I’m not really good at keeping records.” Is this the kind of person you want planning your parent's estate?

But this student's attitude is only part of the problem. Apparently, the school in question failed to offer or require any form of financial counseling; not an uncommon situation in most law schools. So, is this the student's fault? Some may say so. The Subprime JD blog perceptively refers to this as a form of cognitive dissonance - delusional thinking on the part of the law student. And, the #Crasstalk blog calls this The least sympathetic 'I have lots of student debt" story ever.

But the larger fact is that many schools have no incentive to provide or require financial counseling or to put any kind of realistic constraints on the borrowing habits of their students. Private for-profit schools are especially under scrutiny right now. As mentioned Sunday, it may only be a matter of time before the ABA or the Department of Education begin to take a closer look at law schools.

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