Wednesday, November 11, 2009
Did Hell Just Freeze Over? Never Mind
I almost dropped to the floor when I read that the ABA (the American Biglaw Association) was actually confronting reality and addressing the issue of crushing student loan debt head-on. When I actually read what they were proposing, however, it didn't take long to realize what they were really up to:
"The move would help the private loan providers, too, by helping borrowers to pay off their loans when otherwise they might default, Lamm added. 'The [private loan providers] should like this plan because otherwise there is a bankruptcy bath waiting in the wings,' she said."
It seems like Richard Matasar and his crony ilk in the Access Group are in over their heads and need a bailout. With the recent creation of the Income Contingent Repayment plan (ICR), what we would essentially be doing by converting private loans into federal ones is socializing the risk of worthless TTT law degrees and putting on the backs of future American taxpayers millions of dollars in guarantees in worthless triple rated "TTT" junk bonds. I say no way.
What we really need:
1. Create transparency and standardization in the publication of law school post-graduate career statistics.
2. Reallow private student loans to be discharged under the federal bankruptcy code. If Access Group can't underwrite credit worthy loans, they should go out of business.
3. Disallow law school deans from serving as CEOs of private lending companies. Clear conflict of interest.
That is all.