Showing posts with label Mark Tetzlaff. Thomas Jefferson School of Law. Show all posts
Showing posts with label Mark Tetzlaff. Thomas Jefferson School of Law. Show all posts

Thursday, April 7, 2016

John L. King, Jr., Secretary of Education, spouts nonsense about financial literacy for student borrowers

John L.  King, Jr., the new Secretary of Education, knows the student-loan program is careening out of control and that millions of people owe billions of dollars they can't pay back.

So what's Secretary King's solution? Financial literacy. We can solve the student-loan crisis, Secretary King apparently believes, if college students are educated to make better financial decisions.

Thus as the nation enters "Financial Capability Month," Secretary King is touting a recent report prepared by the Financial Literacy and Education Commission that outlines how college students can develop better financial management skills.

Interestingly, the report emphasizes the role that colleges and universities can play in enhancing their students' ability to make good decisions about financing their college experiences. And the report highlights financial literacy programs that universities around the nation are offering.

For example, New Mexico State University "held a money management fair to promote games, websites, and outside financial education organizations to students." I'll bet that was fun.

And Louisiana State University, famous for its planned "Lazy River" water feature, created "financial education' handouts called "Financial Basics on the Geaux" and developed "CashCourse quizzes" to evaluate students' financial knowledge.

The Department of Education seems to think that colleges are great places for students to learn financial literacy, including the skills to manage their student loans. After all, as the Financial Literacy and Education Commission pointed out, colleges have an incentive to produce alumni who repay their student loans.

But of course this isn't really true. Colleges and universities have an incentive to maximize their revenues, which means luring tuition-paying students through the door. But higher education institutions have zero incentive to warn potential students that some of their degree programs are a bad financial investment.

And here's an example. Law students who graduated from Thomas Jefferson School of Law in San Diego in 2013 had an average student-debt load of $180,000 (among students who borrowed). That was the highest student-debt load of any law school in the United States that year.

Yet Thomas Jefferson's admission standards are quite low. According to a recent report by Law School Transparency, 75 percent of Thomas Jefferson's entering 2014 class had LSAT scores so low that they were at high risk of failing the bar. Twenty-five percent of it 2014 freshman class had LSAT scores so low that they were at extreme risk of failing the bar.

Not surprisingly, Thomas Jefferson's bar pass rates aren't high. Among first-time test takers who sat for the California bar in July 2014, less than half of TJSL graduates (44.7 percent) passed the bar exam.

As Paul Campos wrote in his 2012 book, "[I]t's likely that somewhere around four out of five current law students would be better off if they hadn't gone to law school" (emphasis supplied). And that percentage is surely even higher for people who graduate from TJSL.

Do you think Thomas Jefferson School of Law is telling its entering freshman students that they will probably face job prospects so poor that it makes no sense to borrow $180,000 to get a TJSL degree? Probably not. Thomas Jefferson needs to maximize its revenue by admitting as many law students as it can, even if  a majority of its entering students have LSAT scores so low that they run a high risk of failing the bar exam.

So what's my point? Simply this. The Department of Education is being naive or cruelly cynical to suggest that "financial literacy" can be usefully taught by colleges and universities that have every incentive to attract tuition-paying students and no incentive at all to warn potential students of the risks they run when they take out student loans to enroll in expensive programs that aren't likely to pay off financially.

In short, whether you are contemplating a bachelor's degree in religious studies from an expensive, elite university or a law degree from a mediocre law school, you can't count on the higher education institutions to give you good financial advice. When it comes to acquiring financial literacy, you are largely on your own.


Focusing on financial literacy for students. U.S. Department of Education blog site.

Jeff Schmitt, The Leaders in Student Debt. Tipping the Scales, March 31, 2014. Accessible at

Paul Caron. July 2014 California Bar Exam Results. Taxprof blog, December 29, 2014.

Financial Literacy and Education Commission. Opportunities to Improve Financial Capability and Financial Well-Being of Postsecondary Students. Updated 2016. Accessible at

Law School Transparency. Reports on law school admission data accessible at

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.


Elizabeth Olsen. Law Student Gets Her Day in Court. New York Times, March 6, 2016.

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

Thomas M. Cooley Law School v. Kurzon Strauss, LLP, 759 F.3d 522 (6th Cir. 2014). Accessible at