02 March 2015
It's been some time since I've posted anything about America's student loan debacle. (For a few of my more recent posts go here and here.) News about the self-styled "Corinthian 15" has been making the rounds. You can read their manifesto in a New York Times Op-Ed here.
In summary, a number of students who had borrowed money to attend the now-defunct for-profit Corinthian Colleges are undertaking a loan-repayment strike. Rightly angry that they were duped into borrowing money to attend a school that offered nothing of comparable value in return, these students are demanding that the federal Department of Education waive repayment of their federal student loans. As much as I understand the students' ire, their demands are a non-starter. With bubble-sized $1+ trillion in total student loan debt, the federal government isn't about to start walking back on the funds it has lent. In addition, those many thousands of student who have faithfully paid their debts would be left looking like chumps.
A substantial part of the blame for the student loan bubble can be left at Congress' doorstep. Congress has subsidized both direct federal student lending and, as of 2005, added a subsidy for private student loan lenders by making their loans as difficult to discharge in bankruptcy as are federal loans.
Just how difficult should it be to discharge student loans? And what has the Department of Education already done to ease the burden for impecunious student loan debtors? Those issues are at the center of the 23rd Annual Duberstein Moot Court Competition that begins on Saturday, March 7 in New York. Unlike the intricacies of Chapter 11 reorganization law, this year's competition should be near and dear to the hearts of law students. You can read the complete fact pattern here.
I'm particularly excited about the Duberstein Competition this year because for the first time Regent Law School has entered a team. I've helped coach Kathleen Knudsen, Andrew Butler, and Aaron Lindquist. Their written brief is excellent and I'm confident they will do a fine job in the oral arguments.