Showing posts with label Thomas M. Cooley Law School. Show all posts
Showing posts with label Thomas M. Cooley Law School. Show all posts

Tuesday, May 22, 2018

Only about 1 out of 4 law school graduates passed the California Bar Exam last February

Much like the Lusitania, legal education steams full speed toward its ultimate destruction, while law school deans and professors sip California wine and contemplate their retirement portfolios.

Earlier this month, the California's State Bar announced passage rates on the California bar exam, administered last February. Only 27 percent passed the exam--the lowest pass rate in almost 70 years. Think about that-- almost 3 out of 4 law-school graduates failed the California bar exam, which means they cannot practice law in the Sunshine State.

Most of these unlicensed lawyers borrowed money to go to law school--a lot of money. Even public law schools are expensive. University of Texas School of Law, my alma mater, charges students $35,000 a year to attend. And the bottom-tier, for-profit law schools are almost as expensive as top-ranked public schools. According to Law School Transparency, the total cost of attending Florida Coastal School of Law--a bottom-of-the-barrel law school--is $256,939! The total cost to attend the University of Michigan's law school,one of the best schools in the country, is only slightly more expensive--$288,395.

What's going on? First of all, the demand for newly minted lawyers has declined drastically. Smart people have figured that out, and fewer bright young men and women are choosing law as a career.

Many law schools lowered admission standards to keep their classes full, which led to lower bar passage rates for law graduates. A few states (Nevada and Oregon) lowered the standards for passing their bar exams to get their passage rates up. But most states have tried to maintain high standards, which means thousands of poorly qualified but heavily indebted law-school graduates aren't passing the bar and can't work as lawyers.

Then--as law school enrollments went down--Congress enacted the Direct PLUS program, which removed the cap on the amount of federal loans students can take out to go to graduate school. In response, law schools jacked up their prices and students began borrowing more and more money to pursue careers that became increasingly illusive.

Image result for lusitania
A few colleges have done the honorable thing and stopped admitting students. Whittier College will close its law school after its current students graduate, and Valparaiso Law School announced last November that it will not admit new students.

Belatedly, in my view, the ABA began putting the squeeze on the most mediocre law schools in an effort to get them to raise their admission standards. But some of these schools have sued the ABA--Thomas M. Cooley and Florida Coastal, in particular.

I don't see a happy ending to this saga. All across the United States, second- and third-tier law schools have lowered admission standards, thereby watering down the quality of the legal profession. The ultimate result, in my opinion, will be the erosion of the nation's legal system as fewer and fewer of our nation's brightest and most honorable young people pursue legal careers as attorneys and judges.

We see it now. The corruption, deception, and manipulation that characterizes our national politics can be laid at the feet of our political class--and most of these creeps are lawyers.




Sunday, October 22, 2017

Department of Education forgives student-loan debt owed by a wounded veteran, but the IRS sends him a tax bill for $62,000

At age 40, Will Milzarski, an attorney, took leave from his state government job to return to the U.S. Army. After completing officer training, he served two tours of duty in Afghanistan. where he led more than 200 combat missions.

On his last day in combat, Milzarski was wounded in the face, which left him with a traumatic brain injury, hearing loss, and post-traumatic stress disorder.  He was later determined to be totally disabled.

Milzarski returned to civilian life with $223,000 in student-loan debt, most of it acquired to obtain a law degree from Thomas M. Cooley School of Law. In accordance with its policy, the Department of Education forgave all of that debt due to Milzarski's disability status.

But then this wounded veteran received a surprise. The IRS considers forgiven debt to be taxable income, and thus it sent Milzarski a tax bill for $62,000.

Milzarski summarized his experience well. "One part of our government says, 'We recognized your service, we recognize your inability to work," Milzarski said. "The other branch says 'Give us your blood.' Well, the U.S. Army already took a lot of my blood."

Nearly 400,000 disabled Americans have student-loan debt, and this obscure tax provision impacts nearly all of them. Although they are entitled to have their student loans forgiven due to their disability status, this forgiveness comes with a tax bill.

And disabled student-loan debtors are not the only people affected by the IRS forgiven-loans rule. More than 5 million student-loan debtors are in long-term, income-driven repayment plans (IDRs), and most of them are making monthly payments so low that they are not repaying the accumulated interest.

Under the terms of all IDRs (there are several varieties), college borrowers who successfully complete their 20- or 25-year repayment plans are entitled to have any remaining debt forgiven. But IDR participants, like retired Lieutenant Milzarski, will get a tax bill for the forgiven debt.

Obviously, this state of affairs is insane. President Obama recommended a repeal of the IRS rule when he was in office, but nothing  came of his suggestion.

Surely a bill to repeal the IRS forgiven-debt rule would receive bipartisan support in Congress. Who could decently oppose a repeal? In fact, President Trump can probably reverse the rule that is persecuting Mr. Milzarski simply by signing an executive order.

I predict, however, that  that nothing will be done about this problem--either legislatively or by executive action. Washington DC is in so much partisan turmoil that almost nothing positive is getting done. Under current tax law, millions of student borrowers in income-driven repayment plans will have huge tax bills waiting for them when they complete their repayment obligations and have their remaining student-loan debt forgiven.

And unlike retired Lieutenant Milzarski, who is in his forties, most IDR participants will be in their sixties or seventies when their tax bills arrive in the mail. And if they can't pay their taxes, that will not be the government's problem. The IRS will simply garnish their Social Security checks.


Retired Lieutenant Will Milzarski (photo credit Matthew Dae Smith/Lansing State Journal via AP
References

Associated Press. Wounded Michigan vet gets student loan debt forgiven, but now IRS wants $62,000. Chicago Tribune, October 20, 2017.

Jillian Berman. Why Obama is forgiving the student loans of almost 400,000 peopleMarketwatch.com, April 13, 2016.

Judith Putnam. Student debt forgiven, but wounded vet gets $62,000 tax bill. USA Today, October 20, 2017.

Michael Stratford. Feds May Forgive Loans of Up to 387,000 BorrowersInside Higher Ed, April 13, 2016.


Saturday, March 12, 2016

Thomas Jefferson School of Law is being sued for misrepresentation by Anna Alaburda, a TJSL graduate. Let's hope she wins

Thomas Jefferson School of Law in San Diego is a defendant in a lawsuit filed by Anna Alaburda, one its graduates. The case may go to trial this week.

Alaburda, who received her JD from TJSL in 2008, sued the law school in a California state court, claiming the school misrepresented the employment statistics of its graduates. Alaburda argues that she enrolled at Thomas Jefferson based partly on the school's representations about its graduates' job prospects, but that the school dispensed misleading information. Since graduating, Alaburda has not found a full-time attorney's job.

As a New York Times story reported, Alaburda is not the first law school graduate to sue her alma mater, but she is the first to get her case to trial. Judges in Illinois, New York and Michigan have dismissed similar suits based on the grounds that the plaintiffs enrolled in law school "at their own peril," and that they were sophisticated enough to realize that they might not find an attorney's job after they graduated.

Thomas M. Cooley Law School was sued under a theory similar to the one put forth by Alaburda, but a Michigan court dismissed the case. Less well known, however, is the fact that Cooley Law School lost a defamation suit against the attorney who brought the misrepresentation suit. The Sixth Circuit Court of Appeals ruled that Thomas M. Cooley was a public figure for the purposes of a defamation claim and could not prevail  unless the school could show the lawyer had communicated his accusations maliciously, which it had not done.

I hope Ms. Alaburda wins her lawsuit. As Paul Campos and others have written, the market for lawyers has imploded. There is now approximately one law job for every two law graduates. Law school admissions are down by about 20 percent, and many law schools have lowered their admission standards just to get tuition-paying students through the door.  Meanwhile, the average newly minted JD graduates with more than $100,000 in student-loan debt.

Many students at the second- and third-tier schools do not pass the bar exam after they graduate and are not able to earn an income that will allow them to pay back their student loans. Some have filed for bankruptcy.

Unfortunately, the bankruptcy courts have not always been sympathetic. A few months ago, the Seventh Circuit Court of Appeals ruled that Mark Tetzlaff, a graduate of  Florida Coastal School of Law, was not eligible for bankruptcy relief, in spite of the fact that Tetzlaff failed the bar exam, had serious health problems, and hadn't found employment as a lawyer.  In a 2013 decision, a California bankruptcy judge ruled against Mark Lilly, another law school graduate who never found employment as an attorney.

Job prospects for graduates of second- and third-tier law schools are terrible; and thousands of law graduates are burdened with six-figure debt.  In fact, in Don't Go to Law School, Unless, Paul Campos advised students attending down-market law schools to drop out after the first year if they don't excel academically rather than borrow money to continue their studies  In Campos' view, it often makes more sense for a law student to drop out rather than double down and acquire more debt to get a JD degree that won't lead to a high-paying job.

In my view, the law schools have acted irresponsibly to the deteriorating job market for attorneys. Many did not cut their enrollments in response to the plummeting demand for lawyers.  Instead, they lowered their admissions standards in order to keep generating tuition. And according to some law school graduates, at least a few law schools lured people to enroll by misrepresenting the job statistics of their graduates.

If Alaburda wins her case, Thomas Jefferson will appeal. But if she ultimately prevails and gets a money judgment, law schools all over the United States will quake with fear. The law schools have had a good run. They jacked up tuition prices unreasonably and raked in millions of dollars. And students went heavily into debt on the bet that they would get a good lawyer's job that would justify their investment.

But the party is over.  Thousands of unemployed and heavily indebted lawyers deserve some relief. If they are victims of fraud or misrepresentation, I hope they find relief in the state courts. And if they are unable to find remunerative employment as attorneys, I hope they find sympathetic bankruptcy judges who will relieve them of their oppressive student loans and give them an opportunity for a fresh start.

References

Elizabeth Olsen. Law Student Gets Her Day in Court. New York Times, March 6, 2016. http://www.nytimes.com/2016/03/07/business/dealbook/court-to-hear-suit-accusing-law-school-of-inflating-job-data.html?smid=fb-nytimes&smtyp=cur&_r=1

Lilly v. Illinois Student Assistance Comm’n, 538 B.R. 45 (Bankr. S.D. Cal. 2013)

Tetzlaff v. Educational Credit Management Corporation794 F.3d 756 (7th Cir. 2015). Accessible at http://caselaw.findlaw.com/us-7th-circuit/1708687.html

Thomas M. Cooley Law School v. Kurzon Strauss, LLP, 759 F.3d 522 (6th Cir. 2014). Accessible at http://www.ca6.uscourts.gov/opinions.pdf/14a0139p-06.pdf