It's time to make law school debt dischargeable in bankruptcy

The ABA and our law schools are driving down the value of the J.D. Who would have thought that bankruptcy is the only way to make it all stop?

The Whopper, Esq.

J.D. Inc. defined – The business of mass producing and selling law degrees for profit with no regard for the negative effect on the legal profession. It’s time. Law school debts should be dischargeable in bankruptcy. Since this New York Times article appeared a few weeks back, the pressure has been mounting. Law schools and the ABA must come clean. The job prospects for young lawyers are not what have been promised. Graduates at some of the country’s best law schools are struggling to find employment. There is no need to accredit new law schools unless they’ll be based out of New Delhi. Law schools reporting 93% employment nine months after graduation are lying. Thanks to lax survey standards set by the ABA, law schools are becoming more and more skilled at fudging statistics in such an egregious fashion that even Al Franken would blush. Sorry, but working at Burger King does not qualify as practicing law. Despite these inconvenient truths, the ABA isn’t going to stop blessing new law schools and forget about the law schools self regulating. They are never going to stop accepting boat loads of money in tuition. Who can blame them? Both organizations will do what it takes to keep raking in the cash.

Turn Off the Cash

The only solution is to turn off the cash by allowing law school loans to be discharged in bankruptcy. Once you accept the fact that J.D. Inc. is too lucrative to abandon or even scale back, you’re left with some hard choices. As a legal community, we can sit and watch as the talent pool and job market suffers from Mugabe like human inflation or we can take steps to save our profession. Treating law school loans like any other failed investment will force lenders to stop underwriting legal educations. The market will correct as law schools go out of business and the ranks of lawyers dwindle. Once hopelessly indebted lawyers will be free to pursue the careers they envisioned before lives of indentured servitude.

Leave it to the Means Test

The much maligned means test can be the gatekeeper. Law school loans are a form of unsecured debt. Those lawyers gainfully employed will pay back their student loans commensurate with salary. Lawyers employed by firms likely won’t qualify, lawyers employed at Burger King will. Simple and easy, allow law school loans to be discharged in bankruptcy. Stop printing J.D.’s.

John O’Connor