Day: 2014/10/29

Too Bad TJSL’s Grads Can’t Get a 2/3ds Write-Off

Oh, I’m sorry, “restructuring.”

That’s all that really needs to be said about Thomas Jefferson School of Law’s “Restructuring Support Agreement” with 90 percent of its bondholders. I’ve refrained from editorializing on the most of troubled law schools, but an $87 million write-off for its Xanadu-esque building sounds high. I suppose it beats a chapter 7 corporate dissolution; there is still plenty of unsubsidized Stafford loan margin to be captured, after all.

TJSL’s students on the other hand at least get PAYE, which they’ll need because last year they left with an average disbursed debt of $180,665. In order to avoid loan cancellation, even without accrued interest, graduates would need to make $182,000 from their very first repayment. After that, it’s twenty years until the government forgives their balances and sends them a tax bill for it.

But I’m sure employers are committed to ensuring that TJSL grads receive more than triple median household income the day they walk through the door.

Applications ≠ Applicants ≠ Matriculants, Part XXVIII

Kaplan Test Prep tells us that out of 126 law school admissions officers it got on the horn, 46 percent believe their school will receive more applications in the 2015-16 cycle than last year (I think; it doesn’t say what the comparison is). Last year the same survey said that 34 percent believed the upcoming application cycle would see an applications increase. Given the dwindling LSATs reported last week, last year’s officers were very likely over-optimistic. Perhaps they use Kaplan’s survey as an opportunity to communicate to the outside world that they don’t think things are so bad for their institutions rather than as a candid assessment of their futures, or optimism is a job requirement. (For further reference here’s the 2012 and 2013 survey results.)

Nevertheless, what people want us to think they’re thinking is nice, but looking at facts helps too. Last year (’12-’13) only ten law schools saw an increase in full-time applications, which are always more interesting than part-time ones. The overall trend looks like this.

Dispersion of Full-Time Law School Application Growth Rates

For fall 2013, even the 90th percentile law school saw a four-percent decline in full-time applications. It’s possible that this year will see the average rate of decline level off or the dispersion “compress” among the schools, but it’s pretty hard to see why widespread prosperity would return. Since the applicant pool is still shrinking, the only way a substantial number of schools could increase their application rates is if they conveyed (low) cost information so clearly that prospective applicants didn’t bother applying elsewhere. Essentially, many schools higher in the pecking order would have to credibly undercut all the ones beneath them. This, I suspect, is unlikely.

If you understand the subtle hint in the title of this post, the obvious question is why we should care about applications, which people can send out willy-nilly, as opposed to the total number of applicants, which is what the schools are really fighting over. As to that, we have the fall 2014 applicant data:

Applicant Data Per Law School

This, if anything, should tell us that the trough is nearing, sadly. Now that’s newsworthy.

Then there’s the question of how many applicants bother showing up in the fall, aka “butts in seats” or, “the bottom line.” Here the story does show a widening of matriculant growth rate dispersions, meaning some law schools have been successful at pulling accepted applicants away from their peers.

Dispersion of Full-Time Matriculant Growth Rates

Still, about two-thirds saw their entering classes fall, and the dispersion is still skewed downward.

But hey, we’re talking about what’s happening two years away, and it’s not like anyone will call out Kaplan’s law school contacts on their optimism.