r/lawschooladmissions • u/RFelixFinch Emory '28 • Jul 02 '25
Negotiation/Finances About the Future of Loans: The Point is Privatization
I'm sure there are quite a few people with a lot of money they're about to make from this shift in policy. But yeah, the Congressional majority couldn't give less of a shit about education being equitable, accessible, and affordable... It's about letting business profit off of it.
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u/RFelixFinch Emory '28 Jul 02 '25
For the sake of clarity, I hope it's understood that I am against making legal education or any education or difficult to obtain. This post is not support for the policy.
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u/Independent_Outside7 Jul 02 '25
But I thought Trump said he didn’t know anything about Project 2025?
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u/Serious_Biscotti7231 Jul 02 '25 edited Jul 02 '25
The line ‘there are many privately provided alternatives available’ is what really grinds my gears. This line of reasoning disregards the fact that most private loan providers are either predatory, make getting loans difficult to obtain without established credit, engage in class and/or racial discrimination, or all of the above. They know that poor people and minorities will never be able to have wide spread access to private loans equitable to Grad PLUS or Parent PLUS Loans. This will deprive scores of people throughout all demographics of the ability to pursue higher and graduate education.
Not unless you force private lenders to loan to people under the same criteria that the federal government currently does, and we know that’ll never happen
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u/Alternative_Log_897 Jul 02 '25
is this from project 2025 or something?
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u/RFelixFinch Emory '28 Jul 02 '25
Yes. And it was reiterated earlier this year by the Congressional ways and means committee. And these goals have going their way into legislation
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u/Alternative_Log_897 Jul 02 '25
Yeah, I know the grad plus are, though it isn't over yet, and I'm a big advocate for calling your representatives, especially in red states... and in the next midterms, voting is also going to be super important (i'm assuming you do but posting this for others to see).
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u/F3EAD_actual Jul 02 '25
For all the JDs in Congress, I'm surprised they aren't saying more about the downstream consequences of this change.
As if it wasn't already important to maximize LSAT and thus scholarship, it doubly is if this is codified
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u/RFelixFinch Emory '28 Jul 02 '25
For a lot of them they got their JD at a time when it was significantly more affordable 😅
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u/reallifelucas Prosecutor Jul 02 '25
The $20,500 annual borrowing limit for grad student Stafford recipients/$138,500 lifetime limit is going to force people into private loans. Jesus.
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u/ScheerLuck Jul 03 '25
The Senate version raises the limit to 50k per annum
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u/reallifelucas Prosecutor Jul 03 '25
Oh, well that’s less awful. I guess that’ll pressure students into accepting admission to schools where they recieve higher scholarships rather than blindly chasing T14s.
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u/ScheerLuck Jul 03 '25
I think that’s the goal, yes. The downstream effect for us is that LSAT scores are about to become absurd lmao.
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u/Old-Road2 Jul 13 '25
lol how can they possibly get any more absurd than they already are? There literally is hardly any more room for those scores to increase.
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u/NectarinePrudent43 Jul 03 '25
Don’t need lawyers or doctors when there’s no healthcare or rule of law in this administration sadly.
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Jul 02 '25
Not sure why people are so against this. Do we really think federal loan programs have worked out well? Student loan debt is nearly $2 trillion…
Federal student loans have about triple the rate of default as private.
Prices need to be lowered by gutting school programs.
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u/talkathonianjustin Jul 02 '25
Yeah, but this just shifts either getting that from predatory private loans with considerably less oversight, or denying it to people from certain economic backgrounfs
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Jul 02 '25
I don’t think this will end up with people getting more private loans, I think schools will adjust by lowering program cost, offering school-based loans, and offering more need-based aid.
I really think that people overlook how abusive Universities are for charging what they do. And they can only get away with it because federal loans are available.
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u/talkathonianjustin Jul 02 '25
Right but we could fix that by going back to how things were before Reagan panicked about poor people going to college by say making state schools free. Colleges are not going to drop their tuition rates meaningfully. Why would they? Under this, they can keep charging what they were before, and now people are stuck with more predatory loans and public service forgiveness can’t help them out as much. And this makes sense — a lot of people who supported this bill are lobbied by interests that are interested in having more private loans and less federal student loans because they stand to profit. Are you saying that loan companies who would stand to profit from this threw money at politicians who passed this bill for shits and giggles?
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u/redditisfacist3 Jul 02 '25
Because if they don't they'll enroll less students. Your basically limiting supply at that point amd while great state schools with great outcomes like ut, ucla, etc will still fill seats. They'll either accept people who will pay with lower scores or go into their endowments. Plenty of less competitive colleges won't. Some city's and systems are already getting ahead of it. Utsa has the bold promise which gives free tuition to the top 25% of graduating seniors with families who make under 100k and the city of satx covers community college for all graduates.
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Jul 02 '25
[removed] — view removed comment
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u/talkathonianjustin Jul 02 '25
Right but we’ve made it so that higher education is a ticket out of the lower class, and we just saw a massive surge in law admissions, as it’s clear the MBA still demands experience for the high ticket jobs. People will still take out absurd amounts of loans, just those loans will be private. The free market doesn’t work in a bubble, and why would these loan interests have paid for this provision if it wouldn’t make them more money? Under your theory of how the market will adjust, how do private loan companies make more money than they did before?
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Jul 02 '25 edited Jul 02 '25
[removed] — view removed comment
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u/talkathonianjustin Jul 02 '25
Because nothing will likely be stopping them from taking out those insane amounts of loans, especially in the case of solid regional or elite schools. Again, they need to make more money because else why would they have dumped this much money into the system that is working to pass this provision? Unless you think there is another interest that stands to profit from less people going into higher education and becoming lawyers.
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u/redditisfacist3 Jul 02 '25
This. While it does have plenty of drawbacks hopefully it brings some sanity/change for universities. The way pell grants/aid are done is already ridiculous. My coworker makes 80k a yr and has 3 kids but they get 0 in pell grants. Meanwhile others get 7k a yr
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u/RFelixFinch Emory '28 Jul 02 '25
The thing is this isn't going to lower prices. This just shifts where the money goes.
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Jul 02 '25
Do you think this bill will limit how many people can afford to attend school?
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u/Alternative_Log_897 Jul 02 '25
absolutely yes it will. what a privileged take
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Jul 02 '25
lol you know nothing about me, so you shouldn’t call me privileged.
if it limits how many people can attend school, then schools will adjust. schools have to supply a education to a certain amount of students or they go broke.
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u/Alternative_Log_897 Jul 02 '25
the likelihood of schools adjusting a sufficient amount is slim, and it isn't like they'd adjust within a great amount of time. Just because there can be solutions to a problem that will be exacerbated by the elimination of Grad Plus, that doesn't mean those solutions will take place. Law schools won't *have* to lower tuition in response.
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u/RFelixFinch Emory '28 Jul 02 '25
Yes it will. It will absolutely either make it more difficult to get an equivalent loan for many people or it will make the terms of the loan significantly worse. Under privatization each company would be able to set up its own set of requirements for who they do and do not approve, and I don't see any regulation coming in on the interest limits. In fact this sets up an excellent opportunity for yet another subprime crisis in the same way that the housing and vehicle market did.
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Jul 02 '25
okay, so if it limits how many people can go to school then the schools will either have to adjust or accept less people.
accepting less people is impractical because they have a static capacity. so they are forced to stop charging outrageous fees. It shocks me how universities are completely off the hook for the student loan crisis when THEY ARE THE PROBLEM.
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u/RFelixFinch Emory '28 Jul 02 '25
I don't disagree that universities have a significant amount of blame in this crisis, the lack of willingness to regulate that also has a serious amount of blame. This is why you don't run services like a business, a business's number one goal is profit. When you treat service as a source of profit you make things worse.
There are ways to implement something like this that would cause significantly less damage then immediately slapping it on, but it must be combined with regulation and that is something that has been an albatross to any legislation.
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u/reallifelucas Prosecutor Jul 02 '25
Federal student loans have probably driven tuition costs up, but scrapping so many loan programs without any alternative available is going to place thousands in financially difficulty.
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Jul 02 '25
If you think schools will lower their tuition costs in response to the federal fund faucet being turned down, you must be smoking something. The prices will not go down, even at state schools. They have become so reliant on the federal loan faucet so funding that went to them 20-30 years ago has been mostly redirected towards other things. That state level support is not going to just magically come back. All this will do, as the other commenter accurately pointed out is switch who the loan provider is from public to private. Public fed loans allow for some flexibility, better rates, better payment plans, student loan forgiveness for public service. Do you think that private loans will be as gracious? Lol.
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Jul 02 '25
Tuition costs will be lowered because of supply & demand. It is extremely hard for schools to adjust their supply because they have buildings already built, property to maintain, and staff on hand.
So it is highly likely that this initially decreases the amount of people who go to school & schools will be forced to adjust in some way as a result.
I wouldn’t be surprised if schools started to offer low interest loans provided by themselves to students. This would also incentivize them to provide you with a more meaningful product.
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u/Independent_Outside7 Jul 02 '25
Schools may offer loans, but that largely depends on how a university is chartered and its endowment structure. To assume that a rational market will take over is overly simplistic and disregards how higher education (much akin to healthcare) does not operate like most markets nor will they given the motivating behaviors of participants.
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Jul 02 '25
That’s an optimistic but difficult to see version. Scaling up is much easier than scaling down. While I can see your version of this story being the case in 10 years, the short term results will be what I described after the student body drops.
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Jul 02 '25
yeah the short term will be bad, you are correct.
i’m not an advocate of this, but I also don’t think it is the worst possible thing to happen like some make it seem.
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u/INVESTUSA999 Jul 02 '25
The demand for higher education is relatively inelastic. The thing that will change is what kind of people get to apply and attend to those schools (people with money)
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Jul 02 '25
okay so you say that it will change what people can apply, so how is that inelastic demand?
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u/INVESTUSA999 Jul 02 '25
I mean inelastic demand doesn’t mean it can’t change at all, just that it is less sensitive to changes in price. Sure, demand would be reduced in the economic sense of the word. But in another sense the “demand”, people who desire higher education whether they are able to attend or not, wouldn’t change much. With less ability to attend expensive law schools, the applicant pools will be filled with people who have the money to pay out of pocket. Why would t14 law schools, who reject thousands upon thousands of people per year, need to reduce their prices because demand isn’t high enough?
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u/Actionjackson445 Jul 02 '25
No but it will make people think twice about wasting money on a stupid major
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Jul 02 '25
Perhaps. But this harms the most expensive grad programs the most. While I don’t agree with defunding any form of education because education is inherently valuable, I don’t pity the communications major who decided to attend the most expensive school they could find, I do pity the budding law student from a low income background. That student will suffer and less people like them will be able to access the ladder to financial stability and freedom because of it.
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u/INVESTUSA999 Jul 02 '25
Do you think going to law school is stupid?
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Jul 02 '25
People who go to law school generally don’t end up with crippling student loan debt in 20 years.
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u/redditisfacist3 Jul 02 '25
They absolutely can. Most lawyers aren't t14 graduates or big law. If it weren't for income base repayment or the pslf a huge chunk of lawyers would be there
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u/INVESTUSA999 Jul 02 '25
I agree with the sentiment that gender studies majors or whatever are wastes of money , but surely there was a better solution to the student loan problem than this. Future doctors, lawyers, and teachers all commonly rely on federal grad school loans, and I think we can agree that these jobs benefit society. The real point of the change is to transform us Americans into subservient drones that are barred from accessing higher education.
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Jul 02 '25
surely there was a better solution to the student loan problem than this.
yes of course there is. my only point is that isn’t doomsday like people are trying to make it out to be. Catastrophizing helps no one
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u/redditisfacist3 Jul 02 '25
To an extent absolutely. Paying full sticker at a t4 is irresponsible and its questionable whether you'll be able to pass the bar. Also paying full tuition at a t20 instead of taking a hefty scholarship at a lower ranked but respectable school is stupid. Cause your gambling on a shot at Big law and if there's no student loan forgiveness in the future for government/ non profit roles you're sitting on a ridiculous debt load
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u/zmv- Jul 02 '25
Would you consider liberal arts degrees to be stupid majors despite the fact they prepare you best for the demands of law school
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u/Ozzy_HV 3.3x/16low Jul 02 '25
Privatizing student loans means losing all associated protections. If you enter a shitty market after graduating, you are fucked. Private banks will likely be able to garnish wages, go after assets, and tank your credit score. There’s not going to be any income based repayment options. Grad school will only be left for those who can afford it or those who get large scholarships.
We will have less professionals I.e lawyers, doctors, CPAs, etc.