For profit law schools
Paying for law school, scholarships, avoiding
While you’re slaving away at LSAT sample questions, I’d like to take a moment to speak with you about something significant. For many of you, your LSAT prep journey to law school was motivated by a desire to make the world a better place through justice. As a result, a law school should help you develop the skills you’ll need to succeed. However, the reality is that many law schools operate purely as private corporations, focused solely on making a profit regardless of how many students are left behind. I’d like to talk about the organization known as the for-profit law school in particular. Many aspiring lawyers hold the mistaken belief that all law schools accredited by the American Bar Association are, at their most basic level, the same. Many people assume that the object of law school is to select a well-rounded class and shape their minds to become justice-givers. This is completely false.
Many law schools are accredited by the American Bar Association, which accept a large number of severely underqualified students in order to take their money and then kick them out due to poor grades. Every year, these unassuming students are forced to take out thousands of dollars in loans, which they will almost certainly be unable to repay. What is the outcome? The federal government is footing the bill, while law schools benefit.
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However, in 2017, the organization was forced to close Charlotte School of Law in North Carolina, and it recently announced that Arizona Summit Law School in Phoenix will close as well. Only the Florida Coastal School of Law in Jacksonville, Fla., has recently announced its intention to apply for nonprofit status. The American Bar Association (ABA) took action against all three colleges, alleging that they were out of compliance in a variety of ways, including bar passage.
Florida Coastal isn’t the only for-profit law school seeking to have its accreditation reinstated. The Charleston School of Law in South Carolina, which had considered joining InfiLaw, was instead sold to an attorney who is attempting to convert the school to a nonprofit organization.
In 1996, Western State’s San Diego campus gained accreditation and was renamed Thomas Jefferson School of Law. In 2001, Thomas Jefferson became an independent school and received nonprofit status.
However, it wasn’t until Sterling Partners, a private equity firm, founded InfiLaw in 2006 that there was a significant increase in students attending for-profit law schools. In the same year, it acquired Florida Coastal and founded Charlotte School of Law and Arizona Summit. Within five years, the three schools had a total of 3,873 students and a tuition income of $110 million.
The danger of for-profit law schools
David Frakt isn’t easily intimidated by the prospect of giving a public speech. Frakt, a defense attorney and lieutenant colonel in the Air Force Reserve, is best known for securing the release of teen Guantánamo detainee Mohammad Jawad in 2009. He did so by assisting a military tribunal in convincing them that the only evidence Jawad had thrown a hand grenade at a moving American convoy in 2002 was obtained by torture. Frakt’s April presentation to the faculty and staff of the Florida Coastal School of Law seemed to be a much less intimidating job. Frakt had been a finalist for the school’s deanship for many years, and the highlight of his two-day stay was this hour-long conversation, in which he presented his proposals for addressing what he saw as the school’s major problems: sharply decreasing enrollment, dramatically lowered admissions requirements, and poor employee morale.
Although InfiLaw does not report its financials, law schools have historically been profitable businesses. The reasons are simple: law schools are, or at least should be, relatively inexpensive to run. There is no need for expensive lab facilities or, at free-standing law schools like InfiLaw’s, other costly aspects of university life, such as sports teams, recreational areas, esoteric topics studied by an uneconomical handful of students, and so on, since the conventional lecture method of teaching allows for a high student ratio. Indeed, until recently, many universities viewed their law schools as cash cows, with surplus funds used to subsidize the rest of the institution’s operations.
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For school, law students use the Direct Loan Program of the United States Department of Education. The government has income-generating assets in the form of these loans. The government is investing in law schools as well as law students, who can (in theory) repay loans with interest. Without federal investment, some (or many) law schools will close because they rely on tuition revenue to remain open, and students rely on federal student loans to pay tuition and cover living expenses. The government will lend the entire cost of tuition to someone who attends an ABA-approved law school, according to federal student loan policy. If the government changes its lending policy, such as restricting or eliminating Graduate Plus loans, private lenders can fill some, but not all, of the lending market.
The federal investment has shrunk significantly in recent years, dropping by more than $1.1 billion between 2013 and 2016, and another $350 million in 2017. Rather than a shift in federal student loan policy, this is due to a drop in demand for law school.