No Exit: Graduates of bottom-tier law schools have mountains of student-loan debt and little prospect of ever paying it off

You say you went to law school to pursue a better life. Your LSAT scores weren't so hot, so you were turned down by the top law schools. Harvard and Yale tossed out your application with its other junk mail and sent you an elegant rejection letter, complete with a genuine-looking robo-signature from someone in the admissions office.

But a lower-tier law school welcomed you with open arms. Let's say it's a for-profit school like Arizona Summit or Florida Coastal. Or maybe a nonprofit, private law school like Thomas M. Cooley in Michigan, Thomas Jefferson in San Diego, or McGeorge in Sacramento. Or maybe you received an acceptance letter from a bottom-rung public law school like Southern Illinois or Texas Southern.

And so you went to law school. You were vaguely aware that job prospects for people who graduate from bottom-tier schools aren't good and a high percentage of graduates fail the bar exam. But you're special. You'll study hard, you'll prepare for the bar exam, you'll  pound on doors until a law firm offers you a good job. 

And when you get that J.D. degree, your life will suddenly change for the better. You'll drive a nice car, get married, and buy a craftsman-style house like the happy people who inhabit television commercials.

And of course you took out student loans. To your surprise, back-of-the-pack law schools are just as expensive as Princeton and Stanford. Total costs, including living expenses turned out to be $40,000 a year, $50,000 a year, or even $60,000 a year.

But in for a penny, in for a pound. You realized you can't work your way through law school like in the old days because no one can make enough money from a part-time job to pay a $40,000 tuition bill. So you took out loans every semester and when you walked across the stage to receive your law school diploma, you owed $200,000.

You studied hard for the bar examination and paid for a bar review course. But you didn't pass the exam.

And then you realized--fully realized for the first time--you owe $200,000 in student loans and you will never get a good job as a lawyer.

What's your exit strategy?

There is no exit strategy. You must pay back those student loans whether or not you get a good job or pass the bar exam.  You can stall for time by getting an economic hardship deferment that excuses you from making monthly loan payments. But the deferment doesn't stop interest from accruing. In a few years, the $200,000 you borrowed will grow to $300,000.  

Maybe you were enticed to enroll in a crummy law school based on misrepresentations about the law school's employment rate. Can you sue for fraud? Yes you can, but so far at least, fraud suits against law schools have been unsuccessful. Thomas Jefferson and Thomas M. Cooley both beat that wrap.

Can you discharge your student loans in bankruptcy? Maybe. Michael Hedlund, a graduate of Willamette School of Law, won a partial discharge of his student loans after 10 years of litigation. But several law-school graduates have struck out in the bankruptcy courts. Mark Lilly, a McGeorge law-school graduate, and Mark Tetzlaff, a Florida Coastal graduate, lost their adversary actions in spite of the fact that their law degrees did not enable them to get good attorney jobs. Heather Coplin, a McGeorge law-school graduate working as a waitress, only obtained a partial discharge of her student loans, which totaled almost half a million dollars.

*****

Law schools once operated as professional schools with high ethical standards. Today, however, a great many law schools are nothing more than elegant con games designed to rake in federal student-aid money.

So before you enroll in a third-rate law school, do some research. Read Paul Campos' article in Atlantic. This article was the inspiration for John Grisham's recent novel The Rooster Bar, which tells the story of a young man who attended a dodgy for-profit law school.  And read some of the bankruptcy cases that have been decided against law-school graduates who were unable to find good jobs as attorneys. In particular, read the Tetzlaff case and the Lilly case.

And if you still want to enroll at Florida Coastal or Arizona Summit or Southern Illinois or Thomas Jefferson or Thomas M. Cooley, check yourself into a psychiatric facility--because you probably need to have your head examined.

References

Paul Campos. Don't Go to Law School (Unless). Createspace.com, 2012.

Paul Campos. The Law School Scam. Atlantic Magazine, September 2014. 

Coplin v. U.S. Department of Education,  Case No. 13-46108, Adversary No. 16-04122, 2017 WL 6061580 (Bankr. W.D. Wash. December 6, 2017) (unpublished decision).

Steven J. Harper. Too Many Law Students, Too Few Legal Jobs, New York Times, August 25, 2015. Accessible at: http://www.nytimes.com/2015/08/25/opinion/too-many-law-students-too-few-legal-jobs.html

Hedlund v.Educational Resources Institute, 718 F.3d 848, 851 (9th Cir. 2013). 

Lilly v. IllinoisStudent Assistance Commission, 538 B.R. 45 (Bankr. S.D. Cal. 2013).

MacDonald v. Thomas M. Cooley Law School, 724 F.3d 654 (6th Cir. 2013).

David Segal, Is Law School A Losing Game? New York Times, January 8, 2011. Accessible at: http://www.nytimes.com/2011/01/09/business/09law.html?_r=0

Tetzlaff v. Educational Credit Management Corporation, 794 F.3d 756 (7th Cir. 2015).

Joshua Wright. The Oversaturated Job Market for Lawyers Continues and On-the-Side Legal Work Grows. EMSI blog, January 10, 2014.

Staci Zaretsky. Verdict Reached in the Alaburda v. Thomas Jefferson Landmark Case Over Fraudulent Employment Statistics. Abovethelaw.com, March 24, 2016.

The Unfortunate Case of Mark Tetzlaff, a law school graduate with more than a quarter million dollars in student loans. Bankruptcy is the only reasonable option.

One would have to have a stone-cold heart (or no heart at all) not to feel some sympathy for Mark Tetzlaff.  Tetzlaff obtained a law degree from Florida Coastal School of Law in 2005, but so far at least, he has been unable to pass a bar exam.

In 2012, Tetzlaff filed an adversary proceeding in a Wisconsin bankruptcy court, seeking to discharge more than a quarter of a million dollars in student loans.  Tetzlaff had actually paid off his law-school debt but he had incurred $260,000 in student loans to pursue various other degrees.

During his adversary proceeding, Tetzlaff tried to explain why he had been unable to find steady employment. "He introduced evidence showing that he is a recovering alcoholic, that he has been convicted of several misdemeanor offenses and that these convictions have hindered his ability to find a job." Tetzlaff v. Educational Credit Management Corporation, 521 B.R. 875, 877-878 (E.D. Wis. 2014), aff'd, 794 F.3d 756 (7th Cir. 2015). He also introduced evidence from a psychiatrist that he suffered from narcissistic personality disorder, anxiety and depression.

In addition, Tetzlaff attempted to introduce testimony from a forensic psychologist that he had serious memory problems that prevented him from passing the bar. He also had a vocational counselor lined up to testify that his memory problems were serious enough to hinder him from finding a well-paying job.

An unsympathetic  bankruptcy judge refused to allow Tetzlaff's forensic psychologist and vocational counselor to testify because Tetzlaff he had not disclosed these witnesses by the deadline established in the court's pretrial order. But the judge allowed Educational Credit Management Corporation, Tetzlaff's student-loan creditor, to introduce its own forensic psychologist to testify.

ECMC's psychologist tested Tetzlaff to determine whether he was feigning his psychological symptoms. Not surprisingly ECMC's hired gun concluded that Tetzlaff was a malingerer and that he was feigning his symptoms.

The judge herself concluded that Tetzlaff had not made good faith efforts to find a job and that most of "[Tetzlaff's] energy over the last several years has been directed at making excuses for his failure . . . rather than securing employment." Id. at 880. Accordingly, the judge refused to discharge Tetzlaff's student loans.

Tetzlaff appealed the bankruptcy court's decision to a federal district court, which upheld the bankruptcy judge's decision. And he appealed again to the Seventh Circuit Court of Appeals, which also upheld the bankruptcy judge. And then he sought review by the US Supreme Court, which refused to hear his appeal.

Over the years, Tetzlaff has taken the bar exam at least five times--twice in Illinois and three times in Wisconsin. He failed the exam all five times.  In July 1917, he sued the Illinois Board of Admissions, demanding extra time to take the bar exam along with the right to consult written materials and to take the test in a semi-private room free of distractions.  Tetzlaff claims he is entitled to these "reasonable accommodations" under the Americans with Disabilities Act.

Tetzlaff is now in his late fifties. Twelve years after graduating from law school, he still cannot practice law. Somewhere along his life's journey, he also picked up an MA degree and an MBA; and he is currently pursuing a LLM degree from Temple Law School.

What are we to make of this saga?

First, I believe the bankruptcy court was wrong to deny Tetzlaff a discharge of his student loans. Tetzlaff graduated from a bottom-tier law school, which has very low admission standards. It should not be surprising that he failed the bar exam multiple times. Numerous graduates of Florida Coastal School of Law have failed the bar.  And, as Paul Campos pointed out in his book Don't Go To Law School (Unless), many people who graduate from mediocre law schools will never earn an income that will justify the enormous debt load they take on to get their JD degrees.

Second, I understand why the bankruptcy judge refused to allow a couple of Mr. Tetzlaff's witnesses to testify. Parties to litigation are expected to comply with pretrial orders; and apparently Tetzlaff was granted several extensions to list his expert witnesses before the judge ruled that she would not hear their testimony.

But what kind of justice system do we have that permits a well-heeled creditor like Educational Credit Management Corporation to bring in paid experts to testify that a distressed student-loan debtor is a malingerer? Expert witnesses are hired for one purpose and one purpose only--to help their clients win their cases. ECMC is hounding student debtors in bankruptcy courts all over the United States, and it has almost unlimited resources to hire experts to testify against people who are penniless. Is that fair?

Finally, Mr. Tetzlaff's story illustrates the crazy system of higher education we have constructed in this country that allows an individual to borrow money to obtain multiple degrees when it is clear that this money will never be paid back. Mr. Tetzlaff is a case in point. According to news accounts, he has four academic degrees--a J.D., an MA, an MA, and a BBA--and is pursuing a fifth degree--an LLM.

Let us face facts. Bankruptcy relief is the only sensible option for someone like Mr. Tetzlaff. Even if he eventually passes a bar exam and practices law, it is highly unlikely that he will ever pay back $260,000 in student loans (along with accruing interest).

Mark Tetzlaff (seated on the left) (photo credit Bruce Vielmetti, Milwaukee Journal Sentinel)

References

Mike Brown.  Student Loan Plaintiff Mark Tetzlaff Sues Illinois Board of Admissions to the Bar. Lendedu.com, July 31, 2017.

Tetzlaff v. Educational Credit Management Corporation, 521 B.R. 875, 880 (E.D. Wis. 2014), aff'd, 794 F.3d 756 (7th Cir. 2015).

Tetzlaff v. Educational Credit Management Corporation, 794 F.3d 756 (7th Cir. 2015),  cert. denied, 2016 U.S. LEXIS 61 (U.S. Jan. 11, 2015).

Bruce Vielmetti. Waukesha man sues for double the time, and an open book, to take Illinois bar exam. Milwaukee Journal Sentinel, July 26, 2017.

William Vogeler. Law Graduate Sues for Open-Book Bar Exam. findlaw.com, July 27, 2017.

American Bar Association begins cracking down on mediocre law schools: Too little, too late

After waking from a long slumber, the American Bar Association is finally cracking down on mediocre law schools. A few days ago, the ABA censured Valparaiso University School of Law and placed Charlotte School of Law on probation. According to the ABA, both schools had violated ABA standards requiring law schools to only admit students who are likely to pass the bar exam.

This is not the first time that ABA has censured a mediocre law school. Last summer, the ABA's accrediting unit recommended against  accrediting the newly organized University of North Texas School of Law and cited Ava Maria Law School for failing to comply with ABA quality standards. Like Charlotte and Valparaiso, UNT and Ava Maria received ABA raspberries for low admission standards.

But the ABA's sanctions against four mediocre law schools is too little and too late. The job market for lawyers has imploded; and law chool admission applications have plunged. Many second- and third-tier law schools have had to lower their admissions standards just to fill empty seats; consequently, a lot of law schools are graduating a high number of students who will have difficulty passing their bar exams.

Law School Transparency (LST), a watchdog organization that monitors law school admission standards and bar pass rates, identified a great many law schools that have very low admission standards. LST constructed a model for determining when law school admission standards are so low that students run the risk of failing the bar, and it found a high number of law schools with dicey admission standards.

These are some of LST's most startling findings from its 2015 report on law schools' admission standards for their 2014 entering classes:

• Seven law schools had admitted students with qualifications so low that 50 percent of their freshman classes ran an extreme risk of failing the bar exam. Those schools included Southern University Law Center, a historically black institution; and Arizona Summit and Florida Coastal, two for-profit law schools.

• Twenty-six law schools had admission standards so low that 25 percent of their entering classes were at extreme risk of failing the bar.  Texas Southern, another historically black law school, is on that list, along with several regional public institutions, including North Carolina Central University, Ohio Northern University, and Southern Illinois University.

• Twenty-nine law schools had admission standards so low that 25 percent of their entering classes ran a very high risk of failing the bar exam. Among this number were John Marshall Law School, a for-profit institution; Widener University, a private school; and University of Arkansas at Little Rock, a public institution.

It is the ABA's responsibility to monitor law schools' quality standards, and it fell down on the job. In fact, an advisory panel for the Department of Education recently recommended that the ABA's authority to accredit more law schools be suspended for a year--an astonishing rebuke to a very powerful professional organization.

But even if the ABA gets serious about enforcing quality standards at the nation's law schools, thousands of law-school graduates have already been seriously injured. On average, an individual graduates from law school with $140,000 in student-loan debt; and there are now two newly minted attorneys for every available law job.

Some law graduates have sued their law schools for misrepresentation, arguing they were lured into enrolling based on misleading job placement rates that the law schools disseminated. So far, these suits have been unsuccessful. Thomas M. Cooley Law School and Thomas Jefferson Law School, for example, successfully defended lawsuits filed by their graduates.

A number of law school graduates have filed bankruptcy in an attempt to discharge their student loans. Some have been successful or at least partly successful--the Barrett case and the Hedlund case. Others have lost their adversary lawsuits: Mark Lilly and Mark Tetzlaff.

In my view, people who graduated from second- and third-tier law schools with mountains of debt and no law job should seriously consider filing bankruptcy. But if they pursue this course, they must educate the bankruptcy judge about the terrible job market for lawyers and the high debt load that most law graduates now carry.

As the crisis in legal employment becomes more evident, I think bankruptcy judges will become more and more sympathetic toward law school graduates who are burdened by heavy debt loads and don't have law jobs. I think judges might be particularly sympathetic to debtors who graduated from second- and third-tier law schools given the terrible job prospects for these people.

As I said, educating the bankruptcy judge is critical. The data collected by Law School Transparency is a good place to look for data that will help bankruptcy judges understand the absolutely desperate plight of many recent law scool graduates.

References

Barrett v. U.S. Department of Education, 545 B.R. 645 (Bankr. N.D. Cal. 2016).

Paul Fain. Federal panel votes to terminate ACICS and tightens screws on other accreditors. Inside Higher Ed, June 24, 2016.

Andrew Kreighbaum. ABA Censures Law School. Inside Higher Ed, November 22, 2016.

Andrew Kreighbaum. ABA Tighens Up. Inside Higher Ed, August 31, 2016.

Unemployed Lawyers with Student Loan Debt: The Law Schools Should Be Forced To Bear Part of The Cost of Law School Loans

Recently, I wrote about Anna Alaburda, who sued Thomas Jefferson School of Law, her law school alma mater. Alaburda spent  $150,000 to attend TJSL. After graduating in 2008, she was unable to find a remunerative law job; and her student loan debt grew to $170,000. She claimed she was induced to enroll at Thomas Jefferson by the law school's false assertions that most of its graduates got well-paying legal jobs.

Alaburda's case went to trial, and this week a jury ruled against her.  Alaburda's loss is the latest in a string of defeats by unemployed or underemployed law school graduates who sued their law schools for fraud or misrepresentation.

Some unemployed or underemployed lawyers have filed for bankruptcy to discharge their student loans, but they've had mixed success. Michael Hedlund, a graduate of Willamette Law School, succeeded in getting a partial discharge of his law-school debt, but he endured ten years of litigation before the Ninth Circuit Court of Appeals rendered a decision in his favor in 2013.

More recently, two heavily indebted law-school graduates were denied bankruptcy relief. Mark Tetzlaff, racked up thousands of dollars in debt to pursue post-secondary studies; and he eventually received an MBA and a law degree from Florida Coastal School of Law, a bottom-tier law school. Tetzlaff actually paid off his law school debt, which he was required to do in order to get Florida Coastal to release his transcripts. But he never obtained a good job as an attorney, and he was unable to pay off other student loans. When he filed for bankruptcy in 2012, he owed $260,000 in student-loan debt.

The Eighth Circuit was not sympathetic to Mr. Tetzlaff's plight and refused to discharge his student loans in a decision released last year. And the U.S. Supreme Court refused to hear his appeal.

Likewise, a bankruptcy court in California ruled against Mark Lilly in 2013. Like Mr. Tetzlaff, Mr. Lilly took on a massive amount of student-loan debt, including debt he acquired to obtain an MBA and a law degree from McGeorge School of Law in Sacramento, which is not a top-ranked law school. His request for bankruptcy relief was denied, but he never found work as a lawyer.

This is the tragic reality: the legal job market has imploded, but law schools have not reduced enrollments sufficiently in response to the shrinking demand for lawyers. Law schools continue to pump out far more attorneys than American society needs, and many law schools have lowered their admissions standards just to get students in the door. For people like Mark Tetzlaff and Mark Lilly, who graduated from mediocre law schools, there are virtually no jobs. In California, for example, there are now 2.5 law graduates for every job opening.

Thus far, law graduates have borne most of the suffering created by a shrinking job market, especially graduates who received their degrees from nonprestigious law schools like Florida Coastal, Thomas Jefferson, and McGeorge. On average, law graduates who borrow to finance their studies acquire $140,000 in student-loan debt. Graduates of Thomas Jefferson School of Law, where Anna Alaburda obtained her degree, now graduate with an average debt load of $180,000! Many simply can't find jobs that will allow them to pay off their student loans.

In my view, some of the suffering experienced by unemployed law graduates should be shifted to the law schools, which have charged students exorbitant tuition and are graduating more students than our economy can absorb. These schools purport to maintain the highest ethical standards, but in reality, many of them are making admissions decisions based on their revenue needs and not the welfare of their students.

Whether or not they are guilty of misrepresentation, as Ms. Alaburda asserted  against TJSL, many law schools are certainly guilty of behaving contrary to the public interest. Surely, these schools should help their unemployed graduates pay back massive student-loan debt that was acquired to obtain degrees that are virtually worthless.

References

Hedlund v. Educ. Resources Inst., Inc., 718 F.3d 848 (9th Cir. 2013).

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

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

Tetzlaff v. Educational Credit Management Corporation, 794 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

Gary Warth. Jury rejects fraud claim against law school. San Diego Union-Tribune, March 24, 2016. Accessible at http://www.sandiegouniontribune.com/news/2016/mar/24/thomas-jefferson-law-school-verdict/

Joshua Wright. The Oversaturated Job Market for Lawyers Continues and On-the-Side Legal Work Grows. EMSI blog, January 10, 2014. Accessible at: http://www.economicmodeling.com/2014/01/10/the-oversatured-job-market-for-lawyers-continues/

Tetzlaff v. Educational Credit Management Corporation: The Seventh Circuit made a mistake when it refused to discharge a quarter of a million dollars in student-loan debt owed by an umemployed 56-year old man living on his mother's Social Security check

The Seventh Circuit Court of Appeals got it wrong when it affirmed a lower court ruling against Mark Tetzlaff, an unemployed 56 year-old man who tried to discharge $260,000 of student-loan debt in bankruptcy. Mr. Tetzlaff filed a petition for certiorari in October with the U.S. Supreme Court, seeking to have the Seventh Circuit's decision overturned. I hope the Supreme Court agrees to hear his case.

The Seventh Circuit applied the Brunner test too harshly.

In ruling against Tetzlaff, the Seventh Circuit determined that requiring Tetzlaff to repay more than a quarter of a million dollars in student-loan debt would not cause him "undue hardship." To reach this bizarre conclusion, the court applied the three-part Brunner test, which required Tetzlaff to show:

1) [He could] not maintain, based on current income and expenses, a minimal standard of living . . . if forced to repay [his] loan;

 2) additional circumstances exist indicating that this state of affairs is likely to persist for a significant portion of the repayment period;

3) [he] made good faith efforts to repay the loans. 

 At the time Tetzlaff filed his adversary hearing, he was 56 years old, unemployed, and living with his mother. Both he and his mother subsisted entirely on his mother's Social Security check. Thus, the court admitted that Tetzlaff met the first prong of the Brunner test: he could not pay back his student loans and maintain a minimal standard of living.

But the Seventh Circuit panel ruled that Tetzlaff had not meet the second prong of the Brunner test.  According to the court,Tetzlaff was required to show "the certainty of hopelessness" concerning his financial future.  In essence, the court predicted that Tetzlaff's financial situation will probably improve. After all, the court noted, "he has an MBA, is a good writer, is intelligent, and family issues are largely over" (quoting the lower court's opinion).

Moreover, in the Seventh Circuit's view, Tetzlaff had not made good faith efforts to pay back his loans, a requirement of the Brunner test's third prong.

Although Tetzlaff may not have made sufficient efforts to repay the $260,000 he was trying to discharge in bankruptcy, he had also borrowed money to attend Florida Coastal Law School; and he had paid back his law school loans. Tetzlaff argued in court that his successful effort to pay off his law-school loans showed his good faith,

But the Seventh Circuit did not buy Tetzlaff's argument.  In the court's view, Tetzlaff had not made a good faith effort to repay the $260,000 he owed to Educational Credit Management Corporation, the agency that was fighting Tetzlaff's bankruptcy discharge. Thus he failed the third prong of the Brunner test.

Where the Seventh Circuit went wrong: Low Job Prospects for Law Graduates

In my view, the Seventh Circuit erred when it refused to discharge Tetzlaff's student loan debt. 

First of all, a 56-year old man who is unemployed and has significant mental health issues (as he testified in court) will never pay back more than a quarter of a million in student-loan debt--a debt that is growing larger by the day due to accrued interest. The court would have ruled more realistically and more compassionately if it had applied the principle laid down by the Ninth Circuit's Bankruptcy Appellate Panel in its 2013 Roth decision: "[T]he law does not require a party to engage in futile acts." 

It is true Tetzlaff holds an MBA and a law degree, but these credentials are no guarantee of a good job, particularly given his age, his employment history, and his mental health issues. In fact, Tetzlaff's law degree may be almost worthless.  

As Paul Campos wrote in his 2012 book, Don't Go To Law School (Unless), the job market for lawyers is terrible. Indeed, Campos observed, "[L]aw schools are now producing more than two graduates for every available job."

And Tetzlaff's prospects for a legal job are especially dire since he failed the bar exam twice. In addition, he graduated from Florida Coastal Law School, one of the nation's bottom-tier law schools with very low admissions standard. According to Law School Transparency, a public interest group, 50 percent of Florida Coastal's 2014 entering class were at extreme risk of failing the bar exam based on their LSAT scores.

Law School Transparency pointed out that graduates of law schools with low admission standards have a much harder time obtaining employment than graduates from more prestigious law schools. "Legal job rates are considerably worse at the serious risk schools," Law School Transparency's report stated. "A serious risk school is 4 times as likely to have a below average legal job rate. Nearly three-quarters of schools with employment rates below 50% were serious risk schools."

Law School Transparency's recent report shows that borrowing money to attend a law school with low admissions standards is not a good bet. "Based on available salary data from serious risk schools, graduates from these programs cannot service their debts without generous federal hardship programs."

Nevertheless, Tetzlaff was wise to pay off his law-school debt first, since the law school would not release his diploma to him unless he paid that debt. And without a diploma, he would be unable to take the bar exam. In fact, Tetzlaff had no real choice in prioritizing his law school debt over his other student loan debt.

It is truly unfortunate that the Seventh Circuit showed both lack of compassion and lack of understanding by penalizing Mr. Tetzlaff for making the only sensible financial decision he could make.  He simply had to make paying his law-school debt a priority in order to have any hope of ever practicing law.

The Court Should Not Have Allowed ECMC to accuse Tetzlaff of being a malingerer

Educational Credit Management Corporation, perhaps the nation's most heartless and ruthless student-loan debt collector, opposed the discharge of Tetzlaff's student-loan debt, and it hired Dr. Marc Ackerman, a forensic psychologist, to bolster its case. Ackerman performed tests on Tetzlaff and testified that Tetzlaff "'scored very high on several malingering scales,' indicting that Tetzlaff was perhaps feigning his psychological symptoms."

I find it outrageous that Educational Credit Management Corporation's hired a forensic psychologist as a means of suggesting Tetzlaff is a malingerer. ECMC has fought bankruptcy relief for distressed student-loan debtors all over the United States, and its chief executives have grown rich in the debt collection business. For ECMC to force an unemployed man in his mid-50s to take a psychological exam in a bankruptcy proceeding to determine whether he is a malinger is detestable.

It is true that Tetzlaff introduced testimony about his mental health issues, but I don't think that gives ECMC license to use an expert witness to essentially attack his character. In my opinion, the bankruptcy court should have excluded the forensic psychologist's opinion on the grounds of common decency.

And if we are going to be looking into people's mental health, let's check the mental health status of the ECMC officials who opposed bankruptcy relief for Jane Roth, a 68-year-old woman with chronic health problems who was living solely on the income of a $774 Social Security check. Anyone who would persecute Jane Roth must have serious mental health problems--let's call it chronic undifferentiated greed.

Conclusion: The  Seventh Circuit committed a grave error in deciding the Tetzlaff case

The Tetzlaff decision was a bad decision. Mr. Tetzlaff should be commended for trying to improve his economic prospects by obtaining graduate education, and he should not be penalized because some of his educational choices may have been misguided.

Mr. Tetzlaff probably made a mistake when he borrowed money to attend Florida Coastal Law School.  But he should not suffer a lifetime penalty for mistakes he made in his good faith efforts to obtain an education. And people in bankruptcy should not be required to take psychological tests to determine whether they are malingers.

The Department of Education needs to rein in Educational Credit Management Corporation by insisting that it not oppose bankruptcy relief for people like Mark Tetzlaff. Unless it does that, DOE simply cannot continue to say with any credibility that it is trying to relieve the distress of millions of people who are unable to pay back their student loans.

References

Paul Campos. Don't Go To Law School (Unless). Self-published, 2012.
Roth v Educational Credit Management Corp, 490 B.R. 908, 920 (9th Cir. BAP 2013).

Law School Transparency. 2015 State of Legal Education. Accessible at: http://lawschooltransparency.com/reform/projects/investigations/2015/
John Hechinger. Taxpayers Fund $454,000 Pay for Collector Chasing Student Loans. Bloomberg.com, May 15, 2013. Accessible at: http://www.bloomberg.com/news/2012-05-15/taxpayers-fund-454-000-pay-for-collector-chasing-student-loans.html
Tetzlaff v. Educational Credit Management Corporation, 794 F.3d 756 (7th Cir. 2015). Accesible at: http://scholar.google.com/scholar_case?case=900247726541956067&hl=en&as_sdt=6&as_vis=1&oi=scholarr