Spontaneous Exclamations: The loan repayment situation (Part Two)

Adam Katz is a senior associate at Harrison & Held, LLP.  He concentrates his practice on federal & state tax matters, mergers & acquisitions, entity structure and formation, commercial finance, and non-profit law.  Adam can be reached at (312) 753-6110 or akatz@harrisonheld.com.  Comments on all posts are welcome!

Examining the Yale Professors’ Solutions to the Law School Loan Repayment Problem  

Last week, we took a look at the Nov. 18 Slate.com article written by two Yale Law School professors proposing significant changes to how students pay for law school.  Specifically, we examined the professors’ first proposal: that the law schools should give applicants detailed and disaggregated reports on how many graduates passed the bar exam upon graduation and their annual salaries for the first 10 years after graduation.  This week we will explore the professors’ second proposal: that law schools rebate half of the year’s tuition of any law student who decides to drop out after their first year.

In summary, the law school returns half of the quitting student’s tuition or gives the student a rebate applicable towards government loans.  Any student who returns to a law school within five years or so would have to repay the rebate.  The underlying theory is that if both the student AND the law school have “skin in the game,” law schools would potentially select their incoming classes more carefully to maximize admittance of students who will graduate.  On a side note, I will not discuss the economic aspect of refunding tuition because, as far as I can tell, many law schools possess bottomless pits of money while tuition creeps upward.

Now, I like this idea.  It makes sense to me because these days it seems law school admissions offices focus too much on raising their rankings on various publications’ lists and not on choosing applicants who will become the finest attorneys.  Just as I wrote in the last column, a large number of law students choose to go to law school simply because: (i) they don’t know what else to do with their lives; (ii) they heard that lawyers get paid well; and (iii) they love “Law & Order. ” These are typically not the serious students that become serious attorneys.  The rebate may offer these students a way out after their first year when they realize law school isn’t “Legally Blonde” and being an attorney isn’t always as glamorous as Matthew McConaughey makes it out to be.  Students like this are admitted to top law schools because many achieved high college GPAs and performed well on the LSAT.

On a positive note, other than those who were legitimately interested in law school and changed their minds and those who did not get good grades, the lackadaisical students are probably the kinds of students who will take the rebate.  However, these are not the students law schools should be targeting.  If law schools execute the rebate plan, they should also incorporate serious interviews into the admissions process.  Even a simple interview could identify the types of students who don’t really want to go to law school or become a lawyer.  On second, thought shouldn’t law schools be doing this now?  Too many applicants with excellent potential fall through the cracks because a few lackadaisical applicants scored a point or two higher on the LSAT.  Then again, what school would want to take a hit to their ranking calculated by a for-profit publication employing suspect statistical methods that differ each year?

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