NetNet's Law Loan Story Heats Up
The business section of Sunday’s New York Times yesterday asked “Is Law School A Losing Game?” in its lead story.
It's the story NetNet has reported three times since December 31. "Getting Schooled In Law Loans," "Law Degree, Never Used, For Sale On eBay," and "Unused Law Degree: $200k On eBay, Going Once, Going Twice... ."
The glut of law graduates, paired with a struggling economy, is creating severe financial distress among the group. Many graduates owe far more than $100,000 in private loans.
The American Bar Association is trying to deter students from going to law school. The ABA piece, "Value Proposition Of Attending Law School," is on the front page of its website.
If they are fortunate enough to find a job, salaries often do not sufficiently cover the monthly loan expenses. Students may want to pay back their loans but they cannot pay them back with money they do not have.
Spread out over three full pages, the Times story goes in depth into how debt has financially destroyed some graduates, the thousands of legal jobs that have vanished, and the jargon law schools use regarding job placement.
According to the New York Times article, it's an "open secret" that institutions often do a job on the number of students who get a job after graduation.
"A law grad, for instance, counts as 'employment after nine months' even if he or she has a job that doesn't require a law degree. Waiting tables at Applebee's? You're employed. Stocking aisles at Home Depot? You're working, too.
Number-fudging games are endemic, professors and deans say, because the fortunes of law schools rise and fall on rankings, with reputations and huge sums of money hanging in the balance."
Perhaps one kind of attorney may be able to profit off all of this: Bankruptcy.
Stephanie is Squawk Box producer and senior NetNet retail correspondent. Follow her on twitter @StephLandsman
Questions? Comments? Email us atNetNet@cnbc.com
Follow NetNet on Twitter @ twitter.com/CNBCnetnet
Facebook us @ www.facebook.com/NetNetCNBC