Has the decline in law school applications bottomed out?

Final figures for the 2014-15 application cycle are now available, and, as I predicted last December, the steep decline in applications to law school that began four years ago appears to have slowed dramatically, if not stopped completely. The total number of applicants — 53,548 — is slightly less than two percent below last year’s figure. Applicant totals are down 39% from 2010, and 47% from their 2004 peak:

Since the ABA Section of Legal Education saw fit to approve 17 (!) new law schools over the past decade, increasing the number of ABA law schools by nearly 10%, the ratio of total applicants to ABA law schools has declined even more, from 535 to 1 to 262 to 1. Total 1L enrollment this fall, if we assume that last year’s 80% acceptance rate can’t go any higher, will be around 37,200, meaning that first year enrollment will be down 30% from its 2010 peak, despite a sharp drop in admissions standards. Here’s the percentage of applicants admitted to at least one ABA school over the past ten years:

2004: 55.6%
2005: 58.6%
2006: 63.1%
2007: 66.1%
2008: 66.5%
2009: 67.4%
2010: 68.7%
2011: 71.1%
2012: 74.5%
2013: 76.8%
2014: 78.1%

After five straight years of declines, June LSAT administrations were up by 6%, so it’s likely that American law schools are at what is at least a temporary bottom in regard to the cratering of applicant numbers. This plateau, if that’s what it proves to be, rests upon the potentially very thin ice of the continuation of the federal government’s Grad PLUS loan program, which is still loaning out the full cost of attendance to essentially anyone any ABA-certified school chooses to admit, no matter what that school charges. The Grad PLUS program is under increasing political pressure, however, so law school administrators had better not be refinancing that second ski chalet just yet.

Grad PLUS is a classic example of a bad government program, that lots of people are trying to replace with an even worse privatized program, i.e., private educational loans that will continue to be non-dischargeable in bankruptcy, and won’t feature even the limited protection of the income-based soft default provisions available to those who can’t repay their government loans.

And people who think no private lender is going to fork over $200,000 for somebody to go to Thomas Jefferson or Touro are almost certainly wrong about that — private lenders will be more than happy to make even very risky loans at five or six or seven percent over prime, if debtors can’t get rid of those loans in bankruptcy. Getting rid of Grad PLUS will kill some schools that ought to die, but continuing to make private educational loans non-dischargeable in bankruptcy — an egregious giveaway to the financial industry created by the 2005 bankruptcy “reform” bill — will ensure that many others that should go out of business will survive, and that a large percentage of their graduates will spend the rest of their lives buried in life-wrecking amounts of debt.

The good news is that even as distorted and perverse a “market” as that for law degrees paid for with no-questions-asked government loans is still not completely immune from the effects of supply and demand: not only have applicant totals fallen nearly in half, but real tuition (sticker minus discounts) is now almost certainly lower than it was three years ago, in defiance of the apparent law that the price of higher education in America can only go up (If nothing else, American law schools have proven that with enough greedy recklessness it’s possible to kill even that heretofore immortal golden goose).

A mordant illustration of the latter fact is provided by the good folks at Indiana Tech’s fledgling law school, who have just admitted a first year class of fifteen intrepid souls, despite cutting tuition to zero. The school thus seems to have found a theoretical and practical limit to P.T. Barnum’s and H.L. Mencken’s most famous dicta.