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Field of nightmares


This is the first of what may be a series of posts about how law schools are dealing with the sharp decline in demand for legal education. (The second post is here. The third is here).

The University of Iowa is currently the 26th-ranked (out of 202 ABA law schools) law school in the nation, per the US News rankings. Iowa is typical of fairly highly ranked law schools at state flagship universities, in that it has raised tuition drastically over the past ten to fifteen years. In state tuition has gone from $7,100 per year in 1999 to $28,047 this year, while out of state tuition has risen from $17,600 to $49,025.

Graduate debt has risen rapidly as well: members of the 2012 graduate class averaged around $110,000 in total law school debt alone when the first payments of their loans came due in November of last year. Such debt levels would be problematic under any circumstances, but despite the school’s relatively lofty ranking, very few Iowa graduates get high-paying jobs with large law firms (17 of 185 2012 graduates got such jobs), and only 53 graduates in the class (28.6%) were reported to have a salary of $57,408 or more.

Until about six years ago, the school typically enrolled 215 to 240 JD students each year, and had at any one time around 650 to 700 such students in total (Iowa usually loses a few students on net in the post-1L transfer market).

Then a few years ago the school’s entering classes began to shrink, slowly at first, then quite suddenly:

Total JD students enrolled

2004: 712
2005: 656
2006: 644
2007: 633
2008: 616
2009: 590
2010: 574
2011: 550

In the fall of 2012, only 155 1Ls matriculated – by far the smallest class the school had seen in decades. Total enrollment fell to 517: nearly 200 less than the 712 students attending the school in 2004. Then this fall the bottom fell out. Although the school hasn’t officially announced its entering class numbers, the university’s on-line enrollment system shows only 95 first-year students matriculated last month. This story essentially confirms that number, as it reveals only 422 students (I assume this means JD students; Iowa does have an LLM program) are enrolled this fall. Total enrollment has declined 41% since 2004, and first year enrollment is down an even more startling 62% since 2004.

Why has enrollment at Iowa declined so sharply? The precise reasons are no doubt complex, but a simple answer is largely sufficient: because the school has neither reduced admissions standards nor cut real tuition (real tuition = nominal tuition minus “scholarships,” i.e., deep tuition discounts for students with high LSAT and GPA scores, cross-subsidized by students with lower scores who pay full price).

The entering 75th/median/25th LSAT percentiles for last fall’s entering class were actually higher than those of the much larger classes from a few years earlier, and while the stats for this year’s class haven’t yet been released, it seems clear that a willingness to admit a class less than half the size of the school’s traditional 1L group indicates that the school is refusing to cut admissions standards at all. Meanwhile the real cost of tuition to attend the school, as measured by nominal tuition minus discounts, continues to rise.

It’s an interesting strategy, although one that doesn’t seem sustainable, especially given that the school’s student to faculty ratio has declined from 15.5 to 1 in 2009 to 10.8 to 1 last year (I’ve been told that the faculty features a large number of very old very highly paid professors who appear to have no intention of ever retiring). At any rate, these numbers suggest that the school is experiencing a radical decline in its revenues relative to expenses. Indeed the school at present is likely to be losing a great deal of money — something which most universities (though not all) are unwilling to tolerate from schools that have traditionally been profit centers.

Iowa’s strategy is just one of several being pursued by law America’s law schools, as they confront a world in which something resembling accurate entry-level employment statistics for law graduates are now widely available, and (not coincidentally) it is suddenly no longer possible to indulge in unending consequence-free tuition increases that fund reckless institutional spending sprees, while remaining willfully blind to the effects of these policies on law school graduates.

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