Let's Talk About Debt

I've been meaning to write a post about this for a while, but thinking about my impending debt gives me a major case of the sads. Like death or what my scrambled eggs actually are, I find life is more enjoyable if I don't think about it too much.

But graduation approaches and the gig is up. And I face an important choice.

As some commenters have noted, my class (the class of 2012) will be the last Boalt class to enjoy a "pure" LRAP program. By pure, I mean not dependent on new federal programs like IBR and PSLF. So on the pure LRAP program, Boalt would help me make my loan payments for my law school debt, up to $100,000, so long as I do approved legal work and am within a certain income level. In ten years, my $100,000 of debt would be paid. If I left the program at any time (for a private sector job, presumably), I would then be on my own to make payments, but my debt would be smaller, because of all those LRAP payments already made.

The problem, of course, is that I won't have $100,000 of debt. I consider myself lucky because I don't have significant undergraduate debt. And I guess I'll be "lucky" to escape Boalt with a bill around $160,000... errrr make that $170,000. But for LRAP, that's not a pretty scenario.

While LRAP would make payments for $100,000 of my debt, I would need to make payments on the remaining $70,000 or so. The nice lady in financial aid handed me kleenex as she explained this to me. It works out to be about $800 a month.

I've done some math, and this is definitely possible. But it would probably only be possible if I left the bay area for a better cost of living, and if I were lucky enough to land a public sector job paying in the $40-$50,000 range.

The alternative option for me (and the only option for the classes of 2013 and beyond) is to use IBR or PSLF in combination with LRAP (if I'm doing approved legal work). This means I enroll in either IBR or PSLF, which both allow you to make very small monthly payments on your loans. If I'm doing public sector legal work, LRAP will make those tiny payments for me. Which means no monthly payments! Woo! But it also means my debt is rapidly getting bigger over time. And if I leave PSLF at any point, I will have to pay off a lot more debt than when I started. No bueno my friends.

I'm pretty committed to a career in the public sector, but no level of commitment can make me feel totally comfortable with eliminating any private sector work as an option for me in the next ten years. Not to mention the concern that IBR and PLSF could be eliminated in this spending-cuts-only political climate. Dean Edley told some concerned students that he thinks the elimination of the programs is unlikely. I'm sure he'll forgive me for being skeptical. Would we be grandfathered in? I have no idea. Do you?

None of this is to whine. I know so many of my classmates who have it worse. And I'm really grateful that there is something in place that makes it possible for me to pursue a public sector career. I chose this path. Financial cushion is something I knew I was giving up in exchange for doing the kind of work I find fulfilling. But the two options certainly don't leave me feeling at ease. In case you're interested, I'm leaning towards traditional LRAP (and if any graduates have wisdom to share, I will gladly take it).

Future Boalt students pursuing public sector work won't even have my daunting choice to make. They have to use the IBR/PLSF + LRAP option. That's something I hope incoming public sector students are aware of.

The Futurue of LRAP?

Dean Edl*y sent out this email earlier today:

Dear Friends,

I recently received a petition signed by several Boalt students concerning the state of Boalt’s Loan Repayment Assistance Program (or LRAP). Realizing how important LRAP is to the School and to many of you, I write to share some of my current thinking about LRAP in the context of the University’s budget turmoil.

First, let me offer some background. Approximately fifteen years ago, Boalt established LRAP to enable our graduates to pursue careers in public service by assisting them with loan repayment. As Boalt tuition increased with state budget cuts, funding for LRAP similarly increased, most notably in 2006 (my second year here) when it was substantially reformed. Under the original guidelines, only a relative handful of students participated in the program because the parameters were so conservative. This reflected the lower tuition, and the consequently modest typical debt loads of students but also the far smaller Boalt budget, of which tuition revenue is by far the largest component. Under this revised LRAP, graduates became eligible for up to 100% repayment assistance on as much as $100,000 of law school debt. For students working in qualifying public sector employment, the result could be a $0 out-of-pocket debt repayment for LRAP participants as Boalt absorbed the tab on the amortizing loans.

Although this revised program was one of the most generous in the country, two developments prompted a further modification of LRAP in 2009. The first was rising tuition rates across the country at both colleges and professional schools, including here at Boalt. With 1Ls arriving with already significant undergraduate debt-burdens and 3Ls leaving with even larger ones, it quickly became clear that even our commitment to repay $100,000 of law school debt may not be enough to assist Boalt graduates interested in pursuing public interest careers.

At the same time, however, the College Cost Reduction and Access Act of 2007 (CCRAA) created both the Income Based Repayment (IBR) program and the Public Service Loan Forgiveness (PSLF) program that provided a way to address this challenge in a fiscally sound fashion. Under these two programs, any graduate who enrolls in IBR for their federal loans will make minimum monthly payments based on their income. And for those who consolidate or have all of their federal loans with the Direct Loan Program and make 120 scheduled monthly payments while working for qualified public interest employers, their remaining loan balance will be forgiven by the federal government. Based in large part on Boalt student input in 2008, we revised LRAP to take advantage of these benefits: Graduates pursuing a career in public sector work could consolidate law school as well as college loans and elect IBR. Berkeley would then provide assistance with making all or a prorated amount of IBR payments for ten years, at which time the remaining debt balance would be forgiven.

In my judgment, the move to IBR seems undeniably a win-win for both Boalt and our students.[1] Graduates can now pursue a career in public interest work regardless of the size of their law school and college debt burdens. Meanwhile, Boalt benefits by making the most efficient use of scarce financial aid resources, freeing up more money for other important grants and fellowships. That so many of our competitors have since emulated the manner in which we have integrated LRAP and IBR/PSLF seems to confirm the wisdom of this strategy.

Notwithstanding these benefits, however, the student petition as well as research by the Financial Aid Committee this year have highlighted two areas in which this strategy merits further review to ensure that LRAP is the best that it can be. One relates to the cost students could incur if they leave public sector work prior to making their 120 payments under IBR; the other focuses on the chance, which in my political judgment is remote, of adverse changes to CCRAA by Congress.

For this reason, I wanted to let you know that we will be inviting BHSA to work with the Financial Aid Committee next year to undertake a substantive review of these issues and to investigate the different approaches Boalt might take to address them in a reasonable fashion. BHSA’s involvement is especially important because almost all LRAP resources necessarily come from tuition revenue, making the program one in which students cross-subsidize each other over time and across careers. At this point I have no strong view about what alternative approaches might look like. We don’t even know how much further our state funds will be cut in the next six months, much less beyond that.

But for those of you graduating and who worry about the issues raised in the petition, I assure you that absolutely nothing is more important to me, or the faculty as a whole, than the robustness of our Financial Aid programs. They shape the character of the student body, and express a core component of Berkeley Law’s mission. Therefore, the Financial Aid Committee and BHSA will have my focused attention on this matter as they analyze these issues next year. I can also assure you that if we adopt positive changes to LRAP, I will make sure they are retroactive for the class of 2011—the “Hardhats”.

Sincerely,

Christoph[*]r Edl[*]y, Jr.
The Honorable William H. Orrick, Jr. Distinguished Chair and Dean

[1] I can’t resist adding that in 1987, presidential candidate Michael Dukakis proposed a very similar program, designed by Gene Sperling and me. I was national issues director for the campaign, and Sperling was my junior staffer on economic policy. He’s now director of the White House National Economic Council. I’m a fundraiser. But I’m not bitter.

It seems like he provides some good context for why he is transitioning the program to be based on IBR. Admittedly I do not have the most complete knowledge of this issue, however. For example, I do not know what exactly the petition in question contained.

At any rate, I am sure opinions will be diverse on this issue! I look forward to seeing them in the comments.

Paranoia and Prognostications (About Fees)

Maybe it's because of last year's uproar over student fees, maybe it's because Dean Edley seems to be using the vaguest possible language short of "meeting... come if you want", but today's email from DE seriously creeped me out:

Subject: Town Hall with Dean Edley - 11/16/10, 12:45pm, Booth Auditorium

Dear students:

I write to invite you to attend a Student Town Hall. This will be an opportunity for the community to discuss the overall state of the law school as well as student fees. The meeting takes place next Tuesday during the lunch break.

Student Town Hall
Tuesday, November 16, 2010
12:45pm
Booth Auditorium

Christopher Edley, Jr.

By itself, the email seems mundane enough. But that's the problem: this time last year, students were just learning about larger-than-anticipated fee hikes... hikes to the tune of 22% (for residents), that took many by surprise and caused a great deal of frustration (although as a concession to Armen, it's true that information surrounding proposed hikes had been circulating for some time.) What followed was a week of student "strikes" (or were they boycotts?) and a hastily-planned Town Hall wherein Edley addressed a large group of fired-up law students, who came equipped with red and green signs that said things like "I agree" or "Are you kidding??"

Perhaps I'm being paranoid, but DE's email announcement of this year's Town Hall struck me as purposefully understated - the kind of half-assed due diligence that someone in the school administration can point to after a fee-bomb drops and say, "Hey, we invited you kids to the Town Hall. Remember?"

There's no question that fees will go up this year. But DE's vague email sparked my curiosity about just how big this year's fee hikes might be. On November 8, President Yudof issued an open letter to the campus community detailing a proposed systemwide fee increase of 8%. But the letter didn't mention professional fees... so after (very little) sleuthing, I dug up the 2011-12 professional fees budget proposal that the UC Regents will be voting on next week. Specifically:

Law (Berkeley – 12 percent increase in 2011-12).

Berkeley Law plans to use new professional degree fee funds to substantially expand its Loan Repayment Assistance Program (LRAP) offerings and a larger financial aid program, fund six new faculty, pay debt service on new construction and renovations to the law school complex, and expand public interest and public service career programs. Berkeley Law has recently overhauled its financial aid programs and provides “substantially greater assistance to students from low-income families…. [Berkeley Law] return[s] more of our tuition to students in the form of financial aid than any of our competitor institutions,” although student debt has risen in recent years. The program has seen “no statistically significant change in our minority enrollment since fees started to rise seriously in 2003-04” Enrollment of underrepresented minorities at Berkeley Law has been between 14 and 17 percent since 2005. Berkeley Law’s total proposed charges for 2011-12 are projected to be below the average charges at its public comparison programs.

So there you have it - the relevant details that DE should-have-maybe included in his email. If you're interested in discussing this proposal further, I recommend attending the Town Hall. Last year's was actually pretty fun. :)

Untangling the Tangled Web of LRAP and IBR

I made a comment in a thread a while back that included some information about federal loan forgiveness programs and LRAP. It got a few of us thinking that it might be worth an entire post, since this kind of analysis will likely factor into the career decisions many of you are making right now. The thrust of my comment below was basically that, given the array of loan repayment options at your disposal, your debt need not determine your career path.

Unfortunately, understanding that array of options is frustratingly difficult. I was fortunate as a 3L to have a friend on the LRAP committe, so I'll try to relate what I learned from her. Of course, this information is subject to the flaws in my brain and may be a little outdated, so the best thing to do would be to schedule an appointment with Sigrid Allen at Berkeley financial aid as soon as possible. She really knows her stuff when it comes to loan repayment, and she can give you a very clear analysis of your options.

With those caveats, here is what I know about the various programs. I have a tendency to overexplain things, but I think this stuff is complicated enough to warrant it:

INCOME BASED REPAYMENT ("IBR"): This is a program run by the federal government in which all federal student loan debt can be repaid proportionately to your income. The maximum payment is 15% of your income above the poverty line no matter what career you end up in. Unfortunately, if you make below a certain amount, your interest may eclipse your payments, meaning your debt will actually increase, even as you pay it off. (I believe the fancy economic term for this is "negative amortization." Gross.) That's why the federal government included provisions to completely wipe out the debt after a certain time.

WIPING OUT DEBT UNDER IBR: If you continue to pay off your debt at 15% of your income, after a certain amount of time, your remaining debt will be wiped out, even if it has negatively amortized (yuck. stop it.). That amount of time is 25 years for jobs in the private sector and 10 YEARS for jobs in the public sector. Determining whether a job is public or private is more complicated than you might think. These are the kinds of things you can discuss with Sigrid Allen.

I should emphasize, however, that IBR applies to ANY JOB in ANY CAREER. For example, if you really hated law school and decided to go be a teacher, you could theoretically get away with putting 15% of a teacher's salary toward your loans for ten years and then have the debt WIPED OUT. Pretty cool, right? But the legal nature of your job does play into LRAP.

LOAN REPAYMENT ASSISTANCE PROGRAM (LRAP): You all know what this is. It's probably one of the reasons you came to Berkeley. But you may not know how it all works. And given how often it changes, this is an area where my information may be outdated.

The first thing to note is that LRAP covers public interest jobs that are specifically law-related. Determining whether your job counts can be tricky and often involves lobbying, so ask around if you're not sure. Clerkships can count as public interest IF you go to a public interest job after clerking (under IBR, they count as public interest regardless). LRAP also can kick in for "low bono" jobs, where you may technically work in the private sector but the majority of your clients are low-income and traditionally underserved.

Under the current LRAP scheme, there are two possible paths:

1) TRADITIONAL LRAP: This is the old program where Berkeley pays some portion of your loans up to a certain cap as long as you work in a public interest or government job that somehow makes use of your law degree. I believe the cap was $100,000 when I was in school, but it may have gone up since then. What that means is that Berkeley will figure out your total loan payment and then cover the portion equal to satisfying $100,000 of the debt. For example (watch out, there are numbers and stuff), if your total debt was $200,000, your monthly payment was $1,000, and the cap was set at $100,000, Berkeley would pay $500 per month or one half of your total payment. Because $100,000 is half of $200,000. Get it?

Note, however, that LRAP is also income-based, so if your income is above $60,000 (or whatever the new level is), Berkeley will only pay some pro-rated portion of your loan payment UP TO THE CAP of $100,000. (I.e. instead of getting $500 per month, you would get like $350 per month and your income above $60K would be expected to cover the difference.)

The downside of traditional LRAP is the cap, which depending on how much debt you owe, could mean you are still paying a prohibitive amount of your income to loans. The upside is that you don't have to deal with negative amortization. Your monthly payment will make a steady dent in your loans, even if you do have to cover more than half of it yourself. Practically, this means you are more free to switch to the private sector, since your loans will not have been increasing like they might under the ten-year IBR plan. Make sense? So if you are the kind of person who will likely switch away from public interest somewhere between 5 and 10 years from graduating, you would likely be better off making payments through traditional LRAP.

Oh, the other plus here is that traditional LRAP can be applied to any kind of student loan, while IBR only works with loans from the federal government (although you can usually convert private loans into federal loans to take advantage of IBR). BUT, traditional LRAP does NOT cover undergraduate debt, while IBR (and the combined plan below) do. Confused yet? Read it again.

2) LRAP + IBR: Under this plan, LRAP works together with IBR. ("With our powers combined, we are Captain Payment! Captain Payment, he's our hero. Gonna reduce our debt down to zero! Earth, Wind, Water, Fire, Heart!" I apologize for everything that just happened.)

So basically, if you find a job that is both law-related and in the public interest, you can use IBR to knock your payments down to 15% of your income above the poverty line, and then LRAP will step in to pay that for you. Because 15% of your income will likely be so low, the debt cap will probably not be triggered and you will simply pay nothing for the full ten years, at which point IBR will wipe out your remaining debt, and you will have spent a full decade getting fat on government cheese.

The downside of this plan is that if you don't spend the full decade in public service, you may get hit hard with the negative amortization when you come out. In other words, if you leave the plan after less than ten years, you might come out with more debt than you started with. Avoiding this fate means either committing to the plan for a full decade or leaving after only a couple of years, because switching to the private sector makes less financial sense each year you stay on IBR while your debt rises. On the other hand, if you were leaving public service to pursue a cush private sector job, you would probably be able to handle the debt even if it had risen.

I should also note that the 10 years do NOT need to be consecutive, so that might help.

THE WEIRD WILD WORLD OF PROLONGUED UNEMPLOYMENT: And now we come to my personal track: that of the penniless Sitar player. First, I must admit that spending most of your time staring this job market in the face is pretty bleak. As you look into the abyss, the abyss looks into you. Etc. Etc. But all hope is not lost. If you can't find a job for a while, there are many options for delaying repayment on your loans, especially if they are federal loans. Again, this is a matter best discussed with Financial Aid, but suffice it to say that you can forbear or defer your loans for a long time if you are unemployed--potentially years. You can also find some crappy job to pay the bills and use IBR to reduce your payments to a manageable level while you look for something better. If all else fails, there's always People's Park.

I think that covers the basic layout. I hope you found it helpful. Feel free to supplement or correct as needed in the comments.

Help is Nigh on the Student Loan Front

Do I understand all of this? No, to be honest, I don't.

But undoubtedly many students will find the article, which features various boalties in its summary of changes in law school loan forgiveness and repayment programs, helpful.

Speaking of Health Insurance . . .

. . . people listen. Full email from DE here, and in the comments.

There is to much in the linked article to summarize, so you'll have to read it for yourself, although I can't resist pointing out (Armen, are you listening?) that the title could be better. Aside from that and the reference to "the grim budget climate" on page three, I'm very pleased; as a whole the document is actually a pretty good reference guide to financial resources at Boalt -- it has, for example, some information about changes to LRAP that were news to me. So, thank you Boalt for sending this along.

3Ls Shifting Their Sleepless Nights to 1Ls?

A gem exists in the ATL comments to the Morgan Lewis layoff post.

In order to avoid revoking 3L offers, ML decided to defer their ENTIRE incoming class to the following year.

But what of the 2L summers? ML sent each of them a "reassuring" email today as well. 2Ls who receive an offer at the end of the summer will not be allowed to start until the fall of 2011.

So I ask: what of the current 1Ls? Apparently ML isn't going to hire any summers during OCIP in the fall (and will not have a summer class in 2010)?

Interesting times we live in (and by "interesting" I mean "shitty")...

Live Blogging D.E.'s Town Hall

There is no reason for me to be the only person doing this, especially if anyone else was thinking of doing something similar. But how to make it easy for others to play along from home, or the office, or the other side of Booth Auditorium? Here is what I came up with:

I'll transcribe the questions and answers in the comments section, in real time. That way the forum will be wide open for anyone to contribute. And this (60 minuets early) shout out will serve as a heads up. That way anyone can tune in (or tune out) as they see fit.

Does that work? Hope so.

See you at 12:45.

Does LRAP Need More Funding?

More than 40 Boalt Hall Student Groups have signed on to a letter encouraging the Dean to "take substantive and expeditious action in improving LRAP to keep pace with the rapidly increasing tuition."

I have copied the letter into the comments (rather than post here) due to its length.

Initial reactions:

1) If the school's going to represent to its public interest students that loans will not be a future problem, they should honor this promise.

2) I'm not in-the-know, but how does this dove tail with the Federal Government's new loan forgiveness program?

and 

3) Those who work at firms this summer lose their grants starting next year. 

To many, that's a $9,000 hit each year it would apply.  Yes, I know that $9,000 is less than the $30,000 they make while working for a firm.  

I assume this money is being re-distributed to those who work for public interest. Given that there are far more students who work for firms their 2L summers, that's a lot of extra money being dumped on a relatively small portion of the student body, thus reducing their debt burden before they even graduate. 

Again, I'm not in-the-know, but is there a problem here in the first place?

Note: These comments apply to the suggestion of raising the tuition limit of $90,000 - not on the proposal to expand to additional people who are currently not covered by LRAP (other than maybe to ask about how much the federal government plan would apply to these people as I stated above).

1L Town Hall, Part I

The 1L Town Hall is coming up (sort of -- March 11) and suggestions are being solicited for topics to be explicitly addressed by DE. 

Three things I am burning to know:

1. Boalt's bar passage rate has been declining, with a substantial drop last July. How is the UC Berkeley School of Law responding?
2. To what extent will the imminent Boalt construction affect my quality of life as a student here? E.g., will jackhammers, dump trucks, and dudes with suspenders and tin lunch-boxes be the new backdrop for my study time?
3. Pleaded or pled?
   

What do you wish you had asked as a 1L?

Quick Notes From Dean Edley 3L Town Hall

- Edley and Shelanski were unwilling to talk about the drop in bar passage rates, claiming it is due to "very unfortunate circumstances," and that they will tell the student body when they find out the reasons.

- Edley & Shelanski: Class registration times are NOT based on your student ID number despite anecdotal evidence to the opposite.

- Ortiz and BarBri have been passing the buck back and forth over morning BarBri classes at Boalt. Stay tuned.

- Shelanski: Professors have absolute discretion over whether or not they post their teaching evaluations. Take home message: if someone doesn't have his or her evals posted, assume that professor sucks and received terrible evaluations.

---
Please add your observations and thoughts in the comments.

Did you get your $1,000 worth this week?

The Regents are raising fees again. Story here. To people currently applying for law school, I feel for you.

I wonder what the total cost of schooling would become at this point. $40K for tuition, another thousand a month for living expenses (if you're a cheapskate) and we're over $50,000 a year. Now, let's talk interest rates.

Yikes. I hope people think very carefully about whether they really want to be lawyers before incurring the costs of law school. I also worry about what the overwhelming cost of school will have on the student body. Imagine this: you take four class a semester, at about $5,000 a class. Will the professors recognize how much it costs you to sit and listen to them? Will they notice enough to improve their teaching or preparation? I hope so.

Anyway, I'm trying to cut back on posting owing to no longer being a student, but I thought folks might want to comment on this.

Let's LRAP it up Already

Honestly, if I hear one more announcement about the LRAP townhall, I'm going to blow a fuse. Enough already. If one of the most important issues to be tackled by the school is not enough to bring us out, lame e-mails and even lamer class anouncements will certainly not do it.

Multiple Visions

While listening to crappy 70s music, I wondered what other Boalties see in the future of this school (and the University). The Dean has made his plans known (here), but now I'm curious what the students think of the school's future. Feel free to react to Edley's plans but I'm more interested in gripes and praises that school should deal with or emphasize.

Tape Delayedley

Third liveblogging of talk by Dean Edley (see first and second). If you're going to comment be fairly warned that they may appear in the Dean's next mass e-mail.

-- 3:05 Start: No wireless in class, hence the title and hence why I’m “liveblogging” on MS Word. Regents to have a meeting a week from today, hence the talk. They are going to vote on fees, including pro student fees. What’s on their agenda and ours? More staff than students. Is it tea time?

-- Eric Tallizzle is in the hizzouse! Late but loud entry. DE will have slides of his talk on the law school intranet. I’m thinking: We have an intranet when I’m fricken “liveblogging” his talk on Word?

-- 3:10 In US News rankings we get punished for spending per student. Why? (1) Tuition is less per student and allows less to spend (2) Endowment is smaller, and (3) annual cash flow and alumni giving is less. These three are not enough to overcome the state funding. In Leiter’s rankings we are 5.

-- What is the mission? Invest in four pillars: Students, Faculty, Research, Facilities. The state will not be doing more than we are currently doing. The people who think the state will wake up in a few years and spend more money on lawyers are on drugs. Basically he needs $500 million or $20 million a year. If we had this number, our endowment would be as large as our competitors (not richest but still). Another way of looking at it is that this is the cost of education in the 21^st Century. Capital campaign will go to pay for a large part of this from alumni. Main campus and state will help pay for expansion of faculty. And lastly, student fees will pay also. Largest share of funds will go to student services and fin aid. $50 mil for new building is underestimate closer to $70, (which means closer to $90). We can’t expand faculty without a new building.

-- This also relates to our curriculum. Clinical programs. East Bay CLC, DP Clinic, Int’t Hum Rights, etc.

-- Burden sharing. Currently we charge in-state students 2/3 of market price. We used to charge 1/3. In mid-90s and early 2000s our fees stayed constant while competitors slowly increased and added resources. The problem is that when the fees were increased the pro fees went to the central campus for other purposes and did not stay at Boalt. So there was an increase in price without a corresponding investment in the business product, not a brilliant business strategy though some say it’s working for Microsoft.

-- DE Philosophy:

1. Any future PDF increases are for Boalt and Boalt only. No extra Boalt money to fund Celtic Poetry (how about Celtic law and ec?)

2. Increases come with added fin aid sufficient to ensure that Boalt stays ahead of others in our generosity.

3. Increase our fees so that in Year 5 our total fees are equal to Michigan’s (i.e., market - $5k).

-- Where does money go? Loan repayment and fellowship expansion, faculty expansion (some fac will be paid in full or in part with student fees.), Clinical education, Classroom renovation (including library improvements [note this has to be a joke given the e-mails from library staff]).

-- Proposal – currently we pay about $24k. Next year, UCOP will propose over a $1k increase which is less than the 6% increase that our competitors follow. This will widen the gap with our competitors not reduce it. DE proposes we close the gap over 5 years so that in FY 2011 we are at Michigan or Market minus $5k, whichever is less. Alternatively we can do it by cohorts, i.e. once you are admitted, you are guaranteed that your fees will only increase at 6.5% a year to keep up with market. The next year’s class will start from a higher base. By Fall 08, the 1Ls will pay the Michigan level. By fall 11, all three classes will be at Michigan. We’ve lost $80 million by not following this plan 10 years ago. If we follow UCOP instead of DE we will lose $25 million in the next 5 years.

-- 3:32 Some strangeness in the current Fin Aid system.

1. We give grants to larger numbers of students than our competitors.

2. We don’t consider parents resources in calculating need.

3. Our system effectively ignores summer income.

4. Most importantly, our tuition has risen sharply. A revamp of the policy is required for our aid.

-- Potential Improvements (these should come to a faculty decision by winter, see slide)

1. Improve summer fellowship. The increase in this money is no secret of DE, the PDF revenue supported this.

2. LRAP – Currently if loan amount is up to $55K and if your income is less than $40K, the school pays all of your debt. If debt higher, then you are responsible for the difference. What happens if you make more than $40K? There is an implicit tax of 50% meaning every dollar over $40k, the expectation is that half will go to loan repayment and LRAP will cover the rest. So if you borrowed the max of $55 and earned $45, then LRAP will pay $52.5. After $52. the rate goes up to 100%.

CHANGES. Raise loan limit to $85k. But this makes the notch above $52K income tremendous. But by eliminating the 100% contribution mark, then it creates a smooth transition. Another change might be to tax at 40% for income above 40k. That’s a policy and budget choice. Other changes: cover int’l positions, consider definition of legal job (journalist?) etc.

-- 3:45 What we have done so far?

1. Wifi (MY ASS!!!)

2. 5 faculty positions, etc.

-- What we can do to help

1. Explain other UCB students why its unfair to tax law students.

2. Explain that UCB and Haas students were hit hard by fee increases to shelter other UCB students and faculty.

3. Explain to University Admins that PDF principles (for improvements at Boalt) are vital.

4. Explain to everyone that access and excellence go hand-in-hand.

5. Help recruit next wave of Boalt faculty.

-- 3:47 Q and A.

-- Q: If your plan calls for matching Michigan, what about out of state fee?
DE: The out of state money never touches Boalt, it goes straight to UCOP. His preferred solution is to ask UCOP to reduce $7500 from out of state fee. This is a non-solution. More likely, it becomes part of our fin aid buyout package.

-- Q2 from same person: LRAP covers someone with more income and less loans, but you need loans because you’re broke. This doesn’t make sense.
DE: The changes are built on redesigned Fin Aid package.

-- Q: You had a bullet on funds for entering public interest students who are committed to a career in public interest.
DE: The idea is to have scholarships to upfront reduce their fees to entice them to come rather then saying LRAP will kick in later. But if they fall in love with IP and join Wilson Sonsini, then the funds will convert to a loan. Economically this is no different than LRAP.

-- Q (no such thing as dumb question just dumb people asking questions) So we don’t just change LRAP rules but we need funds too right? But what about not changing in time to meet increased fees?
DE: Not an issue. Dumb question. (Real Answer: Enough PDF increase next year can fund the cash flow needed for generous LRAP for people graduating this year. In other words, we can’t help those who are already out.

-- Q2 from this guy (he’s really annoying, and no one knows what the fuck he said but Merced was mentioned).
DE: As of now we have green light on the principle that future PDF increases will go to Boalt.

-- Q: Two ideas both of which may be half baked (DE: But they add up). Why don’t we do away with need based grants? If we are going to take high paying jobs, why should the school subsidize my education? Why not just invest in public interest up front?
DE: Competitors. On the other hand our current program is designed so that a lot of current students get a grant that bears no relation to actual need. This was based on the model that it ought to cost as close to free as possible. So Fin Aid theory was to buy down everyone’s legal fees. This theory does not make sense for 2008.

-- Q2 from same: Enforcing all these ideas. I don’t trust that you can keep state from picking our pockets.
DE: Full baked idea. There’s a guy in Las Vegas named Jim Rogers who is not a Boalt Alumn. He is the premier American philanthropist. He graduated from U Arizona. Went into business with Louis Weener (Boalt alumn). These two got filthy rich. Weener went to Rogers and said we need give some of our money away, we can’t take it with us when we die. A little while later Weener sells his half of the business for $1 on condition that Jim gives it away. Jim gives away money to U Arizona, and money to UNLV law school. He has committed $1 million to Boalt. He gave the money to Arizona with exactly SUCH a condition. The state tried to raise fees but then realized about the condition and backed off.

-- Q: LRAP, thanks for working on this. I didn’t quite get Abe’s question, sorry Abe if you’re reading this, but it seemed like you had a good idea for public interest funds.
DE: Yes.

-- Q: Have you thought about the difference in the cost of living in the Bay Area versus Ann Arbor and Charlottesville?
DE: Sugarman should think about this. This is why we are not going to market. We haven’t thought about this. Prof on Fin Aid Comm whose name I did not catch: We need data that we don’t have for some of these decisions.

-- Prof asks us: What kind of jobs should LRAP cover? Currently covers government lawyers and 503(c)(3) and 503(c)(4).
A: We shouldn’t cover military jobs because of don’t ask don’t tell. [This is the most retarded comment I have ever heard.]
A2: We shoudl cover all low paying jobs. [Get your JD and bus tables].

DE: There should be some link to legal education.
A3: Should we cover Int’l jobs?

-- Q: Intrigued by having LRAP instead of front end fellowship. That way people who go to Covington and then have to pay the school back for the fellowship aren’t painfully reminded that they used to be idealists.

END.

My thoughts: Again, much like the second town hall, this one did not add much that was new. Worth noting is DE's plan to get our fees in line with other comparable elite public law schools. In all honesty, since the talk, I have not had the occasion to really think about this all that much, but it is something that the Boalt Community should consider very carefully. My gut reaction is that I'm all for all that DE does, but this one seems like something that should not get my automatic knee-jerk support.

Nothing In Life Is Free

Boalt Hall, which fancies itself as the premier public interest law school in the country, finally has "guaranteed" funding for summer public interest fellowships. "Guaranteed" gets the air quotes treatment, of course, because the funding has more conditions and exceptions attached than the average Senate bill. As noted in the blog in the past, Boalt's notion of public service does not apparently extend to judicial externs, who are not eligible for fellowship money. As we got the final terms and conditions for the fellowship by email today, it's clear that the guaranteed money is actually given out on a much more restrictive basis than the administration would have you believe in its publicity materials. That is not to say that the public interest fellowship program is a bad thing -- it's a very welcome development -- but rather that the program is being implemented in such a way as to limit the number of people funded, not to open it up to the maximum number of Boalt students who are working even in unpaid public service jobs this summer.

Since many reading this blog are law students, let's get down to a little textual analysis, from the program announcement sent to students (available here, Calnet ID required). My rhetorical questions and comments in italics. Responses from the announcement in quotes.

1) Summer funding for public interest jobs already exists in a limited way at Berkeley, why is Boalt introducing a broader public interest funding program?
"If more students experience this part of the profession, we anticipate that more will pursue a public interest/public service career track."

2) Who is eligible for the funding?
"The Boalt Public Interest/Public Service Summer Fellowship Program offers a one summer Fellowship to every one of our continuing JD students."

3) Everyone? But so many Boalties (over 70%) are just going to go on to get one of those lucrative firm jobs. Why so generous?
"Of course, many Boalt students want to go into private practice after graduation, and a large share of those students will take summer work with private firms. Nonetheless, those who now think themselves headed to private practice are invited to use the Fellowship to give a summer of public interest/public service a try."

3) No, really, who is eligible for the funding?
"The main requirement for obtaining a Fellowship is to show a commitment to public interest/public service work during the school year. This may be demonstrated through participation in one or more of the many Boalt-related public interest/public service opportunities or, at least for this year, in other ways that are individually arranged by Boalt students."

4) But wait, I thought the fellowship "offers one summer Fellowship to every one of our continuing J.D. students"? Now you say the program is available only to students who "show a commitment to public interest/public service work during the school year." Plainly, this isn't necessarily every Boalt student. Moreover, this doesn't seem terribly in keeping with the stated aim of the program, which is to encourage "those who now think themselves headed to private practice... to use the Fellowship to give a summer of public interest/public service a try." It seems, by restricting the funding to those who demonstrate a long-term commitment to public service, you're really only offering "guaranteed" funding to those who are already heading, or want to head, down that path. Again, this isn't necessarily a bad policy, but maybe you should be more upfront about this, non?
(Note: the following was never said by Boalt administration, but I imagine it's their response.) Are you daft? How could you think that summer funding would come with absolutely no conditions attached?

5) Because I only read the first line of most administrative emails and press releases:
"Under an ambitious new program, Boalt Hall is offering $4,000 fellowships to every continuing law student at the school who wants to pursue public interest or public service work this summer." (Emphasis added)

6) Well, that teaches me a lesson in reading the fine print. Any further fine print I should be aware of?
(NB: again, only the indented text actually said by the Boalt administration)
Why yes, a whole host of it, in fact. For the purposes of summer public interest fellowships, you or your job must meet the following qualification requirements:

a) the student must complete an application in a timely manner that includes a statement describing the proposed summer work/project
b) the proposed work/project must be law-related
c) the proposed work/project must be directly supervised by an attorney who must be identified
d) the work must be for at least 10 weeks full time
e) the work must be for a government agency (but not for a judge or the equivalent of a judicial externship), or for a non-profit agency (either a 501c(3) or 501c (4) organization), or, by petition, non-profit legal organizations based in other countries
f) the work must be unpaid, except in the case of work-study students (noted below)
g) the student must agree to file a brief report of the project at the end of the summer, which report is certified by the supervising attorney
h) the student must demonstrate public interest/public service involvement at Boalt. This requirement may be satisfied (1) by being certified as having complied with the membership requirements of the Berkeley Law Foundation (BLF) that would qualify the student to compete for a BLF summer fellowship, or (2) by having put in at least 25 hours of volunteer pro bono/public interest service (not including training hours) through a Boalt-affiliated group such as Berkeley Law Student Community Outreach through EBCLC, the Worker's Rights Clinic, the California Asylum Representation Clinic, the Boalt Police Review Advocates, the Boalt Environmental Law Society, the Youth and Education Law Society, and so on (as certified by a supervisor of such a program), or (3) by petition, having put in (or having arranged to put in) 25 hours of other pro-bono/public interest/public service work (beyond training hours). For 2005, this public interest/public service work need not be completed before the Fellowship application is submitted. For 2005, any student seeking to meet this requirement by petition should file the petition with the Dean of Students as soon as possible and no later than March 1. For this year, we will be especially flexible in approving petitions.

Ok, cool. I think I got it now. You really only get fellowship money if you work on law-related stuff (whoever arbitrarily makes that decision gets a prize), if you work for a particular kind of organization (sorry all you folks doing unpaid pro-bono work in the private sector!), if you work for 10 weeks (what if you split your summer between two unpaid jobs, one eligible for funding, one not?) and if you demonstrate a commitment to public service during the course of the school year (for those of you who do other things during the school year, but maybe were interested in public sector work for personal growth or for whatever reason during the summer, too bad). An expanded, inclusive fellowship plan indeed.

Fellowship of the what exactly?

5 second summary:

Boalt is now guaranteeing funding for at least one summer of work in the public interest/service area. Excluding judicial externships.

In the words of one of my wiser classmates, "Why the f*** should it matter that you're working for the SEC or a judge?"

Adzhemyan, 1L, concurring.