Friday, May 30, 2014

Indiana Tech Law School - Doing the Math

To highlight the colossal and destructive waste of money Indiana Tech Law School is, let’s run a few quick calculations. I’d appreciate any input into whether my assumptions and calculations are reasonable or hopelessly inaccurate.

Indiana Tech Law School:

  • Tuition per year: $29,500
  • 75% of tuition revenue used for salaries, building expenses, library, etc.
  • 25% of tuition revenue used for non-essential costs, such as kickbacks to the university, art collection acquisitions, reserve funds etc.

Year One (2013-2014):

  • ITLS needed 100 students to meet its goals this first year. This would have brought in $2,950,000 in revenue from tuition.
  • Assuming 75% of that was needed to meet the school’s operating costs that year, ITLS would have needed a minimum operating revenue of at least $2,212,500 to stay in the black.
  • Actual enrollment was (generously) 30 students, bringing in actual tuition revenue of just $885,000.
  • This represents an annual shortfall of $2,065,000 from projected tuition revenue, and a shortfall of $1,327,500 from minimum operating revenue. That’s a significant hole.
  • (Factoring in the large number of students on scholarships to get them in the door, the first year deficit is even larger.)

Fully Operational (2015-onwards):

  • ITLS seats 350 students. This represents $10,325,000 tuition revenue per year. $7,743,750 of this would be needed to cover essential operating costs.
  • Enrolling one third of that – 116 students in total – would bring in a mere $3,422,000 per year, which is $6,903,000 short of projected tuition revenue, and $4,321,750 short of minimum operating costs.

Even from a basic ballpark calculation such as this, one can see the magnitude of Indiana Tech’s screw up. The university is now left with a program that (1) draws laughter from the entire legal community, even Cooley, and (2) will cost the university between four and seven million dollars per year to support.

The writing is on the wall. Trustees of Indiana Tech, shut it down! You have some great new classroom space and lecture halls for your legitimate programs.  How about moving the business school there? Or expanding the computer science programs? You know, education that at least has some positive effect?

Right now, the law school has under thirty students. It would be most cost-effective to shut the school now and refund tuition for just those thirty students, perhaps offering assistance to get them into law schools elsewhere. Keeping the law school open merely compounds this problem; refunding tuition for sixty students, or one hundred students, would be far more expensive. The longer the school remains “in business” (or on life support), the harder and more expensive it’ll become to pull the plug.  Consider the fact that some law schools will close, so why not close yours while it's still small and has few students and no alumni to enrage?

And if those with their hands on the “off switch” are concerned that those calling for the school’s closure are just a bunch of disgruntled law grads who are fussing about a system that isn’t broken, you should consider the fact that you listened to the so-called experts and they willfully misled you.  Why on earth would you trust the so-called experts to advise you again?

Students at Indiana Tech  - not just the law school, but the entire university - should be up in arms about this extraordinary misstep on the part of its leadership.

But the bigger question is where all the missing money is coming from.  It's not growing on trees on campus, that's for sure.  Extra cash could be procured from a few places. A bank, perhaps, but that’s got to be paid back at some point, and I can’t imagine any sane banker taking a risk on lending ITLS any money whatsoever given its murky future.  Borrowing merely defers the problem too, although most academic administrators fully subscribe to the idea that as long as the problem doesn’t actually surface until they themselves have retired, it’s not a problem at all.

More likely, the money is coming from general university funds – the tuition of the other students. If you are a current student at Indiana Tech, think about this: a chunk of your tuition dollars may be going not to fund your own education, but to pay for an unaccredited law school that provides you with zero benefit.  Not only that, but the law school is making your degrees less valuable by souring the name of your institution - a double hit.  There are about 6,300 students at Indiana Tech, 1,170 of which are full-time. If the enrollment at the law school stays at its current 30% of capacity (and I see no reason why it will improve), then each student’s portion of the law school deficit will be almost $1,100 per year – each and every student, even the part-timers. If we are just considering the full-time undergrads, from whom much of the overall tuition money comes, each undergrad student will be paying almost $5,900 per year to float the useless, empty law school!  That's almost a quarter of the annual undergraduate tuition.

Or perhaps the missing money could come from the university’s endowment: as Nando pointed out over at Third Tier Reality, Indiana Tech has an endowment of just over $41,000,000. If enrollment at Indiana Tech Law School doesn’t improve, the entire endowment will be depleted in well under a decade. Sucked dry to pay the salaries of law professors and administrative staff.  The law school could literally destroy the future of the entire university.  

It takes a big man to admit a mistake, but people have respect for those who admit they were wrong and who try to do the right thing.  I guess we’ll soon see whether those pulling the strings at Indiana Tech have the backbone to do the right thing for the university.

60 comments:

  1. Regardless of whether the figures are accurate or not, the school is obviously running a loss right now. The question must therefore be 'where the eff is that money coming from?????'

    Not from student tuition, that's for sure, because there are virtually no students at the school. shITLS must be robbing Peter to pay Paul. Or more accurately Dean Peter (Alexander) was robbing Indiana Tech to pay himself.

    What a complete clusterfuck driven by institutional greed, personal greed, and an absolute disregard for common sense and the student body.

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    1. Precisely. I imagine the accounting for Indiana Tech Law School is "creative" to say the least. Unless the building was free and the faculty and staff are working without pay...

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  2. You're neglecting the royalties from Pond Scum's hip-hop albums and Lamparello's titillating biography.

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    1. Yeah, I forgot about that. There's the missing millions. Adam's book, Ten-Mile Morning, is currently ranked 1,084,393 in sales. Con Law (by me and Thane Messinger, still bargain-priced at $2.99) is, in comparison, a runaway success with a ranking of 555,760. More on that subject soon, if I can drag myself away from my beachfront house paid for by book sales...

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    2. I googled up a disgusting result for Adam Lamparello. Some guy in Indianapolis got probation for raping his wife, and the story quoted Adam howling about "breaking the law" and "disrespect for women."

      All valid concerns, but they shouldn't be exploited by an academic shyster to divert attention from his own illegal, misogynistic, and socially destructive experiences with drugs and prostitution.

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  3. I have an interesting theory. In light of Peter Alexander's firing er I mean resignation, do you think that the $25,000 "scholarship" gift from Shambaugh, Kast, Beck and Williams, LLP is not actually a "scholarship" but a reimbursement of fees paid to the firm for work it did in setting up the new law school in light of the fact that one of its attorneys, Robert Wagner, was on the committee that recommended opening the school in the first place? More like a "give us back your $25,000 and we won't sue you for all kinds of misrepresentation and conflicts of interest"?

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  4. First of all, "laughter", not "laugher".

    Secondly, you appear to have a "grass is greener on the other side" syndrome by assuming that a business school education has some positive effect. MBA's are offered by every school and diploma mill and are arguably more diluted than JD's. The only difference is that MBA programs don't proclaim to offer you admission into a specific profession.

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    1. Typo corrected.

      As to the second point, I think you're missing my point. I was not making the argument that business school is a better choice for students than law school, but rather just making the point that there's other programs at Indiana Tech that could use some nice new classroom/lab/lecture/library space. The building doesn't have to remain a law school - it could be put to good use by a number of other programs, and the head of the CS/IT department should be lobbying for dibs on moving in there when the law school folds. That said, you're absolutely right about the relative worth of an MBA - it's not a case of the grass being greener on the MBA side of the fence, but the field being less muddy. I would never recommend anyone attend a low-ranked MBA program, but if they had to choose between an MBA program and a JD program, the MBA program would do far less damage in terms of wasted time and wasted money. Attending neither is, of course, the best option.

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    2. Having been a business major, I can't imagine an MBA is a waste of time. It may not lead to a job as a Captain in corporate America .. but you can learn a lot of stuff, like finance, that might prevent somebody from being dumb enough to take out huge loans in the first place.

      As for IND Tech, obviously the planning was carried out at a time that law schools were raking it in from student loans and people were getting rich and the business model assumed a complete class of student dupes would be applying and matriculating. This dean just fired just saw it as a way to make some cash and he sold it to the University who approved the plan. Of course the bottom fell out and when the School realized the losses, he was fired on the spot. I am willing to bet that this school WILL NOT open its doors next year. How could it? The school will take the loss and not throw good money after bad. The students will be relieved by the law of having to pay back their student loans and the University will likely refund any tuition paid. The Law School is done for. No doubt about that.

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    3. The planning for ITLS was conducted around 2010-2011. At that time, while law schools may have been enjoying their last year of raking it in, there was no doubt in anyone's mind that the profession had been struggling for at least five years, that there was no legitimate demand for more law schools anywhere in the United States, and that opening a new law school would be the height of foolishness. There was no way that the project was so far down the road that ground had to be broken. The feasibility study was essentially rubber-stamping a vanity project and had no basis in reality.

      Dean Peter Alexander could be the "Paul Pless" of this scandal - a convenient low-level scapegoat who takes the fall to protect those higher up the food chain (Arthur Snyder?) who should be fired for gross incompetence.

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    4. This law skule was not a decade in the making; it went from proposal to grand opening in the space of two years. Alexander knew perfectly well that it was a bad idea: he even responded to critics who said that the US already had far too many law schools and that his would not be innovative in any meaningful way.

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    5. Regarding the value of an MBA, I have to assume that @1:17 is not this guy:

      http://money.cnn.com/gallery/news/economy/2013/01/24/masters-degree-debt/

      If you're in an MBA program learning about finance and about how dumb it is to take out huge loans for an education that gives you little or no return in investment, isn't it too late?

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  5. But will a school actually close?

    Right now, there are too many lawyers and academics in denial about the problem. Despite all the (brilliant) efforts of the scam bloggers AND more and more mounting evidence, the legal elite still think everything is running smoothly.

    For example, NY state requires lawyers to report the hours they spend helping the disadvantaged who can't afford legal services. What the NY Bar don't seem to understand is that YOU CAN'T EVEN FIND A VOLUNTEER JOB in the NY area. That's a running joke among co-workers at my firm; we've set out to volunteer our services, but we can't even find the type of job where we get NO money and cover our own expenses. THAT's how saturated it is up here.

    So the only thing that will help improve the situation is if there is some event to shake the law establishment to the core, such as the closure of multiple schools.

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    1. Absolutely agreed. The profession, including law schools, students and applicants, needs something a little more dramatic than studies, stats, or pessimistic articles. The closure of a law school would be a good start.

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  6. "It takes a big man to admit a mistake, but people have respect for those who admit they were wrong and who try to do the right thing."

    The last paragraph addresses the reason that this school probably won't close this year - closing now would just compound their humiliation. Never underestimate the degree to which people will go to refuse to admit they were wrong.

    And years down the road, if & when the school does close, every one of the people who wanted to open it (and keep it open indefinitely) will then say that they thought it was a bad idea to begin with... even if you can pull up newspaper and internet interviews where they praised the program.

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    1. ...at which point they'll be safely retired, cash in the bank, and it's not a problem for them anymore.

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  7. Pond Scum is interim dean. Who will be hired as the regular dean? Is there anyone who still thinks that Indiana Dreck Law Skule is a viable concern?

    I offer to take the job, even if it ends up lasting only one year. I need the money.

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    1. I'd take it for a year too. Bring in $200K, do little more than sitting behind a desk looking at applications and saying "we'll take her, we'll take him, we'll take her". Maybe teach a 1L class from my old 1L notes (not that I have them - I'd have to dig up some from online, but nobody would know the difference.) That ain't working, that's the way you do it. Money for nothing. Chicks for free too, probably.

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  8. You know that scene at the end of "The Rainmaker" when Jon Voight called Matt Damon to say that the company had been looted? It's like that.

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  9. This school was Arthur Synder's vanity project to boost the prestige of his school. Simple as that. He wanted a graduate school, any graduate school, and he settled on a law school as the most prestigious and apparently lucrative.

    Once the deal was done it seemed that he lost interest in it, because instead of the innovative school that was promised what was delivered was an absolutely cookie cutter, overpriced, glorified liberal arts degree, same as most other law schools. Just a lazy effort. Not that America needed another law school of course...

    Why did a humble technical college need a graduate school in the first place? This is big part of why tertiary education is so expensive in America. This constant mindless pursuit of prestige. Colleges love prestige almost as much as they love money (the two often being tied together) and whoever will promise the most prestige will typically gain the most influence.

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    1. Absolutely. Around the early 2000s onwards, there was a surge in colleges trying to buy prestige through rapid expansion and huge real estate projects, all paid for by massive increases in tuition, and many an otherwise-sensible college president was sucked into the game of one-upmanship. School A builds new dorms, so School B builds new dorms and a new gym. School C then starts a massive football program and builds a huge stadium. School D starts a new medical school (DO, not MD) to try to catch up, and School E takes the easy route and starts a law school. You get the idea.

      The mindless pursuit of prestige is so prevalent in higher education, and the very people the system is supposed to benefit - the students - end up losing out by paying countless times more for significantly less.

      If it were up to me, I'd lease an old office building - there's hundreds of thousands of those lying around - staff it with PhDs in English, math, computer science, chemistry, physics etc. Then I'd offer rigorous, no-fluff, three-year undergrad degrees in "normal" subjects - sorry, no film studies or exercise science - for bargain basement prices; tuition levels back in the 1980s. With so many unemployed PhDs, I'm surprised that they haven't already banded together and started a project like this. No gyms, no sports, no greek stuff. Just three years of learning.

      Imagine that - college where students sit in classrooms and actually learn stuff, not fluff, and where they aren't paying through the nose for the four-year prestigious "experience" of being coddled and pampered.

      Of course, such a project would be doomed to failure.

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    2. Yeah of course this was no need for a new law school, but I was thinking - what if they had decided to try something really innovative. Take over an existing building, and then offer a barebones law degree for only $10k p/a concentrating on practical small law/solo subjects.

      But there wouldn't have been any prestige in that. And no chance of making lots of money (although that's not going to happen anyhow). Nor would the study of practical small law subjects over "international law" appeal to lemmings. And even if Arthur Synder wanted to try out such an innovative low cost model, he would have been overruled by investors.

      But their law school really is a beautiful building. Perhaps they can get some more practical use out of it if/when the law school folds.

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  10. The question of who's paying for all this is an interesting one. I'm sure there were major donors involved. Alexander's strategy was most likely to "leverage" their gifts into a school that would ultimately pay for itself.

    There was a major donation of books (acquired from a failed law school) to their library; that one is still online. I believe the art collection was donated too. I also googled the words "Indiana Tech law school donor" and found a very high google result that's been scrubbed from the Indy Tech website.

    My interpretation would be that even the donors are jumping ship at this point, and don't want anyone to know they funded and encouraged this fiasco. It's sort of like Earle Mack not caring if they took his name off the Drexel law school, because it's nothing to be proud of anyway. And as bad as Drexel is, Indy Tech is far worse.

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    1. Those library books seem cursed. The first school didn't obtain ABA accreditation, now ITLS looks like it's not going very far. Would a third law school risk touching them?

      Sensible donors would certainly be looking to jump ship. If someone has earmarked a chunk of cash to fund a higher education project, I imagine they would actually like to see it spent in a manner which would benefit students. Paying the mortgage on a failing law school is just about the least beneficial manner in which such a donation could be spent, and surely some must now be reconsidering whether ITLS is in fact a viable proposition, or whether their donation would be better off at another institution where it could be used to fund new lab space for the biology department, or scholarships to increase access to higher education etc. In terms of bang for the buck, funding a new law school is about as worthwhile as pumping money into a college sports program from the perspective of educational benefit.

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    2. That collection of books reminds me of Kemmerich's boots in All Quiet on the Western Front: whoever gets them is slated for death.

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    3. @5:43, you beat me to that thought, but I will add that the original German title of the novel was "Im Westen Nicht Neues." They translated it to what an English speaking army would report, "All Quiet on the Western Front," but it transliterates as "Nothing New in the West." Nothing new in any attempts to launch a TTT these days, either.

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  11. The telling number is how many applicants the school got in its first year: 69. Keep in mind that number includes a significant percentage made up of non-traditional applicants (people more than a year or two removed from college graduation) who live within commuting distance of the school and applied because life circumstances make it difficult or impossible for them to move to attend law school.

    This is evident from the remarkably high yield (55%) the school got on its 51 offers of admission. That's about three times higher than the average law school, which has to admit five or six applicants for each eventual matric.

    That pool of natural matrics was pretty much tapped in last year's cycle, so I wouldn't be surprised if the school has trouble enrolling even 30 students for its second class. The university realized of course that it would have to subsidize the law school for several years before it was self-sustaining/profit-producing, but it also realizes that a law school of 100 students isn't going to ever make any money. They'll probably keep trying to resurrect the project under "new leadership" for another couple of years or so though. Law students aren't the only people subject to the sunk cost fallacy.

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    1. What do you make of ITLS denying admission to 18 people? Some of us were wondering (quite seriously) a few months back if it was possible not to get in, and it turns out over a quarter of applicants did not.

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    2. Those sunk costs are deceiving, aren't they. Since ITLS (like a low-ranked JD) is unlikely to ever produce a benefit that will outweigh its costs, this is a classic case where shutting it down and chalking it up to a bad decision is the best choice when it comes to financial savings.

      Interesting thoughts about the applicant pool too. For low-ranked schools, the applicant pool is (1) older and (2) less inclined to move to attend law school. People move across country to attend Harvard, less so to attend your average low-tier generic law school, and especially not for an unaccredited school. I wonder if ITLS took this into consideration; if not, they'll be in for a nasty surprise when they find that the fifty or so local applicants last year represented the entire local applicant pool, and one which does not refill each year with fresh applicants from out of state. They may have shot their wad.

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    3. 6:41, I imagine they were rejected on technical grounds. Undergrad degree from an unaccredited online school, maybe no LSAT. The desperation some applicants show for getting into any law school - any law school no matter what - is far beyond what we can possibly perceive; think along the lines of mental illness levels of desperation and obsession. Even ITLS has its standards, I suppose, incomprehensible as they may be to normal people, rather like a career criminal refusing to rob a home for the blind because he has his reputation to worry about.

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    4. The second class is likely to be smaller than the first, for applicants will know that the first class was only about a quarter of the size predicted. No doubt Indiana Tech will try to sell its minuscule size as an advantage—"come and study in an intimate setting where you will enjoy close contact with the professors". But it will still come across as the failed school that it is, and that alone will deter many prospective lemmings.

      As for the 18 people denied admission, I have to assume that they were so plainly hopeless that Indiana Tech had to keep them out lest it spoil its chances of accreditation.

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    5. I would not put it past Indiana Tech to solicit applications for the sole purpose of being able to reject a few people (probably many of whom never intended to attend anyway), so as to seem at least minimally selective.

      More charitably, however, I imagine that Indiana Tech didn't want to dip too deep into the LSAT pool.

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    6. I wonder if the numbers for the incoming class this fall are what did Alexander in. Last year they fell far short of their goal of 100. If the numbers are looking even worse for the second incoming class, it probably set off alarm bells.

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    7. Unless Alexander got himself in some sort of scandal, getting rid of him will just make things worse. Given the limitations he was doubtless working under, he probably couldn't have done much better.

      "The desperation some applicants show for getting into any law school - any law school no matter what - is far beyond what we can possibly perceive;"

      This topic deserves a post of its own. Over on law school lemmings you see many there who genuinely regard law school as their "dream" which will make them rich, but by your description there are some people who go even further than this.

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    8. Don't expect rationality from the likes of Indiana Tech, 11:51. Had its founders had two living brain cells to rub together, they never would have opened the goddamn toilet.

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  12. Why do people keep referring to this toilet as "ITLS"?

    Horrible schools such as Indiana Tech do not deserve the dignity of an acronym, which suggests that they are of such great importance and renown that they can be instantly recognized by an abbreviation. Save the acronyms for institutions with a real reputation.

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  13. Arthur Snyder made $350,000 in reportable compensation in 2011 per tax filings.

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  14. I've been thinking about the economics of Indy Tech. I can't help wondering what would happen if Pond Cummings reduced his own salary, and that of all his deans and professors, to $60,000 a year. Would anything change? Would anyone leave?

    Personally, I think that could keep them going for another couple of years. And since, according to Dean Alexander, they all had a higher calling, they might not even notice the difference.

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  15. Prof. Campos' comment about the first class cleaning out the pent-up demand is very astute. I went to Notre Dame Law 30 years ago. There were VERY few students from the South Bend area. We had a couple of over-40 non-trads in my class who were locals. Both very nice people but quite frankly it was obvious that they were only admitted because the school wanted some over-40 non-trads as part of the mix and it was hard to get people in that category to relocate there for three years. At the opposite end of the spectrum, on average the Notre Dame undergrads (I'm not one) were the brightest folks there. Loads of bright ND gradates wanted to stay on campus for law school but the law school had an unspoken but easy-to-see quota so that the school wouldn't be dominated by their own undergrad alumni. I would also imagine that there were a lot more locals who'd have liked to have stayed local to attend law school, but at least back then the law school had the option of being picky.

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    1. I (Old Guy) happened to live in the vicinity of my law school, one of the so-called élite. They didn't want to admit my fortyish ass—they openly disparaged my age during the interview—despite excellent credentials that included HYP and an LSAT score well above their range (probably the top score in the class). I was finally admitted from the waiting list.

      Oddly enough, however, Old Guy ranked high on the dean's list every semester and found time along the way to publish legal scholarship, edit the law review, complete a clerkship at an appellate court, and teach first-year legal writing, all while working on the side to support himself financially. Meanwhile, scads of rich playboys who were admitted right off the bat came in near the bottom of the class.

      Conclude what you will about the admissions office's competence and sense of priorities.

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    2. Agree with you on admission folks, Old Guy, but the point is that South Bend, Indiana is the closest thing Fort Wayne has to an identical twin, and thus likely to share a limited supply of super-qualified non-trads in the local population. Other than Virginia and Cornell, what T-14 is more than 60 miles from a major city?

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    3. That is why Vermont Law School is teetering on the brink. No local population from which to draw any but a handful of students.

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    4. I'd say that Yale and Duke are more than 60 miles from a major city.

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    5. Aw F u 11:31, what's wrong with the Raleigh/Durham/Chapel Hill triangle?

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    6. Aw Fu again, 11:31, do you know how many major corporations are based in Hartford and Stamford, Connecticut? AEtna, Travelers, The Hartford, United Technologies, GTE Pitney Bowes, Maybe count GE in Fairfield and Stanley Works in New Britain. Learned American geography in the public schools, did we?

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    7. Speaking of Vermont Law School:

      http://vtdigger.org/2014/05/28/vermont-law-partners-zhongnan-university/

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    8. Goodness 10:02, if you understood geography you'd know that it takes more than corporations to make a major city. Racine, Wisconsin isn't a major city, even with a corporate headquarters there. Bentonville, Arkansas isn't a major city, even though a huge corporation is headquartered there. So Fairfield wouldn't qualify either, even if GE occupies an office park there. Stamford doesn't have nearly enough population, economic concentration, or public institutions to be a major city. And New Haven has a university! And New London has a submarine factory! And Bridgeport has 144,000 residents! And Hartford has 124,000 residents! But they're not major cities either.

      To get back to the original point, there aren't enough non-traditional students in Stamford to fill up a law school. That could be why there isn't a law school in Stamford. I hope that little insight about spatial distribution isn't lost on you.

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    9. Learned history and spatial distribution in the public schools, too, I see. Connecticut was fully settled decades before the American Revolution and fully divided into incorporated towns before that war. It thus developed as a colony/state of towns that were geographically very small. Hartford is 17.3 square miles, Stamford's land area is 37.7. Chicago is 234 square miles. Boston got big by annexing several neighboring towns (e.g. Charlestown, Brighton, Dorchester, West Roxbury, Hyde Park and Roxbury.) No such annexations ever occurred in Connecticut. And when modern cities began to grow there was also zero unincorporated territory to annex, so the development spilled into the suburbs, which were pre-existing towns. Yale is commutable from all of New Haven County (population 862,477), Fairfield County (population 933,835), Middlesex County (population 165,608) as well as most of Hartford County (population 897,259) and parts of New London County (population 274,055). Yale has a population of over 2.5 million from which to draw non-traditional commuter students.

      And in all of Connecticut public institutions are spread over several communities rather than all being in one "major" city. Further, in the case of Stamford your criteria are flawed. Trains run night and day to Grand Central - a 50 minute ride each way. Stamford probably has fewer and smaller cultural institutions than would the largest city in a county of 933,835 people bordered by other large counties (including Westchester County, New York) but try competing with the cultural attractions of New York City.

      And in case you're ever on Jeopardy the Electric Boat submarine building yards are in Groton, not New London.

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    10. @12:13:

      As quickly as you can, sign the student loan promissory notes in my hand.

      When you can sign all the student loan promissory notes in my hand, it will be time for you to leave.

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  16. Carthage must be footnotedJune 1, 2014 at 12:17 PM

    Since nobody has mentioned this, I think you could do a much better back of the envelope calculation.

    First, your revenue numbers aren't that great because the listed tuition is not the collected tuition. There's an effective discount through scholarships used to woo students and make them feel all important. It's better for most schools to list a tuition of $40K and then offer "scholarships" averaging out to $10K/student then to just have a flat tuition of $30K. In general, the lower you go down the hierarchy, the bigger the difference between list and actual price. And given the tiny # of applicants, they almost certainly wooed the ones they had with vigor.

    They'd be lucky to be taking in $600K.

    You can guess at the budget for salaries because they list their faculty and staff here: http://law.indianatech.edu/staff/

    They have ten professors listed. Assume a cost of about $140K/professor (probably about right on average--several of the profs serve dual roles as deans, so will get more on average; but the school is bottom heavy with young people who are likely paid poorly, comparatively speaking, and given the institution in question, possibly under six figures. Add in the employer side of employment taxes and benefits--all those usually amount to about 30% more than the actual salary figure).

    Then there are thirteen other staff/administration members, who we'll eyeball at a cost of $45K for the total cost of employment. (This is probably low-ish.)

    That puts total salary at $1,985,000, plus or minus my not being able to count, add, or estimate.

    But 10 faculty members would be hard put to offer the full range of courses necessary for a law school to function, and they lack necessary staff members to provide the education they claim: an internship coordinator, for instance, or any clinical staff that I can identify. There are also some pretty gaping curriculum holes.

    Some of these they will surely adjunct out. But this isn't counting building expenses or the cost of running a library.

    So I'd be willing to bet that their "100 students" mark was chosen with the understanding that in the first year they'd be running a deficit--that is, even if they took in the full $3mil you estimate, they'd be in the hole by at least $500K.

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    1. Don't forget that Indiana Tech Law Skule employs a curator for its art collection. I'm not making this up.

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    2. The finer details are much appreciated. Thanks for putting in the time.

      The closer one looks at this school, the clearer the utter madness of its very existence appears. How anyone with an ounce of education could have thought that a new law school at Indiana Tech was a good idea is utterly beyond me.

      Starting a new program that will run a deficit initially is one thing. Starting one that will perpetually run a deficit is another. Were no bean counters involved in this decision? No attorneys (other than Arthur Snyder's co-conspirator in this mess, Robert Wagner)? Nobody on the entire board of trustees with any business acumen whatsoever? How everyone can have gotten this so wrong is flabbergasting. (That said, in my experience, board members are a lazy bunch, often there just for the free lunches, the token paycheck (which is often rather significant), and the fact that being a trustee or director looks good on a resume. It would not surprise me in the slightest if the board of trustees at Indiana Tech is really "The Arthur Snyder Show", and the other members are just warm bodies who will rubber stamp Mr. Snyder's empire building. I can't think of another explanation - it's either incompetence or laziness.)

      I get the impression that Mr. Snyder fired Dean Alexander and thought that would bring about closure: "Look everyone, the culprit has gone. Nothing else to see here. Move along." This isn't the case. While Dean Alexander's hands are certainly rather filthy in this whole affair, there are clearly a number of others at Indiana Tech who are covered from head to toe in this mess.

      A vote to remove Mr. Snyder from the board would be a good place to start.

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    3. The California Gold Rush, the 1929 stock market frenzy, the 1980's real estate boom, the dot-com madness. People see other people making tons of seemingly easy money and want a piece of the action. But by the time anyone who didn't get in very early figures out there's easy money to be made it is no longer easy. Of course, the early 49ers got to keep the gold they found, but some relatively long-standing law schools might well be headed for the ash heap of history, done in by their greed in assuming students would keep borrowing more and more money for higher and higher tuition forever, and that the market glut would ever get so bad.

      The other funny thing about the Gold Rush was that John Sutter, the relatively wealthy man on whose land gold was first found, was overrun with squatters and ruined, while Levy Strauss got filthy rich selling pants to prospectors. Indiana Tech is screwed financially but the artists who sold them the art collection no doubt made out.

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    4. Regarding bean counters. I once had a conversation with the Executive Director of the United Way in the small, Midwestern city where I attended college. His biggest headache at that moment was that one of his member organizations, the YWCA, was building a brick and mortar addition that would house one tennis court, and planned to pay for it by renting the court out during the winter months. He pointed out that commercial operators built much-cheaper steel buildings or used inflatable structures, and in either case had several courts in one structure to spread out the fixed costs. The YWCA, he said, was going to go broke and he was going to be expected to find a way to save them.

      I told him that I had read in the local paper that they had had a feasibility study done that said that it would work.

      He smiled at me in that kind-but-knowing way older, wiser men smile at 21-year-olds and asked me: "Do you know what the purpose of a feasibility study is?" I said that it was to determine the feasibility of a project you were considering. He smiled again and replied: "No, that's not the purpose of a feasibility study. The purpose of a feasibility study is to tell you that the decision you have already made is absolutely correct."

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  17. Man, I wanna see that art collection before the school closes. I figure I've got another year to save up for a trip to Fort Wayne.

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    1. Keep saving, 4:08, and you may be able to buy that art collection at public auction.

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  18. It's mind boggling that anyone applied to this school at all...

    By the way, people now think that giant student loan debt figures are a big joke. They actually just make light of how deep in debt they will be as if it's not real (see twitter, facebook, etc...).

    Anyone who applies to law school now thinking it's OK to accumulate 6-figure debt at a low/no-ranked school is out of their F&*^ing mind. They deserve what's coming to them. Complete and utter financial ruin.

    I know people in $200-300,000 in debt who graduated this past May without jobs locked up post-bar. It's crazy.

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  19. My money is on closure of Indiana Tech Law School before Sept. 1, 2014. The insiders have to believe by now that they can't admit another class. They're just acting as if everything is business as usual in order to give themselves time to prepare for an orderly retreat.

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    1. I don't believe that they'll close the toilet in the next few months: that would be too sudden, and it might engage legal liability. Besides, the parent institution has its reputation to consider.

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  20. You are all commenting as if the law school is the biggest problem Indiana Tech has. Everything at that school is a scam. They admit drug addicts, violent offenders and child predators ass full-time students. There is also a major financial aid scandal that most know about. They bring in students who would not get in anywhere else on padded loans, then the students take the extra money for personal use and are passed through classes. Upon graduation the loans are due which often students cannot pay back, but Tech already has the tuition money in hand therefore they do not care if students go into debt. Word on the street in Fort Wayne is that Arthur Snyder was unethical in his business practices with Fort Wayne contractors who built the law school. A final fact about Tech: If a student decides to transfer, their credits will not transfer to an accredited university. The ratio of full-time faculty to adjuncts is 1 to 30 and that is generous. Most of the faculty only have M.A. degrees.

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