South Texas College of Law Annotations (Houston, Tex.), Vol. 25, No. 1, Ed. 1, August, 1996 Page: 4 of 12
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Page 4
August 1996
Students must be wise in borrowing
Editor's note: The following
article will also appear in the
Texas Law Reporter.
By Dean Frank T. Read
A law school dean
plays many roles. To a faculty,
the dean is akin to a manag-
ing partner. To a university
administration, the dean is a
middle manager expected to
carry out university policy. To
the alumni, the dean is the
leader of their school; and to
students, the dean is a some-
times judge, jury, advisor, and
boss. And, rarely, to the pro-
fession, the dean plays the role
of a Paul Revere warning of a
coming crisis. It is that latter
role I would like to play in this
article.
For a long time, we in
legal education have ignored
the growing problem of exces-
sive student debt. We have
seen tuition rates rise too fast,
particularly at private law
schools affiliated with univer-
sities desperate for revenue
from their law schools
Many universities now
retain 20-40% of their tuition
paid by law students, to sup-
port non-law school activities
In Texas now, it is fairly typi-
cal for a law student to gradu-
ate with anywhere between
$50,000-70.000 in debt.
In fact, there arc many
who graduate with well in ex-
cess of $100,000 in debt. It is
now estimated that at least 85%
of the tuition revenue collected
by all American Bar Associa-
tion accredited law schools,
both public and private, is
generated by student borrow-
ing.
Law schools, literally,
are financed by the loans
taken out by law students,
loans that must be repaid by
those students. This situation
does not just affect law students
and law schools; it also affects
the profession as well. The
sad truth is that if a law stu-
dent graduates with too crush-
ing a debt burden, that finan-
cial burden can distort, or even
destroy, careers. It is time for
some hard talk about law stu-
dent debt.
I. Debt Can Be
Good
Before highlighting
the evils of too much debt, let
us all candidly acknowledge
that it is vital that law students
have access to low interest,
long-term loans to finance their
legal education. After all, edu-
cation is a long-term invest-
ment. For most graduates,
the higher earning potential
their education makes possible,
will pay the cost of their loans
several times over. The thrust
of this piece is not to con-
demn debt, but to suggest
that it be intelligently con-
trolled. Educational loans
should only be undertaken
when the student is fully
informed of the consequences
of the debt undertaken. Wanda
Morrow, ourAssistant Dean at
South Texas in chaige of finan-
cial aid, is fond of saying, the
student who wants to live like
a lawyer when a law student,
will live like a law student when
a lawyer."
II Debt Can Be Bad
When a student bor-
rows all the way through four
or five years of undergraduate
school and then expects to pay
for the entire cost of law
school through loans incurred
throughout law school, that
student faces a serious debt
burden when their education
life ends and their work life
begins. Frequently, a stu-
dent will have borrowed from
several different loan sources
and, six months after gradu-
ation, the student must begin
payments to not just one
source, but to several sources
at the same time. A too fre-
quent recent pattern is for a
student to borrow the maxi-
mum amount allowed under an
available federally secured loan
program; and, then, to bor-
row from a private loan source
on top of that.
Loans at many law
schools arc easy to obtain and.
too frequently, the law school
docs insufficient counseling as
to the conscqucnccs of willy-
nilly acquisition of debt. Too
much debt can:
A. Distort Career
Choice. A bright law student,
with a good record, may well
want to go into public service
in some form. In fact, public
service may have been the
goal of the student from the
beginning of that student's
legal education. Nevertheless,
too high a debt burden drives
the student to the highest pos-
sible salary.
Thus, the student may
accept employment entirely dif-
ferent from that anticipated
when the student decidedto be
a lawyer. Many students
forego law clerking positions,
and legal aid, and public de-
fender, and public prosecutor
positions simply because of the
crushing burden of debt. Stu-
dents who make career choices
solely because of debt burdens
are likely to be professionally
unhappy the rest of their lives.
B. Distort Personal
Choice. Too much debt can
cause a student to defer home
purchases, marriage and child
bearing decisions, and - even
though the student may have a
good salary - leave the student
feeling they are poverty
stricken.
C. Destroy Financial
Reputation. Worse yet, too
much debt may force the stu-
dent into default or bank-
ruptcy. No lawyer wants to
begin a career by having to
seek debt protection for loans
undertaken as a law student. In
fact, in the case of federal
loans, it is highly unlikely that
the debt can be discharged by
bankruptcy at all.
III. What Should Be
Done
A. Counseling. Law
schools need to recognize a
on-going obligation to en-
gage in counseling with each
student about to undertake any
student loan obligation.
The law school
should inquire as to the amount
of undergraduate debt already
undertaken. The student, if at
all possible, should stay under
the maximum amount that can
be borrowed under federally se-
cured loan limits.
The student should be
required to go through an ex-
ercise where they calculate the
costs of the monthly payments
they will incur when they
graduate, and the length of time
it will take to pay back the
loans.
Lastly, before gradua-
tion, an exit interview should
be held with the students so that
they fully understand their debt
obligations.
B. Sacrifice. Law
school requires sacrifice. As
Dean Morrow counsels, stu-
dents cannot expect to live as
well in law school, while a stu-
dent, as if they would if they
were fully employed.
Students must forego
purchasing new cars, new
stereo equipment, etc. with the
proceeds of their loans. Such
conduct is foolhardy.
Furthermore, students
already heavily in debt from
undergraduate school might
consider going to law school at
one of the many fine part-time
law schools in the nation, so
that they can work during law
school.
If a student attempts
to go to law school full-time
and carry a work load above
20 hours a week, they are not
only risking academic perfor-
mance, they are also placing
their law school in violation of
ABA accreditation standards.
IV. The Bottom Line
The larger legal com-
munity needs to be aware that
too many students have been
borrowing too much for too
long. It is time that law
schools, law students, and the
profession, think seriously
about the costs of financing
a legal education. Loans have
their place.
Many deserving stu-
dents would not be able to ob-
tain a legal education without
loans available. It is wise pub-
lic policy to have both feder-
ally secured loans and private
loans available to law students.
However, law stu-
dents are adults and they are
responsible for their acts; they
need to be aware of the conse-
quences of too much debt.
Furthermore, law
schools need to be aware of
their obligations to properly
advise students.
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INVITES SOUTH TEXAS COLLEGE
OF LAW STUDENTS AND FACULTY.
RECIEVEA 10 % DISCOUNT ON
ALL BREAKFAST AND LUNCH PURCHASES
FACULTY AND STUDENTS MUST SHOW COLLEGE I D OR
EMPLOYMENT PROOF
TO CASHIER TO RECEIVE DISCOUNT.
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Bankston, Mark. South Texas College of Law Annotations (Houston, Tex.), Vol. 25, No. 1, Ed. 1, August, 1996, newspaper, August 1996; Houston, Texas. (https://texashistory.unt.edu/ark:/67531/metapth144511/m1/4/: accessed July 11, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu.; crediting South Texas College of Law.