TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Thursday, January 12, 2017

Charleston, Florida Coastal Law Schools Fail 'Gainful Employment' Test, Will Lose Federal Student Loans If They Fail Again Next Year; Three Other Law Schools In Danger Zone

CFNational Law Journal, Two Law Schools Get an ‘F’ for High Student Debt from Education Dept.:

Two law schools have landed on the U.S. Department of Education’s list of college programs with extremely high student loan debt compared with graduates’ earnings.

Florida Coastal School of Law and Charleston School of Law are identified as failing on the department’s “gainful employment list,” released Monday. Should those schools fail a second year in a row, they will lose access to federal student loans—a situation that is currently rocking the Charlotte School of Law as it struggles to remain open after losing federal loan access at the start of the year.

Charlotte, which Monday said it was delaying the start of its spring semester by a week while it scrambles to secure student loan funding, is among an additional three law schools with a so-called “zone” rating, meaning they were close to failing the department’s measure and are on notice that they must improve. Western State College of Law and Arizona Summit Law School are the other two in the zone. Those three schools must pass the gainful employment standard in one of the next four years in order to remain in good standing, according to Ben Miller, a higher education expert at the Center for American Progress. ...

Programs fail the gainful employment standard if graduates’ annual loan payments are more than 12 percent of their total earnings, or if those payments exceed 30 percent of their discretionary income. [Programs are in the zone if graduates’ annual loan payments are 8-12 percent of their total earnings, or if those payments are 20-30 percent of their discretionary income.]

The Department of Education listed Charleston's median average earnings as $45,201, and Florida Coastal's as $46,053.

Chronicle of Higher Education, Here Are the Programs That Failed the Gainful-Employment Rule:

About 98 percent of the failing programs were offered by for-profit institutions, but some failing programs were at nonprofit institutions. Some of the more prominent failing programs included a theater-arts program at Harvard University, a music-performance program at the John Hopkins University, and a music-technology program at the University of Southern California.

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