The Debt Crusader

The stereotypical image of Harvard law school is of a crowded lecture hall dominated by a crusty, intimidating professor—think Professor Kingsfield from "The Paper Chase"—sparring with students over grand constitutional questions. But on a snowy February evening in a basement classroom, the scene could hardly be more different. Just nine students sit around a small table, staring at PowerPoint charts while their professor, Elizabeth Warren, offers bubbly praise and gentle critique. No one cites Supreme Court cases. These students don't even want to practice law—they aspire to be law-school professors, so Warren is teaching them to produce the wonky journal articles upon which academic careers are built. "You have the right insight, but you're not milking your data," Warren tells one student, suggesting a different statistical technique. There's no time to waste: final papers are due in three weeks.

When it comes to ushering students into the ivory tower, there are few better guides than Warren, one of the nation's leading bankruptcy scholars. For three decades she's devoted herself to the same grind on which these students are about to embark: churning out treatises that are rarely read outside of law libraries. But in the last few months, her work has been anything but obscure. In November, Sen. Harry Reid appointed her to head the Congressional Oversight Panel, the group that's critiquing the government's bank bailout and advising legislators on how to reform the financial system. For years Warren has been an outspoken critic of banks, and in this new job she's got her best chance yet to see her views turned into law. That's a prospect that pains financial lobbyists, who basically despise her.

To do that, she'll need to learn to navigate politically—a set of skills she admits isn't her strong suit. But if politics is partly about grabbing a megaphone, her first few months have been successful. She's become a frequent presence on cable news shows, and her reports have lambasted the Bush administration's handling of the early days of the crisis. "The idea that we could save the banks and not save the American family just isn't right," she said after releasing her group's first report.

Warren seems an unlikely advocate for working-class debtors. She and her second husband, also a tenured Harvard professor, live a few blocks off the Square in a restored 1875 Victorian home that was worth $2 million before the real-estate bust. But her roots are far from the Ivy League. Warren, 59, was born in Oklahoma a decade after depression and drought led to the exodus described in Steinbeck's "The Grapes of Wrath." "I worried about money from the time I was a little kid," she says, recalling how, when she was sick, her mother would weigh her temperature against the amount the family owed the doctor before deciding whether to take her in. But for a debating scholarship, she'd have had little chance of attending college. Married at 19, she completed college and attended Rutgers Law; soon after she graduated, the school asked her to teach in its new night program. At 26, she was younger than many of her students.

Over the next 20 years Warren was an academic migrant, teaching at Texas, Michigan and Penn before arriving at Harvard in 1995, propelled by groundbreaking research on America's bankruptcy system. Her early studies analyzed just how destitute people filing for bankruptcy really were—countering the notion of well-off people declaring themselves broke just to shirk bills. Her later work identified the three primary factors—divorce, job loss and medical debts—that fuel most bankruptcies. Former student Katherine Porter, now a law professor at the University of Iowa, recalls her first day in Warren's class, in which the professor described why she finds bankruptcy so fascinating: "It's about the other side of capitalism, which is really good at rewarding the winners, but doesn't tell us what to do about the losers."