Dive Brief:
- Based on significant declines in enrollment, up to a third of all law schools were expected to close. But they’ve stayed open because creditors have nothing to gain by shutting them down, the New York Times reports.
- Overall enrollment in law schools dropped to 39,675 last year, down 24% from its high point of more than 52,000 in 2010 — and the 2014 number is expected to drop 5% to 10% more.
- The dropping enrollment numbers have hurt lower-tier law schools the most.
Dive Insight:
The New York Times uses the financially struggling Thomas Jefferson School of Law in San Diego as an example. The school is ranked in the lowest tier of the U.S. News & World Report listings, with the highest per-student debt load, $180,665, and an abysmal full-time attorney job-placement rate for recent graduates — 29%. The school defaulted on its debt in June, but creditors allowed it to write down that debt to $40 million from $127 million and cut the interest rate to 2% because they would have lost more by shuttering the school. The situation is similar with other law schools —creditors, or the administrators, if the law school is part of a university, will lose more by forcing them to close.
