Law School Loan Incentives Reconsidered

The New York Times has an excellent article on the wasted money going into encouraging law school loans for people who will never get bar cads, or pay back their loans.  The law schools get cash, and everyone else gets hurt.

The Times suggests:

Perhaps the most galling part of this crisis is the misallocation of resources. Even as law schools are churning out unqualified graduates stuck under hopeless mountains of debt, millions of poor and lower-income Americans remain desperate for quality legal representation. Public defenders around the country rely on minuscule budgets to handle overwhelming caseloads. In many cases, the lawyers are so overworked that they cannot provide constitutionally adequate representation for criminal defendants. Civil legal services that help people with housing, immigration and workplace issues are even more scarce, with hardly any public support.

If fewer federal dollars were streaming into law schools’ coffers and more were directed to fund legal services organizations, the legal profession — and the American legal system as a whole — would be better for it.

Indeed.  But perhaps we should also be thinking in a more advanced way about making the incentives more sophisticated.  How about giving loans only for law schools that have incubator programs designed to get graduates into sustainable practice, and enougth seats in those programs? How about incentivizing states that have bar exams that are validated as testing for skills that help graduates actually practice?  How about taxing profit-making law schools in part on their graduation rates? How about requiring law schools themselves  to forgive 50% of the loans if their enrollees fail to graduate, or if their graduates who have taken the bar exam fail to pass?  How about reducing this requirement when the school’s graduates that work in nonprofit or solo middle income practice?  How about incentives for law schools that also offer nonlawyer programs whose graduates will get limited practice licenses that cost far less money to get, and will be able to charge lower rates to the public? (In Washington State, the law schools are deeply involved with these programs.)

A risk-free legal education system would be a rich white system, not the one we want.  But, we want a system in which schools take risks on some students — but not because the system is set up so that the schools always win, but because some students are worth taking a risk on, for the schools, and for society.

I am sure that there are lots of other good ideas.  The point is that we need to think in a more nuanced way about incentives.  That way we avoid the risk of seeming to care more about fundraising than about the end results.



About richardzorza

I am deeply involved in access to justice and the patient voice movement.
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1 Response to Law School Loan Incentives Reconsidered

  1. Lisa Rush says:

    Some law schools discourage students from holding jobs while attending law school. This leaves the student in more debt as he/she must borrow for living expenses, too.

    I would like to see the law school loan forgiveness program extended to government-employed attorneys who work in self-help centers.

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