Day: 2013/04/13

Albany Law School’s Bond Rating Downgraded

Scott Waldman, “Standard & Poor’s Downgrades Albany Law School,” Times Union.

From the folks who rated mortgage-backed securities as AAA and have been downgrading sovereign debts denominated in their own currencies, S&P now thinks Albany Law School’s bonds aren’t as safe as they used to be. (Hey, it might not be credible in some things while retaining credibility in others.)

The report suggested that Albany Law is more vulnerable to the national trend of enrollment decline because it is not connected to a larger university. Law schools that are part of a larger university or university system were better able to absorb losses of the last few years. Schools tied to a university also can better attract students amid the shrinking market in the future because they are more able to offer bigger financial aid packages.

Standard & Poor’s believes enrollment will eventually stabilize at a lower level than where it is today and schools will adjust accordingly.

I opened an account with S&P, and while it doesn’t list ALS’s rating, I did manage to find Cooley’s, which is BBB – stable, where ALS now finds itself.

“We believe that over the outlook’s two-year period, Albany Law School will likely maintain its financial resources at current levels, continue to generate surpluses on a full-accrual basis, and stabilize student enrollment,” Standard & Poor’s credit analyst Emily Avila said in a statement.

The real question is how many of ALS’s students are paying full tuition.

Albany Law School Grant Distribution (FT Only)

The answer: About two-thirds. The median grant for both years was $20,000, which puts it in an 11-way tie for the 20th highest median grant to full-time students at a private law school. Remember: The nucleus of every law school enrollment body consist of people willing to pay whatever the law school tells them to.

Also, don’t forget that the schools can do whatever they want and no individual will ever be held personally liable for any of their debts. Student debtors, on the other hand, aren’t so fortunate.