By
WILMETTE, Ill. — Ten months after graduation,
only 60 percent of the law school class of 2014 had found full-time long-term
jobs that required them to pass the bar exam.
Even that improvement over the class of 2013 (a
57 percent employment rate) came with three asterisks: Last year, the American Bar Association changed the job-reporting rules to give
law schools an extra month for the class of 2014 to find jobs; graduates
employed in law-school-funded positions count in the employment rate; and the
number of jobs that require bar passage fell from 2013 to 2014.
Amazingly (and perversely), law schools have
been able to continue to raise tuition while producing nearly twice as many
graduates as the job market has been able to absorb. How is this possible? Why
hasn’t the market corrected itself? The answer is that, for a given school, the
availability of federal loans for law students has no connection to their poor
post-graduation employment outcomes.
Students now amass law school loans averaging
$127,000 for private schools and $88,000 for public ones. Since 2006 alone, law
student debt has surged at inflation-adjusted rates of 25 percent for private
schools and 34 percent for public schools.
In May 2014, the A.B.A. created a task force to
tackle this problem. According to its recent report, 25 percent of law schools
obtain at least 88 percent of their total revenues from tuition. The average
for all law schools is 69 percent. So law schools have a powerful incentive to
maintain or increase enrollment, even if the employment outcomes are dismal for
their graduates, especially at marginal schools.
The underlying difficulty is that once students
pay their tuition bills, law schools have no responsibility for the debt their
students have taken on. In other words, law schools whose graduates have the
greatest difficulty finding jobs that require bar passage are operating without
financial accountability and free of the constraints that characterize a
functioning market. The current subsidy system is keeping some schools in
business. But the long-term price for students and taxpayers is steep and
increasing.
Paradoxically, the task force chairman was
Dennis W. Archer, the former mayor of Detroit, who is also head of the national
policy board of Infilaw, aprivate equity-owned consortium of three for-profit law
schools — Arizona Summit, Charlotte and Florida Coastal. These schools are
examples of the larger problem. Most Infilaw 2014 graduates didn’t find jobs
that required their expensive degrees. Excluding positions funded by the law
school, only 39.9 percent of Arizona Summit graduates found full-time jobs
lasting at least a year and requiring bar passage. Florida Coastal’s rate was
34.5 percent. At Charlotte, it was 34.1 percent.
Yet as the demand for new lawyers continued to
languish from 2011 to 2014, the size of Infilaw’s graduating classes almost
doubled, to 1,223. These schools are also among the leaders in
creating law student debt. Arizona Summit’s 2014 graduates had average law
school debt of $187,792. At Florida Coastal, the average was $162,785. Charlotte’s average was $140,528.
The task force report said that some witnesses
proposed “capping law student loans, requiring law schools to have ‘skin in the
game’ by being responsible for loan repayment in certain situations, and even
scrapping the current federal student loan program altogether.” It
characterized proponents of such measures as hoping “that a kind of fiscal
tough love will force schools to become more financially responsible and reduce
cost.”
But the task force argued that “there seems to
be little need to impose the kind of tough love some want because the market is
already doing it.”
Except that the market is doing no such thing.
While enrollment did decline to about 38,000 last year from 52,000 in 2010, it
has not been falling at the pace necessary to reach equilibrium in a stagnant
legal job market. Too many incoming law school students still believe they will
be among the lucky few who get decent jobs.
The task force, having dodged the issues that
should have been the focus of its work, offered four suggestions: law schools
should offer students better debt counseling; the Department of Education should
develop “plain English” disclosure information about student loans; the A.B.A.
should collect and disseminate information about how law schools spend their
money; and the A.B.A. should encourage law schools to experiment on curriculums
and programs.
None of those will make a difference. The crisis
in legal education is real. Magical thinking and superficial rhetoric about
declining enrollments, better debt counseling for students, and law schools’
experimenting with curriculum changes will not create more jobs.
The A.B.A. should treat the challenge seriously
and begin to address it with serious solutions. So far, that has not happened.
In fact, earlier this month, the A.B.A. House of Delegates missed an
opportunity to address this issue by giving its rubber stamp of approval to the
task force report.
Until student loans bear a rational relationship
to individual law school outcomes, law schools will exploit their lack of
accountability, the legal education market will remain dysfunctional, and
equilibrium between supply and demand will remain elusive.
The A.B.A. calls itself “the national voice of
the legal profession.” When it comes to the profession’s most urgent problem,
it’s long past time to speak up.
No comments:
Post a Comment