Showing posts with label Law School Transparency. Show all posts
Showing posts with label Law School Transparency. Show all posts

Wednesday, November 7, 2018

Iowa Wesleyan and Valparaiso Law School make brave decisions: “It is a far, far better thing that I do, than I have ever done"

“It is a far, far better thing that I do, than I have ever done." Who said that? I think it was some dead guy from the 19th century. Charles Dickens maybe?

Iowa Wesleyan University and Valparaiso Law School both made brave decisions this week, and I salute them for it. Valparaiso Law announced it is closing after negotiations to transfer the school to Middle Tennessee State University broke down. And the President of Iowa Wesleyan University, Steven E. Titus, posted a statement on the university web site candidly telling the campus community that the university faces a serious financial crisis and that the governing board is pondering the university's future.

These decisions must have been very hard for both institutions. President Titus acknowledged that publicizing Iowa Wesleyan's financial situation might hurt enrollment, which could hasten its demise. "But we decided it was the right thing to let people know what was going on," Titus said. "There is risk no matter what we do."

As for Valparaiso, the loss of its law school diminishes the reputation of the university as a whole, as a law school is generally seen as a prestige-enhancing program.

In my view, both institutions are facing the stark financial reality that many private colleges are facing, and they are facing it with courage. Let's first look at Valparaiso. 

There are far too many law schools in this country, and enrollments have been declining. As reported in Inside Higher Ed, law-school enrollments have sunk from a high of 52,000 to 37,000. 

The quality of students being admitted to law schools is also declining. As tracked by Law School Transparency, a nonprofit group that reports on law -school admissions, some law schools have admitted students with LSAT scores so low that half the entering class faces a very high risk of failing the bar.

Valparaiso is closing its law school,  which is certainly in the public interest. It is far better for Valparaiso to close than for it to lower its admissions standards just to enroll more students.

As for Iowa Wesleyan, the school has been discounting tuition to attract students; according to one report, it has discounted tuition by more than half.  At some point that practice raises ethical issues.  How can a college justify charging its least attractive students full price when the average price is less than half that amount?

And how does a college explain the discounts to the students who receive them? Some colleges have been showering first-year students with scholarships--athletic scholarships in particular.  But is it honest to give an incoming student a volleyball scholarship when the school doesn't even field a decent volleyball team?

No, Valparaiso and Iowa Western should be commended for their courage and their honesty. It was a far, far better thing they did than perhaps anything they've ever done.

References

Scott Jaschik. Iowa  Wesleyan could become the latest small college to close. Insider Higher Ed, November , 2018.

Emma Whitford. Valparaiso Law School will close following unsuccessful attempt to transfer to Middle Tennessee University. Inside Higher Ed, October 31, 2018.

Thursday, October 18, 2018

Thomas Jefferson Law School won't admit new students next spring: Ask not for whom the bell tolls; it tolls for the legal profession

Thomas Jefferson School of Law (TJ) announced it will not admit new students to enroll this spring. Why?

Linda Keller, Thomas Jefferson's new dean, gave this explanation (which was probably drafted by a public relations person):
The Law School is committed to providing the best environment for our students. We've decided to forego the revenue that a spring entering class would provide because a proportionally smaller spring entering class might not provide the vibrant, collaborative atmosphere for our new students that is an essential part of the first-year law student experience.
My cynical interpretation of this cheery blather is that Thomas Jefferson didn't recruit enough students to make up a decent cohort for spring 2019. Indeed, TJ's student enrollment dropped from more than 400 in 2010 to less than 300 in 2017.

Thomas Jefferson School of Law should close--period. By almost any measure, the school is not producing lawyers who can find decent jobs in the legal profession. According to Law School Transparency, which reports important metrics for law schools, TJ's 2017 graduating class had an employment rate of only 21.3 percent. Graduates' under-employment rate was 42.3 percent.

Not a single 2017 graduate got a judicial clerkship, jobs that go to the most able law graduates. And none went to work for large law firms,  which generally pay the highest salaries.

And most shocking of all, TJ's 2014 entering class had a 2017 bar passage rate of only 26.5 percent! That's right, only a little more than one in four of TJ's 2017 graduates passed the bar.

Why do students enroll at a law school with such a dismal record? Is it cheaper than more prestigious schools? No, it is not. The non-discounted cost to get a law degree from Thomas Jefferson is $280,000! That's right, it costs more than a quarter of a million dollars to get a law degree from Thomas Jefferson, and only one out of four 2017 graduates passed the bar.

This country has too many law schools. There simply are not enough jobs for the newly minted attorneys coming out of the nation's lawyer factories. The American Bar Association, which accredits law schools, has done a poor job and allowed too many schools to operate. Based on their bar passage rates and poor job-placement rates, at least 20 schools should be shut down immediately.

Some of Thomas Jefferson's graduates sued the school awhile back for fraud, but TJ beat the wrap. But enrollment is dropping, bar pass rates are awful, and the time has come for TJ to close its doors.

Thomas Jefferson School of Law


References

Scott Jaschik. Thomas Jefferson Law Won't Admit Students for Spring. Inside Higher Ed, October 18, 2018.

Staci Zaretsky. Struggling Law School Will Not Accept New Students This Spring. Above the Law, October 17, 2018.

Staci Zaretsky. Verdict Reached in the Alaburda v. Thomas Jefferson Landmark Case Over Fraudulent Employment Statistics. Abovethelaw.com, March 24, 2016.




Tuesday, May 22, 2018

Only about 1 out of 4 law school graduates passed the California Bar Exam last February

Much like the Lusitania, legal education steams full speed toward its ultimate destruction, while law school deans and professors sip California wine and contemplate their retirement portfolios.

Earlier this month, the California's State Bar announced passage rates on the California bar exam, administered last February. Only 27 percent passed the exam--the lowest pass rate in almost 70 years. Think about that-- almost 3 out of 4 law-school graduates failed the California bar exam, which means they cannot practice law in the Sunshine State.

Most of these unlicensed lawyers borrowed money to go to law school--a lot of money. Even public law schools are expensive. University of Texas School of Law, my alma mater, charges students $35,000 a year to attend. And the bottom-tier, for-profit law schools are almost as expensive as top-ranked public schools. According to Law School Transparency, the total cost of attending Florida Coastal School of Law--a bottom-of-the-barrel law school--is $256,939! The total cost to attend the University of Michigan's law school,one of the best schools in the country, is only slightly more expensive--$288,395.

What's going on? First of all, the demand for newly minted lawyers has declined drastically. Smart people have figured that out, and fewer bright young men and women are choosing law as a career.

Many law schools lowered admission standards to keep their classes full, which led to lower bar passage rates for law graduates. A few states (Nevada and Oregon) lowered the standards for passing their bar exams to get their passage rates up. But most states have tried to maintain high standards, which means thousands of poorly qualified but heavily indebted law-school graduates aren't passing the bar and can't work as lawyers.

Then--as law school enrollments went down--Congress enacted the Direct PLUS program, which removed the cap on the amount of federal loans students can take out to go to graduate school. In response, law schools jacked up their prices and students began borrowing more and more money to pursue careers that became increasingly illusive.

Image result for lusitania
A few colleges have done the honorable thing and stopped admitting students. Whittier College will close its law school after its current students graduate, and Valparaiso Law School announced last November that it will not admit new students.

Belatedly, in my view, the ABA began putting the squeeze on the most mediocre law schools in an effort to get them to raise their admission standards. But some of these schools have sued the ABA--Thomas M. Cooley and Florida Coastal, in particular.

I don't see a happy ending to this saga. All across the United States, second- and third-tier law schools have lowered admission standards, thereby watering down the quality of the legal profession. The ultimate result, in my opinion, will be the erosion of the nation's legal system as fewer and fewer of our nation's brightest and most honorable young people pursue legal careers as attorneys and judges.

We see it now. The corruption, deception, and manipulation that characterizes our national politics can be laid at the feet of our political class--and most of these creeps are lawyers.




Friday, December 1, 2017

The Rooster Bar: Why Won't the ABA Shut Down Bottom-Tier For-Profit Law Schools ?

John Grisham's latest novel, titled The Rooster Bar, tells the story of Mark Frazier, a law student who attends a for-profit institution called Foggy Bottom Law School. By the time he is a senior, Mark has accumulated $195,000 in student loans and concludes he made a bad investment.

FBLS's bar pass rates are embarrassing low, and few of its graduates obtains jobs that justify their enormous student-loan debt. By the time FBLS students are seniors, their morale has plummeted, and some even spare verbally with their professors in class. In fact:
To varying degrees, almost everyone Mark knew believed that (1) FBLS was a sub-par law school that (2) made too many promises, and (3) charged too much money, and (4) encouraged too much debt while (5) admitting a lot of mediocre students who really had no business in law school, and (6) were either not properly prepared for the bar exam or (7) to dumb to pass it.
Foggy Bottom Law School is a fictional for-profit law school, but it closely resembles the real ones. Infilaw, owned by an equity group out of Chicago, runs three for profit law schools; and all three are in trouble. Charlotte School of Law closed in August after it lost its license to operate. Arizona Summit Law School was placed on probation last March by the American Bar Association, and the ABA warned Florida Coastal School of Law in October that it was "significantly out of compliance" with the ABA's accreditation standards.

Not surprisingly, Infilaw wants to sell its two law schools that are still open. But why did the American Bar Association ever accredit these schools in the first place? The answer is illusive, but here is a key fact. In the 1995, when Bill Clinton was president, the U.S. Justice Department sued the ABA, claiming it was in violation of federal antitrust laws.  The suit was settled in 1996, and the ABA agreed not to deny accreditation to a law school solely because it was a for-profit entity.

That same year, a law professor named Don Lively started Florida Coastal Law School in Jacksonville, Florida. In 2004, Lively sold out to Sterling Partners, a Chicago-based private-equity firm. According to the Wall Street Journal, Sterling created Infilaw as a holding company for the law schools and lined up additional investors, allegedly including Harvard University's endowment fund.

By almost any measure, all three Infilaw law schools are sub-par institutions. If you want to see the data, visit Law School Transparency's web site.  All three schools charge high tuition rates similar to reputable law schools like Harvard and Yale. Yet these three schools have low bar pass rates and very few graduates find law jobs that justify the enormous student-loan debt they accumulated to get their law degrees.

The for-profit advocates say schools like the Infilaw trio offer opportunities to minority students who are often rejected by reputable schools because of mediocre undergraduate GPAs and low LSAT scores. But the top-tier schools bend over backward to attract minority students and have plenty of scholarship money to recruit them. Too often the people who enroll at for-profit law schools are not academically prepared to study law and often fail their bar exams.

As has been often reported in the media, the job market for recent law graduates is terrible; and the bottom-tier law schools are producing lawyers who run a high risk of failing the bar while facing dismal job prospects.

In short, the integrity of legal education has been seriously undermined by a herd of poor-quality law schools, including the Infilaw schools and several public law schools as well.  Apparently, even Harvard University contributed to this train wreck, although Harvard wouldn't confirm that its endowment fund invested in Infilaw's schools.

The American Bar Association is primarily responsible for this disaster, but is it taking steps to shut down the bottom-feeding law schools? No it is not. In fact, the ABA is considering a measure that would allow law schools to make LSAT scores an optional criteria for law school admission. The purpose of that action, perhaps, is to make it harder to measure just how low some law schools' admission standards really are.



References

John Grisham. The Rooster Bar. New York: Doubleday, 2017.

Andrew Kreighbaum. ABA Backs Testing Choices on law Admissions, Inside Higher Ed, November 7, 2017.

Andrew Kreighbaum. Report: For-Profit Looking to Sell 2 Law Schools. Inside Higher Ed, November 29, 2017.

Josh Mitchell. The Rise and Fall of a Law School Empire Fueled by Student Loans. Wall Street Journal, November 24, 2017.

Law School Transparency web site.

Angela Morris. GRE or LSAT? ABA Council's Latest Move Could Nix Tests Altogether. Law.com, November 3, 2017.

United States v. American Bar Association, 934 F. Supp. 435 (D.D.C. 1996).

 








Monday, November 20, 2017

Law schools give most financial aid to students who need it least: Legal education is "rolling downhill like a snowball headed for hell"

To borrow a phrase from James Howard Kunstler, American law schools are going through their own private version of "The Long Emergency." Law school applications are down, enrollments are down, and the job market for attorneys continues to be terrible.

Meanwhile, tuition prices at American law schools keep going up, which means most law-school graduates begin their careers with mountains of debt. A 2015 report  by the American Bar Association found that average debt for people attending private law schools was $127,000. But average debt loads at for-profit schools is often higher than that. The average debt load for students who attended the now defunct Charleston School of Law was reportedly $200,000.

With fewer people attending law school and fewer people actually enrolling, law schools have done two things to keep their enrollments up:

First, the second- and third-tier law schools began lowering admission standards, which means more and more of their graduates are failing the bar exams.

According to Law School Transparency, some schools have admission requirements so low that half their students are at "extreme risk" of failing the bar.

Second, law schools have been investing more and more money on financial aid, hoping to lure students through their doors.

Unfortunately, most of this financial aid is going to students who have relatively high LSAT scores and who are most likely to have successful careers. Law schools are increasingly happy to admit students with low LSAT scores, but the schools are not supporting these students with adequate financial aid..

"The net effect," writes retired law professor William C Whitford, "is that lower-LSAT students are subsidizing the legal education of higher-LSAT students, when the latter are more likely to have the postgraduate income that will allow them to repay substantial student indebtedness without undue hardship."

Moreover, the law students with low LSAT scores and overall poorer credentials are likely to be less affluent than law-school applicants with high LSAT scores. As Brian Tamanaha put it in a recent book on law school admission practices, "Law schools have in effect constructed a reverse Robin Hood arrangement, redistributing resources between students making the (likely) poorer future graduates help pick up the tab for the (likely) wealthier future graduates" (as quoted by Whitford).

In short, the middle-tier and bottom-tier law schools have concocted a witches' brew of declining admission standards, inequitable financial aid policies, and high tuition costs, which is forcing the least qualified law students to take out loans that they can never pay back.

Paul Campos summarized this state of affairs in his 2012 book Don't Go To Law School (Unless). Job prospects are so poor for graduates of bottom-rung law schools, Campos warned, that some students would be better off financially if they dropped out after the first year rather than continue with their studies.

All of this is eroding the quality of American lawyers. As bar pass rates go down, the pressure is on state bar associations to lower the pass rate on state bar exams. So far, California has resisted this trend in spite of low pass rates on the California bar exam. At least two states, however--Oregon and Nevada--have caved in to pressure and lowered the pass rate on their state bar exams.

The American Bar Association bears most of the blame for this slow rolling catastrophe. It needs to close the bottom-tier law schools--both public and private. In my view, at least 20 law schools should be shut down.

Apparently the ABA doesn't have the courage to do what needs to be done to preserve the integrity of the legal profession, which, in the words of the immortal Merle Haggard, is "rolling downhill like a snowball headed for hell."  As a result, the long-term health of our democracy is being threatened by a chain of forces driven primarily be greed and cowardice.

Merle Haggard:  "Are we rolling downhill like a snowball headed for hell?"


References

Natalie Bruzda. Nevada lowers the bar for state legal exam as passage rate skids. Las Vegas Review Journal, August 2017.

Paul Campos. Don't Go to Law School (Unless) (2013).

Cathryn Rubino. Oregon Finds Out Easiest Way To Improve Bar Exam Passage Rate is To Lower Its Cut Score. Above the Law (blog), October 5, 2017.

Brian Tamanaha. Failing Law Schools (2012).

Task Force of Financing Legal Education. American Bar Association Report (2015).

William C.Whitford. Law School-Administered Financial Aid: The Good News and the Bad NewsJournal of Legal Education, 67(1) (Autumn 2017).

Monday, July 24, 2017

Association of American Law Schools joins California in Boycotting Texas: Silly Prigs

The Association of American Law Schools recently announced that it is boycotting Texas and moving its 2018 conference on clinical legal education from Austin to Chicago. Why? The AALS is displeased with a couple of statutes passed recently by the Texas Legislature.

I have a few comments to make about the AALS's fatuous tantrum against Texas.  First, AALS's action is a gratuitous insult to a state with a long history of progressive government and tolerance. As I said in an earlier blog, Texas is the nation's second largest economy; and its population is booming because the state offers jobs, relatively inexpensive housing, and decent public schools. It has one of the finest state universities in the United States, and it is sheltering literally millions of immigrants from all over the world.

It was Texas, after all, that accepted a quarter of a million refugees from South Louisiana after Hurricane Katrina devastated New Orleans in 2005.  Houston alone absorbed 150,000 Katrina victims; and the city did it with a smile and a howdy.

Illinois, on the other hand, where the AALS is moving its clinical legal education conference, is  a basket case.According to the Chicago Tribune, Illinois has lost more population than any other state for the last three years in a row.

Illinois' financial affairs are in shambles; its property taxes are outrageously high, and the state has billions of dollars in pension obligations that it will never repay. In short, Illinois is looking  less and less like a state and more and more like a banana republic. 

And Chicago, where the AALS's 2018 CLE conference will take place, is one of the most dangerous cities in America--more than 2,000 shooting victims this year and almost 400 murders! And the year's still young.

Second, the AALS has joined a pernicious trend that the state of California has made fashionable. California now bans state-funded travel to eight American states--including Texas. Where will this end? Is America going to collapse into a loose affiliation of warring political entities like the Italian city states of medieval Europe?

Finally, AALS's condescending attitude toward Texas seems singularly inappropriate in light of the shameful way American law schools have behaved over the last 20 years. Year after year, the law schools have brazenly raised their tuition rates even while the market for new lawyers has collapsed.  The law schools have drastically lowered admissions criteria in order to keep their enrollments up, and some law schools have standards so  low that half their students are in danger of failing the state bar exam.

American law school graduates now hit the job market with an average debt load of $140,000; and a significant percentage of the ones who graduate from bottom-tier law schools fail the bar.

In fact, Southern Illinois University's law school, in the state where the AALS will squat for its 2018 legal education conference, is near the bottom of the barrel.  According to Law School Transparency, LSAT scores for SIU's 2014 cohort are so low that 25 percent of the graduates from that cohort are at EXTREME RISK of failing the bar.  Cost to attend SIU Law School: $145,000.  USI's 2015 bar pass rate: about 70 percent.

Do you think the AALS nabobs will be talking about their own moral crisis at their conference in Chicago? Not bloody likely. 

So here's some friendly advice to all you self-righteous prigs who enjoy thumbing your noses at the Lone Star State. Be nice to the Texans, because when the national economy collapses--and it will collapse--it will be Texas that rises most quickly from the rubble; and you might be looking for a job in the state you now despise.

And after we sack Pisa let's boycott Texas.


 References

Elyssa Cherney and Elvia Malagon. Nearing 400, homicides in Chicago continue to outpace last yearChicago Tribune, July 24, 2017.

 Marwa Eltagouri. Illinois loses more residents in 2016 than any other state. Chicago Tribune, December 21, 2016.

Richard Fossey. California bans state-funded travel to Texas: Frankly, my dear, Texans don't give a damn. Condemned to Debt, June 27, 2017.

Nick Roli. Law School Group Ditches Texas Conference. Inside Higher Ed, July 24, 2017.







Thursday, January 12, 2017

The Department of Education's "Heightened Cash Monitoring" list and its list of programs that failed DOE's Gainful Employment Rule: Big Trouble Ahead for American Higher Education

As the Obama administration limps to a close, the U.S. Department of Education issued two lists that should scare the heck out of anyone working in the field of higher education.

First, a few days ago, DOE issued its most recent list of colleges that it flagged for "Heightened Cash Monitoring." More than 500 colleges are on that list.

At about the same time, DOE also released its list  of post-secondary programs that failed DOE's "gainful employment" rule.  More than 800 programs are on that list.

DOE's Heightened Cash Monitoring List: 539 institutions

Let's look first a DOE's Heightened Cash Monitoring List. Most of the schools on this list are for-profit institutions, which shouldn't surprise anyone. Is anyone shocked to discover that Lubbock Hair Academy in Lubbock, Texas and the Institute for Therapeutic Massage in Haskell, New Jersey are on that list?

A lot of the colleges on DOE's Heightened Cash Monitoring List are nonprofit liberal arts schools, and that isn't surprising either. The small liberal arts colleges are finding it more and more difficult to attract students, and a number are on shaky financial ground.  Colleges on the list include secular institutions like Pine Manor College and Mount Ida College in Massachusetts and religious institutions like St. Gregory's University in Shawnee, Oklahoma and St. Mary of the Woods College in Indiana.

But I was surprised that DOE put 38 foreign colleges on its Heightened Cash Monitoring List. Who would have thought the federal government would issue student loans to Americans studying abroad? But it does, and some of those foreign schools have financial concerns that got them on DOE's Heightened Cash Monitoring List.

Here are just a few of the foreign schools that made the list: Medical University of Gdnask in Poland; Tyndale University College and Seminary in Toronto, Canada; and the University of Gloucestershire in Cheltenham, England.

But what surprised me most was the number of public institutions that were flagged by DOE for Heightened Cash Monitoring--84! In Minnesota, more than 30 public colleges and universities made the list, including regional universities like Bemidji State University and Minnesota State University in Mankato. Nine public institutions in Alabama are also on the list, including the University of North Alabama and the University of West Alabama.

In short, DOE's latest Heightened Cash Monitoring list shows us that a lot of for-profit colleges, non-flagship public colleges, and small liberal arts colleges are under financial strain. Not all of the 539 schools on that list will fail in coming years; but certainly some of them will.

More Than 800 Programs Failed DOE's Gainful -Employment Rule

The Department of Education adopted a Gainful-Employment Rule in 2014, which was designed to protect students from enrolling in expensive for-profit colleges that did not prepare them for good jobs. Under this rule, programs risk losing federal student aid money if their graduates do not make enough money on average to justify the expense of getting their education. Specifically, programs fail the Gainful-Employment Rule if their graduates have student-loan payments that exceed 12 percent of their total earnings or 30 percent of their discretionary income.

Over 800 higher-education programs failed DOE's gainful-employment test, which it released this week. As reported by the Chronicle of Higher Education, 98 percent of the failing programs were offered by for-profit institutions. But even the mighty Harvard University made the list for one of its programs--a certificate program in theater arts.

Here is what surprised me about the list of programs that failed the gainful-employment test: Only two law schools were on it. Florida Coastal School of Law and Charleston School of Law, both for-profit law schools failed to meet the debt-to-earning ratio that the Gainful Employment rules requires.

Given the damning evidence compiled by Law School Transparency, I was puzzled by the small number of law schools that failed DOE's gainful employment rules.  After all, LSAT scores for students at 7 law schools are so low that Law School Transparency estimates that 50 percent of their graduates are at "extreme risk" of failing their bar exams. And LSAT scores at 26 schools are so low that a quarter of their graduates run an extreme risk of failing their licensing exams.

Conclusion: Big Trouble Ahead For Higher Education

DOE's Heightened Cash Monitoring List and its list of programs that failed the Gainful-Employment Rule are warning signs that a number of higher education institutions are in trouble. For-profit institutions, non-prestigious public college, and small liberal arts schools are all surviving on federal student-aid money. If DOE turns off the spigot to any of the schools on these two lists, those schools will certainly close within a few months.

If higher education leaders are not concerned about the financial health of their industry, they certainly should be.

Gee, I'm scared!



References

Andrew Kreighbaum. Latest Heightened Cash Monitoring List. Inside Higher Ed, January 12, 2017.

Law School Transparency. 2015 State of Legal Education.

Karen Sloan. Two Law Schools Get an 'F' for High Debt From Education Dept. Law.com, January 11, 2017.

U.S. Department of Education press release. Obama Administration Announces Final Rules to Protect Students from Poor-Performing Career College Programs, October 30, 2014.

U.S. Department of Education press release. Education Department Releases Final Debt-to-Earnings Rates for Gainful Employment Programs. January 9, 2017.

Fernanda Zamudio-Suarez. Over 800 Programs Fail Education Dept.'s Gainful-Employment Rule. Chronicle of Higher Education, January 9, 2017.

Fernanda Fernanda Zamudio-Suarez. Here Are the Programs That Failed the Gainful-Employment RuleChronicle of Higher Education, January 9, 2017.





Tuesday, December 20, 2016

Charlotte School of Law loses access to federal student aid money: The beginning of the end for bottom-tier law schools?

In less than two weeks, Charlotte School of Law will lose all access to federal student financial aid money. CSL is a for-profit law school with an undistinguished reputation. According to Law School Transparency, an organization that gathers data on American law schools, only 46.3 percent of CSL graduates passed their bar exams in 2015. LST calculates that 50 percent of its 2014 freshman class had credentials so low that they were at extreme risk of failing the bar.  LST also reported that not a single one of CSL's 2015 graduates obtained a federal judicial clerkship, another indication of CSL's mediocrity.

The Department of Education's decision to deny student aid money to CSL is probably the school's death knell. Most of CSL's students must take out student loans to pay CSL's extremely high tuition--about $44,000 a year.

The American Bar Association had already found that the law school was out of compliance with the ABA's accrediting standards, but DOE did not pull the plug on CSL solely for that reason.

Rather, as DOE's press release explained, CSL was found to have made misleading statements about itself to prospective students:
"The ABA repeatedly found that the Charlotte School of Law does not prepare students for participation in the legal profession. Yet CSL continuously misrepresented itself to current and prospective students as hitting the mark," said U.S. Under Secretary of Education Ted Mitchell. "CSL's actions were misleading and dishonest. We can no longer allow them continued access to federal student aid."
Without federal student-loan money, CSL won't survive long. And if the school closes, that will be a good thing for the legal profession and all the potential students who might have borrowed money to attend this extremely lackluster institution.

Nevertheless, even if CSL closes, hundreds of the school's graduates will suffer. Most have borrowed a lot of money to attend CSL; few obtained jobs that made the financial investment worthwhile.

DOE needs to do more than just cut off funds from one lower-tier law school. It needs to allow graduates of CSL and similar bottom-feeder law schools to discharge their student loans in bankruptcy.

And then DOE needs to get busy and shut off student aid money to some other law schools that have low admission standards and that are not placing enough of their graduates in well-paying law jobs. Here are some schools DOE needs to examine:

North Carolina Central University
Southern University Law Center
Appalachian School of Law
Florida Coastal School of Law
Ave Maria School of Law
Arizona Summit Law School

LST calculates that  these schools admitted students with LSAT scores so low that 50 percent of their 2014 freshman class were at extreme risk of failing the bar exam.

And here are some more schools that bear watching:

Florida A & M University
Texas Southern
Mississippi College
Thomas M. Cooley Law School
Valparaiso University
St. Thomas University-Florida
University of North Dakota
Ohio Northern University
University of South Dakota
Barry University
University of La Verne

LST has identified these schools as ones that admit students with LSAT scores so low that 25 percent of their  entering 2014 classes were at extreme risk of failing the bar exam.

DOE and the ABA must work together to raise the overall quality of legal education in the United States.  As Kyle McEntee, writing for Law School Transparency, observed:
Charlotte School of Law is not the only law school operating shamelessly to the detriment of the legal profession. This school, like several dozen more, set large percentages of their students up to fail, leaving them with high debts, wasted time, no job, and no hope. It’s long past time for these schools to go.
ABA needs to rescind accreditation for some of these schools, and DOE needs to cut off federal funding for at least a dozen more law schools.

References

Law School Transparency. 2015 State of Legal Education.

Kyle McEntee. Will This Law School Close After Feds Cut Funding? Bloomberg News, December 19, 2016.

U.S Department of Education. Charlotte School of Law Denied Continued Access to Federal Student Aid Dollars. U.S. Department of Education press release, December 19, 2016.



Saturday, November 26, 2016

American Bar Association begins cracking down on mediocre law schools: Too little, too late

After waking from a long slumber, the American Bar Association is finally cracking down on mediocre law schools. A few days ago, the ABA censured Valparaiso University School of Law and placed Charlotte School of Law on probation. According to the ABA, both schools had violated ABA standards requiring law schools to only admit students who are likely to pass the bar exam.

This is not the first time that ABA has censured a mediocre law school. Last summer, the ABA's accrediting unit recommended against  accrediting the newly organized University of North Texas School of Law and cited Ava Maria Law School for failing to comply with ABA quality standards. Like Charlotte and Valparaiso, UNT and Ava Maria received ABA raspberries for low admission standards.

But the ABA's sanctions against four mediocre law schools is too little and too late. The job market for lawyers has imploded; and law chool admission applications have plunged. Many second- and third-tier law schools have had to lower their admissions standards just to fill empty seats; consequently, a lot of law schools are graduating a high number of students who will have difficulty passing their bar exams.

Law School Transparency (LST), a watchdog organization that monitors law school admission standards and bar pass rates, identified a great many law schools that have very low admission standards. LST constructed a model for determining when law school admission standards are so low that students run the risk of failing the bar, and it found a high number of law schools with dicey admission standards.

These are some of LST's most startling findings from its 2015 report on law schools' admission standards for their 2014 entering classes:
  • Seven law schools had admitted students with qualifications so low that 50 percent of their freshman classes ran an extreme risk of failing the bar exam. Those schools included Southern University Law Center, a historically black institution; and Arizona Summit and Florida Coastal, two for-profit law schools.
  • Twenty-six law schools had admission standards so low that 25 percent of their entering classes were at extreme risk of failing the bar.  Texas Southern, another historically black law school, is on that list, along with several regional public institutions, including North Carolina Central University, Ohio Northern University, and Southern Illinois University.
  • Twenty-nine law schools had admission standards so low that 25 percent of their entering classes ran a very high risk of failing the bar exam. Among this number were John Marshall Law School, a for-profit institution; Widener University, a private school; and University of Arkansas at Little Rock, a public institution.
It is the ABA's responsibility to monitor law schools' quality standards, and it fell down on the job. In fact, an advisory panel for the Department of Education recently recommended that the ABA's authority to accredit more law schools be suspended for a year--an astonishing rebuke to a very powerful professional organization.

But even if the ABA gets serious about enforcing quality standards at the nation's law schools, thousands of law-school graduates have already been seriously injured. On average, an individual graduates from law school with $140,000 in student-loan debt; and there are now two newly minted attorneys for every available law job.

Some law graduates have sued their law schools for misrepresentation, arguing they were lured into enrolling based on misleading job placement rates that the law schools disseminated. So far, these suits have been unsuccessful. Thomas M. Cooley Law School and Thomas Jefferson Law School, for example, successfully defended lawsuits filed by their graduates.

A number of law school graduates have filed bankruptcy in an attempt to discharge their student loans. Some have been successful or at least partly successful--the Barrett case and the Hedlund case. Others have lost their adversary lawsuits: Mark Lilly and Mark Tetzlaff.

In my view, people who graduated from second- and third-tier law schools with mountains of debt and no law job should seriously consider filing bankruptcy. But if they pursue this course, they must educate the bankruptcy judge about the terrible job market for lawyers and the high debt load that most law graduates now carry.

As the crisis in legal employment becomes more evident, I think bankruptcy judges will become more and more sympathetic toward law school graduates who are burdened by heavy debt loads and don't have law jobs. I think judges might be particularly sympathetic to debtors who graduated from second- and third-tier law schools given the terrible job prospects for these people.

As I said, educating the bankruptcy judge is critical. The data collected by Law School Transparency is a good place to look for data that will help bankruptcy judges understand the absolutely desperate plight of many recent law scool graduates.

References

Barrett v. U.S. Department of Education, 545 B.R. 645 (Bankr. N.D. Cal. 2016).

Paul Fain. Federal panel votes to terminate ACICS and tightens screws on other accreditors. Inside Higher Ed, June 24, 2016.

Andrew Kreighbaum. ABA Censures Law School. Inside Higher Ed, November 22, 2016.

Andrew Kreighbaum. ABA Tighens Up. Inside Higher Ed, August 31, 2016.


Wednesday, January 6, 2016

Tetzlaff v. Educational Credit Management Corporation: The Seventh Circuit made a mistake when it refused to discharge a quarter of a million dollars in student-loan debt owed by an umemployed 56-year old man living on his mother's Social Security check

The Seventh Circuit Court of Appeals got it wrong when it affirmed a lower court ruling against Mark Tetzlaff, an unemployed 56 year-old man who tried to discharge $260,000 of student-loan debt in bankruptcy. Mr. Tetzlaff filed a petition for certiorari in October with the U.S. Supreme Court, seeking to have the Seventh Circuit's decision overturned. I hope the Supreme Court agrees to hear his case.

The Seventh Circuit applied the Brunner test too harshly.

In ruling against Tetzlaff, the Seventh Circuit determined that requiring Tetzlaff to repay more than a quarter of a million dollars in student-loan debt would not cause him "undue hardship." To reach this bizarre conclusion, the court applied the three-part Brunner test, which required Tetzlaff to show:
1) [He could] not maintain, based on current income and expenses, a minimal standard of living . . . if forced to repay [his] loan;
 2) additional circumstances exist indicating that this state of affairs is likely to persist for a significant portion of the repayment period;
3) [he] made good faith efforts to repay the loans. 
 At the time Tetzlaff filed his adversary hearing, he was 56 years old, unemployed, and living with his mother. Both he and his mother subsisted entirely on his mother's Social Security check. Thus, the court admitted that Tetzlaff met the first prong of the Brunner test: he could not pay back his student loans and maintain a minimal standard of living.

But the Seventh Circuit panel ruled that Tetzlaff had not meet the second prong of the Brunner test.  According to the court,Tetzlaff was required to show "the certainty of hopelessness" concerning his financial future.  In essence, the court predicted that Tetzlaff's financial situation will probably improve. After all, the court noted, "he has an MBA, is a good writer, is intelligent, and family issues are largely over" (quoting the lower court's opinion).

Moreover, in the Seventh Circuit's view, Tetzlaff had not made good faith efforts to pay back his loans, a requirement of the Brunner test's third prong.

Although Tetzlaff may not have made sufficient efforts to repay the $260,000 he was trying to discharge in bankruptcy, he had also borrowed money to attend Florida Coastal Law School; and he had paid back his law school loans. Tetzlaff argued in court that his successful effort to pay off his law-school loans showed his good faith,

But the Seventh Circuit did not buy Tetzlaff's argument.  In the court's view, Tetzlaff had not made a good faith effort to repay the $260,000 he owed to Educational Credit Management Corporation, the agency that was fighting Tetzlaff's bankruptcy discharge. Thus he failed the third prong of the Brunner test.

Where the Seventh Circuit went wrong: Low Job Prospects for Law Graduates

In my view, the Seventh Circuit erred when it refused to discharge Tetzlaff's student loan debt. 

First of all, a 56-year old man who is unemployed and has significant mental health issues (as he testified in court) will never pay back more than a quarter of a million in student-loan debt--a debt that is growing larger by the day due to accrued interest. The court would have ruled more realistically and more compassionately if it had applied the principle laid down by the Ninth Circuit's Bankruptcy Appellate Panel in its 2013 Roth decision: "[T]he law does not require a party to engage in futile acts." 

It is true Tetzlaff holds an MBA and a law degree, but these credentials are no guarantee of a good job, particularly given his age, his employment history, and his mental health issues. In fact, Tetzlaff's law degree may be almost worthless.  

As Paul Campos wrote in his 2012 book, Don't Go To Law School (Unless), the job market for lawyers is terrible. Indeed, Campos observed, "[L]aw schools are now producing more than two graduates for every available job."

And Tetzlaff's prospects for a legal job are especially dire since he failed the bar exam twice. In addition, he graduated from Florida Coastal Law School, one of the nation's bottom-tier law schools with very low admissions standard. According to Law School Transparency, a public interest group, 50 percent of Florida Coastal's 2014 entering class were at extreme risk of failing the bar exam based on their LSAT scores.

Law School Transparency pointed out that graduates of law schools with low admission standards have a much harder time obtaining employment than graduates from more prestigious law schools. "Legal job rates are considerably worse at the serious risk schools," Law School Transparency's report stated. "A serious risk school is 4 times as likely to have a below average legal job rate. Nearly three-quarters of schools with employment rates below 50% were serious risk schools."

Law School Transparency's recent report shows that borrowing money to attend a law school with low admissions standards is not a good bet. "Based on available salary data from serious risk schools, graduates from these programs cannot service their debts without generous federal hardship programs."

Nevertheless, Tetzlaff was wise to pay off his law-school debt first, since the law school would not release his diploma to him unless he paid that debt. And without a diploma, he would be unable to take the bar exam. In fact, Tetzlaff had no real choice in prioritizing his law school debt over his other student loan debt.

It is truly unfortunate that the Seventh Circuit showed both lack of compassion and lack of understanding by penalizing Mr. Tetzlaff for making the only sensible financial decision he could make.  He simply had to make paying his law-school debt a priority in order to have any hope of ever practicing law.

The Court Should Not Have Allowed ECMC to accuse Tetzlaff of being a malingerer

Educational Credit Management Corporation, perhaps the nation's most heartless and ruthless student-loan debt collector, opposed the discharge of Tetzlaff's student-loan debt, and it hired Dr. Marc Ackerman, a forensic psychologist, to bolster its case. Ackerman performed tests on Tetzlaff and testified that Tetzlaff "'scored very high on several malingering scales,' indicting that Tetzlaff was perhaps feigning his psychological symptoms."

I find it outrageous that Educational Credit Management Corporation's hired a forensic psychologist as a means of suggesting Tetzlaff is a malingerer. ECMC has fought bankruptcy relief for distressed student-loan debtors all over the United States, and its chief executives have grown rich in the debt collection business. For ECMC to force an unemployed man in his mid-50s to take a psychological exam in a bankruptcy proceeding to determine whether he is a malinger is detestable.

It is true that Tetzlaff introduced testimony about his mental health issues, but I don't think that gives ECMC license to use an expert witness to essentially attack his character. In my opinion, the bankruptcy court should have excluded the forensic psychologist's opinion on the grounds of common decency.

And if we are going to be looking into people's mental health, let's check the mental health status of the ECMC officials who opposed bankruptcy relief for Jane Roth, a 68-year-old woman with chronic health problems who was living solely on the income of a $774 Social Security check. Anyone who would persecute Jane Roth must have serious mental health problems--let's call it chronic undifferentiated greed.

Conclusion: The  Seventh Circuit committed a grave error in deciding the Tetzlaff case

The Tetzlaff decision was a bad decision. Mr. Tetzlaff should be commended for trying to improve his economic prospects by obtaining graduate education, and he should not be penalized because some of his educational choices may have been misguided.

Mr. Tetzlaff probably made a mistake when he borrowed money to attend Florida Coastal Law School.  But he should not suffer a lifetime penalty for mistakes he made in his good faith efforts to obtain an education. And people in bankruptcy should not be required to take psychological tests to determine whether they are malingers.

The Department of Education needs to rein in Educational Credit Management Corporation by insisting that it not oppose bankruptcy relief for people like Mark Tetzlaff. Unless it does that, DOE simply cannot continue to say with any credibility that it is trying to relieve the distress of millions of people who are unable to pay back their student loans.

References

Paul Campos. Don't Go To Law School (Unless). Self-published, 2012.
Roth v Educational Credit Management Corp, 490 B.R. 908, 920 (9th Cir. BAP 2013).
Law School Transparency. 2015 State of Legal Education. Accessible at: http://lawschooltransparency.com/reform/projects/investigations/2015/
John Hechinger. Taxpayers Fund $454,000 Pay for Collector Chasing Student Loans. Bloomberg.com, May 15, 2013. Accessible at: http://www.bloomberg.com/news/2012-05-15/taxpayers-fund-454-000-pay-for-collector-chasing-student-loans.html
Tetzlaff v. Educational Credit Management Corporation, 794 F.3d 756 (7th Cir. 2015). Accesible at: http://scholar.google.com/scholar_case?case=900247726541956067&hl=en&as_sdt=6&as_vis=1&oi=scholarr

Friday, October 30, 2015

Income-Based Repayment Plans are a fraud on college students: Reflections on Paul Campos' analysis of IBRs

Don't Go To Law School (Unless), Paul Campos' excellent book on the economics of legal education, was published in 2012, and I am embarrassed to say I did not read it until this week. Campos delivered a devastating critique of American law schools, which have charged insanely high tuition for turning out more lawyers than the nation needs. No one should make a decision to go to law school without reading Campos' book, along with the recent report on law-school admissions standards put out by the public interest group Law School Transparency.

Even people who don't plan to go to law school should read Campos' book, because his indictment of legal education also applies to higher education in general. All over the United States, colleges have jacked up their tuition, forcing their students to borrow more and more money. It is now apparent that millions of students are saddled with unmanageable student-loan debt.

To keep the gravy train rolling, higher education's insiders now back long-term income-based repayment plans (IBRs) that lower borrowers' monthly loan payments but extend the repayment time to as long as 25 years. Policy think tanks like the Brookings Institution, the Obama administration, and the New York Times have all backed IBRs.

Let's look at what Paul Campos had to say about IBRs in Don't Go To Law School (Unless).  (Campos also criticizes public service loan forgiveness plans (PSLFs), but I will not comment on PSLFs in this essay).

"The truth is," Campos wrote, "that people who are likely to end up in IBR . . . if they go to law school should not go at all" (48).  People who participate in these long-term repayment plans will generally be making payments so low that they don't cover accumulated interest, which means that many debtors will never pay off their loans. Moreover, Campos notes, under current IRS regulations, any debt that is forgiven at the end of a long-term repayment plan is considered taxable income.

Campos trenchantly pointed out that IBRs are simply a way to prop up the law schools' broken business model:
When law schools push the supposed benefits of IBR . . . to prospective students, what they're really doing is advertising that they're operating under a business model that doesn't work unless it is subsidized heavily at both ends by the American taxpayer. Law school is subsidized on the front end by federal educational loans, which allow students to borrow money they won't be able to pay back, and by IBR  . . on the back end, which allows graduates to have the "privilege" of being in debt servitude to the U.S. government for ten or, more likely, twenty-five years, with the added bonus of being hit by a huge tax bill at the end of it all. (51)
Indeed, Camps suggests that law schools that push the benefits of IBRs are engaging in unethical behavior. "Given that the American taxpayer will be left holding the bag for all the unpaid debt accrued by law graduates in these programs, there's a good argument to be made that law schools who promote IBR are participating in a fraud on the public" (50) (my emphasis).

Every criticism Campos raised about IBRs as a means of financing legal education applies to higher education in general. Twenty-five year repayment plans (or even the less onerous 20-year repayment plan developed by the Obama administration) force students to pay a percentage of their income to the federal government for the majority of their working lives.

These long-term repayment plans demonstrate the intellectual vacuity of our higher education community. In their desperate effort to maintain the status quo, colleges and universities are throwing their students under the bus.  Rather than change their business model, they raise their tuition rates every year and soothingly assure their students not to worry---they will have 25 years instead of 10 to pay off their student loans.

Image result for throwing someone under the bus funny
American universities are using IBRs to throw their students under the bus.

References

Paul Campos. Don't Go To Law School (Unless) (published by the author, 2012).

Thursday, October 29, 2015

Does South Dakota need a law school? Probably not.

Among Alaska's many admirable distinctions is the fact that the state does not have a public law school. Alaskans apparently decided that the United States has enough law schools (203) and that Alaskans who want to become lawyers can enroll in a law school out of state.

But every other state has at least one law school, including the states of North Dakota and South Dakota.  Unfortunately, neither state has been particularly good at attracting high-quality students. According to a recently report prepared by Law School Transparency, 25 percent of the students admitted to the 2014 class of students at both states' law schools were so low as to put them at "extreme risk" of failing the bar exam.

Wouldn't it make sense for North Dakota and South Dakota to close their law schools and send their best students to study at an out-of-state law school like Alaska does?  And wouldn't it make sense for Ohio to close Ohio Northern Law School and for Illinois to close the law school at Southern Illinois University, two law schools with high percentages of students with abysmally low LSAT scores?

And let me raise another question. In the dawning years of the 21st century, do we really need historically black law schools like Texas Southern and the law school at Louisiana's Southern University? Both law schools had 2014 classes with high numbers of students with extremely low LSAT scores.

Texas Southern's law school is just down the street from the University of Houston School of Law, and Southern's law school is just a few miles from LSU's law school. Why are the states of Texas and Louisiana maintaining two public law schools in the same city?

Unfortunately, law schools serve other functions besides training lawyers. Universities want the prestige attached to having a law school along with the high tuition rates they can charge for offering relatively cheap educational experiences. Historically black colleges and universities have a great deal of political clout, and closing a historically black law school would raise a howl of protest.

But our nation's refusal to face the crisis in legal education is going to have catastrophic consequences. Thousands of people are graduating from law school with massive debt and no job, and the quality of our lawyers is deteriorating as law schools lower admission standards to attract students.

As a person who practiced law in Alaska for nine years, I can attest that lack of a law school created no hardship for Alaskans.  During the 1980s, when I was a lawyer in Anchorage, the city had one lawyer for every 200 residents. Somehow, the state muddled along without a law school and seems to have suffered no ill consequences.

And I will end this blog on a somber note.  Seattle University School of Law recently announced plans to open a satellite-branch law-school campus in Anchorage, and the University of Alaska at Anchorage has entered into some kind of partnership with Willamette University College of Law and Washington Univesity School of Law.

Image result for map of alaska
Poor Alaska: No law school!
References

Law School Transparency. 2015 State of Legal Education. Accessible at: http://lawschooltransparency.com/reform/projects/investigations/2015/

Seattle University School of Law reaches agreement to house satellie law campus at Alaska Pacific University, June 17, 2014. Accessible at: https://www.alaskapacific.edu/seattle-university-school-of-law-reaches-agreement-to-house-satellite-law-campus-at-alaska-pacific-university/