Shpoonkle still around?

Posted on January 17, 2012 by NTLAdmin
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Evidently, yes it is.  The latest news release is that Shpoonkle is offering a large library of free legal forms for the public to download.  Take a look here.

After a quick browse, however, it’s evident that this library is at best irrelevant, and at worst actually harmful.  It seems to be a a collection of state and (mainly) federal forms that is duplicative of what’s already available on the Internet for free.  There is no curation of these forms at Shpoonkle, and there’s very little point in merely linking to every single form out there with no reason other than trying to create a large resource for marketing purposes.  It’s as if an intern or two has just bulk-downloaded every form they could find, and posted them to the web site with about as much thought as it took me to write this sentence.

The danger comes in when downloading a legal form from anywhere but the official source.  It is extraordinarily bad, er, ‘form’ to use anything but the most recent version from the official source, and downloading forms from a third party like Shpoonkle rather than from the offical web site (e.g. IRS, Social Security etc.) will lead to people submitting the wrong information on the wrong form to the wrong address, and missing all the helpful information that the original web sites provide to aid the consumer in filling out the forms in the first place.

I just can’t imagine any circumstances where someone would actually need to go to a third party for these important forms.  From Shpoonkle’s press release:

The benefit to the newest Shpoonkle feature is to provide a centralized hub for State and Federal forms to everyone for free. People needing these forms don’t have to pay for them anymore, or scour the internet to find the correct one. Then when they review the form, they choose to either find an affordable attorney on the site to assist them, or do it themselves. Shpoonkle is providing a one stop center for all consumers’ legal needs.

It seems it’s a feature designed to draw in unsuspecting customers.

First of all, these state and federal forms are free to begin with – only a true fool would ever consider paying for them, and they are so clearly free online that I’m not sure where Shpoonkle came up with the idea that anyone actually ever pays for them, even if they are offered for sale side by side with the sites that offer them for free.

Second, these forms are easily obtained from the obvious sources; tax forms from the IRS, etc.  They aren’t difficult to find.  For example, if someone needs an immigration form, they generally go to the US Bureau of Citizenship and Immigration Services – it’s right up at the top of Google, along with the following text: “Official U.S. government site. Download Forms FREE. Learn how to file. Get information on citizenship, green cards, work visas, E-Verify and more.”  It’s not like it’s a puzzle to find these things.  I mean, tax forms from the IRS, immigration from USCIS, etc.  Few, if any, people wouldn’t know where to look.

Third, when obtained from the official sources, they are usually accompanied by all manner of helpful information, such as explanations of the law, the agency, the processes behind getting whatever it is you want done, done.  Names, email addresses, and phone numbers of people at the agency who can help.  Shpoonkle isolating these forms from their original context creates confusion rather than clarity by ensuring that the consumer doesn’t get to see all of this helpful info, and doesn’t get to understand how to fill in the forms or who to ask.  But I guess then people figure they’ll need a lawyer, and they’re already at the Shpoonkle site…you can join the dots.

What am I missing?

Posted in Just odd | Leave a comment

Please read this report…

Posted on January 17, 2012 by NTLAdmin
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…from Law School Transparency, available here.  Bottom line: law schools, across the board, are still touting the benefits of a legal education, yet hiding the true lack of opportunities.  Depressing stuff.

Posted in Careers, Employment, Law school, Law School Transparency, Rip off | Leave a comment

Sallie Mae Watch – January 11, 2012

Posted on January 11, 2012 by NTLAdmin
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So our friends at Sallie Mae are bragging about their Chief Security Officer, Jerry Archer, and how he recently won an award recognizing “information security executives for outstanding achievements in risk management, data asset protection, compliance, privacy and network security”.

According to the press release, “the award salutes Sallie Mae’s information security team’s accomplishments ensuring millions of customers can rely on the company’s systems which transact billions of dollars to save and pay for college securely and smoothly.”

Odd.  Because Sallie Mae owns Upromise – yes, that “college savings” scheme that allows people to literally save pennies towards college in return for shopping at certain retailers and buying certain products.  (That’s perhaps slightly unfair – I know of one family that saved over over a whole dollar after using this program for god knows how many years.)

And Upromise recently settled charges with the Federal Trade Commission in relation to its gross failings in customer information security.  From the FTC news release (which is notably absent from Sallie Mae’s own web site):

A membership reward service aimed at consumers trying to save money for college has agreed to settle FTC charges and will be barred from its allegedly deceptive practice of using a web-browser toolbar to collect consumers’ personal information without adequately disclosing the extent of the information it is collecting.

The settlement with Upromise Inc. is part of the FTC’s ongoing efforts to make sure that companies live up to the promises they make about privacy and data security. The settlement order will require Upromise to clearly disclose its data collection practices and obtain consumers’ consent before installing or re-enabling any such toolbar products, and to notify consumers how to uninstall the toolbars already on their computers. The settlement also will bar misrepresentations about the extent to which the company maintains the privacy and security of consumers’ personal information, and require the company to establish a comprehensive information security program and to obtain biennial independent security assessments for the next 20 years.

Twenty years of independent security assessments?  But I thought Sallie Mae was a leader when it came to information security.  The FTC release continues:

In its complaint against Upromise, the FTC alleged that to allow consumers to identify and select merchants that would provide rebates, Upromise’s website offered a “TurboSaver Toolbar” download that would highlight partner merchants in consumers’ search results. When downloading the toolbar, consumers saw a message that encouraged them to enable the “Personalized Offers” feature of the Toolbar, which Upromise allegedly claimed would collect information about the websites they visited “to provide college savings opportunities tailored to you.”

The FTC alleges the Toolbar with the “Personalized Offers” feature enabled collected and transmitted, in clear text, the names of all websites consumers visited and which links they clicked on, as well as information they entered into some webpages, such as search terms, user names, and passwords. In some cases, the information collected included credit card and financial account numbers, user names and passwords used to access secured websites, security codes and expiration dates, and any Social Security numbers consumers entered into the webpages. The Toolbar transmitted consumers’ information without encryption.

According to the FTC, while Upromise’s toolbar was collecting and transmitting the data, its privacy statement claimed, “We understand the need for our customers’ personal information to remain secure and private and have implemented policies and procedures designed to safeguard your information.”  Upromise also said it was “proud of the innovations we have made to protect your data and personal identity,” and that “Upromise automatically encrypts your sensitive information in transit from your computer to ours.”

The Upromise TurboSaver Privacy Statement allegedly stated that the Toolbar would collect and transmit information about websites consumers visited, and that “infrequently” the collection might “inadvertently” collect a “name, address, email address or similar information,” but that any personally identifying information would be removed before the data was transmitted.

What, is Sallie Mae still living in the 1990s, when credit card and other personal data was sent unencrypted over the Internet and when vendors thought that tracking customers online was acceptable?  That just about says it all.

Sallie Mae, including all of its components, seems rotten to the core.  It’s student loan products are horrific in terms of the damage they will do to an unsuspecting student’s future.  The bank accounts linked to its student loans were exposed by this web site as containing set-off provisions that would have allowed Sallie Mae to take its payments directly from the unsuspecting students’ accounts under certain circumstances, a policy which was changed only after it was made public.  And now Upromise is exposed as being less-than-healthy.  The modus operandi of Sallie Mae appears to be “let’s start by doing stuff that is illegal, highly-profitable, just plain wrong and/or utterly contrary to the welfare of our customers, and then if/when we get caught, we’ll back off a little.”

Taking a step back in time, let’s look at this pattern of behavior.  With its Sallie Mae bank accounts recently, the terms and conditions expressly allowed Sallie Mae to reach its hand into the accounts to take money for student loans if the student loans were in default.  Any competent lawyer reviewing the terms and conditions of the bank accounts would have seen this as a huge problem.  Sallie Mae’s legal team and business team would have read those terms and conditions many times during the development of its bank account product, tweaking them here and there, before releasing it to the customers.  So it follows that Sallie Mae knew that the set-off provisions in the terms and conditions were there, and they knew the effect that it would have.  It’s just too big of a mistake to claim that it was unintentional.  (See my earlier posts for more detailed info about that whole episode).  In short, Sallie Mae was deliberately trying to get one over on the customer.

And the same thing seems to have happened with its Upromise tracking.  No competent Internet development team would have accidentally allowed all of this data to be tracked, transmitted (unencrypted!), and collected.  It is something so obvious that it can only have been done deliberately.

And this is the standard behavior of a company that is asking you to trust it with what could be tens of thousands of dollars (and over six figures in some cases?) of student loans?  If they are actively looking to bend every rule to the very limit, sometimes beyond the limit, they will do the same to you when you borrow from them – you’ll just be another customer to squeeze to the boundaries of legality in the name of making money for its shareholders.  Why do business with a company that behaves in this manner?

I can’t urge readers strongly enough to shop elsewhere for private student loan products, along with loyalty programs, bank accounts, and whatever other products Sallie Mae might offer for as long as Sallie Mae treats its customers like dupes, and actively tries to sneak harmful ingredients into its products, hoping that nobody will notice.  Sallie Mae is after one thing – your money – and it looks as if it will stop at nothing to take it from you.

Posted in Finances, General education, Rip off, Sallie Mae, Uncategorized | Tagged , , , , , , | Leave a comment

Paying students to quit law school?

Posted on January 2, 2012 by NTLAdmin
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Really?  This story?

Two professors at Yale seem to think that they’ve solved the problems facing law schools and the legal profession: paying law students to quit after the first year.  The article starts off well, correctly claiming that many law grads can’t find jobs that service their education debt, and that some law schools (at the low end of the rankings) admit many students who will never see any financial benefit from attending law school.

So far, so good.  But then the article essentially lifts the whole premise of Law School Transparency – without reference – and pretends that the LST mission is something that these two professors have miraculously discovered:

First, give applicants better information about how past graduates have fared. All students who received federal loans should be required to report whether they passed the bar as well as their annual salary for the first 10 years after graduation. Law schools should be required to disclose this information in a standardized format, enabling applicants to better assess what their degree will be worth, long-term. This reform directly addresses the current problem of woefully incomplete disclosure. Law schools usually only report how well their most successful students do, and only for the first year after graduation.

In addition to reporting average results, schools should disaggregate data to avoid misleading applicants at greatest risk of failure.

That’s LST in a nutshell.  And LST has been around, in one form or another, for years.  (Either LST isn’t getting its message out, or the law professors who wrote the article, and who claim “as law professors, we know law schools best” and “we have a few ideas for dramatic reform”, really are far less knowledgeable than they think, and utterly clueless about pre-existing movements pushing for the law school reforms they are claiming as their own.)

But moving on.  The main point of the article is to propose that, after the end of 1L, law schools offer students a 50% rebate in their tuition if they decide to withdraw at that point.  And this is billed as a broad solution to the problems facing law schools and students.

Great.  But why not do the following: simply disclose all the stats up front, be honest about the prospects for law grads, and let students make an informed decision before wasting even one year in law school?  That said, there will always be students who think that their abilities and employability are far greater than they really are, and who will make an expensive mistake, so an easy exit point after 1L would be useful to some extent.

But no amount of disclosures or statistics or rebate programs will solve the problem at the core of legal education today: there are too many new lawyers being produced for too few jobs.  Perhaps a better solution would be for the ABA to try and predict the demand for lawyers in the future, and expand or contract law school class sizes across the board to ensure that supply meets demand, rather than supply grossly outstripping demand.  Perhaps then the powerful law schools at the top of the rankings would start to lobby against the continual increase in the number of law schools in the nation.  Or just close some law schools.  Or just not allow any new law schools to be created.  And even this is just one piece of the puzzle.

The point is, there are so many ideas around – so many good ideas – about how the crisis in legal education can be lessened.  And it’ll take a combination of many ideas to make a difference.  There’s no silver bullet or gimmick idea like paying students to quit after 1L that would solve the problems.  The answer lies with law school reform, student attitude reform, and student finance reform.  Lower tuition.  Smaller class sizes.  Bankruptcy reform for student loans.  More practical education and less impractical theory.

And it’ll take more than good ideas.  It’ll take action.  It’ll take the ABA actually doing something rather than talking about doing something.  It’ll require incoming students to take greater responsibility for their decision to attend law school – there’s so many good resources out there right now that give a more accurate picture of the legal profession.  And it’ll take universities, college administrators and law professors moving away from the attitude that a law school is an ATM with unlimited cash for the taking.

Ideas is not what we’re short of.  It’s action and results that’s lacking.

Posted in ABA, Careers, Employment, Finances, General education, Law professor, Law school, Student debt, Theory v. Practice | Leave a comment

Law schools fighting back, or a law firm trying to cash in?

Posted on December 22, 2011 by NTLAdmin
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This news release from the law firm LeClair Ryan is either evidence of law schools fighting back at some of the claims that they are cooking the employment stats, or an attempt to drum up business by the law firm LeClair Ryan.

I suspect it is the latter.

The news release, which is worth reading, is full of the typical fearmongering and hyperbole used by lawyers when trying to create a niche practice area out of a non-issue.  Let’s take a look:

Critics who accuse law schools of inflating graduates’ employment and salary statistics are not just using the blogosphere to air grievances among themselves—some are brazenly seeking to drum up new plaintiffs for a wave of class action lawsuits against American colleges and universities, warned two attorneys for the national law firm, LeClairRyan.

Brazen indeed.  In reality, the mere handful of firms I personally know of that have filed this kind of lawsuit are doing nothing more than looking for clients via the Internet.  Which is exactly what LeClair Ryan is doing with this news release – fishing for business.

“We have been tracking this issue closely for six months, and the noise on the blogs and social networks is getting louder,” said veteran higher education attorney Robert B. Smith, a Boston-based partner in LeClairRyan and leader of the firm’s Education Industry Team. “Among those disenchanted souls who believe law degrees should come with guarantees of ‘gainful employment or your money back,’ the effort to find potential plaintiffs has been bold, to say the least.

And there’s some of the obvious hyperbole.  Disenchanted souls?  Hardly, although there are a handful of bloggers who are more vocal and aggressive about this issue than others.  The remainder (and vast majority) are, in my experience, rather rational observers and critics of a broken, but not irredeemable, system.  (In fact, some of the critics are industry insiders – it’s not all students and recent grads.)

And nobody – absolutely nobody – believes that “law degrees should come with guarantees of ‘gainful employment or your money back,’” as suggested by Smith.  What students and grads are arguing for is data that is accurate enough so that they can make an informed decision about law school, not the current system where the data is presented in such a manner that it makes law school look like a far better deal than it really is.  The vast majority of critics are asking for nothing more than transparency.

Let me present a brief analogy for readers who are still unclear about this, and it’s also applicable to those who don’t get the whole Occupy Wall Street movement either.  Let’s say you go to Vegas with $100,000 to play with.  Before placing a particular bet, you are told that the odds of you winning are much better than the odds of you losing.  You place $100,000 on this game.  You lose, and after losing, the casino tells you that in reality, the odds of you losing were far greater than they first told you.

That’s the issue here.

Law schools, and higher education in general, are asking students to place a bet; that they will be better off after spending six figures on tuition than they would be if they didn’t spend that much.  Law schools go one step further and publish data that actually looks like most graduates go on to “win” and end up with great jobs.  So the students spend the money and the time to get the degree, but it turns out that there aren’t as many jobs, and the jobs are paid far less than the schools led the students to believe.  And law schools knew this beforehand.

I’m the first to admit that this is a function of the economy in many cases.  But there are many schools out there which are peddling false hopes, false data, and essentially hiding the odds of success from the students.  If anyone needs proof of this, just browse this blog to see the documented, admitted, newsworthy and legitimate scandals relating to false statistics put out by law schools in their attempts to lure in students.

And I’ve been tracking this issue for years and years, as have many other commentators; far longer than the six months that LeClair Ryan has been tracking this issue.  But moving on:

In class action suits filed earlier this year, seven former students from New York Law School and Thomas M. Cooley School of Law accused their alma maters of trying to artificially boost enrollments by exaggerating or misrepresenting graduates’ employment and salary statistics. Meanwhile, online forums have been full of speculation that at least 15 other schools are on a “hit list” of possible targets for similar suits, noted veteran class-action defense attorney Michael S. Haratz, a partner in LeClairRyan’s Business Litigation Team. “Even institutions that are not on this list need to proactively manage the potential risk posed by the proliferation of these veiled and not-so-veiled threats,” said Haratz, who is based in the firm’s Newark, N.J., office. “The management of potential litigation shouldn’t just start early—ideally, it starts before the plaintiff’s bar has your school in its sights. The time to take action, in other words, is now.”

“Hit list”?  “Veiled” and “not-so-veiled threats”?  “Sights”?  Are we talking about the Mob, or some kind of assassination attempt?  This kind of language is there simply to worry law schools into hiring LeClair Ryan to address a problem that doesn’t exist, as are the final two sentences of the above quote, which can be translated as: “The time to give us your money is now.”  I’m all for proactive management of legal issues, but this is a stretch.

Here’s my advice to schools: you don’t need an attorney.  All you need to do is publish accurate job placement data.  It’s absolutely that simple.  No hiding behind the ABA or NALP.  No spending cash on attorneys to help you find loopholes instead of honesty.  Just publish the data.  And you already have this data from 2010 on hand!  It literally could be up on the school’s web site in minutes.  (Of course, the problem then becomes: what if the accurate data shows that prior years’ data is fudged?  And if that’s the case, then the school deserves to be sued by the graduates it has deceived for any legitimate harm they have suffered.)  This problem could disappear with a few hours of work by the university general counsel and compliance departments.  No outside counsel needed.

While taking a proactive and aggressive approach, including suing class-action attorneys and bloggers for defamation, might mollify alumni, even these strategies could backfire, Haratz noted.  However, he said, other proactive decisions amount to a no-brainer for law schools everywhere. “For example, whether your school is on the ‘hit list’ or not, you should already be looking carefully at the content and presentation of your own salary and employment data. Make careful examination of whether this information is consistent with regulatory requirements and whether modifications might be warranted, as well as any risks associated with various modifications,” he said. “It also makes sense to look into how you are managing your communications within your board of trustees and to influential alumni and the rest of the world. This is potentially discoverable information. It needs to be handled in ways that will not cause harm later on, while still bearing in mind that you are managing a university with a student-body and alumni network that have questions or concerns or seek clarity amidst a stream of biased, incomplete or inaccurate information that is being disseminated from sources outside the university community.

An “aggressive” approach might indeed mollify alumni – the successful alumni, that is.  The others, who are now drowning under piles of loans and who have jobs that pay less than they earned before law school, won’t be so impressed, and it’s worth noting that the schools on the “hit lists” tend to be those with large numbers of graduates who don’t go on to stellar careers.  Nobody is suing Harvard; they’re thinking of suing the lowest end of the legal education world where high tuition and few job prospects are a real problem.  There may well be fewer satisfied alumni than expected when push comes to shove and lawsuits are filed, especially if success on the plaintiff’s side may mean some form of financial compensation for alumni.

And having outside counsel scrub all of your communications?  If you’re going that far to hide your inaccurate or misleading statistics, then there’s a real problem with dishonesty in your law school.

Counter-suing bloggers and commentators will have no positive effects – as can be seen by the negative reaction surrounding Cooley’s efforts to silence its critics via the legal system – and merely draws more attention (a/k/a ridicule) to the problems with the legal education system in general, and the suing school in particular.  It would be far more effective – and far cheaper! – to simply put out accurate data, even if the data is not as rosy as the schools might like it to be.

Advising law schools to look “carefully at the content and presentation of your own salary and employment data” is what organizations like Law School Transparency, the so-called scambloggers, and many other mainstream blogs like this one, have been calling for for years now.  It’s common sense, as well as being the right thing to do.

“If pending motions to dismiss fail, the plaintiffs’ bar will be emboldened,” Smith concluded, “and these suits could spring up like wildfire.”

More hyperbole designed to cause law schools to throw money at defense counsel.  “Wildfire”?  Really?

Remember, nobody will file lawsuits against schools that are transparent and honest.  This entire news release is nothing more than scaremongering by a law firm that is looking to cash in on the wave of disenchantment in college grads, and looking to tap into some of that lucrative higher education cash for themselves.

Posted in Careers, Employment, General education, Law school, Law School Transparency, LeClair Ryan, Student debt | Tagged , , , , , | Leave a comment

Cooley Law doing something right?

Posted on December 20, 2011 by NTLAdmin
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With all the negative press surrounding Cooley Law – historical (languishing at the bottom of the rankings for years and years, and its futile attempts to publish its own, self-serving rankings) and recent (its lawsuit that is trying to silence critics) – one might be tempted to think that this particular school has very little to be proud of.

But this story shows another side to Cooley Law.  While many other schools all but ignore immigration law entirely (odd, considering we’re a nation of immigrants, and immigration is at our very core), perhaps offering a mere one course covering the basics, Cooley Law is opening an immigrant rights clinic that will allow students to gain practical skills and help clients in need of general immigration assistance, including landlord-tenant issues and unfair wage claims.

I complain all the time about how legal education doesn’t address either the practical aspects of law, or the actual problems that clients face.  And there’s certainly far too much emphasis on subjects that just don’t matter to the 99% of people who use lawyers (and real people need help with residential real estate, estate planning, small claims, minor criminal matters, traffic defense, and immigration law, to name just a few, not appellate practice, capital defense, advanced international business transactions, law and insert-subject-here etc.)  Graduates can come out of law school never having set foot in a real courtroom and never having met a person with a legal problem that needs a solution.

And this is where Cooley has stepped up to the plate in a big, relevant manner.  Many other schools offer clinics that provide good practical experience, but even these clinics tend to avoid the bread-and-butter of what most lawyers do.  Innocence projects, for example; while playing an important role, how many law grads go on to work in that specialized field?  Maybe one per school?  Capital punishment clinics – same deal; a niche area that needs attention, but is of limited use to 99.999% of people living in the US.

Even immigration clinics at many law schools tend to focus on the higher-level stuff, like refugee work or human rights matters.  Important, of course, but again irrelevant to 99% of people who are in need of legal assistance.

Cooley Law is doing the right thing here.  A low-level, practical clinic that will help immigrants with stuff that immigrants actually face on a daily basis.  The small stuff – too small for the fancy clinics at the fancy schools to touch, but huge deals for the immigrants.

I’ll keep an eye on this particular clinic, but it’s a large step in the right direction for legal education – a clinic that might actually give students real skills, and help many underserved clients with real issues.  This clinic won’t be helping one unique client per year with a hugely complex and unique issue that gives a handful of law students a line item to talk about in a biglaw interview, after which they will never work with immigrants again unless it’s for the purpose of fulfilling some token pro-bono commitment to put up on the firm’s web site.  This clinic will be helping (hopefully) dozens, if not hundreds, of clients per year with real issues and giving students actual skills they can walk away with, and providing meaningful access to help – if not justice – for many needy immigrants.

Cooley Law may have many issues, but for everyone who is working towards changing legal education for the better, Cooley Law may well be an example of how things should move in terms of practical education for lawyers.  So bash away at Cooley Law for its self-made rankings or its attempts to silence those who might criticize the school, but let’s not forget that Cooley Law is doing some innovative and useful things in terms of changing the direction of legal education.  Will the fancy schools at the top of the rankings take note?  I doubt it, but every little helps.

Posted in Careers, Cooley Lawsuit, Employment, Law school, Rankings | 2 Comments

Update from Law School Transparency

Posted on December 14, 2011 by NTLAdmin
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The hardworking guys and girls over at Law School Transparency have sent me a link to this news release, detailing their request for the most recent NALP reports from every single law school.  These reports contain the employment data for the class of 2010, and will be posted on the LST web site for everyone to see.

Transparency is the key here.  There is nothing wrong with transparency.  Law school applicants are smart enough to understand the data – they’re not idiots.  And what better way than letting prospective students look at the same data that the schools look at, before it is tweaked, scrubbed and dressed up to hide the imperfections.  Employment data might seem insignificant or unimportant to law schools, but to applicants, it’s one of the main reasons they’re applying to law school – to get a job after graduating.

As an aside, the web site for the law school I attended is still directing students to its class of 2009 employment statistics, despite having the 2010 data in hand.  Why?  I don’t think it’s an oversight or laziness, because the site is generally up-to-date and well-maintained.  I think it’s because the data for the class of 2010 will be ugly, and the school is delaying its release until accepted students have firmly committed to attending this particular school.  At that point, the accepted students are far less likely to run in the opposite direction when the data is released.

What can you do to help?

Well, if you’re an applicant with an offer that you haven’t accepted yet, shoot an email over to the admissions office and ask that they either send you the data directly, or they send it to LST so you can see it on the LST web site.  You have a valid right to know, since your entire future may depend on it.  And if you get it, send it to LST.

If you’ve accepted an offer, send a similar email, but suggest that if the school doesn’t comply and hides this relevant information from you, you’ll rethink your decision to attend.

If you’re a student, march yourself to the dean’s office and ask that they comply.  The school’s failure to comply will be embarrassing for the school, and will decrease the positive reputation of the school, directly affecting your job prospects.

And if you’re a law school graduate, write to your alma mater and state in no uncertain terms that the school should comply immediately so it is not added to the list of schools that are being deliberately deceptive (and thus adversely affecting your professional reputation), and let the school know that you will not consider donating a single cent in the future if the school drops the ball on this simple request.

Posted in ABA, Careers, Employment, Law school, Law School Transparency, Rankings | Leave a comment

Sallie Mae Watch – December 13, 2011

Posted on December 13, 2011 by NTLAdmin
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I was watching an episode of series 2 of The Wire yesterday, the one with a short scene in which Stringer Bell (the drug dealer) consults with his economics professor about how to increase sales and market share for an inferior product.  One of the answers was that he should rebrand so the clients think they are dealing with a new organization, one that isn’t associated with the prior bad product, despite it still being the same bad product.

And then in the news this morning, guess who is rebranding with a nice new logo?  Sallie Mae.  (Story here.)  Same old product, but this time with some kind of rainbow or shooting star trail added.

The old:

 

 

And the new:

 

 

I hope SM didn’t pay too much for that stunning reworking of their logo.  I would have suggested adding a couple of empty bottles of whiskey, or perhaps a pile of unpaid bills, to represent how SM will affect the lives of many borrowers.  Or perhaps just turning the color of the writing from blue to red, because that’ll represent your bank balance.

I can’t overstate the basic advice: go to a college you can afford, use federal financial aid, work through college, or save for college.  Taking out private student loans for college is a huge red flag and a sign that you’re getting in over your head.

Also in the same “news” story is a heavily-PR’d paragraph or two about an immigrant who came to the US as a little girl from Cuba, and her mother only had a sixth-grade education.  This little girl grew up, borrowed from SM for her undergrad and graduate education, and was so successful that she paid off her loans in seven years.  This story has every heartwarming ingredient needed to push SM’s product on those who are least likely to reap the financial rewards of a college education – recent immigrants, the poor, those struggling at the low end of society and desperate to get up into the middle class.  Like some other rather dubious investments, perhaps SM’s publicity stories like this one should come with the kind of disclaimer seen on late-night infomercials for instant real estate riches.  “Results no typical, and a significant portion of our clients end up struggling with large debts after attending for-profit colleges or low-end private universities.”

Posted in Finances, For-Profit, General education, Rip off, Sallie Mae, Student debt | Leave a comment

Where does all your tuition money go?

Posted on December 9, 2011 by NTLAdmin
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Well, I was browsing around for something to write about today, and came across this story about the University of Texas Law School dean being asked to resign by UT’s president.  There had to be something interesting behind that.

And there was.

Linked to that story is a very large information request document – available here (it takes a while, so be patient) – that shows a detailed breakdown of the compensation for every faculty member at UT Law.

You should not be surprised, at this point, to see that most faculty base salaries are in the $180K-190K range, with some up into the $220K range.  Across the board.

As if that’s not enough (and comparable to what a successful and experienced law partner might earn in a very good regional firm), the faculty are all given “supplements” of about $10K-15K.  Not sure what this is for, but it’s paid out across the board.  Probably to make sure none of the professors show up to work driving a 1991 Honda Accord with rusty doors.

As if that’s not enough, faculty members are paid an additional $30K-75K for “summer” work, pushing the total compensation for faculty members well into the low $200K range at the bottom end, and up into the $300K range at the top end.

(Some junior faculty, or part-timers, have total compensation that is only in the high $170K-180K range, but they are few and far between.)

Tuition at UT Law is about $32K in-state, $47K out-of-state.  So it’ll take a minimum of 4 out-of-state students’ entire tuition payments to cover the salary of the most junior professor, or about 10 in-state students’ entire tuition payments to cover the salary of a senior professor.

And I’m assuming that this doesn’t include side benefits like retirement, healthcare, and so forth, but even if it did, it wouldn’t detract from the simple fact that law school faculty members are extraordinarily well paid.  And outrageously well paid considering they lead rather stress-free, relaxing lives compared to the average working lawyer.

Something else struck me as interesting from looking at the tables of compensation.  The tables show the year of graduation from law school of each faculty member, and also the year the faculty member started teaching.  Most faculty members have a gap of only one or two years between graduation from law school and commencing their teaching careers.  Some went straight from law school into teaching.  Some clearly spent a little more time actually practicing what they preach, but they are rarer specimens.  The general trend seems to be graduation from law school, one or two years in practice (generally a clerkship, followed by another clerkship or a year in a large law firm before realizing that working as a lawyer is difficult), then disappearing off into the shelter of the ivory tower.

I can’t help but highlight the madness of having inexperienced teachers in the classroom other than with the following example: Sam graduates from high school and wants to be a teacher.  So he spends one or two years grading the homework assigned by another high school teacher – no teaching practice, no higher education, just grading homework and perhaps watching the teacher in the classroom for one day per week.  After this, he is essentially qualified to become a high school teacher himself, and he goes back to high school and teaches other high school students.  There would be widespread outrage.

So why are we letting law grads spend a year or two observing a judge or doing first-year lawyer busywork, then returning to law school to teach law students?

And paying them immense salaries to do so?

 

Posted in Higher Education Bubble, Inside the Law School Scam, Ivory tower, Law professor, Law school, Rip off, Theory v. Practice | Leave a comment

Sallie Mae Watch – December 7, 2011

Posted on December 7, 2011 by NTLAdmin
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Albert Lord, CEO of Sallie Mae, was speaking at the Goldman Sachs U.S. Financial Services Conference in New York City – summary of his comments here – and he gave everyone some insight into where SM will be going in the future.  Any guesses?

Yup, you’re right.  Debt collection on the private student loans that SM issues:

Chief Executive Albert Lord said the student lender is aiming to expand the company’s yearly fee-income business to $1 billion in the next several years, a goal that would require some acquisitions to achieve.

Lord said SLM, commonly known as Sallie Mae, would need to engage in some merger and acquisition activity to bolster fee income from the current $700 million per-year rate.

“Fee-income” business?  What exactly is that?  Well, it’s debt-management (late fees) and debt collection (more fees).

There is a huge conflict of interest in SM’s business model: it issues loans to borrowers, but it makes lots of profit from borrowers in default.  Am I the only one who sees this leading to a predatory business of lending money to unsuitable borrowers simply because it’s more profitable to do so?  Real estate bubble, anyone?

This must worry Lord too, as he went on to tell Goldman the following:

Lord acknowledged there were some concerns about an education-loan bubble, and even referenced the Dutch tulip market crash in 1637. He said economic bubbles–such as the dot-com bubble in the late 1990s and the real-estate bubble in the 2000s–tend to burst when the underlying collateral or investment declines in value.

“The fact is the education is worth it,” Lord said, noting unemployment for undergraduates was far less than their non-college graduate peers. Furthermore, Lord said once individuals pass the age of 25, loan collection becomes highly reliable.

He’s actually correct.  Education is still worth it.  Borrowing heavily for education is the problem.  College is still a good move for many people, but there needs to be a shift away from financing college through debt, and an understanding that working through college or not attending colleges at “sticker price” should be the new normal.  Resorting to debt, especially private loans, to pay for college is what needs to be discouraged.

But will SM do what’s right, and make money for college more difficult to obtain (which would reduce borrowing, which would reduce college affordability in the short term, which would reduce tuition and wasteful/excessive spending by colleges, which would increase college affordability in the long term)?  Of course not, since SM’s business model would fail.  SM wants to increase college costs, thereby increasing borrowing and increasing defaults.

In other words, when college becomes ever more expensive, and when college becomes a “bad” investment and borrowers default on their large loans, Sallie Mae profits.  Money from the misery of others.

What a great example of how Corporate America has lost its way.

Posted in Finances, For-Profit, General education, Higher Education Bubble, Law school, Rip off, Sallie Mae, Student debt | Leave a comment