Monthly Archives: November 2015

Theory and evidence that college for all isn’t a good idea

From a new paper by Sang Yoon Lee, Yongseok Shin, Donghoon Lee:

Going to college is a risky investment in human capital. However, we highlight two options inherently embedded in college education that mitigate this risk: (i) college students can quit without completing four-year degrees after learning about their post-graduation wages and (ii) college graduates can take jobs that do not require four-year degrees (i.e., underemployment)… We show that the interaction between these options and the rising wage dispersion, especially among college graduates, is key to understanding the muted response of college enrollment and graduation rates to the substantial increase in the college wage premium in the United States since 1980. Furthermore, we find that subsidies inducing marginal students to attend colleges will have a negligible net benefit: Such students are far more likely to drop out of college or become underemployed even with a four-year degree, implying only small wage gains from college education.

On a related note, Ben Casselman reports:

barely half — 52.9 percent — of students who enrolled in fall 2009 had earned a bachelor’s or associate degree six years later…. graduation rates were much lower, and fell much more sharply, for older and part-time students, the same groups that saw big enrollment increases during the recession… The low graduation rate shouldn’t come as a big surprise. The recession drove people to attend college who wouldn’t have gone otherwise and who were likely less prepared than other students. Many of them ended up inworse shape than if they hadn’t gone to college in the first place: burdened with thousands of dollars in student debt, but without a degree to show for it.

IBR continues on its path toward a massive train wreck

Josh Mitchell reports on the unfolding disaster that is the loan forgiveness under IBR:

The federal government is preparing to forgive billions of dollars in student loans to doctors and other white-collar Americans with expensive educations…

At issue is a 2007 program that forgives any federal student debt after a borrower has made a decade of payments… while working for government or nonprofit entities. It was designed to encourage young Americans to pursue traditionally hard-to-fill jobs: public defenders, social workers, teachers and modestly paid doctors in underserved areas.

But the program is encompassing far more workers than envisioned, many of them well-paid. Thousands of workers with pricey graduate degrees are on track to discharge five- and six-figure debts on their way to typically lucrative careers…

The biggest beneficiaries will be medical-school students, who owe on average $180,000 upon graduation…

“We’re subsidizing people who are going to be well-off, better than middle class,” said Gailen Hite, a retired Columbia University finance professor who has researched the program…

For ideas on how to fix IBR, see here.

Mike Masnick on the possibility of shutting down patent troll forum shopping

Mike Masnick:

the East Texas district court… patent trolls have been flooding that court with cases. The trolls claimed they liked East Texas because the judges worked quickly and because they “understood” patent issues. The reality, of course, is that East Texas became notorious for a few judges who were insanely pro-patent troll…

The top judge for patent cases in East Texas used to be John Ward, until he “retired” to join his son in a local law practice representing patent trolls. Then the crown went to Judge Rodney Gilstrap, who is handling a ridiculous number of patent cases. In 2014, he was given 968 patent cases — or 20% of all patent cases filed in the country… This is the same Judge Gilstrap who has never (not once) granted attorneys’ fees to a defendant, despite all of the cases he’s heard…

It’s pretty clear that what we’ve been witnessing for over a decade is what’s known as “forum shopping” in which plaintiffs seek out specific courts known to favor them… there’s actually a chance to stop it. In 1990, a ruling by the Court of Appeals for the Federal Circuit (CAFC, the “patent appeals court”) in VE Holding v. Johnson Gas basically opened the floodgates for forum shopping in patent cases…

But there’s a new case that has the potential to put an end to this forum shopping. In Re: TC Heartland is another patent forum shopping case, in which an Indiana-based company is looking to get a patent case tossed out of a Delaware court over jurisdiction…

Vera Ranieri on how the Eastern District of Texas became a patent troll haven

Vera Ranieri:

One of the biggest reasons the Eastern District of Texas hears so many patent cases (at last check, almost half of all cases filed this year were filed in the Eastern District) is because of a Federal Circuit case from 1990—VE Holding—that radically expanded the places patent owners could sue for infringement…

VE Holding has allowed patent owners to sue in practically any district in the country, no matter how tenuous the connection to the alleged infringement. In turn, this has given rise to “forum selling,”…