Sunday, October 25, 2015

Because That’s Where the Money Is…

Willie Sutton, the bank robber, would have been lost to history if not for a single quip.  When asked why he robbed banks, he responded “that’s where the money is.”  His misunderstanding of the question got at a larger truth.

I was reminded of Sutton’s line in reading the New York Times piece this weekend advocating the application of “gainful employment” rules to law schools.  The idea is to get a handle on student loan debt where it’s greatest.  Given the low rates of full-time legal employment among recent law school grads, it’s unsurprising that default rates are higher than they used to be.  And given the rate of increase in tuition, those underemployed lawyers are coming out with more debt than they used to. I’ve written before about applying it first to graduate schools before moving down the ranks; law school seems as good a place as any to start.

The beauty of choosing law schools as the place to start is that law schools are unabashedly vocational.  They exist to train lawyers.  To the extent that they fail to train lawyers, or the lawyers they train can’t find work, it’s fair to ask why the schools continue to exist.  

I wouldn’t stop with law schools, either; medical and graduate schools strike me as subject to the same logic.  If people are unable to parlay their years of very expensive training into salaries high enough to repay their loans, I think it’s fair to raise some questions.

The paradox, of course, is that there’s typically an inverse relationship between student debt levels and the likelihood of default: the less they owe, they likelier they are to default.  That’s largely a function of dropouts, though it also reflects the lower levels of family wealth among students who attend community colleges.  The presence or absence of “the bank of Mom and Dad” makes a meaningful difference in the ability to avoid default, and community college students typically have less access to that than do students who attend more expensive places.  Extrapolating from that to a measure of institutional performance amounts to punishing those who serve risky populations.

Of course, in my perfect world, the idea of “performance based funding” wouldn’t only apply to public services.  It would be applied also to, say, regressive tax cuts, or wars of choice.  Fair is fair. But we aren’t there yet.  

If we want to reduce the exploitation of naive strivers, then yes, let’s tackle abuses in graduate education.  They’re real, they’re hardly news, and they’re expensive.  If we want to reduce defaults among folks with smaller balances, let’s transfer some of that money to community colleges to help improve graduation rates, and maybe even to make those first sixty credits free.  The bang for the buck will leave our current system in the dust.  

Or we can pretend that “where the money is” now makes sense.  How’s that working out?