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It's not a happy Monday for our nation's law schools. The news, across the board, appears to be negative, both in terms of schools' financials and their graduates' job prospects.
Back in October, we reported that Standard and Poor's was close to downgrading Brooklyn Law School's debt rating. It seems they aren't the only law school in trouble, however. According to the Wall Street Journal, a new report from Standard and Poor's offers a grim outlook for standalone law schools, with at least one school reaching "junk bond" status.
Meanwhile, the cause of the collapse -- decreased demand resulting from a lack of jobs for graduates, may not be improving in the near future. According to the Department of Labor's most recent report, after a steady period of recovery, the legal sector lost 1,100 jobs in November, the second straight month of decline.
Much like law graduates, law schools outside of the prestigious top-15 are facing their own debt crisis, more so if the school is independent of a larger university.
Standard and Poor's new report on the state of law schools spends the first few pages rehashing what is common knowledge for followers of this blog: there are fewer test-takers, applicants, and students clamoring for our nation's law school seats. It then jumps into the credit ratings.
A sample size disclaimer is necessary here -- only five ABA-accredited standalone schools, out of 26 such institutions, are rated by Standard and Poor's. Nonetheless, the data for these schools, which lack the financial support from being part of a larger university, is grim:
The report also mentions a few small regional universities, with dependent law schools, where the crisis might be affecting the university as a whole (Widener University, Pace University, Regent University, and others).
Of course, the biggest key to recovery for the schools is increased demand, which will only come when there is a reason (job prospects) to go to law school.
Unfortunately, the data doesn't look good. The Department of Labor's newest report shows a second straight month of decline, after the number of jobs in the sector peaked in September at the highest number since 2009.
It's not all half-empty. Year-over-year, the industry has gained 2,500 jobs, however. It's just not the sustained growth that many of us were hoping for.