LSAC Report Calls Into Question ‘Law-School Tipping Point’

One discovery I’m fond of is identifying the “law-school tipping point,” the moment when people with LSAT scores in hand decided to forgo law school entirely. I hypothesized that one could detect the tipping point by comparing over time the ratio of LSAT takers to subsequent applicants. Sure enough, the ratio spiked in the 2010 application cycle, which is the last applicant peak.

Here’s an updated version of the chart I created for that post:

(Source: LSAC (here for total LSATs and here (pdf) for first-time takers)

The arrow focuses on the pronounced gap between first-time LSAT takers in the 2009 calendar year and applicants for fall 2010. I took this as evidence of what I suspected had happened: Many people with LSAT scores in hand chose not to apply to law school the following year, presumably because they realized it was a really bad idea. In the three prior years, the ratio between first-time test takers and subsequent applicants was 1.08 on average. In 2010, it jumped to 1.19, accounting for 8,800 test takers who were not found in the 2010 application cycle. The ratio has since fallen to about 1.15 going forward.

The LSAC, however, recently published a report titled, “Analysis of LSAT Taker Application Behavior: Testing Years 2009-2010 Through 2015-2016” (pdf). It is an update of a similar report published in 2013, which I don’t recall seeing and cannot find, and it contains a table showing when test takers applied to law school.

Curiously, there’s scant evidence of a drop in test takers applying to law school, going by the first three columns of the table. People who took the LSAT between June 2009 and February 2010 pretty much all applied, save for 1 percent (~1,400 test takers). It doesn’t look like they delayed their applications either, which would cause them to appear in the rightward columns. (I don’t think the fact that I’m looking at calendar-year LSATs as opposed to June-February LSATs changes the results significantly.)

I have a hard time explaining the diverging results. It would certainly help to see previous years’ data, but my best hunch is that test-takers’ application behavior stayed the same while the frequency of their test-taking rose. In other words, perhaps many of these first-time takers simply retook the LSAT. As evidence, the LSAC report provides another figure (not shown) indicating that non-applicants tend to do very poorly on the LSAT, though they overlap with the low-end of applicants. These non-applicants may have doubled-down and chosen to retake the test again in 2010-11, and applied with whatever score they got then. Moreover, the ratio for second-time test takers to subsequent applicants (not shown) remained elevated after 2009-10 at about 0.42. Rather than walking away from the process potential applicants simply tried harder to beat the pack.

It’s a discouraging thought, but either hypothesis is valid at least to some degree until better information comes along. In the meantime, one thing the LSAC report teaches is that by and large people who do poorly on the LSAT are not as unsophisticated as they’re often portrayed. They tend to self-select by dropping out of the system. That doesn’t matter much to me since I care more about applicants, admits, and matriculants than LSAT takers, but whenever folks focus their attention on the smart people not applying to law school, just remember that many people who aren’t so good at standardized tests have been making the right choice all along.

LSAT Tea-Leaf Reading: June 2017 Edition

For those of you who were as curious as I about whether a secular trend in law-school interest was causing the uptick in LSATs, well, too bad! Count me in on the bandwagon attributing it to His Emolumence’s perfidy. I try to caution against reading the minds of potential law-school applicants, but what other explanation is there? In June 2017, 27,606 people took the LSAT, up an amazing 19.8 percent from a year ago (23,051).

The four-period moving sum rose by 4.2 percent to 113,909, a record not seen since December 2012 (115,348). To put these numbers in context, the last time there were this many June LSAT-takers was June 2010 (32,973). You know, back when I first joined the crowed warning people that law school was usually a bad idea. In fact, the year-over-year growth rate is the highest going all the way back to 1988—the second year for which the LSAC reliably publishes LSAT-administration information. The 4.2-percent growth rate for the moving sum is comparable to December (4.1 percent) and September/October (6.5 percent) 2009 . If I had seen the June 2017 LSAT without knowing anything else, I’d’ve thought the economy was in a recession (or L.A. Law came on the air, which is what some claim caused the ’80s surge).

I note three more items. One, the LSAC sure released this information a lot more quickly than last year, when it took until August to tell us about the June LSAT results. If I didn’t know any better, I’d think it was happy to discuss good news…

Two, I acknowledge that the 19.8-percent LSAT jolt was leaked last week. Uh-huh. That’s consistent with the times…

Three, if the political cause for the renewed enthusiasm is true, then bless these LSAT-takers idealistic hearts. However, next to nothing has changed in the U.S. or legal economies since Inauguration Day to warrant a more optimistic outlook on the legal profession (unless you’re defending His Emolumence and his family, in which case, you’re probably teetering in the character-and-fitness department). Meanwhile, going by my predictions from earlier this year, it appears Congress is going nowhere, so don’t expect much reform of Grad PLUS loans. Instead, maybe Betsy DeVos will whip up yet another income-directed repayment plan. Or maybe she’ll get high on Ben Carson’s glyconutrients stash.

Final word: I can’t imagine the renewed interest in law school lasting as long as our dear leader’s tenure in office, but it may be a while yet.

Office of Management and Budget: +$725 Billion in Direct Loans by 2027

Every year in July the Office of Management and Budget (OMB) publishes its Mid-Session Review of the federal budget, which normally includes the Federal Direct Loan Program and projects its future. This year, the MSR (pdf) was only 22 pages because Director Mick Mulvaney said there were only “limited budget developments” since the administration released its misopauperous budget on May 23, 2016. So let’s take a look at that instead…

It’s titled, “A New Foundation for American Greatness.” My favorite part reading it thus far is the entry, “Invest in Cybersecurity,” which features an unspecified commitment.

Anyway, the budget has the Federal Direct Loan Program information we’re looking for, so back to that. The federal government’s direct loans consist primarily of student loans, but there are a few other programs in there as well. However, federal direct loans do not include private student loans, but these are a small percentage of all student loans. Thus, the OMB’s measure is both over- and under-inclusive of all student debt, but it covers most of it.

The OMB classifies direct loan accounts as financial assets net of liabilities totaling $1.227 trillion in 2016. According to the office’s projections, by 2027 this figure will grow to $1.952 trillion—59 percent.

(Source: Budget of the U.S. Government Fiscal Year 2018 (pdf))

As with previous years, the current (2016) direct loan balance is below the OMB’s past projections, but not by much. For example, in FY2012, it predicted the balance would be $1.486 trillion by 2016, $259 billion (21 percent) higher than what actually occurred. Here are the OMB’s direct loan projections going back to FY2010.

Indeed, the most notable difference between His Emolumence’s OMB and Barack Obama’s is that it is now predicting far less student lending going forward. Total direct loans won’t even exceed $2 trillion. This, I think, is a more realistic assessment of where federal student lending is going. Whether this has something to do with the new administration or is standard practice for the OMB is outside of my knowledge base.

The OMB’s measure of direct loans is the net amount owed to the government, and the annual changes to that amount are not the same as the amount lent out each year to students. The Department of Education tracks its lending, which I discuss on the Student Deb Data page.

UK Media: Adam Smith Was a Marxist

Before the UK parliamentary election a few weeks ago, the Internet kept directing me to what I surmise was mostly conservative media reporting on the Labour Party’s proposed *horrors* land-value tax, aka “garden tax.” I’m not sure if “garden” here is the Anglo version of what I would think of as a grassy backyard, but it’s very surprising that collecting location rents for public finance was both a significant issue in the days before the election and didn’t result in a loss for for the party advocating it. That’s probably the best news I’ll report on all year.

Labour’s platform included a position in favor of “considering” replacing some taxes with a land-value tax. “We will initiate a review into reforming council tax and business rates and consider new options such as a land value tax, to ensure local government has sustainable funding for the long term,” reported the Mirror.

Yet the Conservative opposition treated “consider new options” as though Labour had a bill in hand, and the sputtering from Boris Johnson and Chancellor of the Exchequer Philip Hammond was illuminating. Articles published by The Telegraph and the Daily Mail quoted these men as saying that the tax would:

  • “Bring misery to every single family in Britain”
  • “Wreck the economy”
  • “Devastate farmers”
  • “Increase food costs”
  • “Attack land on Marxist principles”

A good chunk of this is politicized anti-tax paranoia. “They talked about taxes in their manifesto. That must mean they’re coming for you!” It’s interesting in itself, however, that the Tories’ audience must be yeomen landowners as opposed to renters or condo dwellers. Then there’s the Marxism stuff, which just demonstrates their ignorance. If they were familiar with capitalism’s talisman, Adam Smith’s Wealth of Nations, they would have come across book V, chapter 2, in which the author advocates taxes on the ground-rent of houses. So yes, Tories think Adam Smith was a Marxist.

More bizarre is the obsession with farmers. Supposing that a land tax did raise food-production costs, which it would not, why would it be somehow worse than the other taxes farmers pay? Is it because farmers are really connected to the land? Does that mean I work at a floating desk? Why don’t we hear about overtaxed urbanites who are really connected to commerce? Don’t taxes on their incomes raise their labor costs? (Hint: They do.)

Oh, and did I mention that Labour’s not advocating a tax on gardens but on the locational value of the space occupied by gardens?

Anyhow, the articles mistakenly cite 3 percent of the value of people’s property as the tax’s rate. Rather, the foundation for this statement originates with the Labour Land Campaign, which explicitly recommends beginning with a 0.85 percent rate on owner-occupied real estate—not 3 percent. (More here.) Neither of the articles’ factual errors have been corrected.

The Telegraph article also says, “Opponents of the tax say it would cause house prices to plummet, putting homeowners at risk of negative equity and forcing families to sell off their gardens to developers to lessen their tax burden.” First, it’s not a tax on houses—just where they happen to be. Second, why are housing shortages caused by undeveloped real estate a good thing? Third, why are the opponents against affordable housing? Notwithstanding the possibility of negative consequences to some homeowners, the Telegraph doesn’t find anyone to answer these questions.

And you thought American media was bad.

The good news is that Labour won (and no, I’m not a Corbynite), and the Labour Land Campaign’s thankless work resulted in positive coverage when anyone bothered to check their facts. It’s well earned.


[I made a few unfortunately significant errors when I compiled the data and created the table for full-time, long-term, bar-passage-required outcomes by law school in my first post on this topic. I overlooked the fact that the ABA now separates school-funded jobs in its employment status breakdown, meaning I subtracted school-funded jobs needlessly. I also mis-sorted the employment data for the class of 2015. Rather than correct that post, I am reposting the data, along with the information from this morning’s “second cut” to keep it all in one place. I will keep the previous posts up but will replace their text with links redirecting readers to this site to preserve links to that information and comments.

I hate making these kinds of preventable mistakes, so I apologize to readers. However, I greatly appreciate those of you who reached out to me to notify me of the errors.]


On Thursday, the ABA updated its Employment Summary Report Web site, which provides employment data for each law school class going back to 2010. Many if not all law schools have uploaded their individual reports, and some intrepid researchers have already dug into them, but I prefer to wait until the easy-to-use spreadsheet comes out. The ABA may revise these data over the next few months, but this first cut gives a good sense of the class of 2016’s employment outcomes. Also, completionists will note that while Indiana Tech graduated a small number of students last year, it did not report their employment outcomes. I exclude it.

36,618 people graduated from 200 ABA-accredited law schools outside of Puerto Rico roughly between September 1, 2015, and August 31, 2016. The employment information should be good as of about March 15, 2017.

Here’s the pie chart of the employment status distribution.

I’ll analyze these numbers in more depth in my second cut, but overall the percentages look slightly better than last year. However, even though there are fewer graduates (down 15 percent from two years ago) the proportion obtaining work hasn’t risen dramatically.

More tables appear below the fold to conserve blog space.