Original Research

Office of Management and Budget: +$845 Billion in Direct Loans by 2028

Nearly every year in July the Office of Management and Budget (OMB) publishes its Mid-Session Review (MSR) of the federal budget, which includes the Federal Direct Loan Program, and projects its future. These direct loans consist primarily of federal student loans, but there are a few other programs in there as well. However, it does not include private student loans, but these are a small percentage of all student loans and smaller still of new student loans. Thus, the MSR measure is both over- and under-inclusive of all student loans, but it covers most of them.

The OMB classifies direct loan accounts as financial assets totaling $1.281 trillion in 2017, but careful readers of these reports will find that OMB has now combined direct loans with “Troubled Asset Relief (TARP) equity purchase accounts.” No reason is given, and these items don’t appear related. In prior years TARP amounts have been negligible, so I’ll continue this series, assuming these TARP accounts make no impact. According to the office’s projection, by 2028 this figure will grow to $2.126 trillion—66 percent growth.

(Source: OMB FY2018 Mid-Session Review (pdf))

As with previous years, the current (2017) direct loan balance is below the OMB’s past projections, but not by much. For example, in FY2012, it predicted the balance would be $1.593 trillion by 2017, $312 billion (24 percent) higher than what actually occurred. Here are the OMB’s direct loan projections going back to FY2010.

As with last year, the OMB projects less student lending than during most of the Obama presidency. At the time, I noted that the projection came in much lower, but now it’s trending back upward. By 2028, federal student loans will reach $2.126 trillion. Because the OMB expects GDP to grow as well over this time period (we’d have bigger problems than student loans if it didn’t), the ratio of direct loans to GDP will level off below 7 percent over the next decade.

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.

———-

Past coverage of this data series:

State-Level Employment Projections: High Lawyer Replacement

Every two years the Bureau of Labor Statistics (BLS) publishes state-level employment projections on its affiliated Web site projectionscentral.com. The data from this site include estimates of the number of lawyer positions (not people who are lawyers) out there in 2016, a prediction of how many there will be by 2026 (assuming full employment), and the projected number of annual lawyer job openings.

In past years this topic was one of my favorites because I could compare the number of lawyer job openings to the numbers of law-school graduates (via the ABA) and new bar admits (via the NCBEX). However, because the BLS changed its methodology for calculating occupational replacement rates a few years ago, this is no longer possible. Instead, I can show the ten-year replacement rate for lawyers by state, but first here are the basic numbers compared to those from the previous cycle two years ago.

STATE/BEA REGION NO. EMPLOYED LAWYERS LAWYER EMPLOYMENT PROJECTIONS ANNUAL LAWYER GROWTH RATE
2014 2016 % CHANGE 2024 2026 % CHANGE 2024 2026 % CHANGE
Alabama 7,050 6,860 -2.7% 7,410 7,400 -0.1% 140 350 N/A
Alaska 1,070 1,030 -3.7% 1,020 930 -8.8% 20 30 N/A
Arizona 9,630 11,830 22.8% 11,870 13,310 12.1% 370 670 N/A
Arkansas 4,720 3,900 -17.4% 5,360 4,520 -15.7% 130 240 N/A
California 91,900 97,400 6.0% 102,700 108,000 5.2% 2,420 5,330 N/A
Colorado 15,800 14,630 -7.4% 19,270 17,370 -9.9% 600 1,010 N/A
Connecticut 12,620 12,260 -2.9% 13,080 12,960 -0.9% 230 590 N/A
Delaware 3,540 3,270 -7.6% 3,660 3,550 -3.0% 60 170 N/A
District of Columbia 38,920 39,360 1.1% 41,480 41,770 0.7% 830 1,920 N/A
Florida 59,400 60,180 1.3% 68,400 67,970 -0.6% 1,770 3,440 N/A
Georgia 18,160 20,570 13.3% 19,690 22,800 15.8% 420 1,120 N/A
Hawaii 2,410 2,690 11.6% 2,500 2,820 12.8% 40 130 N/A
Idaho 3,030 1,460 -51.8% 2,960 1,610 -45.6% 50 80 N/A
Illinois 35,840 36,230 1.1% 37,950 39,280 3.5% 740 1,870 N/A
Indiana 9,450 10,500 11.1% 10,520 11,530 9.6% 250 560 N/A
Iowa 4,340 4,330 -0.2% 4,880 4,880 0.0% 120 250 N/A
Kansas 5,090 4,750 -6.7% 5,570 5,350 -3.9% 130 270 N/A
Kentucky 9,490 6,850 -27.8% 10,640 7,250 -31.9% 250 330 N/A
Louisiana 9,180 8,390 -8.6% 9,730 9,210 -5.3% 190 450 N/A
Maine 3,170 3,000 -5.4% 3,210 3,020 -5.9% 50 130 N/A
Maryland 11,690 14,520 24.2% 13,370 14,930 11.7% 360 540 N/A
Massachusetts 22,100 22,220 0.5% 23,080 23,880 3.5% 420 1,120 N/A
Michigan 17,900 18,770 4.9% 19,230 20,140 4.7% 400 940 N/A
Minnesota 12,640 12,640 0.0% 13,340 13,800 3.4% 260 660 N/A
Mississippi 3,760 4,150 10.4% 4,030 4,200 4.2% 80 180 N/A
Missouri 12,470 12,220 -2.0% 13,160 13,510 2.7% 250 660 N/A
Montana 2,550 2,490 -2.4% 2,830 2,700 -4.6% 70 130 N/A
Nebraska 3,910 3,720 -4.9% 4,400 4,220 -4.1% 110 220 N/A
Nevada 6,030 7,050 16.9% 7,880 7,560 -4.1% 270 350 N/A
New Hampshire 2,010 1,950 -3.0% 2,070 2,090 1.0% 40 100 N/A
New Jersey 24,520 26,610 8.5% 25,140 28,660 14.0% 420 1,350 N/A
New Mexico 3,810 3,600 -5.5% 3,830 3,760 -1.8% 60 170 N/A
New York 90,830 84,230 -7.3% 99,020 93,900 -5.2% 2,150 4,660 N/A
North Carolina 16,020 14,430 -9.9% 17,870 16,010 -10.4% 420 790 N/A
North Dakota 1,740 2,080 19.5% 1,790 2,240 25.1% 30 110 N/A
Ohio 20,180 20,150 -0.1% 21,290 20,120 -5.5% 410 830 N/A
Oklahoma 9,480 8,280 -12.7% 10,290 8,930 -13.2% 220 420 N/A
Oregon 8,250 8,180 -0.8% 9,440 8,960 -5.1% 240 430 N/A
Pennsylvania 31,240 31,640 1.3% 32,960 33,790 2.5% 630 1,570 N/A
Puerto Rico 4,420 4,260 -3.6% 4,500 4,250 -5.6% 70 170 N/A
Rhode Island 4,210 4,050 -3.8% 4,460 4,250 -4.7% 90 190 N/A
South Carolina 7,220 8,160 13.0% 7,670 8,870 15.6% 150 420 N/A
South Dakota 980 970 -1.0% 1,080 1,070 -0.9% 20 50 N/A
Tennessee 7,990 9,660 20.9% 8,690 10,850 24.9% 200 550 N/A
Texas 51,420 N/A N/A 63,140 N/A N/A 1,920 N/A N/A
Utah 5,310 5,550 4.5% 6,360 6,800 6.9% 180 380 N/A
Vermont 1,940 1,950 0.5% 1,990 1,940 -2.5% 30 80 N/A
Virginia 21,860 21,530 -1.5% 24,150 23,660 -2.0% 550 1,150 N/A
Washington 17,290 15,510 -10.3% 18,940 17,040 -10.0% 430 830 N/A
West Virginia N/A 3,230 N/A N/A 135 N/A N/A 150 N/A
Wisconsin 9,620 9,400 -2.3% 9,940 9,870 -0.7% 170 450 N/A
Wyoming 1,160 1,020 -12.1% 1,130 1,060 -6.2% 20 50 N/A
STATES (EXCL. P.R.) 774,940 777,640 0.3% 854,470 857,480 0.4% 19,410 40,240 N/A
U.S.A. (EXCL. P.R.) 778,700 792,500 1.8% 822,500 857,500 4.3% 15,770 40,700 N/A
New England 46,050 45,430 -1.3% 47,890 48,140 0.5% 860 2,210 N/A
Mideast 200,740 199,630 -0.6% 215,630 216,600 0.4% 4,450 10,210 N/A
Great Lakes 92,990 95,050 2.2% 98,930 100,940 2.0% 1,970 4,650 N/A
Plains 41,170 40,710 -1.1% 44,220 45,070 1.9% 920 2,220 N/A
Southeast* 164,850 164,680* -0.1%* 183,640 182,740* -0.5%* 4,300 9,020* N/A
Southwest* 74,340 75,130* 1.1%* 89,130 89,140* 0.0%* 2,570 >3,180* N/A
Rocky Mountains 27,850 25,150 -9.7% 32,550 29,540 -9.2% 920 1,650 N/A
Far West 126,950 131,860 3.9% 142,480 145,310 2.0% 3,420 7,100 N/A

(Note: Only Texas did not report its numbers this year, which is lamentable because it’s a large state. West Virginia did not report two years ago. For the purposes of the regional estimates, wherever there were gaps, I used Texas’ 2014 numbers for this year and omitted West Virginia entirely.)

Superficially, one can tell that the data are erratic. It’s unlikely that half of Idaho’s lawyers disappeared in two years, and there are other wide swings like Maryland and Kentucky. The BEA regional numbers look steadier though.

On to the specifics. You can clearly see that the annual job growth numbers are much higher for 2016, but that’s because of the methodology change, not anything to do with the legal labor market. Presumably, had the new methodology been used in the past, the numbers would have been quite higher. Even as it is, unfortunately, the new methodology gives the misleading impression that the legal profession is capable of absorbing significant numbers of law-school graduates and new lawyers. Indeed, the class of 2017 only had about 34,500 persons, and nearly 42,000 people were admitted by examination or diploma privilege. Certainly this should indicate a healthy employment situation for law graduates, right?

The question isn’t simply whether grads get jobs, but what kind of jobs they are and how long they keep them. Moreover, lawyer positions that open by replacement won’t necessarily be filled by new lawyers. So, here’s a table depicting the projected annual number of new lawyer jobs created each year until 2026, the number created by replacement, and an estimate of the ten-year replacement rate.

STATE Annual New Lawyer Jobs Annual Replacement Lawyer Jobs 10-Year Lawyer Replacement Rate
2024 2026 2024 2026 2026
Alabama 36 54 104 296 43.1%
Alaska -5 -10 N/A N/A N/A
Arizona 224 148 146 522 44.1%
Arkansas 64 62 66 178 45.6%
California 1,080 1,060 1,340 4,270 43.8%
Colorado 347 274 253 736 50.3%
Connecticut 46 70 184 520 42.4%
Delaware 12 28 48 142 43.4%
District of Columbia 256 241 574 1,679 42.7%
Florida 900 779 870 2,661 44.2%
Georgia 153 223 267 897 43.6%
Hawaii 9 13 31 117 43.5%
Idaho -7 15 N/A 65 44.5%
Illinois 211 305 529 1,565 43.2%
Indiana 107 103 143 457 43.5%
Iowa 54 55 66 195 45.0%
Kansas 48 60 82 210 44.2%
Kentucky 115 40 135 290 42.3%
Louisiana 55 82 135 368 43.9%
Maine 4 2 46 128 42.7%
Maryland 168 41 192 499 34.4%
Massachusetts 98 166 322 954 42.9%
Michigan 133 137 267 803 42.8%
Minnesota 70 116 190 544 43.0%
Mississippi 27 5 53 175 42.2%
Missouri 69 129 181 531 43.5%
Montana 28 21 42 109 43.8%
Nebraska 49 50 61 170 45.7%
Nevada 185 51 85 299 42.4%
New Hampshire 6 14 34 86 44.1%
New Jersey 62 205 358 1,145 43.0%
New Mexico 2 16 58 154 42.8%
New York 819 967 1,331 3,693 43.8%
North Carolina 185 158 235 632 43.8%
North Dakota 5 16 25 94 45.2%
Ohio 111 -3 299 N/A N/A
Oklahoma 81 65 139 355 42.9%
Oregon 119 78 121 352 43.0%
Pennsylvania 172 215 458 1,355 42.8%
Puerto Rico 8 -1 62 N/A N/A
Rhode Island 25 20 65 170 42.0%
South Carolina 45 71 105 349 42.8%
South Dakota 10 10 10 40 41.2%
Tennessee 70 119 130 431 44.6%
Texas 1,172 N/A 748 N/A N/A
Utah 105 125 75 255 45.9%
Vermont 5 -1 25 N/A N/A
Virginia 229 213 321 937 43.5%
Washington 165 153 265 677 43.6%
West Virginia N/A 15 N/A 135 41.8%
Wisconsin 32 47 138 403 42.9%
Wyoming -3 4 N/A 46 45.1%
U.S.A. (EXCL. P.R.) 4,380 6,500 11,390 34,200 43.2%

(Note: States that predict declines in lawyer counts do not have replacement rates. Also, the U.S.A. totals at the bottom are not the sums of the individual jurisdictions of them.)

The one ray of hope here is the faster rate of new lawyer job growth nationwide. The BLS appears to be predicting it’ll accelerate at about 50 percent. However, most jobs are created by replacement, not growth. Thus, we have a set of ten-year replacement rates that are consistently above 40 percent, which astonishes me, but is still consistent with the national data from last year. I question whether the methodology is producing reliable results. Perhaps law practice is too small an occupation to accurately measure, unlike retail salespeople. Although, it’s necessary to bear in mind that not all lawyer jobs are created equal and some may turnover multiple times in a decade.

Meanwhile, I checked the numbers again, and occupations such as “Dentists, General” and “Physicians and Surgeons, All Other” have ten-year replacement rates below 30 percent. “Paralegals and Legal Assistants” have a staggering ten-year replacement rate of 120 percent.

So yes, the projections don’t inspire me with confidence, but they’re the best, neutral evidence we have about the long-term viability of a law career. If they gave a contrary result (and other evidence backed it up), then I’d arrive at a different conclusion. But today is not that day, so I stand by my opinion that law schools cannot credibly represent good outcomes for their prospective and current students.

CLASS OF 2017 EMPLOYMENT REPORT: The Rankings

…And now, what you crave: law schools ranked by the percentage of their class of 2017 graduates in full-time, long-term, bar-passage-required jobs.

PERCENT GRADUATES EMPLOYED FULL-TIME/LONG-TERM IN BAR-PASSAGE-REQUIRED JOBS (EXCL. LAW-SCHOOL-FUNDED JOBS)
RANK LAW SCHOOL ’16 ’17 CHANGE
1. Duke 92.4% 93.8% 1.4%
2. Columbia 91.5% 92.8% 1.3%
3. Cornell 90.2% 92.1% 1.9%
4. Chicago 93.5% 92.1% -1.4%
5. Virginia 88.8% 91.6% 2.8%
6. Pennsylvania 89.1% 90.6% 1.5%
7. Michigan 91.1% 90.4% -0.7%
8. New York University 88.9% 88.6% -0.2%
9. California-Berkeley 84.2% 88.2% 4.0%
10. Harvard 88.0% 86.7% -1.2%
11. Vanderbilt 86.3% 86.2% -0.1%
12. Washington University 80.1% 85.8% 5.7%
13. Southern California 70.0% 85.6% 15.6%
14. Georgia 78.3% 84.0% 5.7%
15. Alabama 75.9% 83.2% 7.3%
16. Stanford 89.6% 82.7% -6.9%
17. Seton Hall 80.1% 82.6% 2.5%
18. Baylor 77.2% 82.3% 5.1%
19. Northwestern 81.5% 82.3% 0.7%
20. Tulsa 61.4% 81.4% 19.9%
21. Louisiana State 63.6% 81.3% 17.7%
22. Oklahoma 75.5% 80.8% 5.2%
23. Notre Dame 76.2% 80.7% 4.5%
24. Minnesota 74.4% 80.5% 6.1%
25. Cardozo, Yeshiva 74.6% 80.1% 5.6%
26. Washington and Lee 76.8% 79.8% 3.0%
27. Kentucky 70.7% 79.6% 8.9%
28. Boston College 80.6% 79.4% -1.2%
29. Temple 68.8% 79.3% 10.5%
30. Texas 79.8% 79.2% -0.6%
31. California-Los Angeles 75.6% 79.1% 3.4%
32. Illinois 78.9% 78.2% -0.7%
33. Iowa 71.0% 77.4% 6.4%
34. New Mexico 68.1% 77.4% 9.2%
35. New Hampshire 63.5% 77.0% 13.5%
36. Rutgers 73.1% 76.8% 3.8%
37. Georgetown 74.4% 76.8% 2.4%
38. Lincoln Memorial 76.5% 76.5% 0.0%
39. Ohio State 76.5% 76.4% -0.2%
40. Colorado 66.8% 76.2% 9.3%
41. Utah 59.5% 76.1% 16.6%
42. William and Mary 72.0% 76.0% 4.0%
43. Hofstra 73.2% 75.9% 2.7%
44. Florida 71.2% 75.9% 4.7%
45. Southern Methodist 75.2% 75.8% 0.6%
46. Cincinnati 71.2% 75.7% 4.6%
47. Belmont 71.0% 75.6% 4.6%
48. Boston University 71.0% 75.6% 4.5%
49. Missouri (Columbia) 67.5% 75.5% 8.0%
50. Villanova 69.2% 75.5% 6.3%
51. Nevada 72.4% 75.2% 2.8%
52. Wake Forest 73.4% 75.1% 1.8%
53. California-Irvine 71.2% 75.0% 3.8%
54. Yale 78.8% 75.0% -3.8%
55. Miami 64.4% 75.0% 10.6%
56. Pace 71.9% 74.7% 2.8%
57. West Virginia 62.6% 74.5% 11.9%
58. Montana 71.8% 74.4% 2.6%
59. Arizona State 68.9% 74.2% 5.3%
60. Wisconsin 71.4% 74.2% 2.9%
61. Missouri (Kansas City) 65.2% 74.1% 8.9%
62. Nebraska 65.3% 74.0% 8.8%
63. Tennessee 65.2% 73.0% 7.8%
64. St. Louis 66.2% 72.7% 6.5%
65. Florida International 70.6% 72.3% 1.7%
66. St. John’s 72.1% 72.0% -0.2%
67. Penn State (Penn State Law) 66.3% 71.9% 5.6%
68. Emory 70.1% 71.9% 1.8%
69. Brooklyn 66.9% 71.7% 4.8%
70. California-Davis 63.0% 71.3% 8.2%
71. Louisville 60.7% 71.2% 10.6%
72. Marquette 68.1% 71.2% 3.1%
73. Ohio Northern 48.6% 71.2% 22.5%
74. Drexel 75.5% 71.0% -4.5%
75. Albany 70.2% 70.9% 0.7%
76. North Carolina 67.7% 70.8% 3.1%
77. Florida State 72.0% 70.4% -1.5%
78. Denver 62.9% 70.2% 7.3%
79. Fordham 74.5% 70.2% -4.3%
80. George Washington 67.2% 69.8% 2.5%
81. Northeastern 57.2% 69.7% 12.5%
82. Memphis 67.0% 69.7% 2.7%
83. Mercer 60.6% 69.6% 9.0%
84. Georgia State 67.0% 69.6% 2.6%
85. Texas Tech 68.7% 69.5% 0.9%
86. City University 66.3% 69.1% 2.8%
87. Syracuse 60.2% 69.1% 8.9%
88. Washington 67.3% 68.9% 1.6%
89. Kansas 66.1% 68.6% 2.5%
90. Wyoming 74.6% 68.6% -6.1%
91. Creighton 57.5% 68.3% 10.8%
92. Loyola (CA) 62.1% 68.2% 6.1%
93. South Carolina 68.4% 68.1% -0.3%
94. Arkansas (Fayetteville) 64.5% 68.1% 3.6%
95. Touro 62.6% 68.0% 5.4%
96. Richmond 64.2% 67.8% 3.6%
97. Indiana (Bloomington) 69.6% 67.2% -2.4%
98. Penn State (Dickinson Law) 82.4% 67.2% -15.1%
99. Willamette 38.6% 67.0% 28.4%
100. Houston 67.5% 66.2% -1.3%
101. Washburn 68.0% 66.0% -2.0%
102. Oklahoma City 63.5% 65.6% 2.1%
103. Connecticut 71.5% 65.4% -6.2%
104. Arizona 68.5% 64.8% -3.7%
105. Texas A&M [Wesleyan] 59.5% 64.5% 5.0%
106. Tulane 63.3% 64.0% 0.7%
107. Liberty 55.2% 63.8% 8.6%
108. Stetson 56.5% 63.5% 7.0%
109. Duquesne 62.9% 63.5% 0.6%
110. Arkansas (Little Rock) 50.4% 63.3% 12.9%
111. Howard 47.8% 63.1% 15.3%
112. Pittsburgh 61.7% 63.0% 1.3%
113. Campbell 49.5% 62.9% 13.3%
114. Gonzaga 61.6% 62.6% 1.0%
115. Concordia 60.5% 62.5% 2.0%
116. North Dakota 51.3% 62.5% 11.2%
117. Samford 56.9% 62.3% 5.5%
118. Mississippi 57.0% 62.2% 5.2%
119. Loyola (IL) 57.4% 62.2% 4.7%
120. Drake 59.3% 62.1% 2.8%
121. Quinnipiac 44.7% 61.9% 17.2%
122. Oregon 51.2% 61.5% 10.4%
123. SUNY Buffalo 63.2% 61.2% -2.1%
124. George Mason 64.7% 60.5% -4.1%
125. Idaho 67.2% 60.4% -6.8%
126. Baltimore 51.6% 60.3% 8.6%
127. St. Mary’s 60.5% 60.2% -0.3%
128. Case Western Reserve 56.6% 60.1% 3.6%
129. Pepperdine 54.1% 60.1% 5.9%
130. Northern Illinois 59.1% 60.0% 0.9%
131. Brigham Young 64.6% 60.0% -4.6%
132. Chicago-Kent, IIT 56.2% 59.6% 3.4%
133. Texas Southern 52.3% 59.4% 7.1%
134. San Diego 46.8% 59.3% 12.5%
135. Michigan State 56.2% 59.3% 3.1%
136. Akron 46.8% 59.2% 12.4%
137. Widener (Commonwealth) 49.1% 59.0% 10.0%
138. Regent 64.8% 59.0% -5.8%
139. California-Hastings 51.3% 58.9% 7.6%
140. Hawaii 53.2% 58.3% 5.2%
141. South Dakota 70.7% 58.2% -12.5%
142. Seattle 52.2% 57.9% 5.7%
143. Maryland 59.2% 57.1% -2.0%
144. Nova Southeastern 49.0% 57.1% 8.1%
145. Loyola (LA) 46.8% 57.0% 10.3%
146. Wayne State 61.8% 57.0% -4.8%
147. Santa Clara 47.4% 56.6% 9.2%
148. John Marshall (Chicago) 51.7% 56.5% 4.8%
149. Lewis and Clark 53.1% 56.3% 3.2%
150. Vermont 50.9% 56.1% 5.2%
151. Maine 63.4% 55.4% -8.0%
152. Toledo 36.4% 55.3% 18.9%
153. Indiana (Indianapolis) 48.8% 55.2% 6.4%
154. Southern Illinois 57.3% 55.2% -2.1%
155. Massachusetts — Dartmouth 39.6% 55.1% 15.5%
156. Catholic 38.4% 55.0% 16.5%
157. DePaul 53.8% 54.8% 0.9%
158. Chapman 49.4% 54.7% 5.4%
159. St. Thomas (FL) 48.0% 54.7% 6.7%
160. Widener (Delaware) 47.4% 54.1% 6.7%
161. Roger Williams 51.2% 54.1% 2.9%
162. Capital 37.8% 53.8% 16.0%
163. California Western 46.6% 53.8% 7.2%
164. St. Thomas (MN) 55.7% 53.3% -2.4%
165. South Texas-Houston 52.9% 53.0% 0.2%
166. American 52.8% 53.0% 0.2%
167. Appalachian 35.7% 52.4% 16.7%
168. Mitchell|Hamline 57.6% 52.3% -5.3%
169. Cleveland State 52.1% 52.1% 0.0%
170. Mississippi College 59.3% 51.6% -7.6%
171. Northern Kentucky 48.3% 51.6% 3.3%
172. North Texas-Dallas N/A 51.5% N/A
173. New York Law School 53.3% 51.0% -2.3%
174. Dayton 49.4% 50.0% 0.6%
175. Faulkner 58.1% 49.4% -8.8%
176. San Francisco 32.9% 49.0% 16.2%
177. Pacific, McGeorge 40.3% 47.3% 7.0%
178. Suffolk 43.2% 46.7% 3.5%
179. Florida A&M 37.5% 46.6% 9.1%
180. Barry 33.6% 46.3% 12.7%
181. Southern University 45.5% 45.6% 0.1%
182. Charleston 53.2% 44.5% -8.6%
183. Western State 33.0% 43.8% 10.9%
184. Detroit Mercy 33.6% 43.7% 10.1%
185. Southwestern 38.9% 43.5% 4.6%
186. Western New England 42.7% 42.6% -0.1%
187. Florida Coastal 36.1% 40.8% 4.6%
188. Atlanta’s John Marshall 35.0% 40.7% 5.8%
189. Ave Maria 57.1% 39.5% -17.6%
190. Valparaiso 35.6% 38.4% 2.8%
191. New England 38.6% 38.2% -0.4%
192. Golden Gate 26.8% 37.9% 11.1%
193. Arizona Summit [Phoenix] 38.0% 34.4% -3.6%
194. Elon 33.7% 34.1% 0.4%
195. La Verne 13.7% 31.6% 17.9%
196. WMU Cooley 30.5% 30.7% 0.2%
197. North Carolina Central 35.0% 30.1% -4.9%
198. Whittier 29.7% 29.5% -0.2%
199. District of Columbia 34.0% 26.8% -7.3%
200. Thomas Jefferson 21.9% 23.6% 1.7%
201. Puerto Rico 22.5% 20.5% -2.0%
202. Inter American 9.9% 8.8% -1.1%
203. Pontifical Catholic 0.0% 0.7% 0.7%
204. Charlotte 23.5% N/A N/A
TOTAL (EXCL. P.R.) 62.5% 67.1% 4.6%
10TH PERCENTILE (EXCL. P.R.) 37.8% 45.6% 7.8%
25TH PERCENTILE (EXCL. P.R.) 51.2% 56.1% 4.9%
MEDIAN (EXCL. P.R.) 62.9% 66.1% 3.2%
75TH PERCENTILE (EXCL. P.R.) 71.2% 75.6% 4.4%
90TH PERCENTILE (EXCL. P.R.) 80.1% 82.6% 2.5%
MEAN (EXCL. P.R.) 60.7% 64.8% 4.1%

One school I omitted was Indiana Tech, which had graduating classes for the last two years but didn’t report any graduate employment outcomes for ’16 (much less ’17). The ’16 class had only 18 graduates, so it’s not a big loss, but to pound my fists again, the ABA should be maintaining data on all law schools on its required disclosures site and not just ones that have chosen not to shut down. It’s downright Orwellian.

**********

Because I hope to merge all my employment reports in the future, here’s a list of all of them.

CLASS OF 2017 EMPLOYMENT REPORT: Take That, JD-Advantage Jobs!

So I was all set to write up the class of 2017 employment report two weekends ago, but I went out of town twice, so that distracted me from my very important blogging duties. To make up for that I’m redoing my annual employment report by foregrounding the actual important information and editorials and then following up with the employed-bar-passage-required full-time, long-term ranking of shame.

To begin with, here’s the table of graduate underemployment. (Everything on this post excludes the three Puerto Rico law schools.)

STATUS (EXCL. P.R.) 2010 2011 2012 2013 2014 2015 2016 2017
Unemployed – Not Seeking 1,245 1,014 939 795 553 494 469 441
Unemployed – Seeking 2,686 4,016 4,770 5,060 4,103 3,744 3,142 2,614
Status Unknown 1,458 1,453 1,073 979 841 766 557 437
Total Grads 43,526 43,735 45,757 46,112 43,195 39,423 36,619 34,392
Unemployed – Not Seeking 2.9% 2.3% 2.1% 1.7% 1.3% 1.3% 1.3% 1.3%
Unemployed – Seeking 6.2% 9.2% 10.4% 11.0% 9.5% 9.5% 8.6% 7.6%
Status Unknown 3.3% 3.3% 2.3% 2.1% 1.9% 1.9% 1.5% 1.3%
Total Percent 12.4% 14.8% 14.8% 14.8% 12.7% 12.7% 11.4% 10.2%

For ’17, the underemployment rate (“Total Percent” in the table) fell by yet another percentage point, almost all of which appeared in the Unemployed – Seeking category. This is good news. 10.2 percent is still a terrible rate, to say nothing of the 7.6 percent seeking work, but progress is progress.

On the reverse side, 67.1 percent of graduates found full-time long-term work in bar-passage-required jobs. Last year, that figure was 62.5 percent, so this is quite the jump. In three years, the percentage has risen by 10 points, which is quite notable, except that the absolute number of students finding these jobs has been roughly the same each year. Reducing students at unheralded law schools reduces poor outcomes.

So what differed this year? Let’s take a look at the analytic tables that compare this year to last year.

EMPLOYMENT STATUS NO. OF GRADS GRADS PCT. OF TOTAL PCT. CHANGE IN GRADS DISTRIBUTION OF CHANGE IN GRADS GINI COEFFICIENT
2016 2017 2016 2017 2017 2017 2016 2017
Employed – Bar Passage Required 23,833 23,939 65.1% 69.6% 0.4% -4.8% 0.34 0.34
Employed – JD Advantage 5,162 4,021 14.1% 11.7% -22.1% 51.2% 0.36 0.38
Employed – Professional Position 1,390 1,091 3.8% 3.2% -21.5% 13.4% 0.54 0.54
Employed – Non-Professional Position 435 401 1.2% 1.2% -7.8% 1.5% 0.54 0.55
Employed – Law School 757 605 2.1% 1.8% -20.1% 6.8% 0.80 0.79
Employed – Undeterminable 21 23 0.1% 0.1% 9.5% -0.1% 0.95 0.92
Employed – Pursuing Graduate Degree 600 535 1.6% 1.6% -10.8% 2.9% 0.50 0.52
Unemployed – Start Date Deferred 253 285 0.7% 0.8% 12.6% -1.4% 0.64 0.59
Unemployed – Not Seeking 469 441 1.3% 1.3% -6.0% 1.3% 0.57 0.52
Unemployed – Seeking 3,142 2,614 8.6% 7.6% -16.8% 23.7% 0.46 0.43
Employment Status Unknown 557 437 1.5% 1.3% -21.5% 5.4% 0.67 0.66
Total Graduates 36,619 34,392 100.0% 100.0% -6.1% 100.0% 0.29 0.29
EMPLOYMENT TYPE NO. OF GRADS GRADS PCT. OF TOTAL PCT. CHANGE IN GRADS DISTRIBUTION OF CHANGE IN GRADS GINI COEFFICIENT
2016 2017 2016 2017 2017 2017 2016 2017
Solo 508 439 1.4% 1.3% -13.6% 3.1% 0.61 0.58
2-10 6,269 5,773 17.1% 16.8% -7.9% 22.3% 0.35 0.33
11-25 1,739 1,695 4.7% 4.9% -2.5% 2.0% 0.41 0.42
26-50 942 998 2.6% 2.9% 5.9% -2.5% 0.43 0.45
51-100 797 800 2.2% 2.3% 0.4% -0.1% 0.48 0.48
101-250 958 977 2.6% 2.8% 2.0% -0.9% 0.51 0.51
251-500 1,008 1,003 2.8% 2.9% -0.5% 0.2% 0.68 0.64
501-PLUS 4,243 4,611 11.6% 13.4% 8.7% -16.5% 0.78 0.77
Unknown 228 96 0.6% 0.3% -57.9% 5.9% 0.91 0.85
Business Industry 4,930 4,142 13.5% 12.0% -16.0% 35.4% 0.36 0.36
Government 4,402 4,133 12.0% 12.0% -6.1% 12.1% 0.32 0.32
Public Interest 1,638 1,617 4.5% 4.7% -1.3% 0.9% 0.47 0.48
Federal Clerkship 1,197 1,170 3.3% 3.4% -2.3% 1.2% 0.72 0.69
State/Local Clerkship 2,091 2,050 5.7% 6.0% -2.0% 1.8% 0.58 0.58
Other Clerkship 20 24 0.1% 0.1% 20.0% -0.2% 0.93 0.93
Education 583 483 1.6% 1.4% -17.2% 4.5% 0.49 0.48
Unknown Employer Type 45 67 0.1% 0.2% 48.9% -1.0% 0.94 0.91
Total Employed by Type 31,598 30,078 86.3% 87.5% -4.8% 68.3% 0.30 0.31

For ’17, there were 2,227 fewer graduates than in 2016, a decline of 6.1 percent. Three employment statuses accounted for nearly 90 percent of the difference between the two classes: Employed JD Advantage (51.2%) (!), Unemployed – Seeking (23.7%), and Employed – Professional Position (13.4%). This pretty much tells you what you need to know about this year’s employment report.

Changes among the employment types accounted for 68.3 percent of the 2,227 graduates. The four largest drivers were business-and-industry jobs (35.4%), 2-10-lawyer practices (22.3%), government jobs (12.1%), education positions (4.5%), and solo practices (3.1%). Notably, jobs at 501-plus-lawyer firms grew by 368 people, so it pushed back against the graduate decline (-16.5%). Biglaw’s gains are consistent with last year’s trends, as is the decline in small-law jobs.

I won’t discuss the Gini coefficients as I did last year. The most desirable jobs are still distributed worse than wealth in a kleptocracy.

Editorial: This year’s employment report showcased many of the similar trends from last year: Good outcomes substituting for worse ones. It differs in that JD advantage jobs took a big hit while bar-passage-required jobs grew slightly. What’s interesting here is that overall, law-firm jobs fell nonetheless. Somewhere in the employment type outcomes are compositional changes where grads found law jobs and not JD advantage jobs. I sure hope none of that is accounting shenanigans by law schools.

Finally, I’m happy that the ABA has not implemented its decision to change how it collects and displays employment data. Readers will note that I did not repeat the mistakes regarding law-school-funded jobs that I made last year, and yes, I recognize that perhaps I don’t find much use for short-term or part-time job categories. Nevertheless, the purposes of careful data collection are usefulness, detail, transparency, and consistency—not what’s convenient for law-school employees.

That’s all for now.

Similar editions of this post from prior years can be found here:

W&S Lawyer Employment Inches Up in 2017, Incomes Inch Down

The Bureau of Labor Statistics (BLS) usually completes its updates of its many measures of occupational employment for the previous year by April. Data for 2017 are now available, allowing a comprehensive summary of lawyer employment for that year. For detailed discussion of what the BLS datasets are and how they address lawyer employment, I recommend the lawyer overproduction page [updated!].

For context, according to the Current Population Survey (CPS), the number of people who reported working as lawyers in 2017 grew trivially to 1,137,000, up just 4,000 people. The CPS also estimated 781,000 people working as lawyers on a wage or salary basis, a 4.8 percent rise from the previous year (+36,000 lawyers). By contrast, the more accurate Occupational Employment Statistics (OES) program found that the number of wage-and-salary lawyers grew by 1.4 percent last year to 628,370 (+8,840 jobs). The number of employee lawyers in the legal sector also grew by 1.4 percent to 388,670 (+5,940).

Employee lawyers’ incomes fell slightly in 2017. The OES estimated a -1.2 percent median hourly wage decline, although the CPS registered a striking 6.0 percent median weekly wage increase. Going by the OES, the last peak for lawyers’ earnings was 2009 (~$125,000 annually); incomes are about 7.8 percent lower (-$9,800) in real dollars since then. Here is an annualized dispersion.

These lawyer employment and income measures are not strong bellwethers for the value of legal education because they include many established lawyers and don’t measure recent graduate outcomes particularly well, especially those of graduates who do not promptly start careers in law. Readers seeking insight into that topic are instead advised to look at my criteria for predicting improvements in law graduate outcomes and the lawyer production page for a clear discussion of the BLS’s Employment Projections program.

**********

Prior editions of this post:

2016: Full-Time Students Paying Full Tuition Fell by 2.4 Percentage Points

Discussions of law-school costs are incomplete if they do not include discounts some students receive, usually as merit scholarships paid for by their full-tuition-paying classmates. The topic is salient today because Congress is considering limiting the amount law students can borrow from the federal government. If the PROSPER Act passes, then it’s likely law schools would need to reorganize their cost structures—notably by reducing scholarships and their full price tags. To analyze the phenomenon of discounting, I focus on the ABA’s 509 information reports’ scholarship data. This information lags the academic year by one year, so as of the 2017-18 academic year, we now have data on 2016-17. One new drawback this year is that law schools that closed or stopped accepting new students before 2017 did not provide scholarship data for 2016, so the picture is slightly distorted.

In 2016, the proportion of full-time students paying full tuition fell by 2.4 percentage points from 28.1 percent to 25.7 percent at the average law school not in Puerto Rico. At the median law school less than one-quarter of students pay full tuition.

The proportion of students paying full tuition has fallen considerably over the years. At the turn of the century, more than half of students paid full cost; now about a quarter do.

At the average private law school, which don’t price discriminate in favor of resident students, the number of students receiving grants ranging between half tuition and full tuition now exceeds the number paying full tuition. Many more receive a grant worth less-than-half tuition.

One advantage of knowing how many full-time students pay full tuition is that we can estimate the total revenue they generate for private law schools, except Brigham Young University, which charges LDS students less.

Since 2011, the peak year, inflation-adjusted revenue from full-tuition-paying full-time students has fallen 55 percent. Since 2001, the last year for which data are available, the drop is 35 percent. In 2016, the median private law school’s full-tuition revenue was $3.8 million, down from $12.2 million in 2011. In 2001, the median was $9 million. This is quite a precipitous decline.

So how substantially are private law schools discounting? The best way to answer that question is by treating the sticker price at private law schools as the independent variable, and treating as the dependent variable their tuition after subtracting their median grant (median-discounted tuition “MDT”). First I divide private law schools into full tuition quintiles and give their mean averages. Then I take mean of the MDTs within each quintile.

We find that the MDT at the most expensive law schools is about as much as full tuition at the cheapest private law schools. Meanwhile, schools in the fourth quintile now discount to the level that third quintile law schools do. This indicates pretty fierce competition for students. MDTs at the bottom four-fifths of law schools are converging with one another while diverging from the most expensive schools.

That’s all for now.

Information on this topic from previous years:

2017: Full-Time Private Law School Tuition Up 3.2 Percent

Full-time tuition costs at private law schools rose an average 3.2 percent before adjusting for inflation. The rate is about half a point higher than last year’s increase, but it’s still well below the typical 5 percent rate before the Great Recession. For comparison, 2012 and 2013 saw increases of 3.7 percent and 3.6 percent, respectively. I focus on private law-school tuition because public law schools receive varying degrees of state subsidies, so they do not reflect the already distorted legal-education market’s prices.

Here’s what the dispersion of full-time private and full-time public (residential) tuition looks like going back to 1996:

Last year I pondered whether the public law school at the 25th percentile would begin charging more than the Stafford Loan limit of $20,500. It’s still one thousand dollars shy of it—in fact, it fell by $200 after adjusting for inflation. As of now, 10 percent of private law schools (12) charge more than $60,000, with the maximum at $67,564 (Columbia). It was only back in 2012 that the top 10 percent charged over $50,000 in nominal dollars, +$10,000 in five years.

In 2017, the median private law school charged $47,071 (between Pace and Suffolk); the mean was $46,843.

Unusually, costs grew consistently among private law schools. If we separate the law schools into quintiles, here’re the increases at the mean of each quintile.

From 2014-16, the tuition increases were stacked towards the high end, which was consistent with the prediction that the cheaper law schools were so fiscally crunched that they couldn’t afford to raise their costs any more. 2017 clearly breaks that trend, and along with its moderate mean increase the growth is distributed fairly evenly among private law schools.

The following private law schools raised their tuition charges by more than 5 percent:

  • Widener (Delaware) (+12.0%)
  • Liberty (+10.8%)
  • La Verne (+10.2%)
  • Elon (+10.0%)
  • Brooklyn (+9.8%)
  • Belmont (+8.9%)
  • John Marshall (Atlanta) (+5.9%)
  • Mississippi College (+5.6%)
  • Mitchell|Hamline (+5.5%)
  • Capital (+5.4%)

I would be cruel to ignore private law schools that cut their full tuition, so here’s that meager list:

  • University of Tulsa (-33.6%)
  • Howard University (-10.4%)
  • Santa Clara University (-3.4%)
  • Whittier Law School (-2.2%)
  • Arizona Summit (-0.3%)

Yes, Tulsa’s one-third slash is the largest nominal tuition cut I can find going back to 1996. It beat Indiana Tech’s (-31.1 percent) last year (fat lot of good that did) and Ohio Northern’s (-26.4 percent) in 2014. Howard’s is fairly significant as well, particularly because in 2016 it raised tuition by 10.9 percent. Big raspberries go to Elon University which extended its students a -12.1 percent cut in 2015 only to mostly reverse it with a 10 percent hike this year.

Nine private law schools kept their full-tuition tags flat (Golden Gate, University of the Pacific, Western State, Ave Maria, St. Thomas (FL), Mercer, Illinois Institute of Technology, Western New England, and Vermont). Barry increased its costs by … $1.

Here are public law schools that cut their costs to resident students:

  • University of Illinois (-7.8%)
  • University of D.C. (-5.6%)
  • University of New Mexico (-5.3%)
  • Texas Tech University (-1.1%)

I note that D.C. and New Mexico both increased their costs last year by more than these decreases.

Overall, the size and character of the increases at private law schools was the same as last year, they were just distributed more evenly among law schools. The phenomenon of nominal tuition cuts is still marginal, and some schools appear to reverse their cuts shortly after instituting them.

Going forward, the thing to look out for is if Congress passes the PROSPER Act, which would cap federal loans to law students at $28,500 and fix a lifetime cap of $150,000 per student. If it does, then I predict that law schools will respond by serious restructuring: eliminating merit scholarships, slashing tuition to $28,500 plus whatever private lenders are willing to lend out, and getting rid of many faculty and their perks. I’m also sure many central universities will use the PROSPER Act as an opportunity to shut down their money-losing law schools.

Of course, this all assumes that the Bennett hypothesis is true, but AccessLex-funded research falsified it, so we all know law schools will raise their prices forever.

Full-time tuition costs don’t necessarily indicate what students are actually charged, but they do show how much rent law schools can extract from the government’s loan programs.

Information on this topic from prior years: