A large part of this educational debt was incurred by law students (now graduates) who, unfortunately, typically find themselves among the poorest of Americans. That is, they’re often in debt to the tune of $200,000 or more, and huge numbers of them are unable to find legal employment, or any employment at all. In response, some of these graduates sued their former law schools, claiming that the schools provided false or misleading employment data that induced them to enroll. Typically, schools had reported that their graduates were obtaining salaries well into the six-figure range, with 95 percent or more obtaining jobs—but neither one of these things was true. In fact, most of the lawsuits against the law schools were dismissed, oddly, because the employment data was so obviously false, that the then-prospective law students (now law school graduates / plaintiffs) should have known better than to rely on the data.
Now that’s rather curious judicial reasoning. But, in any case, with law schools off the hook, and with their graduates owing massive amounts of debt that they’ll never be able to pay, who is on the hook? That’s right: we the taxpayers are. And we could be on the hook for up to a $160,000 bailout for each unemployed or underemployed lawyer. But what’s different about this bailout is that it’s not just being used after-the-fact to bailout poor (or lied to) decision-makers; instead, it’s being used proactively by law schools to entice prospective students to enroll and take on debt that they know, up front, they’ll never be able to repay.
With our $16 trillion (and growing) national debt—not to be confused with our annual trillion dollar deficits—the bailouts have to end at some point. And the way to stop students from taking on more debt in the future, which will result in more bailouts even further down the road, is simply to cap the amount that the government will lend to each prospective law student. And when that happens, watch how fast law school tuition rates will plummet to match the available funds.