Step back, New York Times. Law students and attorneys no longer need you to tell the world that law school is a losing game. No, the hedge fund managers have entered the discussion, and they've got numbers on their side.
One such manager, Daniel Ades, has gone so far as to call law school a "sucker's bet"--something that has low returns for both students and investors.
He suggests that burgeoning lawyers head to technical school instead.
Ades' entire theory is based on his experience in the $242 billion bond market backed by student loans. Investors have always expected a 25%-30% loan default rate, according to the Wall Street Journal. But for recent grads, it's about 30%-40%.
Law schools in particular fill up during times of recession, leading to an excess supply of lawyers. Lawyers thus have a much more difficult time finding work than other professionals and are more likely to default on their student loans.
Or so say the investors who spoke with the Journal.
The situation has caused investors to step back from all student loans, but especially those given to 2010 and 2011 graduates. Daniel Ades' explanation? There's just no way for investors to "quantify the risk."
And of course, this has impacted everyone who is jobless with student loans, or who will be soon. A lack of investment means higher student loan interest rates all around. Joy.
None of the above should be that surprising to anyone in the legal profession. In fact, it's the same stuff that's been repeated for the last few years. But it just seems a bit more tragic when numbers are involved. Doesn't it?
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