December 29, 2011
Henderson on the End of Student Loans for Law Schools
Posted by David Zaring

It's a pretty good article, but all the law school sturm und drang is still missing an important "compared to what?"  Federal school loan default rates are 9%.  I bet the loan default rates subsidizing community college attendance are substantially higher than the law school default rate, and we're expanding that program.  Since no one appears to have checked, I'm just going to posit that law school loan default rates are lower than they are for any other form of higher education.  And I bet I'm close enough to right about that to make other professional schools pretty nervous about going through the current law school wringer.

Anyway, and in contrast to the above punditry, I thought this observation by Henderson and his co-author was particularly insightful:

Students who choose the highest-ranked school to accept them tend to be the biggest borrowers because their LSAT scores and undergraduate GPAs are more likely to be below the school’s median statistics. As a result, these students get less merit scholarship aid, which pushes their cost of attendance to $40,000-$65,000 per year. After three years, the cumulative debt is $120,000-$195,000, with a blended interest rate of roughly 7.3 percent.

In other words, the long pushed best strategy of picking your law school may leave the students the worst off in its aftermath.  That's pretty interesting.

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