Keeping Out Competition

Did you know that you can be denied a law license if you have too many outstanding student loans? Look at this quote from the New York Times:

“Applicant has not made any substantial payments on the loans,” the judges wrote in a terse decision and an unusual rejection of the committee’s recommendation.

According to these New York judges, you’re supposed to borrow money for law school and pay off the loans before you begin working as a lawyer. Only afterward will you be admitted to the bar. Never mind that people can pay off loans far more easily once they’re practicing lawyers — or that this policy gives a huge advantage to wealthy law students.

Many students with debt have become lawyers, of course, which makes this story appear to be an outrageous anomaly. And I expect that all the scrutiny from the press will lead to a reversal of the decision.

That doesn’t mean we should rest assured if this man succeeds in his quest to practice law. Occupational licensure prevents people from earning a living if they don’t meet arbitrary requirements; it’s had that pernicious effect all along. This particular case is unusual because one man was held to a higher standard than other applicants. When licensing requirements bar people from professions for falling a little bit short of the standards, which happens all the time, it doesn’t make the news.