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62 Vill. L. Rev. Online 1 (2017)

handle is hein.journals/vlrtoleg62 and id is 1 raw text is: VILLANOVA LAW REVIEW: TOLLE LEGE CITE: 62 VILL. L. REV. TOLLE LEGE 1 SWAPPING PAST THE LAW SCHOOL GRAVEYARD: IN RESPONSE TO PROFESSORS LEFF AND HUGHES MICHAEL C. MACCHIAROLA* AND ARUN ABRAHAM** The poor man retains the prejudices of his forefathers without their faith, and their ignorance without their virtues; he has adopted the doctrine of self-interest as the rule of his actions, without understanding the science which put it to use; and his selfishness is no less blind than was formerly his devotedness to others. - Alexis de Tocqueville, Democracy in America IN Student Loan Derivatives: Improving on Income-Based Approaches to Financing Law School (the Article), Professors Benjamin M. Leff and Heather Hughes suggest a new and innovative approach to financing law school in an attempt to tie students' financing obligations to post-graduate income rather than interest rates.2 The authors posit that the proper model for financing higher education must transition from today's debt-based version to one incorporating the post-graduate income of its subjects. To that end, the authors propose a so- called Income-Based Repayment Swap (IBR Swap), which employs derivatives to enable income-based payment for education that does not (1) rely on taxpayer subsidies or (2) implicate the practical and legal impediments associated with human capital contracts.3 The Article represents a significant and welcomed development, serving as an important addition to the increasing dialogue of academics and commentators concerning the exploding costs of legal education.4 The skeptic might question whether the academy's newfound focus on the subject matter is motivated as much by scholarly investigation as by self-preservation. Such judgment, * Partner and Head of Financial Engineering, Olden Lane LLC; Adjunct Professor, St. Francis College; A.B., College of the Holy Cross, 1994; J.D., New York University School of Law, 1997; M.B.A., Columbia Business School, 2001. ** M.B.A., University of Chicago Booth School of Business, 2013; J.D., University of Southern California School of Law, 2007; B.A., Yale University, 2004. This Article is a private publication of the authors, and expresses their views only and not the views of any firm. 1. Benjamin M. Leff & Heather Hughes, Student Loan Derivatives: Improving on Income-Based Approaches to Financing Law School, 61 VILL. L. REv. 99, 100 (2016). 2. Id. at 99. 3. Id. at 100. 4. See, e.g., Paul Campos, The Crisis of the American Law School, 46 U. MICH. J.L. REFORM 177 (2012) (bemoaning relentless growth in law school costs and unsustainability of current model); Jonathan D. Glater, Student Debt and Higher Education Risk, 103 CALIF. L. REV. 1561 (2015) (describing dramatic increase in student borrowing and negative effects that have followed); John A. Sebert, The Cost and Financing ofLegal Education, 52 J. LEGAL EDUC. 516 (2002) (suggesting reforms to limit law school costs); Maulik Shah, Note, The Legal Education Bubble: How Law Schools Should Respond to Changes in the Legal Market, 23 GEO. J. LEGAL ETHICS 843 (2010) (suggesting reforms). 5. For an interesting discussion of the cartel protection tendencies of the behavior of school officials, see Lloyd Cohen, Comments on the Legal Education Cartel, 17 J. CONTEMP. LEGAL IssuEs 25 (2008); see also George B. Shepherd & William G. Shepherd, Scholarly Restraints? ABA Accreditation and Legal Education, 19 CARDOZO L. REV. 2091 (1998). (1) VII IANOVA LAW REVIEW: TOI Ev LEGE . CIT: 62 ViiII L. Rvv. TOi.L .F IG

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