Short answer: no.
But let’s talk.
The job market is not doing so hot right now. Despite the fact that the economy has grown, stock prices are up, and Wall Street executives are back to getting multimillion-dollar bonuses as if the recession never happened, unemployment stubbornly hovers at just under 10%.
The job picture is even bleaker for recent graduates of college and grad school
who are entering the professional workforce for the first time in their lives. While a bachelor’s or master’s degr
ee in a relevant subject will certainly give you an advantage over someone with identical qualifications, minus the degree, it seems that a degree doesn’t mean much these days. And it’s understandable why: having an advanced degree, and not much else, on one’s resume gives employers almost no information about how good the applicant will be at a job. Combine this with the fact that massive layoffs in most industries have created a glut of people with years of work experience looking for new jobs, and you can see the problem. A new graduate simply is not competitive. It’s created a situation where you need a job to get work experience, and you need work experience to get a job, when few are available.
Especially despondent are people who “did everything right” in college and graduate school, only to find that the jobs they were “promised” (or believed they were promised) are not showing up at the end of the tunnel. Recent graduates from law schools have been particularly vocal, with several blogs and message boards dedicated to exposing the “law school scam,” as they put it. Without going into the merits of their positions, I’ll simply agree with them on the point that it’s currently rough for everybody.
One Jobless 3L at Boston College has written a letter to the dean of the law school, offering to give up his JD in exchange for a refund on tuition. Above the Law has the story too, of course. I’ve blogged before about how a degree does not entitle a person to a job, and I stand by that. After all, even in the best of times, no university can guarantee employment to its graduates.
However, it’s not unreasonable to expect schools (especially law schools, considering the debt load law school usually puts on graduates, and the particularly bad job prospects for new attorneys) should be more up-front about employment and salary statistics for their graduates. On top of that is the fact that student loan debt, with very few exceptions, cannot be discharged in bankruptcy. This means that many graduates of advanced degree programs might very well find themselves saddled in debt for most of their lives.
So, the solution is to simply make student loan debt dischargeable in bankruptcy, right? Well…maybe. When you file for Chapter 7 bankruptcy, you’re typically expected to give up some of your property (unless all of it is exempt), to pay off as much of your debt as possible, before the rest of the debt is discharged. But a degree is a strange form of “property” – if such a term can be applied to a degree. It’s not as if a school can reach into a person’s mind and remove the knowledge they acquired in school. So, if student loans are to be made dischargeable in bankruptcy, we don’t want to create a system where people get as many degrees as they want, rack up student loan debt, then file for bankruptcy, walking away with a large number of potentially-marketable degrees.
But what if someone ends up with an expensive degree, paid for with loans, only to find that their job prospects aren’t much better than they were before they had a degree?
Maybe bankruptcy should be an option for those people. However, because education has a great deal of value which can’t easily be quantified, and most of its value comes in the form of something that cannot be taken away (knowledge and skills), bankruptcy for student loans is tricky.
But what if this law student is onto something? What if you could “give back” your degree in exchange for discharging student loans in bankruptcy?
Suppose filing for bankruptcy in a student loan required you to notify the school you attended and paid for with student loans, and required the school to revoke your degree? Granted, this doesn’t mean they could force you to forget everything you learned in school, but it would make the years spent in school far less valuable. If you tried to put the degree on your resume, and your employer contacted the school, they would be told that you did not earn a degree there.
Furthermore, if you graduated from a program whose primary purpose is to help you get licensed to practice some type of profession (medicine, law, accounting, etc.), you would be unable to get that professional license.
The prospect of their loans being dischargeable would probably make lenders quite a bit more cautious when giving student loans. While it’s probably true that making student loans dischargeable would encourage more people to take out student loans without thinking about a degree’s marketability, this should be mostly offset by lenders’ newfound caution, and the fact that discharging student loan debt would involve a huge tradeoff.
I’m no expert in bankruptcy or economics, and I’m sure there are plenty of problems with this idea that I’m not seeing. However, given the massive debt and dim job prospects that many recent graduates from undergrad and grad school, I think this, and other approaches to student loan reform, are worth considering.