Home / General / Dealing with the crash, Pt. 2

Dealing with the crash, Pt. 2

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wcl

This post is part of a series. The first post is here.. A third post is here.

Background information here.

I got a particularly glossy and garish bit of law porn in my mailbox yesterday, from American University’s Washington College of Law. It highlighted the school’s current one hundred and something million dollar building project, (a live stream of which can be viewed here), which is erecting a voluptuous and gleaming structure among the leafy streets of northwest Washington’s Tinley Park Tenleytown neighborhood.

American is arguably the biggest ripoff going in legal academia, as it combines “prestige” of a sort (it is normally ranked among the top quarter of ABA law schools) with sky-high sticker attendance costs (estimated as $71,070 per year for 2013-14), very little in the way of tuition discounts (more than 60% of the class is currently paying sticker, and almost all the rest get a miserly $10,000 discount off that $70K bill), and wretched employment statistics, which have combined to produce a massively indebted and seriously depressed student body.

In these increasingly transparent times, the school tries to disguise these facts with a bunch of malarkey about how a law degree from American will allow prospective admits to “champion what matters”

The school markets itself as deeply committed to serving the public interest, which is an accurate characterization if serving the public interest is defined as transferring increasingly large sums of taxpayer money in the form of non-dischargeable educational loans into the bank accounts of law school administrators and faculty. Prospective AU law students are lured with visions of writing Brandeis briefs about polar bears for the DC office of the Environmental Defense Fund, without being warned that these days it’s actually easier to get a job at Wachtell than an even moderately sexy public interest position.

Moving right along . . . despite the seemingly endless supply of naive young people who can be snookered by this kind of thing, it’s heartening to note that the law school reform movement has helped crash AU’s applicant pool, which has shrunk from 9,000 three years ago to 5,800 this fall. Like other schools, American had and has three options for dealing with this unpleasant and potentially unprofitable development, which are to reduce the size of its class, the cost of attendance, or the selectivity of its admissions — or some combination of these strategies.

While the University of Iowa represents a school that appears to have gone all in with the first option, American has shoved in its chips with the third. This fall’s entering class of 474 1Ls is at just about the average size for AU entering classes over the last decade, and while real as opposed to nominal tuition data isn’t officially available yet, all indications are that the school didn’t up its very small “scholarship” budget.

What it did instead was continue to slash admissions standards. The median LSAT for the entering class has declined from the 86th to the 70th percentile in just two years, and, even more tellingly, since 2009 the 25th percentile for full-time matriculants has fallen a startling seven points — from 160 (the 80.4 percentile) to 153, which is barely above average for LSAT takers (55.6%). To get some sense of what the latter stat signifies, consider that a decade ago, only 55.6% of all law school applicants were getting into any law school, and that only about two-thirds of LSAT takers even bothered to apply to law school at all.

Amusingly, even as it trends toward an open door policy for modestly qualified applicants, American has become particularly aggressive about practicing what is known in the trade as “yield protection.” This is the practice of rejecting or more often wait listing highly qualified applicants, in order to game admission stats for the purpose of the ever-pernicious rankings. The way this works is that part of a school’s ranking is based on its “selectivity,” which is measured by what percentage of applicants it offers admission end up enrolling. What American did in this last cycle was to wait list or reject almost everybody who applied with a 166 LSAT or higher, which under the circumstances is sort of like sending Salma Hayek an email informing her that you won’t be asking her out tonight after all.

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  • Kyle C

    Google and I don’t think there is a Tinley Park, DC — maybe you mean Tenleytown?

    • snarkout

      Yeah, AU is at the Tenleytown Metro stop.

  • Monday Night Frotteur

    Good stuff.

    One mild quibble: do you really believe that American is a bigger rip-off than Cooley? American might charge more, but great googly-moogly, paying one dime to attend Cooley seems like a huge mistake.

    • Paul Campos

      Which was the bigger ripoff: the subprime mortgage bonds hawked by Goldman, or the guy on the corner next to their office who was selling “genuine” Rolex watches?

    • People who go to Cooley pretty much know that they are attending a bottom of the barrel law school; people who go to American might be able to persuade themselves otherwise. We are operating in the realm of self-delusion with both schools, obviously, but the fact that American is in DC, and is a part of a university probably classes it up a little. I suppose it’s a bit like buying a watch in Chinatown: should you go for the fake Casio or the fake Rolex? Either way you start out not knowing what time it is, and end up not knowing what time it is and out the $20 bucks.

      • ryan

        That’s a pretty accurate description of the self delusion which AU students engage in. This was/is aided in large part by the relatively high rankings of AU. But it’s not just the students who are deluded this way. Rather, the Professors and Administrators sincerely believe they are better actors then their counterparts at Cooley.

        Obviously this doublethink was so much easier to continue before the reform movement and the revealing of the fraudulent employment statistics.

        By 3rd year only the most thick headed of AU students believe they didn’t make a mistake attending AU. These tend to be persons with deep reverence for institutions. They are reactionaries and will sadly turn to their abuser for comfort in this brutal economic recession. AU’s Profs and Admins knows this too well, and smile wide while telling these delusional kids about the great L.L.M. opportunities available.

      • NewishLawyer

        Having met some people who went to Thomas Cooley, I am going to disagree. They seemed to place a great emphasis that TC was very hardcore with old-school socratic method teaching and an unforgiveable curve. This somehow made them better than Harvard or even Tier II students (my law school was Tier II).

        Having never been to Michigan, I cannot comment on the veracity of their statements but I’m doubtful.

        • I’m afraid you could tell most Cooley students pretty much anything and they’d believe it, poor souls.

          • Lawdog

            Every single Cooley grad I have ever dealt with has been a complete idiot. And I used to practice in FL so I’ve dealt with quite a few of them.

      • NewishLawyer

        I knew one person who attended American Law School. She attended while I was still in undergrad and this was 1998-2002, so a long-time before the law school crisis.

  • Strong Thermos

    I would think all DC law schools would be on par with AU, except Georgetown. At least with Georgetown you get the veneer of prestige, but still the worst employment of the so-called T-14 (a function of location no doubt), and a diploma-mill sized class (I realize Harvard and Columbia have huge classes, but, you know…).

    Catholic has to be at least as big a ripoff, no? From what I’ve heard their career services are even worse (if that’s possible) than AU’s.

    GW is sort of in between. It’s not a terrible school, and a decent amount do get good jobs, but it’s still expensive as hell, and plenty are left high and dry without much to show for it.

  • Casual Observer

    This series is terrific and classic Campos.

    What Iowa did is commendable. What American did is wrong. I hope that the budget nonsense and the push to reform student loans turns off the spigot and re-introduces bankruptcy rights.

    I cannot wait until 50 or so law schools and their quasi-larcenous practices are run out of business.

  • Doug

    Paul – Charlotte School of Law might be worth a look. Thanks for your research.

  • SV Bob

    It’s amazing what some of these law schools will do to try to game the system. They probably have secret laboratories in a back room full of guys in white lab coats devising methods to fool prospective students, the ABA, USN&WR, and the general public. Each year they come up with some new trick — this year it’s rejecting overqualified applicants. Probably next year they will spread swine flu among high-LSAT-scoring free-ride scholarship students so they will drop out after the first year. And in the near future they may starting enrolling dead people (a la Gogol’s Dead Souls) and billing the US government for tuition.

    • dybbuk

      Good news. American is still a scam, scammier than ever. But it is no longer a trap. Even US News has demoted it to the second tier, and its fall should accelerate, notwithstanding its pathetic yield protection game.

      The kids who entered American in 2008 and 2009 were unusually brutalized. Excellent credentials, enrolling in a school deemed by US News to be first tier, and holding a then undebunked belief that DC was a great place to land an entry-level law job in government or public interest advocacy. And they graduated to employment outcomes that were much, much worse than the dismal national average.

  • Pablo

    Yield protection on admissions has been going on for many years at the undergraduate level. In our town, a young woman who was admitted to Harvard (no connections or wealth) was turned down by BU.

  • BamBam

    That is just a sick photograph. I guess that is American’s admins/deans “breaking ground” for some useless new building. You can just see them slobbering all over themselves at the thought of even more taxpayer-backed student loans gushing into their bank accounts.

    • MemeDreme

      That marked plot is about the size of a grave.

  • Rhymes with Smolorado

    I can also think of another institution which went down 2 points in LSAT this year, and increased its class size by 32 students per TLS, and thus seems to be pursuing the same strategy at least for the current cycle.

    • SV Bob

      I think they are deliberately giving the finger to a certain well-known whistle-blowing professor. “What? No problem here!”
      BYU fired a tenured chemistry professor for saying dangerous things, using a pretext, so please watch your back, Herr Professor.

      • A Jellyfish

        “Dangerous things”?

        Are you talking about “cold fusion”, perchance?

        • MattT

          The cold fusion thing was at University of Utah, not BYU.

      • Anonymous

        I really can’t muster any tears over a fired 9/11 truther.

  • matt

    There are a bunch of problems with the comments on American. First, do you really believe the LSAT measures one’s ability to be an attorney? If it doesn’t then it doesn’t matter if American’s LSAT’s are slipping.

    Second, American’s actions benefit its students because they don’t have to pay tuition, the gov’t does. Remember, American’s students borrow money from the gov’t to pay tuition and then only have to repay a minimal amount of what they borrowed due to the Pay as you earn program. The loans also cover living expenses.

    So the question a college grad with no marketable skills faces is really between working at Starbucks, and living in his parents house, versus living in DC (a great city), impressing dates by saying he is a law student, and having more spending money than he would if he worked. That seems like an easy choice to me.

    If anything, American needs to raise tuition to fund a loan repayment assistance program, like Georgetown’s, so it can ensure its grads never have to pay anything on their loans. It could also raise the expected “cost of living” so its students could borrow even more money they’ll never have to pay back.

    And if you think any of this is going to change, remember the gov’t repayment assistance program was started by a republican (George W. Bush who called it IBR) and expanded by a democrat who renamed it pay as you earn. Since it has such bipartisan support, its hard to imagine its going away.

    • dl

      A second-order concern is: should the government be paying to train unemployable lawyers?

    • RSP

      “Second, American’s actions benefit its students because they don’t have to pay tuition, the gov’t does. Remember, American’s students borrow money from the gov’t to pay tuition and then only have to repay a minimal amount of what they borrowed due to the Pay as you earn program. The loans also cover living expenses.”

      Sounds like you’re shilling for the law schools, this is the kind of advice I fight everyday. Sure, repayment options now ensure that you won’t be immediately destroyed but IBR and alternatives (with the exception of the public interest loan forgiveness plan) but in 20-25 years (depending on plan) when the amount is “forgiven” they get hit with an enormous tax bill that they can’t pay given the fact that they couldn’t pay the original loan amounts. To say nothing of a massive outstanding student loan bill and the impact upon your future credit and borrowing capacity. Now if IBR is ever changed to give tax-free forgiveness, I’d have fewer concerns but I don’t see that happening anytime soon.

      • Andrew

        He’s also missing (intentionally?) the huge problem that IBR is premised on a comically inaccurate projected default rate. When 40% of students start going on IBR there is no way that the program is going to be sustained; instead, the government is going to start chipping away little by little (requiring larger monthly payments) and eventually it’s going to provide an insignificant benefit or just be abolished.

    • Julian

      Second, American’s actions benefit its students because they don’t have to pay tuition, the gov’t does.

      I’m just going to leave this right here.

      • Paul Campos

        I’m hoping that “Matt” is doing some subtle parody in this thread, but it’s so hard to tell these days.

    • My $0.02

      First, do you really believe the LSAT measures one’s ability to be an attorney? If it doesn’t then it doesn’t matter if American’s LSAT’s are slipping.

      The LSAT is a broad measure of analytical intelligence. A class with a lower LSAT median is a class where, on average, the students are not as smart. Not-smart law grads tend to make bad lawyers. Employers tend to not hire students from schools where they’ve had a bad experience hiring not-smart, incompetent lawyers.

      • Strong Thermos

        I’m not convinced that the LSAT is a useful measure of intelligence or ability to practice law. I’ve known people with 95+ percentile scores do poorly in law school and practice, and people in the low 160s do very well in both. But that’s within a very narrow range towards the top end of the spectrum.

        I will say this: if you don’t have the intellectual ability to crack even the 60th percentile on the LSAT, I daresay there’s a good chance you don’t have the intellectual ability to do well in law school or be a decent lawyer. I think a guy with a 165 and a 172 are both fairly intelligent and can do well-towards the top I don’t put too much stock in the differences. But sub-160? A 153? I’m sorry if that sounds mean or hurtful, but that doesn’t bode well.

    • Casual Observer

      Sadly, this is true. The taxpayers do not yet know the scope of the moral hazard PAYE has created. Frankly, I’m surprised that blowhards like Ted Cruz aren’t all over this yet.

      The current funding system (PAYE) cannot last more than 2 or 3 years, as the barbarians will then be at the gates. Maybe the schools want to party while the music’s playing knowing full well that they may face the fiscal death penalty by 2020.

      • Unemployed Northeastern

        Representative Thomas Petri (R) of Wisconsin is on a crusade to repeal PAYE, citing moral hazard and unfairness to private sector workers. It’s only a matter of time before others go after PAYE and IBR. There’s simply no way those programs will go the distance.

        • BoredJD

          Even if the programs themselves go the distance, it wouldn’t take more than a few tweaks to exempt certain federal loans (i.e. GRADPLUS) from the program. If the government is really seeking to profit off of student loans there is simply no reason to allow a small, unprofitable exception to the rule for law schools- nobody is going to cry for law schools or law students.

        • matt

          One crazy representative can’t get much done. Heck, the whole house of representatives can’t repeal Obamacare. What’s more important is the broad consensus supporting repayment assistance programs. The republicans won’t do anything about gov’t loans because gov’t loans help out the for profit education industry. And PAYE is necessary if we have gov’t loans because it prevents an embarrassing rash of defaults. Obama wants to make the PAYE program even more generous by removing any tax hit when the loans are forgiven.

          If you think law schools are inefficent, look at american medicine. People have been saying for 40 years we can’t go on spending twice as much as other countries for mediocre results. But year after year we keep on spending more and more. And the most recent response was not to control spending but to bail out the health care industry with Obama-care. It won’t be any different with law schools.

    • The LSAT doesn’t measure one’s ability to be a lawyer, but it has a fair correlation with performance in law school. (See, e.g. http://abovethelaw.com/2013/09/whats-the-best-predictor-of-bar-exam-success-its-not-the-lsat/). Standardized tests are problematic, of course, and law schools use more that merely the LSAT in their admissions process for that reason.

      Performance in law school doesn’t necessarily correlate with success as a lawyer, but it damn sure correlates with the kind of job you are going to get. So take your low LSAT and tell yourself that you’ll do fine once you finish school and pass the bar. Maybe you will. People do. Just because the prospects grow worse with every lawyer who enters the market doesn’t mean that you won’t be the lucky one. You’ll be just fine….

    • Strong Thermos

      So the question a college grad with no marketable skills faces is really between working at Starbucks, and living in his parents house, versus [being a ] law student, and having more spending money than he would if he worked. That seems like an easy choice to me

      Easy choice if you’re a dumbass. Look, if your only options upon graduating college are unemployment or law school, that constitutes a serious failure of imagination.

      As to the bold, you have to pay that back, shitcock. Livin large is not the object of student loans.

      Anyway, I daresay that working at Starbucks/being unemployed with a BA is a damn sight better than working at Starbucks/being unemployed with a JD and six figures of debt. And the really smart people who I’d actually be interested in dating wouldn’t be impressed by the mere fact of being a law student.

      By the way, how does it feel to be a whore? God, the stupid, law school shilling hurts my brain. You are in desperate need of either some intelligence or integrity. Possibly both.

      • Sooner

        I don’t think Matt is “law school shilling”, he is “PAYE and IBR shilling”.

        • Andrew

          The fact that law school administrators aren’t being hauled before Congress and informed that they are not allowed to promote IBR/PAYE as a first option is a travesty.

    • Barry

      “Second, American’s actions benefit its students because they don’t have to pay tuition, the gov’t does. Remember, American’s students borrow money from the gov’t to pay tuition and then only have to repay a minimal amount of what they borrowed due to the Pay as you earn program. The loans also cover living expenses. ”

      This has been rather thoroughly covered on this and other blogs.

    • Anonymous

      “First, do you really believe the LSAT measures one’s ability to be an attorney?”

      Well, American apparently does, since they make it a requirement for admission. And if they are lowering the threshold, that’s consciously lowering their standards, by their own lights, in response to the threat of declining enrollment.

      There’s no need to engage the broader question of the value of the LSAT as such.

  • mpowell

    This is a decidedly short term outlook for American as their rankings will probably ultimately take a nasty hit. But keeping the checks from bouncing is probably worth it to the current administration.

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  • pete moss

    does anyone else find the way the google affiliate ad network feeds ads for Cooley Law school to this page to be unintentionally hilarious?

  • BoredJD

    Compared to NYC/NJ, the DC/NOVA market has a much smaller private sector, it’s main drivers of entry-level employment, the government and nonprofit jobs, are arguably doing even worse than biglaw, there are as many schools feeding into it, and arguably just as many students from out-of-region schools targeting the market.

    Even at CLS, students who had no problem securing elite firm jobs took their chances with DC.

  • Law Student Studying For The GMAT

    American Law School Admission Stats (Median LSAT followed by enrollment numbers)

    2010 163, 502
    2011 162, 475
    2012 159, 491
    2013 157, 474

    American Dropping their admission standards this fast is actually quite impressive.

    • Anonymous

      Using the LSAT score drop instead of the percentile drop really understates the difference. The median dropped from an 88th percentile to a 71st percentile. They more than doubled the pool of applicants that would have a median or above LSAT at AU.

  • Gloria Mundey

    Meme dream,

    I thought the same thing. Photo caption should read, “American administration excavates permanent place for 0L dreams of success.”

  • Guest

    All of the law schools that have posted class profiles for the fall have dropped in stats or class size except Harvard. Problem is that none of these schools, including Harvard, are safe down the road. We are talking people with Harvard Law Review, or cum laude Harvard Law with federal clerkship not finding jobs after long stints in big law, or in one case finding a job that did not last, not necessarily through the fault of the lawyer. We are talking unemployment for a long time after that job ended. I know several people like that.

    The problem here, for all of the talk of low ranked law schools producing terrible results, is that some people from low ranked law schools get good jobs and hold on to those jobs. In an acute oversupply of lawyers, as exists now, there may well not be a career position for a male lawyer, primary breadwinner, who does wery well at Harvard and spends years at big law because of the limited career jobs, a good number are held by grads of lower ranked law schools, so there is less to go around for the top school grads.

    The other sickening trend in the lateral job market for lawyers is temporary jobs. Maybe half the jobs listed on the ACC In House Jobline are temp.

    With the Affordable Care Act coming in, you can be sure fewer and fewer lawyer jobs will be permanent and full time. Most will be temp if possible for the employer to avoid the mandate. This is not effective till 2015, but legal employers are already on board for this change. After all, it is very easy to hire a lawyer with the oversupply, so what employer needs to offer a permanent job and pay for health insurance when there are less costly options and lawyers are so fungible?

    A frigging economic/ tax disaster because most temp lawyers will exceed the income threshold for federal premium assistance and have to buy their health insurance after tax. That will drop their after tax income to near or below the level of what they would have made right out of college in many cases.

  • tony smith

    Colorado students pay Campos’s salary so he can have the luxury of blogging repeatedly the same things. Now that’s the REAL law school scam!

    • glenn fucking reynolds

      True dat.

  • Casual Observer

    There is a very obvious and easy solution that helps almost everyone — even if those whom it helps are blind to it. Shut them down. Close down, through economic forces, the majority of law schools. Allow debt to be dischargeable and cap the loan amount students may borrow. And Uncle Sam should end Grad Plus.

    If these things happen, the ship rights itself over night. Mind you, this will completely fuck the majority of law schools, but who cares? Really, who cares? It will (unfortunately) mean that many poor kids and a disproportionate number of black and hispanic kids will not be able to afford law school in the very short term (like 3 to 5 years).

    In the long term, however, law will be a smaller, more stable profession that doesn’t burden everyone with unsustainable debt. It makes zero sense to subsidize the legal profession to allow everyone with a pulse to attend, provided they are willing (or ignorant to the fact) to live in postgrad poverty.

    • SV Bob

      It’s easy to say that all these law schools should close (they should of course) – but it’s not doable, because each law school is like a small town and a lot of people (the professors and the administrators) depend upon it for their income, their livelihood, their existence. They’re going to fight for their lives, even if it means spending all the law schools’ endowment on free tuition and lying about all sorts of things.
      The solution should be for the parent universities to act responsibly and shut down the crappy law schools and reassign people to jobs in the parent universities, or for other law schools to hire laid-off professors to replace adjuncts or work as legal writing instructors. But of course nobody is going to do that.
      So the only solution is to starve the crappy law schools of their oxygen, mainly by spreading the word that law school is a terrible career option and prospective students should not go. The invisible cruel hand of the free-market is the only solution, alas.

      • jan

        “Free market” would just pony up more loans with advertising blitz or pay-off more politicians to do the same. Or, as is becoming very common at all levels of academia, use up the last veneer of U.S. exceptionalism by roping in less savy nueavo rich foreigners.

  • ryan

    the link details the huge temple the WCL faculty and administrators are building to honor their god Moloch.

    http://tenley.wcl.american.edu/

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