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Editor: Paul L. Caron
Pepperdine University School of Law

Wednesday, February 8, 2017

NY Times:  The Crisis At Charlotte Law School

Charlotte Logo (2016)Following up on my previous posts (links below): New York Times, For-Profit Law School Faces Crisis After Losing Federal Loans:

[Charlotte Law School], with hundreds of students, remains in business, even without the lifeline of federal student aid. It is counting on the Education Department under the Trump administration to reopen the loan spigot that the agency turned off last month after the American Bar Association, the law school accreditor, found that the school did not satisfy its admissions and curriculum standards. ...

Charlotte Law’s struggles and its dispute with the government highlight the questions being raised over for-profit law schools and the sky-high amounts that students are borrowing for their education. Law school debt alone, when counting interest, has risen to about $175,000 per student, said J. Jerome Hartzell, a lawyer in Raleigh, N.C., who has studied the debt issue.

“It would require an income of over $122,000 to be able to afford just the interest on a student loan of that size,” Mr. Hartzell said. “Most North Carolina lawyers don’t earn that much.”

The Obama administration cracked down on for-profit schools whose students did not graduate or failed to pay off loans after earning degrees that had little value in the job market. Charlotte Law found itself among them, the first law school to have its federal student aid severed.

Its problems have placed greater scrutiny on the A.B.A. and its accrediting arm in their role as watchdog for legal education.

“The system we have now was designed for times when schools were flush with students and cash, and accreditors just had to make sure those were used well,” said Rick Bales, a professor at Ohio Northern University’s law school, and its former dean. “It was not designed for crises, and there is more than one law school now facing problems.” Critics of Charlotte Law say it has enticed unqualified students. Many graduates, they say, have racked up considerable debt but failed to find higher-paying legal jobs. According to A.B.A. data, only 26.3 percent of recent Charlotte Law graduates had full-time jobs that required passage of the state bar and another 10 percent were in jobs where a law degree was preferred.

As federal law school debt mounts, discontent with the accrediting process has been building. Last summer, Education Department officials asked bar accreditors why so few graduates of low-performing schools had found bar-required employment. According to a transcript, when asked how many law schools had lost their accreditation for low bar passage rates, the A.B.A.’s answer was none.

A recent review of the 205 accredited law schools, by the nonprofit Law School Transparency, found that 51, including Charlotte Law, were in the “extreme risk” or “very high risk” category for graduate success.

Still, the A.B.A. has been reluctant to clamp down on schools. On Monday, its delegates defeated a measure that would have required law schools to shorten the period that graduates have to pass the bar.

Prior TaxProf Blog coverage:

http://taxprof.typepad.com/taxprof_blog/2017/02/ny-timesthe-crisis-at-charlotte-law-school.html

Legal Education | Permalink

Comments

As the anonymous father of a law student at Northeastern, back in the 2005-2008 period, I suspected a severe disconnect between reality and the fibs the law school was peddling. I remember going in to talk to the Dean and asking her why she didn't cut tuition so these kids would not be so burdened when they got out, and she looked out through the glass windows of her office at desks and cubicles of administrators, gestured at them, and said, more or less, "All this has to be supported." Emily Spieler was her name.

Posted by: Anonymous Boston father | Feb 8, 2017 6:27:11 AM

Ruh-roh, the NYT published another "law school is bad and here are the clear, well-supported reasons why" article! Who will write the novella-length appeal?

Posted by: Unemployed Northeastern | Feb 8, 2017 9:07:09 AM

Unless the NY Times is misquoting this guy, his numbers are widely off the mark.

"“It would require an income of over $122,000 to be able to afford just the interest on a student loan of that size,” Mr. Hartzell said. “Most North Carolina lawyers don’t earn that much.”"

The interest on a $100,000 student loan is between $5,000 and $7,500 per year. Even if the students are borrowing $200,000, that's only $10 to $15K per year. That's affordable on an income of $40,000, especially if you're living somewhere inexpensive like North Carolina, where median per-capita income ranges from $15,000 to $33,000.

https://en.wikipedia.org/wiki/List_of_North_Carolina_locations_by_per_capita_income

Posted by: One innumerate lawyer | Feb 8, 2017 9:35:21 AM

I think the ABA should take more responsibility. The AMA does a much better job at managing the supply side of doctors. Why can't the ABA at least cut out those law schools which produce bar passing lawyers? Just seems like they have a responsibility that they're lax to admit to.

Posted by: Anonymous | Feb 8, 2017 10:45:11 AM

Sorry - meant "fail to produce" of course.

Posted by: Anonymous | Feb 8, 2017 10:45:49 AM

Anonymous Boston Father--interesting. Also: are you Unemployed Northeastern's dad? If so, you should be proud of your son.

Posted by: LaVonna | Feb 8, 2017 6:11:23 PM

@Innumerate lawyer,

Sorry, are you saying that annual interest payments of $15k are "affordable" on an income of $40k? For real? That's like half the takehome!

@LaVonna,

Believe it or not, a school that graduates hundreds of kids per year and generally only manages to place between 40% and 50% of them into full-time, long-term, license-required jobs at any salary within ten months of graduation has more than unhappy customer.

Posted by: Unemployed Northeastern | Feb 9, 2017 10:54:14 PM

Since around half of the people who live in North Carolina make due with less than $27,000 per year, $40,000 - $12,000 in interest payments probably sounds pretty darn good to them.

But I understand that New York Times reporters think no one can survive on less than $110,000 per year. It's a wonder 90 percent of the United States hasn't starved to death already!

Posted by: North Carolina | Feb 11, 2017 9:55:16 AM

So North Carolina is saying that an income of $40k, less taxes, less $12k in INTEREST PAYMENTS ALONE, is a "pretty darn good" outcome for seven years of higher education. Your mileage may vary...

Posted by: Unemployed Northeastern | Feb 11, 2017 4:52:53 PM