John Grisham’s Latest Villain? For-Profit Colleges

There’s a scene early in John Grisham’s new legal thriller, The Rooster Bar, where a third-year law student begins to unravel the sort of conspiracy that audiences have come to expect from a Grisham novel. Intertwining shell companies and a greedy villain work behind the curtain, pulling invisible strings to imperil the protagonists. Grisham fans will anticipate that, before the final page, this corporate titan will get his comeuppance and our heroes will have the last laugh.

What’s different here, which may broaden Mr. Grisham’s audience to include higher-education enthusiasts, is that Hinds Rackley, the Svengali figure at the center of The Rooster Bar, makes his millions as the owner of eight for-profit law schools. While he cashes in, the students run up hundreds of thousands of dollars of debt with little prospect of ever passing the bar exam or finding gainful employment.

“So how does Rackley do it?” the student asks. “He sells the dream and we took the bait.”

After years of Congressional hearings, white papers, and regulatory fixes, the student-debt crisis and the abuses of for-profit colleges have officially gone mainstream. An issue that has largely been the province of policy wonks now serves as the dramatic catalyst for a novel by one of the nation’s top-selling fiction authors. Through his latest book, Mr. Grisham, a pop novelist with no formal higher-ed expertise, could do as much as anyone ever has to educate the general public about student lending, proprietary colleges, and the perils of college debt.

On a recent dreary morning in New York, Mr. Grisham arrived at the offices of Doubleday, his publisher, wearing a blue patterned blazer. He had just wrapped up a segment on CBS This Morning with Gayle King, Norah O’Donnell, and Charlie Rose. You know Gayle, he explains, such a cutup.

When Mr. Grisham is promoting a book, morning shows are standard stops. He is less accustomed to talking with reporters who write about higher-education policy.

Mr. Grisham says he understands that he may have an outsize role in shaping popular views about the wisdom of borrowing money to pay for college. He does not intend to scare people away from law school or to sow fears about debt, which many students use responsibly to finance their education. But he does want to make people stop and think.

“What I hope happens in that situation,” Mr. Grisham says, “is that a potential student will read the novel or their parents will and at least take a long hard look at what they’re doing. This money is too easy to borrow.”

The Rooster Bar is inspired by a 2014 magazine article titled “The Law-School Scam,” in The Atlantic. Paul F. Campos, a law professor at the University of Colorado at Boulder, unknowingly provided the bones of Mr. Grisham’s story. The article described a small cohort of for-profit law schools that “admit large numbers of severely underqualified students” who take out millions of dollars of loans each year that they are unlikely to repay. That is of no consequence to the schools, the article says, because they get their money up front and taxpayers are the ones left holding the bag when things go wrong.

The seeds of this public-policy problem, Mr. Campos posits, were planted in 2006, when Congress expanded federal PLUS loans, allowing graduate and professional students to borrow up to the full cost of attendance for any accredited program.

Mr. Campos, whom Mr. Grisham thanks in an author’s note, was surprised to learn that his article had so resonated with the novelist.

“I had no idea he was lifting my Atlantic piece as the plot structure for a novel,” Mr. Campos said in a recent interview. “That’s pretty cool.”

The central characters in The Rooster Bar — Gordy, Mark, Todd and Zola — have collectively borrowed about $1 million to attend Foggy Bottom Law School, a fictional for-profit institution in Washington, D.C., that suffers from comparisons to the nonprofit law schools at George Washington and Georgetown Universities. Only about half of Foggy Bottom’s students pass the bar exam, and job prospects are slim even for those who do.

The students are effectively pawns in a hedge-fund manager’s elaborate scheme to get rich off federal student loan money.

It is Gordy who connects these dots, which he relates to his classmates in a half-drunken rant. For policy makers and professors, these sorts of passages will probably be surreal, as Mr. Grisham’s characters sound off like they have stumbled into the cocktail hour at an academic conference.

Gordy, mounting a soapbox, begins, “In 2006, the bright people in Congress decided that every Tom, Dick, and Harry should be able to vastly improve their lives by getting more education, so the bright people said, basically, that anyone, including the four of us, could borrow as much as needed to pursue professional degrees. Loans for everyone, easy money. Tuition, books, even living expenses, regardless of how much, and of course all backed by the good word of the federal government.”

Gordy’s classmate, Mark, responds like a young man well-versed on federal-aid policy: “This is well-known, Gordy.”

What follows is a set of classic Grisham plot turns, as the characters find ever more elaborate ways to earn a living and to stick it to Mr. Rackley, who has profited from their misery.

‘Just Hit the Basics’

Before he became a novelist, Mr. Grisham earned an undergraduate degree in accounting from Mississippi State University and a law degree at the University of Mississippi. He came from modest means, but he says he managed to make it through without accruing any debt.

“I guess you could borrow money back then, but I didn’t know anybody who did,” he says. “We didn’t have any money, but all of us kind of worked part time and our parents sacrificed and we got through college.”

That personal experience has shaped Mr. Grisham’s view of for-profit education, which he describes as inherently problematic.

“Something about making a profit off education just strikes me as being a bad deal,” he says. “We shouldn’t have corporations that are making money off education. I don’t pretend to know anything about education — higher education. It just strikes me as a bad way to educate.”

For-profit colleges came under particular scrutiny during President Obama’s administration, which put forward the so-called gainful-employment rule to crack down on institutions with records of saddling students with large amounts of debt and few job prospects.

But Washington’s posture toward for-profit colleges has changed under President Trump. Betsy DeVos, the education secretary, has pledged to delay and renegotiate the gainful-employment rule, along with another regulation that would make it easier for borrowers to have their loans forgiven if they say they have been defrauded by colleges.

In researching his novel, Mr. Grisham, who lives outside Charlottesville, Va., employed a small cadre of University of Virginia students to tell him more about for-profit law schools and student debt. He also consulted with Jennifer M. Hulvey, director of financial aid at Virginia’s law school.

“Give me a memo,” he says he told the students, “nothing deep, nothing fancy — just hit the basics, OK? These kids are really smart and they write beautifully and they send me these memos that sometimes I just plagiarize and put in the novel.”

Mr. Grisham aims to write a book every year, and the process takes as little as six months. He has the technique refined to a system, collecting news clippings and ideas, the best of which are gathered together for a novel that he starts writing each January.

Lots of novels are set on college campuses, but seeing student debt and for-profit education run through the Grisham fiction machine is a new experience for experts in the field.

“It’s fascinating,” says Sandy Baum, a senior fellow in the education-policy program at the Urban Institute and a professor emerita of economics at Skidmore College. “I’m slightly worried about it, because most things written about student debt in the popular press are exaggerated.”

As Ms. Baum points out, many of the students who default on loans are those who have borrowed small amounts and failed to complete degrees. The student with $100,000 in loans, while appealing to novelists and news reporters, is far less common.

That said, Mr. Grisham has rightfully highlighted perverse incentives in student-lending policy, Ms. Baum says. Graduate students enrolled in income-driven repayment plans, which set payments based on what they earn, can theoretically borrow a lot more than they need to and see the remaining debt forgiven after 25 years at taxpayer expense.

“What it means is there’s no incentive not to borrow that extra $100,000,” Ms. Baum says. “This is bad public policy, and for-profit law schools are a perfect example.”

For-profit law schools, however, constitute a tiny universe of higher education. Among more than 200 law schools accredited by the American Bar Association, just five are for-profit institutions. Three of those — Arizona Summit Law School, Atlanta’s John Marshall Law School, and Western State College of Law — have bar passage rates of less than 51 percent; the remaining two — Florida Coastal and Charleston Schools of Law — have passage rates below 63 percent, according to bar association data. By comparison, Ole Miss, where Mr. Grisham earned his law degree, has a passage rate of 83 percent.

The Charlotte School of Law, a for-profit school that had been placed on probation by the association and that has been the subject of a federal fraud investigation, closed this year.

Easy Money

Researching his novel, Mr. Grisham dove into the blogosphere, where he read the testimonies of students who said they had been misled by for-profit schools. It was all grist for the mill.

“Some of the blogs are really fascinating because the students just cut loose,” Mr. Grisham said. “I mean they pull no punches. A lot of them have a lot of debt. They can’t find a job. They can’t pass the bar exam. There’s a lot of conflict there, and a lot of bad behavior, and a lot of profit-making, and a lot of people who’ve been misled and abused. So it was a pretty rich, fertile area.”

Throughout The Rooster Bar, the novel’s demoralized students exchange emails with their loan servicers, who are looking for information about the students’ employment prospects and pleading for particulars about how they plan to repay their debts. The servicers come across in some passages as parasitic, reflecting national concerns about bad practices in the loan-servicing industry.

In January, just before Donald J. Trump’s inauguration, the Consumer Financial Protection Bureau sued Navient, the country’s largest servicer of federal and private student loans. The federal agency alleged a variety of misdeeds, including that Navient provided borrowers with bad information and processed their payments incorrectly.

Mr. Grisham, who has read up on lawsuits against the industry, said he wanted to reflect the wide variation within it.

“It’s a spectrum,” he said. “Some are OK. Some are sleazy.”

The students at the center of The Rooster Bar are flawed in some respects, bumbling their way toward (spoiler alert) a happy ending. But Mr. Grisham largely spares his protagonists from personal responsibility for accumulating debts in the first place, pointing the finger instead at flawed federal policy and a greedy billionaire who is there to take advantage of it.

“They’re adults; they did it, but the money was too easy to get,” Mr. Grisham says. “That’s one point I keep making. The money, it shouldn’t be that easy for kids to borrow like that. Yes, there’s personal responsibility, but at the same time it’s not black and white.”

Yet, the central public-policy question, which is raised by Gordy early in the novel and drives the plot, is simple and likely to resonate with a general audience.

“Who in their right mind,” Gordy asks his friends, “would loan the four of us a million dollars?”

Jack Stripling covers college leadership, particularly presidents and governing boards. Follow him on Twitter @jackstripling, or email him at jack.stripling@chronicle.com.

Correction (10/31/2017, 9:30 a.m.): This article originally misidentified Jennifer Hulvey as a law professor at the University of Virginia. She is the director of financial aid at Virginia’s law school. The text has been corrected.