Student Loans for College | How Much?
Getting Student Loans for College Has Never Been This Easy
With outstanding student loans for college, as well as student loan delinquencies, at an all-time high, law schools continue to add to the problem. At the present time, there are many more graduates than jobs, yet the law schools continue to raise tuition, further compounding the problem.
The primary reason for this problem is that federal student loans can be obtained fairly easy despite the fact that many of those students will not be able to get a job in the legal profession.
The average student loans for college for a law school graduate ranges from $88,000.00 for a public school student up to $127,000.00 for one attending a private school. Six months after graduation, the student loans are scheduled to begin repayment, and it’s very likely the graduate won’t have a job due to the surplus of graduates. This will continue to spiral until changes are made to correct the current procedures.
Most of the law schools revenue comes from tuition payments, and as a result, their primary incentive is to keep every seat filled with as large a student body as possible. In contrast, they share no responsibility for the high debt their students incur even though they realize the possibility of finding a job is remote.[bctt tweet=”Law schools seem to operate with no accountability.” username=”HBSMoneyTips”]
Essentially, this permits the schools to function without being accountable to anyone except their bottom line, with the taxpayers and students paying the ultimate price. The American Bar Association created a task force to come up with a solution to this dilemma. Their suggestions were:
- The schools should have some responsibility to share in the repayment of student loans.
- There needs to be a cap on the amount of student loans
- Eliminate the federal student loan program in its current format. One school, Thomas Jefferson School of Law, recently advised its students enrolled in certain degree programs that they would have to seek private loans to finance their education for those degrees. No federal student loans are available for them.
It was a general consensus of the task force that the problem would eventually take care of itself based on market conditions. School enrollment did decrease from 2010 through 2014, however, not in any amount that was needed to attain equilibrium. Another ineffective suggestion was made to offer “better” debt counselling to the students, but that will not remedy this current crisis.
It is our opinion that law schools must be required to see that the amount of student loans for college granted have a realistic relationship to the employment of their students. Unless that is done, they will continue to operate with no accountability, further contributing a surplus of law graduates, many of whom will be unable to find jobs. These graduates fortunately have the Income Based Repayment (IBR) and the Pay As You Earn (PAYE) programs that can reduce the monthly payment considerably.
Gust Lenglet is the CEO of HBS Financial Group, Ltd., an accounting & tax preparation firm in Maryland. He has more than 25 years of experience in the banking and financial industry. Gust started his career as a loan officer at a major national bank, and then moved on to become controller of a major law firm. In recent years, he has written many financial articles that have been published on Ezine Articles and many websites.