ABA Journal, Vermont Law Receives $17 Million Loan From US Department of Agriculture:
Vermont Law School has received a $17 million loan from the United States Department of Agriculture. The loan will be used to restructure debt and further develop an online education program and year-round classes that offer greater flexibility for students. ...
The law school laid off staff in 2013 following a [39%] enrollment decline and in 2014, Moody’s Investors Service downgraded revenue bonds [to junk status] that led to the law school “technically” defaulting on a loan agreement with TD Bank. ...
Marc Mihaly, president and dean of the law school, told the newspaper that applications and enrollment are increasing. “They were attracted because we’re an economic engine, and a part of rural America that needs investment,” he says of the USDA. “Also, they were attracted because there was a crisis in law schools. There was a rapid decline. We had been through that and more than stabilized.” The school has 143 students enrolled for the 2016-17 academic year and 135 faculty members.
Valley News, VLS Receives Millions In Federal Loan:
Mihaly said the environmental law school has experienced “a bit of a Trump bump” — the school has seen a 6 percent increase in applications spurred by President Donald Trump’s election — since January, bucking the continued nationwide trend of declining law school applications.
The online offerings have helped the school expand its student base, and Mihaly said that some two-thirds of 187 master’s students are fundamentally online students, though there is some crossover that makes categorization difficult. ...
The school is directly investing roughly $2.5 million of the loan into the services, staff and technology needed to support the new direction, Mihaly said. ... The 2.4 percent interest rate on the loan will allow the school to save roughly $600,000 annually in interest payments on about $13 million in debt, according to Mihaly. The remaining $14.5 million of the loan is going to the restructuring of the school’s debt.
Prior TaxProf Blog coverage:
- Vermont Law School to Downsize, Offer Buyouts to Staff; Faculty May Be Next (Nov. 26, 2012)
- Vermont Law School to Offer Buy-Outs to Faculty Next Month Due to Declining Enrollment (Jan. 24, 2013)
- Vermont Law School Eliminates 25% of its Full-Time Faculty Positions (June 28, 2013)
- American Prospect: Law Schools Take Scamming Students to a Whole New Level (July 11, 2013)
- WSJ: Law Schools Slash Professor Jobs as Enrollments Drop (July 16, 2013)
- Moody's Downgrades Vermont Law School's Bonds to Junk Status (Apr. 21, 2014)
- Four Law Schools' Debt Classified as 'Junk Bonds' (Apr. 22, 2014)
- The Coming 'Civil War' Between Doctrinal Faculty and Experiential Faculty as Law Schools Downsize (Oct. 31, 2014)
- The Over/Under on the Number of Law Schools Closing by 2018: One (Dec. 1, 2014)
- Vermont Law School Contributes $30.5 Million in Direct Expenditures, 376 Jobs to State Economy (Apr. 6, 2015)
- Moody's Withdraws Vermont Law School's Ba1 Bond Rating (Feb. 1, 2016)
- Vermont Law School Seeks $15 Million Federal Loan To Restructure Its Debts Via Sale-Leaseback With Related LLC (July 26, 2016)