Summary: A recent ABA meeting explored the problem with student loans and the growing debt law students incur.

At the 2018 ABA Midyear Meeting held in Vancouver, British Columbia, a topic of interest was Student loan programs. The American Bar Foundation gathered a panel together to explore how student loan programs affect the rising cost of law school. The panel was titled “The Perennial (and Stubborn) Challenge of Cost, Affordability and Access in Legal Education: Has it Finally Hit the Fan?” according to the ABA Journal.

ABA managing director of accreditation and legal education Barry Currier said, “If I have to put the blame for the title of this panel on any one place, I would put it on these student loan programs and the fact that they are basically unregulated, really, in terms of the amount. The students can borrow as much money through those programs as they want so if Harvard Law School or New England Law School said, ‘Tuition at our school next year is $200,000, and living expenses are $50,000,’ the federal government wouldn’t say, ‘You’ve got to be kidding me!’ They would say, ‘Where can we send that check for $250,000?’”

Currier is not speaking on behalf of the council of the Section of Legal Education and Admissions to the Bar. This is something he thinks needs to be addressed, whether there is a direct link or not. “But I think if you had to pick one place, that’d be where I would go,” Currier added.

Currier and senior research professor at the American Bar Foundation, Stephen Daniels, pointed to a bill that may affect federal student-loan programs, the law schools, and law students. HR 4508 “Promoting Real Opportunity, Success and Prosperity through Education Reform (PROSPER) Act” was introduced in December to the House of Representatives.

As Currier explained, “That bill, as currently written eliminates the loan forgiveness programs that are now in effect, and it puts a cap on student borrowing for graduate and professional education of $28,500 a year and I venture to say that if a cap of $28,500 per year were put on law school borrowing through the federal student-loan programs, one of two things would happen: A lot of students would then not go to law school because they couldn’t afford it. Or the interest rate they would have to borrow on the private loan that they would have to take out to supplement that would be at a rate of interest that would make it really difficult to justify the decision to go to law school.”

The PROSPER Act is still in early stages so it is unclear at this time “if there is a cap, what the cap will be… But for law schools at this point in time, this is a very serious issue,” Currier said.

In order to tackle the rising debt and access to student loans, Currier has four suggestions. The first is for the federal government to reduce its profit margin from student loans. The second option would place responsibility on states to reinvest in legal education so access to justice in increased. The third option has law schools taking a role of authority and limiting how much their students can take out in loans. The last option is for the government and law schools to share the risk so that when a student defaults on their loans, the law school would have to cover some of the debt repayment to the government. Currier explained, “Let the schools have a little bit of skin in the game. That might trim the school’s appetite for taking students that they aren’t sure can graduate and pass the bar and get a good job.”

Do you think law schools should be involved in ensuring their students take out loans wisely? Share your thoughts with us in the comments below.

To learn more about student loan debt, read these articles:

• How Can You Get Your Law School Student Loans Forgiven?
• Student Loan Refinancing May Be Tempting but Also Risky
• How Does the Navient Student Loan Scandal Affect You?