Bar Admission Denied for Nonpayment of Student Loans

The front page of today’s NY Times has a story entitled Aspiring Lawyer Finds Debt is Bigger Hurdle Than Bar Exam which may be of interest to law students at BLS and elsewhere. The case is reported in Matter of Anonymous, 2009 NY Slip Op 02883, ___A.D.3d____(3rd Dep’t. April 16, 2009) where the Third Department of the Appellate Division determined nonpayment of student loans, caused by an undesirable financial situation and unwise student loans, is a basis for denial of admission to the bar.

According to the opinion, after the student graduated from law school and passed the New York bar examination in Feb. 2008, he disclosed to the Character and Fitness Committee disclosed various unpaid student loans with balances of about $430,000 and attributed his nonpayment of the loans to the downturn in the economy as well as bad faith negotiations on the part of some of the loan servicers. While the facts of this case seem extreme, the decision presents a cautionary tale to law students generally. This is particularly true given that nationwide, the average student loan debt for law graduates is more than $75,000, and the median salary for the first several years after law school is only around $60,000. (See and

Postings of comments on a number of blogs present the facts in a different light. See, for example, the Legal Profession Blog and the comments there, as well as the Adjunct Law Prof Blog where the applicant writes in an April 22nd comment:

The sum borrowed was $220,000, the approximate amount owed is $430,000. Below is the first page of correspondence and the last page – the conclusion. It should be noted that approximately 70k was borrowed to cover medical expenses after my left leg was severed off in an accident.

While the facts contained in these comments did not persuade the Character and Fitness Committee or the Third Department of the Appellate Division, they do shed some light on the circumstances showing that the loans date back to the 1980s because the applicant had taken an extended medical deferrment after suffering a leg amputation; the loans appear to have gone into default shortly after graduation, while the applicant was studying for the bar exam; and that the loans include more than $200,000 in interest and fees. The applicant, raised in a homeless shelter, appears to have had some serious medical problems and has no significant family support. His argument that his loan provider, Sallie Mae, acted in bad faith might resonate with many student loan debtors.