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Monday, October 31, 2011

New Accreditation Standards: Student Loan Default, Law School Closure

ABA LogoFrom the ABA Section of Legal Education and Admissions to the Bar:

At its October 1, 2011 meeting, the Council of the Section considered and approved the following proposed revisions to the ABA Standards and Rules of Procedure for Approval of Law Schools for Notice and Comment:

New Interpretation 510-2 [For law schools not affiliated with a university, the school’s student loan cohort default rate shall be sufficient ... if it is not greater than 10% for any of the three most recently published annual cohort default rates.]

Proposed Revisions to Rule 5(a), Rule 22 [Teach-out Plan and Law School Closure]

A hearing on these proposed changes is scheduled for 3-4 p.m. on November 17, 2011 at the ABA, 321 N. Clark Street, Chicago, IL 60654. Please address written comments and requests to speak to Becky Stretch, Assistant Consultant, at the above address or at Becky.Stretch@americanbar.org.

Comments and requests should be submitted no later than November 15, 2011.

We expect that final Council action on these matters will occur at the Council meeting scheduled for December 2-3, 2011.

http://taxprof.typepad.com/taxprof_blog/2011/10/new-aba.html

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Comments

Is the 10% default rate meaningful? If I look at DOE Cohort Default Rates, here are the highest listings (correct me if I'm wrong) over the three-year period for listed schools of law, and only one comes close:

Atlanta's John Marshall: 7.1% (FY2008)
Appalachian: 3.9% (FY2009)
Cooley: 2.7% (FY2009)
John Marshall: 2.7% (FY2009)
Thomas Jefferson: 2.3% (FY2009)
Albany: 1.9% (FY2007)
Phoenix: 1.8% (FY2009)
California Western: 1.7% (FY2009)
Florida Coastal: 1.7% (FY2009)
Michigan State: 1.6% (FY 2009)
Hastings: 1.3% (FY2009)
New York Law School: 1.6% (FY2009)
Brooklyn: 1.4% (FY2007)
CUNY: 1.4% (FY2009)
Southwestern: 1.4% (FY2008)
New Hampshire: 1.3% (FY2009)
Western State: 1.3% (FY2008)
New England: 1.1% (FY2008)
Vermont: 1% (FY2007)
William Mitchell: 1% (FY 2008)
Ave Maria: 0.9% (FY2008)
South Texas: 0.8% (FY2009)

Posted by: anon | Oct 31, 2011 11:03:35 AM

This is another way in which the ABA fraudulently misrepresents a law school statistics.

Only a student who is completely clueless would have to default when they could achieve the exact same goal (paying nothing) by going on IBR/deferments. Yet the ABA will not count deferments and IBR as "default." Rather, they will use a narrow and unrepresentative definition of default to grossly overstate the ability of graduates to repay their loans.

Posted by: anon | Oct 31, 2011 3:21:01 PM