The Official Guide is Dead, Long Live the Official Guide!

Deciding that paper is out, the ABA has moved the information that used to be published in the encyclopedic ABA-LSAC Official Guide to the ABA Law Schools to the Internet. I’m told that the ABA will release a spreadsheet full of the same data to make researchers’ lives easier.

Being a masochist, I went ahead and looked through the full-time tuition numbers anyway.

The biggest overall changes are one new private law school (Belmont), and Texas Wesleyan is now Texas A&M. It’s the first time since 1997 that a private law school has merged with a public university, but I think it will become more common going forward. For instance, South Carolinians were discussing buying up Charleston School of Law a few months ago. Same goes for the University of New Hampshire. In fact, just this weekend Vermont Law School was said to be in merger talks with the University of Vermont.

And yes, I have no idea why a public university would want to buy up a law school that’s losing money and students. Texas A&M, in fact, lost 33 students this year (~$770,000 netting out full-time and part-time students and assuming they’d pay full tuition). It’s like, they must be asking for a reorganization at some point down the road to say nothing of the fact that public law schools are obsolete.

As for tuition … it went up!

Full-Time Law School Tuition Dispersion (Excl. P.R., 2013 $)

(Clicking on this chart shall embiggen it.)

…As did the number of law schools that charge more than the $20,500 annual Stafford loan limit. Welcome to Grad PLUS country, travelers.

No. Law Schools With Tuition Exceeding Annual Stafford Loan Limit

Okay, we know at this point that a lot of people aren’t paying full price for legal education anymore, except if they lost their scholarships. Nevertheless, someone has to be paying for the merit aid, and despite the applicant crash, as of two years ago inflation-adjusted revenue from full-time students paying full tuition hadn’t stopped increasing. Even the median law school hauled in more money from full-time, full-paying students than before (~$7.8 million).

For tuition increases, though, the outlier of the year is Thomas M. Cooley Law School, which increased its full-time tuition by $6,400 (17 percent). Meanwhile, its full-time enrollment fell from 604 last year to 386 this year. The number of full-time matriculants this fall was 49, down from 115 last year (57 percent). Wow.

On the other side of the cost curve universe, Arizona’s resident tuition fell by 10 percent, a record low going back to … 2009, when you were listening to the soundtrack to Hannah Montana: The Movie.

I haven’t carefully combed the numbers for this year, but researchers should know that Southern University Law Center reported its semester tuition, not annual.

For private law schools, full-time tuition increases occurred on the more expensive end, but they’re slowing down in tandem, just not as quickly as the inflation rate.

Full-Time Private Law School Tuition Increases by Tuition Quintile (Current $)

That’s all I’ve got. Peace.

New America Foundation Discovers Law School Debt Disaster

Via Jordan Weissmann of Slate, the New America Foundation (NAF) issued a policy brief titled, “The Graduate Student Debt Review.” It opens with a suspiciously leading question, “Is America’s student debt problem due more to expensive graduate degrees than unaffordable undergraduate educations?” Like, why would it think graduate debt is a bigger problem than undergraduate debt? Hm … If I didn’t know any better I’d say the NAF has it in for Grad PLUS loans…

…Which I have no problem with. If the NAF wants to dress up in camos, put on war paint, and emerge from the lagoon with a machete clenched in its teeth as it hunts down the beast of unlimited student lending, I say have at it. I might even sneak into the theater to watch.

The obvious question, though, is what does the NAF mean by “America’s student debt problem”? I know what I think it means, but the NAF’s justifications appear to be different:

Students, families, and taxpayers invest significant resources in financing “college,” in large part because a bachelor’s or associate degree is a must for anyone who wants to secure a middle-class income. If students are taking on unmanageable debt to earn those credentials, then many would argue that the system isn’t working. We should not, however, draw the same conclusions from debt levels of students who attend graduate and professional school. While a graduate or professional degree boosts a student’s earnings prospects and the economy at large, it is not the foundation for economic opportunity and middle-class earnings that a two- or four-year degree now provides. (2)

My eyes bleed reading such ideology.

So if someone goes to college, doesn’t take out a lot of debt, but ends up among the 20 percent of graduates who earn less than the median high school graduate in the same age bracket, then the higher education system is working? What about the average defaulted federal loan balance being less than $15,000? How is the system working if someone can borrow a lot of money and pay it off even if they learned their skills on the job?

If I were paranoid, I would suspect that the NAF’s goal is to cut off the worst abuses of the student loan program to save it from critics who think higher education is mostly a positional good. That, or it’s innocently confused on the theoretical debate (such as it is in Washington). Recall that the NAF advocated eliminating Grad PLUS loans while increasing the unsubsidized Stafford loan limit to restore students’ lost purchasing power. It reasoned that Grad PLUS loans can “discourage prudent pricing on the part of institutions,” but the mainstay Stafford certainly does not because education is necessary for the middle class and $30,000 of student debt isn’t so bad.

Okay, so the NAF is probably motivated by a (correctly) assumed conclusion, but what about its findings?

The point of the policy brief is to show that graduate and professional students are borrowing more than a few years ago and that their borrowing accounts for a large portion of total federal student loans (40 percent of the evil $1 trillion+ figure). Therefore, we should separate trends in college borrowing from post-college borrowing. As evidence, the NAF sampled a dataset of people who finished several types of graduate and professional programs in 2004, 2008, and 2012 and displayed their median, 75th percentile, and 90th percentile debt levels.

The tables the NAF provides are interesting for what they are, and along with data provided elsewhere they do show that typical grad students’ debt levels are growing more than undergrads’. However, the tables don’t really answer the questions the NAF is asking. If 40 percent of all student loans are owed by graduates and professionals, we’d want to know the distribution of that 40 percent aggregate by course of study. (How much of it went to med school students? Is it really as bad as those law school scambloggers say? Etc.) That way, we’d know if the growth seen in the tables is systemic as the NAF asserts or isolated to a handful of degree fields.

Instead, the NAF tells us median debt levels for graduates in all fields have gone up, but we knew this already because Grad PLUS loans can go to living expenses and relatively few 2008 grads used them. In a sense the NAF equivocated when it asked, “Is America’s student debt problem due more to expensive graduate degrees than unaffordable undergraduate educations?” Are graduate degrees expensive because tuition costs more or because people are borrowing from the government to leave near campus? We can’t tell, but in Weissmann’s post, the brief’s author, Jason Delisle, claimed Grad PLUS loans mightn’t responsible for the increasing medians but probably the increases at the 75th and 90th percentiles. I don’t believe him either, but that’s what happens when you deny the possibility that credentials are positional goods.

One big reason a distribution analysis would have been more useful is that median debt levels in most graduate degree fields grew by less than $10,000 between 2008 and 2012, and the overall median was only $6,854 higher. The median for “medicine and other health sciences” grew by $23,700, but law grads, as always, stole the show: $44,500 more debt in four years. Indeed, very savvy readers will note that at $128,000, the median 2012 law grad’s debt load was way higher than the weighted average grad’s debt (~$107,000 by looking at the number of graduates and U.S. News debt rankings).

If there’s anything to say about graduate students and debt from this policy brief, it’s that the NAF has discovered that legal education is a unique disaster in higher education.

Instead, it lectures:

Students pursuing [graduate and professional] degrees already have an undergraduate degree, and they should be far more informed consumers. Therefore, they shouldn’t need a lot of public support to finance their next credential, which is why there are no Pell Grants for master’s degrees.

I can’t tell if the gratuitous phrase, “should be far more informed consumers,” is a normative statement against the grad students, their undergraduate institutions for failing to educate them properly, or the grad programs for pitching degrees of dubious value. Chalk one more up to the strategic use of the passive voice, I guess. The worst-case scenario is that the NAF believes that everyone who goes to grad school knows about IBR’s loan cancelation feature, so they irresponsibly attend thinking they won’t have to repay their debts even though they make lots of money because they’re so amazingly educated.

If you think I’m being hard on the NAF—well, I am—but the point is that its policy brief is a bellwether. The Grad PLUS Loan Program is not long for this world, and that’s a very good thing. On the other hand, the NAF is not the ally to the working class—sorry, “middle class”—it fantasizes to be. It’s very much enthralled by human capital theory, and it won’t pay any price if people graduate from college and don’t collect any premium.

When Did the Law School Tipping Point Occur?

Answer: We’ll never really know (for reasons I’ll get into), but there are some good indicators that it was late 2009/early 2010. This isn’t widely acknowledged, but demonstrating it requires some careful calculating that’s worth showing.

The question is, when did people start not thinking about going to law school? (If that makes sense.)

Enrolling in law school is a multi-step process that I’ll reduce to two, taking the LSAT and applying. Looking at applicants is easy enough; looking at LSATs is not. Some people take the test more than once, and the LSAC is stingy about releasing data that break down LSATs by how many tests were first-time or repeat administrations. Worse, the previous release of the LSAC’s “Performance of Repeat Test Takers on the Law School Admission Test,” which publicizes this information, stopped at February 2010, tantalizing us with what was to come. Nor did it help that the February 2010 administration was a cliffhanger: There was an 11 percent drop in first-time takers over the previous year! Did the decline continue in June! Tune in next season, viewers!

Well, it’s been three years, so the LSAC has at last televised the resolution (pdf).

First-Time LSATs One-Year Moving Sum

It turns out that the number of first through third-plus LSATs do not add up to the total. I listed the discrepancy as “Canceled/Nonstandard.” I don’t know if that’s correct strictly speaking, but it tends to correlate with movements in first-time takers. I have no idea how many people take the LSAT under nonstandard conditions, but the data show a discrepancy, so there it is.

A few observations. One, by February 2013, there was a record low number of first-time LSATs going back to 1995 and certainly earlier. Two, the number of second-time LSATs has trended upward since 2006, which is attributable to the ABA’s decision to require law schools to report repeat takers’ highest LSAT scores and not their averages. This is one more reason to isolate first-time takers.

And what do they tell us? Although there was a substantial drop in February 2010 first-time test takers, the decline was modest the following June. Then it hit the fan in October.

Percent Change LSAT One-Year Moving Sums

You can also see that repeat takers resisted declines for a few more periods. All administration types only started falling together in June 2011. The real question is why did February 2010 fall more than June 2010? For that I have no answer. I’d need to know the typical demographics of the test takers in each cycle, so the February drop could be mostly an anomaly. The only thing I know is that first-time takers in that period tend to have lower scores, which indicates that they might be older, non-trad types—not because people’s LSAT abilities rapidly turn to mush as people age but because people who would naturally do well on the test either did so already or are employed in other fields. It’s a big ol’ case of selection bias.

All told, we can imagine the number of LSAT takers as a ball being pushed up a hill by multiple forces and resisted by others, e.g. unemployment versus the population of college-educated young people and informal voices telling them not to bother with law school. At some point the forces pushing the ball uphill were countered by other forces in late 2009/early 2010. Those were, I imagine, early scamblogs (Big Debt Small Law), Above the Law (Elie Mystal’s writings in particular), and Mark Greenbaum’s op-ed to the L.A. Times.

If you want a second opinion on the evidence, we can hypothesize that a “signature” of the tipping point would be an unusual number of people who took the LSAT once or twice but who decided not to retake it or apply after all. Mathematically, the LSAT year, June to February, corresponds best to the applicant cycle. We find that in 2007, 2008, and 2009, that on average there were 1.08 first-time LSAT takers per applicant in 2008, 2009, and 2010, respectively. In 2010, the ratio spiked to 1.17 and then fell a little in subsequent years. With 102,948 2009-2010 first-time LSAT takers, and assuming the 1.08 ratio, we get about 94,500 applicants for 2010. Instead, there were only 87,900, implying that about 6,500 people with a first-time LSAT score in hand in 2009-10 chose not to apply to law school. (It doesn’t matter that the ratio accounts for behaviors of repeat takers, it just needs to be measurable, correlative, and logically related.) Repeating the same process for all LSATs to find a ceiling that includes subsequent test takers who mayn’t’ve applied, we get 100,300 expected applicants, a shortfall of 12,400.

LSATs to Subsequent Applicants

So, sometime between receiving their scores for the June 2009 administration and the beginning of the fall 2010 application cycle, somewhere between 6,500 and 12,400 people dropped out between the LSAT cycle and the application cycle. Switching to a calendar year LSAT cycle (to align it better with the application cycle) raises the range to 8,800 and 14,400.

This, second analysis, suggests that the tipping point occurred in late 2009 but the impact on first-time LSATs wasn’t felt until 2010. It could mean more credit for the early scamblogs and Above the Law, and other sources than the Greenbaum op-ed.

Once the peak was reached, the countervailing forces overpowered the upward ones. Unemployment gave way to distrust in law school as a viable long-term career path. Certainly other sources contributed as well, e.g. The New York Times, but those articles were published a year after the Internet set things in motion. Now inertia is setting in and the trough is slowly being reached.

It’ll be another three years until the LSAC updates the number of first-time and repeat takers again. We may find out who contributed to the upswing in February LSATs in 2014.

Stay tuned…

Site Update: Lawyer Overproduction Page

You can find it here or in the “original research (updated)” menu above. It’s long overdue as I’ve received requests for its sources.

I also delisted the “law schools and law students per capita” page. It hadn’t been updated in around three years, and the lawyer overproduction page pretty much supersedes it. It’s a little sad because that was the first research project I started on this blog back in the summer of ’10. Maybe I’ll come up with a reason to put it back into the mix, but not now.

No Progressives, the ABA Does Not Control the Supply of Lawyers

You can trash the ABA and its Section of Legal Education and Admissions to the Bar, which accredits law schools nationally, for many reasons. You cannot, however, trash either for restricting the supply of lawyers in the United States because they are not licensing authorities. They certainly do not restrict the number of law schools. But if you’re Michael Lind writing for Salon, then you’re free to make all kinds of unsubstantiated claims to the contrary.

Lind’s title succinctly describes his argument, “College-Educated Professionals Could Doom Progressive Politics,” and he gives three reasons. One, professionals won’t support higher taxes on themselves. Two, they extract rents by restricting the supply of professionals, e.g. lawyers, doctors, and for some reason tenured university professors. Three, Lind’s personal experience tells him that these folks aren’t really interested in working class issues.

I normally like Michael Lind. He’s even mentioned Henry George approvingly in his Salon articles. This piece, though, is a disaster that substitutes prejudice for reason—and not just because he walks back from supporting land taxes to calling for higher income and, ugh, consumption taxes.

Support for Higher Taxes

Since Lind’s only evidence that professionals don’t support higher taxes on themselves is Democratic politicians fiscal proposals (tax hikes for households with incomes greater than $250,000, in other words the top two percent), there’s really nothing to discuss here. Household income isn’t the same as individual earnings, which I’ll get to below, and plenty of these households don’t include highly paid professionals. It’s not even clear to what extent these households’ incomes are due to investments and not professional earnings.

To editorialize, many professionals, even highly paid ones, aren’t wealthy in the sense that they have significant workplace autonomy and easy alternatives to their current jobs. Many of them even have hefty student loans that cut into their discretionary incomes, IBR or no. These people might understandably prefer taxes on households with higher incomes, whatever the source.

Supply Restrictions

Lind writes:

Try to find a progressive activist denouncing the monopoly rents of the American professoriate, the American Bar Association, or the American Medical Association [Yes, this sentence didn't end in a period.]

The dirty secret of the American professional elites is credential rents. By restricting the supply of practitioners — you generally can’t be a tenured professor, a practicing lawyer or a doctor without the right degree — the guilds that the professions control artificially drive up the price of college education, legal services and physician services.

As I understand it, the physician shortage in the U.S. is due in part to residencies being funded out of Medicare and Congress not increasing the dollar amounts. Maybe the AMA can ease the rules in other ways, maybe not, but I don’t think it’s pure black hat stuff. I could be wrong though. This blog isn’t defending all professionals.

The supply of lawyers, on the other hand, is not restricted by the ABA. The “generally” Lind uses is a bit broad here. For example, California allows foreign-trained lawyers to take its bar exam (same with New York) and those states have the highest-paid lawyers in the country nevertheless. California also has a slew of non-ABA-accredited law schools. You’ve seen these points here before, so I won’t repeat them, but if there were a lawyer shortage, that’s where you’d see cheap lawyers, not expensive ones.

As for tenured professors … Wow, this one was way out there. Tenured faculty don’t drive up college tuition prices. That’s caused by loose federal student lending, lost public university subsidies, and lack of job opportunities for high school grads. There are plenty of people who teach at the college level for very little, and it ain’t because they lack the credentials.

Lind then states that these professionals maintain their solidarity with the poor by demanding more subsidies to low-income consumers, which is a mixed point. It turns out that poor people can’t afford things like health care, which is why progressives want to give them nationalized insurance. Same goes with legal services. I’ll demur on subsidies for higher education, but it doesn’t occur to Lind that lawyers might have high incomes because rich people and corporations like paying them lots of money. Conspicuous consumption in services provided by superstars and all that. If you don’t like it, the problem is the rich clients, not the superstars.

Lawyers also make money because the economy is poorly managed and industries are badly regulated. For example, many lawyers will make money on recalls of defective hip replacements because the manufacturers didn’t test them and the regs didn’t require them to. Others will make money because large Silicon Valley tech firms allegedly fixed their workers’ wages. You can quibble with how much these lawyers are paid, but it’s not their fault if they make money in high-profile cases. Talk about subsidies.

This is my favorite part:

Doctors, lawyers and professors tend to think of themselves as altruistic servants of the public good. At the same time, many insist on being compensated well enough to belong to the top few percentiles in income, rather than being paid like teachers, nurses, police officers and firefighters. This contradiction generally does not bother professionals, but it should bother progressives.

Here are some median salary numbers courtesy of the BLS and their estimated earnings percentiles in 2012:

Teachers: For elementary and middle school, $56,180; for secondary school, $57,710 (~80th %). Postsecondary teachers tend to earn between $50,000 and $100,000 (~93rd %) (law teachers get more, but that occupation’s grown quite a bit over the last decade because of the bubble, so no artificial shortage there).

Nurses: $67,930 (~85th %)

Police Officers: $57,770 (~80th %)

Firefighters: $47,850 (~74th %)

Lawyers: $130,880 (~96th %)

Doctors: $190,060 (~98th %)

Earnings for detailed occupations vary, but the bottom 10 percent of lawyers on a wage and salary basis make $54,310, which from the above list is less than all but the median firefighter. Self-employed lawyers in smalllaw and law grads who could never find work in the profession probably do much worse. Maybe they suffer from enough false consciousness that they think they’re in the two percent by household income?

Lind’s Personal Experience of Professionals’ Uninterest in the Poor

I base my observation (admittedly a personal one) on a quarter-century of experience in journalism and the nonprofit sector. If you want to fill an auditorium at a think tank, magazine office or other venue, hold a panel on one or more of the non-economic issues I just mentioned [global warming or freedom from NSA surveillance] and the seats will fill up quickly with enthusiastic, affluent, mostly white upper-middle-class progressives. If you want to hold a panel on the minimum wage or workplace tyranny, expect to have a lot of empty seats. To avoid embarrassment, you might reserve a smaller room.

Isn’t the stereotype of university professors that they’re all tweed-jacket-wearing Marxists? The other problem here is that this isn’t evidence that professionals don’t agree with progressives about those issues, just that they don’t want to attend lectures on them. (Incidentally, I attended a lecture on the minimum wage at the Henry George School last year, and I’m a cheating credentialed professional. I’ll accept my progressive cred by e-mail, thankyouverymuch).

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I’m not being hard on Lind just because his article is a lazy swing at supposedly liberal professionals that he happens to dislike. The reason Lind and those who think like him rile me so much is this: I don’t expect people to go to law school based on spurious studies saying they’ll make an extra million dollars. Nor do I think anyone who does will be surprised when conservatives unhelpfully tell them they were absolutely liable for their employment outcomes, and if they don’t like it they should have conducted an After the JD study of their own and interpreted the data better than even the AJD’s own Ph.D.-wielding researchers have.

Rather, I think would-be lawyers expect progressives (whom they tend to identify with) to not use them as propaganda targets to score points with perceived working class constituencies. I’m reminded of when the New America Foundation, which Lind co-founded, did just this when it sensationalized the changes to the already-generous IBR by saying the graduates of a high-debt, poor-outcome law school were essentially welfare beneficiaries because they were so amazingly educated. The rich lawyers get all the goodies while Pell languishes!

Moreover, even if lawyer-licensing requirements are loosened, which I agree they should be, it won’t result in cheap prices for consumers. Letting in foreign lawyers, a policy futilely advocated by Dean Baker and already implemented in many lawyer-heavy states, will only create a lot of malemployed foreign lawyers. Don’t expect Michael Lind and the progressives to explain why prices haven’t dropped or help clean up the mess anymore than the “absolute-liability” conservatives or million-dollar-law-degree professors will the current one. Meanwhile, the effort progressives spend attacking their educated constituents pointlessly alienates them.

The message that Lind et al. send to law applicants and grads is that they can expect no ideological allies if things don’t work out for them. It even tells them that if they do succeed at law, it’s because they cheated. If there’s a reason not to go to law school, political isolation is it.

‘After the JD’ Offers Weak Evidence of JD’s Value

…Is up on The Am Law Daily.

And now ladies and gentlemen, the band called Death.

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This band’s interesting story is the subject of a documentary titled, A Band Called Death, that’s on Netflix.

LSAT Tea-Leaf Reading: February 2014

It’s the end of the LSAT year! Party! And we have 19,499 people taking the LSAT in February 2014, a record low going back to … February 2013. Yup, there was actually a 1.1 percent increase in LSATs year-over-year.

No. LSAT Takers, 4-Testing Period Moving Sum

The four-testing-period moving sum is thus slightly higher at 105,532. In December it had reached a record low of 105,319. It’s the first time since June 2010 that the moving sum saw an increase. Nevertheless, the 2013-14 testing year is a record low going back to 1998-99.

It’s possible that the bottom has been reached, but I’m not betting on it. The February LSAT has historically had the lowest ratio of first-time LSAT takers compared to the other testing periods, so the other testing periods can stand to lose more first-time takers.

Since we’re talking LSAC data, here’re the fall 2014 applicant and application estimates, which were updated yesterday.

No. Applicants Over App Cycle

No. Applications Over App Cycle

There was a slight bump in the final estimate last week, but it shows that there will be about 53,500 applicants this year. I’ve read some comments here and there saying that the law schools have already made offers to everyone who was on the fence last year. I don’t know if that’s true, but if it is, we’d expect the final applicant count to be noticeably lower than the current projections, which have steadily risen over the past several weeks. Then again, last year there was a shift in the number of applicants as a percentage of the previous year’s final preliminary applicant count, indicating latecomer applicants.

No. Applicants as a Percent of Preliminary Final Count by Week

What’s interesting is that the shift became apparent around week six (mid February) and then after week 10, which would have been last week. Then again, schools could just be shifting their application deadlines.

That’s all I’ve got.

Peace.

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