Monday, February 13, 2017

Applicants Down 1.5% or Up 20.5%, Depending on How You Do the Math

Now that we are roughly ten weeks into the 2017 applicant cycle, I thought it was time to discuss the latest round of numbers from LSAC.  Looking through the analysis, though, it is not good news, so far as supporters of the scamblog movement are concerned.

LSAC started this cycle reporting a five percent decline in applicants over 2016, which has slowly been shrinking to the -1.5% mark.  So far, not so controversial - as time goes by and more and more applicants surface, the delta tends to improve rather than get worse.  However, if you take the LSAC data and plot it on a chart that is actually legible for once, you start to notice something odd: applicants appear to be tracking the 2014 data, which is significantly more than 2016.

Which leads to the obvious question: how can LSAC be showing declining numbers, when the plots show an improvement over 2016?  That's when apples-to-apples comparisons become critical.  Long story short, I believe I discovered the issue: LSAC appears to be going off pure spreadsheet numbers, but not paying close attention to which data they are comparing to what.  The summary is below:

When dealing with LSAC, is it difficult to line up their "start dates" as they tend to fluctuate a bit from year to year.  For example, I have to take LSAC's word that after week "1", applicants were down 5%.  However, when comparing weeks "2" and "3" with the same period last year, you will see that we are off to a good start on agreement: -4.7% and -4.2% respectively. 

However, starting with week "6", things start to diverge.  Apparently instead of comparing 2016's "Week 6" to 2017's "Week 6", LSAC did the math on 2016's "Week 6" and 2017's "Week 5."  While that comparison does yield -3.7% (per LSAC) in applicants year-over-year, the reality is that actual Week-6-to-6 (in red) shows in increase of 8.04%.

Similarly, there is a variance in Weeks 7, 8, and 10.  Each time, one can calculate and arrive at LSAC's % Difference calculation, but each time it appears to be wrong.  They are just going down the spreadsheet, and not comparing apples-to-apples.  Comparing Week 7-to-Week 7, (Green), Week 8-to-Week 8 (Orange) and Week 10-to-Week 10 (red), the actual percentages are actually up over 2016. 

When looking at the graphical data, one can see this as well.  Looking at Week 10, Applicant Data shows that that 2017 is much higher that the same time in 2016.  We appear to be back at 2014 levels.

Is it possible that the OTLSS analysis is off by one week, i.e. that the 2017 curve needs to be shifted to the left one week?  It's possible, as again LSAC is not clear from their charting about when they start - but even then the 2017 curve would still appear to trend higher than 2016, perhaps even by a larger percentage.  As LSAC does not report every week but instead skips some weeks randomly from year to year, this only adds to the potential confusion.

Unfortunately, even allowing for some fluctuation it would appear that students are somewhat changing their minds and ignoring the warnings about law school.   With Indiana Tech and Charlotte and others in the news, with their blatant, craven treatment of students as nothing more than loan conduits, it boggles the mind that students would be considering law school in greater numbers, even at more highly ranked schools.  Maybe they feel they have no other options.  Maybe they think they can beat the odds.  Maybe they are independently wealthy and a $175k price tag for a law degree means nothing to them.  Who knows.

All the more reason for the scamblog community to stand firm.  While a potential increase in the student crop this year is music to the ears of ScamDeans and LawPrawfs, we also know that it is a disastrous outcome for many once the student has been through the Law School Gristmill.  While not everyone will heed our warnings, some do and that is the best result anyone can hope for. 

Tuesday, February 7, 2017

Winding up a law school: the case of Indiana Tech

Indiana Tech's law school will shut down after this semester, and Charlotte's cannot be long for this world. What will happen to their assets?

Soon after last autumn's announcement of Indiana Tech's impending closure, Eric Welch of Muncie, Indiana, demanded that that glorious Harvard on the Wabash (as I called it in a previous article) return the $20k that he had put up to endow a scholarship:

Unlike me, Welch is "very disappointed" by the shuttering of Indiana Tech. He established the scholarship in order "to help a law student with a well-rounded body of work, extracurricular activities and classroom studies". Generous though his donation indubitably was, it would not have helped a law student very much: a base of $20k invested at 5% would have supported a scholarship of only $1k per year, nothing like the $30k that Indiana Tech originally charged (but admittedly more than the $0 that Indiana Tech charged in its penultimate year). And I'm not convinced that a single deserving student could be found at Indiana Tech. Hell, only one member of the first year's graduating class passed the bar exam (and another got in on appeal).

Nonetheless, Welch endowed a scholarship in perpetuity, and he certainly didn't expect Indiana Tech to shut up shop in less than four years. His purpose has been thwarted by the very recipient of his largesse. Why shouldn't he get his money back?

Shambaugh Kast Beck & Williams LLP of Fort Wayne apparently donated $25k for a scholarship. Rather than seeking a refund, it plans to let Indiana Tech put the money towards some other program. But Welch doesn't want his money to support the bachelor's program in recreation therapy or the infamous PhD in global leadership (for which Fort Wayne is an internationally recognized center of excellence). And why should he? The university may have a legal claim to those funds but not a moral claim. It should give the money back to Welch or at least transfer it to a law school of his choice.

But the contention at Indiana Tech goes well beyond scholarships. Washington-based lawyer Christopher Mackaronis represents thirteen students and two faculty members of soon-to-be-defunct Indiana Tech. He is "looking into misrepresentation and fraud", as Indiana Tech allegedly duped students and staff alike into moving to Fort Wayne (not exactly the Côte d'Azur) and forgoing other opportunities.

And what about the art collection that Indiana Tech touted even before it opened? Is the university simply going to absorb that collection? Has the artwork already been sold off to make up part of the law skule's eight-figure losses?

These concerns apply in spades to the Charlotte School of Law. Although Harlotte doesn't have a parent university that can absorb its assets, it is owned by the notorious InfiLaw chain of scam schools. Does InfiLaw have the right to absorb any endowments that donors may have set up for scholarships at Harlotte? Would it be appropriate, morally or legally, to move those funds from Harlotte to Horrida Coastal or Arizona Scum Pit?

Two law schools are on their death bed, and others are likely to follow. We shall see what happens to their estates, so to speak. For now, anyone wishing to endow a scholarship should consider using an independent foundation rather than putting the law school in control of the funds.

Saturday, January 28, 2017

Setting standards for the LSAT

A few years ago, when I was in law school, I tutored people on the LSAT. I told them that a 150 would get admission only to a lousy school and that a 140 would almost certainly be rejected everywhere.

Today, by contrast, a 150 will earn a large discount (deceptively called a "scholarship" in scamsters' jargon) from any of several dozen toilets. Forty-nine ABA-accredited law schools—almost one in four—have median LSAT scores of 150 or lower (often much lower). (I have omitted the three law schools in Puerto Rico for linguistic reasons: the low scores there probably reflect the fact that most students had to take the test in a non-native language.) And even a 140 is good enough for admission at many a toilet. At Appalachian and Arizona Summit, the LSAT score at the 25th percentile is 140; at Cooley, it is 138. I hesitate to estimate the floor for admission nowadays: the Univershitty of Texas, regarded as a "first-tier" institution by the standards of You Ass News (but as a fourth-tier institution by my outcome-based standards), has been known to admit people with scores in the upper 120s.

The limp-wristed ABA requires that applicants take the LSAT but doesn't set a minimum score. Unsurprisingly, law schools take full advantage of the hollow requirement by admitting applicants with scores that would make a garbage collector blanch. To understand just how frightfully bad the students at many toilets are, we need to examine the percentiles that correspond to the various LSAT scores. One convenient table is found here:

Although the table is six years old, its percentiles are close to those of today. Here is an extract:

150: 44.3%
145: 26.1%
140: 13.4%
135: 5.6%

Thus a person scoring 150 outperforms only 44% of the people taking the test in the same administration. Remember that nearly a quarter of the accredited law schools have a median LSAT score of 150 or lower. That means that a quarter or more of the law schools drew most of their students from the bottom half of all people who took the LSAT.

Does that seem appropriate? Is the pool of people who sign up for the LSAT really so strong and distinguished that the great majority should be presumptively admissible, even at law schools far from the bottom?

Consider Cooley's data. At the 25th, 50th, and 75th percentiles of its latest entering class, the LSAT scores were, respectively, 138, 141, and 147. Converted to percentiles according to the table cited above, those scores correspond to 9.6, 15.2, and 33.0. In other words, at least a quarter of the students in Cooley's latest entering class fall in the bottom 10% of all test takers.

How can that be right? Does the bottom 10% of registrants spill over ipso facto with so much lawyerly potential that Cooley, by far the largest law school in the US, can appropriately draw upon it for a quarter or more of its class?

Is there any score on the LSAT that even hints at inadmissibility? Apparently not in the view of the ABA and the scam schools that it enables and defends. The very act of registering for the LSAT must mark a person with such godlike excellence that the score fades into anticlimax.

Well, maybe money-grubbing scamsters like Frank Wu feel that "law school is for everyone", but I don't. Not every Tom, Dick, and Harry is cut out for the legal profession. We lawyers should insist on high standards, not no standards. If (as I believe) the LSAT should be required of everyone, surely there must be some reasonable limit below which a candidate is at least presumptively inadmissible. I'd set the floor at the 80th percentile, which corresponds to a score of 160; but even the 70th percentile (157) or the 60th (154) would be a vast improvement—and would drive dozens of toilet schools out of business immediately. Perhaps each school should be allowed to admit a small percentage of students with lower LSAT scores, just to accommodate the common but unproven claims of brilliant applicants who Don't Do Well on Standardized Tests. But there should be some limit—and a damn sight higher than 120 (the lowest possible score).

I propose a slight reform that is triflingly easy to implement: get rid of the 120–180 scale and report the percentiles instead. Force Cooley to tell the world plainly that at least a quarter of its class scored in the bottom 10% on the LSAT. Make several so-called "first-tier" law schools admit to dipping well below the 60th percentile. Let prospective toileteers see just how horribly low their scores are. Straightforward percentiles in place of arbitrary scaled scores can cast much-needed light on shady admissions practices.

Wednesday, January 25, 2017

2,000,000 Page Views

Back around October 2014, this blog reached 1,000,000 page views.  Just a little over two years later, we have recently surpassed the 2,000,000 mark, and I thought a short review was in order.

First of all, it is gratifying to see that a sea-change finally took place within the movement.  The first two to three years of OTLSS was regularly peppered with mockery, derision, and disbelief concerning the idea that law school could even remotely be a "scam."  Deans, Prawfs, and some other vocal critics would regularly pontificate about how great a law degree was, how the employment data was "fine," how the debt was "managable," and how scambloggers were uncouth know-nothings who just didn't want to work very hard.

Turning to today, I don't see much of that anymore.  With Indiana Tech closing down and schools like Charlotte teetering on the brink, all of a sudden the scambloggers don't sound so misguided.  Law jobs keep not coming.  LSAT and Bar Passage rates continue to drop.  Hard-hitting articles in major news sources, naming law schools by name, are more and more prevalent.  Significant amounts of staff and faculty have been let go.  The ABA and DoE are being shamed into finally doing their actual jobs and following their own standards.  Student Loan default rates and employment statistics have been shown to be doctored.  The Cartel is on the defensive, instead of basking effortlessly in the unearned, unspoken and unquestioned presumption of quality and preftige.  OTLSS and many, many others deserve a pat on the back for not backing down and proclaiming the truth.

That said, there are still miles to go.  Many schools are engaging in whatever tactics they can to garner students, get bail-out funds by slapping names on buildings, firing employees, and anything else to keep the doors open.  Shockingly, there are a handful of schools who are still trying to get opened and accredited in the first instance, as if there was some strange economic sign that law schools were lucrative again and legal careers plentiful at this point outside of the T14 or so (if that).  Many still want to blame the bar exam or State-level Boards of Bar Examiners for failing statistics, not their own admission policies.  The Courts are still loathe to afford the same standards and findings for law students that they are willing to afford to other students who have been scammed by educational institutions.  Yet more and more students are pumped out into a market that cannot absorb them by half.  

As we go forward, patience is key.  People are paying attention and getting the message.  Applicants are down again this particular cycle, and the "new normal" appears to be settling in.  Just an in protracted civil litigation, sometimes the process has to take its own course for an extended period of time before the parties are willing to settle, or before the court finally issues a ruling.  Reality is slowly being accepted, and we can celebrate that fact regardless of what particular source or sources are driving it at any given time. 

Perhaps one day, going to law school will actually be a smart move again for a significant number of people.  Up to and until that time, friends, let's continue to stick to our guns and proudly proclaim our message - it matters to people, whether or not they realize it and whether or not we get a "thank you".  (Although, once in a while, it happens!)  Ultimately, this market correction is fundamentally no different than any other, and it is long overdue.  

Thursday, January 19, 2017

A Technical Programming Error

It's time to take a short break from failing law schools, as this will be going on for some time, and instead take a look at failing federal agencies.  Namely, the Department of Education:

Last Friday, the Education Department released a memo saying that it had overstated student loan repayment rates at most colleges and trade schools and provided updated numbers.

When The Wall Street Journal analyzed the new numbers, the data revealed that the Department previously had inflated the repayment rates for 99.8% of all colleges and trade schools in the country.

The new analysis shows that at more than 1,000 colleges and trade schools, or about a quarter of the total, at least half the students had defaulted or failed to pay down at least $1 on their debt within seven years.

Well, hey, anybody can make a mistake, amirite?  At least it wasn't 100%, so that counts for something!  I thought IBR and PAYE and all that alphabet-soup was solving the student loan crisis so that liberty and justice could abound, among other things.  What, pray tell, is the culprit here? 

A spokeswoman for the Education Department said that the problem resulted from a technical programming error.

Those damn computers, lemmetellya.  Continuing on:

This isn’t the first time data problems have affected the Education Department. A recent government report criticized how the department tracks information including the budgetary implications of student loan forgiveness.  

“This is a quality control issue with a Department of Education that has been facing criticism already for other data issues,” Robert Kelchen, an assistant professor of higher education at Seton Hall University.  The department “needs to be regularly audited so these issues can be discovered sooner.”

No college saw its repayment rate improve under the revision, and some schools saw their seven-year repayment rates fall by as much as 29 percentage points.

Wait, we have Education Professors at Seton Hall taking shots at the student loan gravy train, and demanding accountability and standards?  You may want to watch your back, Professor Kelchen, as the Law School next door may have a thing to say about that.    A law school, by the way, that puts approximately 25% of its class in full-time, long-term bar-passage-required jobs, at a $270k sticker price?  Physician, heal thyself!

Zerohedge, as usual, cuts through the chaff:

There is another interpretation: as we reported yesterday, when we revealed that a Chinese province admitted it had fabricated fiscal data for the period 2011-2014, the reason the data were made up "because officials wanted to advance their careers." One can imagine that the career pressure for those government workers who would report, and be held accountable, for revealing the true picture of America's disastrous student loan bubble, would be likewise staggering...the far more dire implications, however, are for broader student loan market, because if the latest unfabricated data suggesting that loan delinquencies are rapidly rising toward 50% across most of America's colleges, then the US is facing a default problem of staggering proportions. 

Ok, kids, non-trads, whoever:  go sign up for law school, and take out those massive student loans!  I'm sure IBR will be there, waiting for you.  No worries.  The Law School Cartel says so.  I have no doubt that they all have your best interests at heart.  I'm also sure the angry Senators and Representatives who feel mislead about ballooning higher education costs will get over it soon...

Tuesday, January 10, 2017

Charleston and Florida Coastal fail DOE's standards for "gainful employment"

[NOTE: Thanks to a poster for pointing out that I had written Charlotte instead of Charleston. I have edited this posting accordingly. Apologies for the error. ——OG]

The US Department of Education has identified more than 800 programs that fail its "gainful employment" rule by having a typical graduate's annual loan payment exceed 30% of discretionary income or 12% of total earnings:

Unsurprisingly, the usual suspects are various associate's degrees or "certificates" in fields to do with make-up, hairdressing, drawing, photography, and the performing arts. But the list also includes two professional degrees: the JD programs at the Charleston School of Law and the Florida Coastal School of Law ("Horrida Coastal").

Charleston has been in dire financial straits; its very survival is in doubt. Horrida Coastal, like the recently disgraced Charlotte School of Law ("Harlotte"), is owned by the notorious InfiLaw company, which also operates the equally dreadful Arizona Summit Law School ("Arizona Scum Pit").

Failure to meet the threshold for "gainful employment" can result in loss of eligibility for federally guaranteed student loans. That would sound the knell for institutions that depend on such funds—especially profit-seeking academies, such as Charleston and Horrida Coastal, most of whose students could not come up with many tens of thousands of dollars per year without a little help from Uncle Sugar. Already Harlotte has been kicked off the student-loan gravy train, for reasons that go well beyond a comparison of debt and earnings. Horrida Coastal may be the next to get the boot.

That would leave InfiLaw with only one scam school, Arizona Scum Pit. With the dubious distinction of being one of only five out of 200+ schools (excluding the ones in Puerto Rico) to post LSAT scores worse than those of the other InfiLaw toilets, Arizona Scum Pit may not lag far behind. See these data on Arizona Scum Pit from Law School Transparency (LST):

A quarter of the class of 2015 was "Non-Employed"—not working in any capacity—ten months after graduation. Almost a third of the graduates reporting employment were in "Business & Industry", which could mean anything from CEO of a Fortune 500 corporation (not bloody likely) to stock clerk at a grocery store. Arizona Scum Pit reports no data on salaries, but LST estimates that someone relying wholly on loans will owe a cool quarter of a million dollars at the time when payments begin. Almost a third of the class pays full price, and the great majority get small discounts at best.

If Arizona Scum Pit isn't already out of compliance with the standard for "gainful employment", it must be close to the line. Even typical debt of only $80k upon graduation would require a typical gross income of $58k—quite a lot for a toilet school with many unemployed graduates—in order to stay within the limit of 12% of total earnings.

InfiLaw, it would seem, derived its name from the Latin infimum, meaning 'the lowest'. Now it's sharing the ignominious company of fly-by-night beauty schools. With one school already ineligible for student loans, another threatened with ineligibility, and the third hanging by a thread, InfiLaw may soon be gone. Good fucking riddance.

Tuesday, January 3, 2017

Did disgraced Charlotte School of Law supply the missing causal link between misleading law school representations and reasonable reliance by students?

A few months ago, Chidi Ogene, President of Infilaw’s disgraced bottom-of-the-barrel Charlotte School of Law (CSL), tweeted in favor of public disclosure of body and dash cam footage from a local law enforcement lethal force incident. I agree with the substance of the tweet, but I am also kind of stunned by the hypocrisy of CSL's chief executive issuing a call for transparency.

Indeed, in its very zeal for non-transparency, CSL has unintentionally made a contribution to the scamblog cause of greater magnitude than even its own likely self-destruction. In appealing an ABA disclosure order, the school commissioned a market study that connected its own misleading statements regarding the quality of its educational product with reasonable reliance on the part of its intended audience of prospective and enrolled students.

A no-brainer, one might think, that a prudent but relatively unworldly young person fresh out of undergrad might be vulnerable to focused and carefully crafted deception by a sophisticated institutional scammer. However, almost all of the class action fraud lawsuits that were filed against law schools a few years back were summarily dismissed because courts ruled that the plaintiffs could not meet their burden of demonstrating the element of reasonable reliance. See e.g. MacDonald v. Thomas M. Cooley Law School, 724 F.3d 654, 665 (6th Cir. 2013) (“We agree with the district court that this statistic [provided on Cooley’s website that the average starting salary of Cooley grads was $54,796] is objectively untrue [but]. . . [d]espite the statement's untruth, the graduates cannot demonstrate that their reliance on this statement was reasonable”).

CSL commissioned the study in mid-2016, on appeal from an order by the ABA to reveal on its website that it was noncompliant with general ABA admissions standards. CSL’s apparent purpose in commissioning the study was to persuade the ABA that disclosure would be overly burdensome.

Instead, what the CSL study ultimately accomplished was to provide the Department of Education (DOE) with proof positive that the school had made statements that were “substantially misleading” (an administrative standard that incorporates reasonable reliance, thus quite similar to fraud). In finding CSL ineligible to participate in federal student loan programs, the DOE cited to CSL's own study: 
"[T]he positioning of CSL’s description of its curriculum as “rigorous” directly beneath the discussion of compliance with the ABA standards. . . has the likelihood or tendency to leave students and prospective students with the false impression that CSL was compliant with that very requirement by the ABA.
* * *  
CSL’s assertion that knowledge of noncompliance would be material to student admissions and retention decisions was not conjecture. . . . CSL commissioned (and provided to the ABA) a market study that tested the impact of disclosure on CSL applicants. The study analyzed the views of individuals with LSAT scores above 142 who had applied to one or more of the InfiLaw schools. These individuals were asked to assess the impact on the likelihood of their respective enrollment at a particular law school if acceptance materials from that school included a statement that the school failed to meet accreditation standards dealing with admissions, educational programs, and bar passage. The study concluded that approximately 3 in 4 applicants (or 74%) stated that they would be “much less likely to enroll” after reading such a statement – establishing that reasonable students were highly likely to rely on the disclosure of information regarding the accreditation failures that CSL sought to keep from public view.”  (emphasis added). 
The CSL study calls into question the summary dismissal of the law school fraud lawsuits. If reasonable reliance exists as to a law school’s misleading representations regarding its compliance with general ABA admissions standards, why not as to its misleading representations regarding the seemingly more important matters of graduate job placement and salaries? 

Looking forward, we have recent and troubling evidence that law schools may still be routinely publishing substantially misleading graduate employment data on their websites. In 2016, 10 randomly-selected law schools were subjected to an ABA employment survey audit. Five of these schools, or fully 50% of the audited institutions, failed to meet the minimum standard set forth in the ABA’s audit protocol that no more than 5% of employment files can be incomplete, inaccurate or misleading. Furthermore, two schools appeared to have created supporting documentation after being asked to submit files, i.e. they provided manufactured data to the ABA. 

The ABA requires law schools to publish the employment survey results on their websites (See ABA Standard 509(b)). That same ABA Standard requires that all information published by a law school must be complete and accurate.

Shouldn’t the ABA require the five schools that failed to comply with the ABA’s minimum requirements for ensuring the accuracy of reported employment data to inform prospective students of their noncompliance? You know, instead of providing these violators with confidentiality, as ABA managing director Barry Currier shamefully has done? And whether the ABA takes action or not, shouldn’t the DOE investigate whether these five schools, in publishing alleged employment data without informing prospective students that their data failed to meet the national accreditor's mandatory minimum standards for completeness and accuracy, have engaged in substantial misrepresentation?