In August, the Student Loan Ranger reviewed Brian Tamanaha's book "Failing Law Schools," focusing on his explanations for rising law school tuition and the implications for prospective students. A professor of law at the Washington University in St. Louis School of Law, Tamanaha is well aware that rising tuition and declining job prospects have hit home for prospective law students, who are shying away from law school
One thing we did not focus on — but that has become increasingly relevant for students given the amount they're investing in their legal education — is the effect of that decline on the viability of law schools' economic model.
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Tamanaha's analysis of the danger for law schools is simple: As the number of applicants declines, schools essentially have three options. They can keep the size of enrollment constant but increase scholarships to maintain the quality of their students, which will result in lower revenue. They can simply lower enrollment to maintain quality, which will again mean less revenue.
Or schools can maintain revenue by holding enrollment and scholarships at the same level, which will result in admitting a higher percentage of applicants, but a consequent decline in the average LSAT and GPAs of the admitted students, as well as lower rankings.
Many law schools are taking the proactive step of lowering their enrollment. One study estimated 51 percent are doing so, including highly ranked schools like George Washington University Law School, Northwestern University Law School and the University of California Hastings College of the Law.
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Assuming schools are doing this to maintain the academic quality of incoming students and to preserve their reputation and rankings, it may be a wash for most prospective students. Students should, however, make sure that the decline in revenue will not force the school to sacrifice quality instruction and clinical programs that are important to them.
Law schools also are offering increased scholarships in order to entice students. This has led to an increase in the number of students bargaining over scholarships. The Student Loan Ranger strongly encourages this; reducing the amount you have to borrow — and repay multiple times over — is the best way to manage your student loan debt.
A couple of words of caution apply here. First, make sure the school is not sacrificing programs you care about to deal with the decline in revenue. Second, be especially wary of accepting merit scholarships that you could easily lose after your first year. The decision to pay full freight for two years or eat the sunk cost of your first year will not be an easy one.
It also appears that some schools, such as Thomas M. Cooley Law School, do not intend to lower enrollments. This will probably entail accepting a much higher proportion of applicants (one estimate is that overall admission rates may top 80 percent) and a decline in the LSAT scores and GPAs of admitted students, as well as a decline in rankings for those law schools.
The Student Loan Ranger believes this is a situation for applicants to avoid, because law school rankings do affect job and salary prospects — which, in turn, affect your ability to repay your loans.
Finally, law school applicants should also be aware, as a concerned colleagues letter to the ABA Task Force on Legal Education put it, that the "financial survival of some schools [is] in question."
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The Student Loan Ranger cannot stress enough how deeply law school student loans, which now routinely top $100,000, will affect major life decisions like marriage, having children, buying a home and retirement.
Prospective law students need to make sure they are going to law school for the right reason — to be a lawyer — and to make sure they are going to a school that will maximize their chances of having that career and paying off their student loans in 10 years.
Closely examine every school you are considering to make sure it is taking proactive steps to deal with the new reality of declining law school admissions, and take advantage of the opportunity to strike the best scholarship deal you can to minimize your borrowing.
Most of all, make sure you are confident in the long-term future of your law school; you do not want to be at a job interview explaining how you got a great legal education even though your law school no longer exists.
Isaac Bowers is a senior program manager in the Communications and Outreach unit, responsible for Equal Justice Works's educational debt relief initiatives. An expert on educational debt relief, Bowers conducts monthly webinars for a wide range of audiences; advises employers, law schools, and professional organizations; and works with Congress and the Department of Education on federal legislation and regulations. Prior to joining Equal Justice Works, he was a fellow at Shute, Mihaly & Weinberger LLP in San Francisco. He received his J.D. from New York University School of Law.