Since 2008, a retrenchment at the nation’s law firms has had newly minted attorneys wringing their hands over the rapidly shrinking job market.
Yet enrollment at law schools has continued to climb, with a record 44,004 people earning law degrees last year. The result has been that employment rates for new graduates are at their lowest levels since 1996, a gloomy prospect for students who borrow heavily to attend law school. Recent surveys of graduates show a growing proportion carrying loans of $120,000 or more.
Now, regulators and members of Congress are pressing the agency that accredits law schools — the American Bar Association — to step up efforts to keep student debt levels down and reduce the risk of default.
The push comes as the government mounts a similar crackdown on for-profit colleges and trade schools.
A recent Department of Education review of the ABA’s accreditation work found that the agency does not demand schools keep loan default rates below a certain level, as required. The ABA has also failed to set minimum standards for postgraduate employment rates and show that it has a transparent and public accreditation process, a department review panel found in a June hearing. The panel found that the ABA unit fell short on meeting 17 federal standards required of accreditation agencies.
It’s not uncommon for accreditation agencies to be out of compliance with some rules and still have their accreditation rights renewed. Only two of the 10 accreditation agencies seeking continued recognition from the Department of Education last spring complied with all requirements set for their respective field.
But in a letter to the ABA dated July 11, Sen. Charles E. Grassley (R-Iowa) asked the agency to answer 31 questions, including whether it tracks how many merit-based scholarships get revoked, and if it has programs to help students make sure they’re not borrowing more than they can repay. His letter followed similar questions raised last year by Sen. Barbara Boxer (D-Calif.)
“The ABA appears to be doing little to assess student-loan default rates in its law school accreditation process,” Grassley wrote.
The ABA shot back Thursday with a letter to Grassley’s office, saying it does not track student loan default rates for all law schools because most — 181 of the 200 ABA-approved schools — are part of larger universities that do not break out the data for each academic program. The ABA, however, does track default rates for the remaining 19 schools, which operate independently; default rates at those schools range from zero to 7.4 percent.
ABA President Stephen Zack said he shares Grassley’s concerns about making law school financing and postgraduation job prospects transparent, and that the compliance issues raised by the Department of Education “are being dealt with in an expedited manner.”
The arm of the ABA that accredits schools, the Legal Education and Admissions to the Bar section, operates independently. Hulett “Bucky” Askew, the Bar’s legal education consultant, said nine of the 17 violations are because the ABA has yet to adjust to regulations the Department of Education passed for accreditors in 2008. The ABA is making those changes and will have them in place before its annual meeting in August, he said.
Askew said the remaining violations are procedural, or focused on the ABA not setting standards that schools must meet on certain criteria — such as postgraduation employment rates and loan default rates — as opposed to not tracking the numbers.
“The criticism of the [Education] Department is not that we don’t collect the data, the criticism is we don’t have a benchmark for what’s an unacceptable rate for a law school,” Askew said. “Is 10 percent too high that raises a compliance issue? It’s our impression that they’re asking us to set a benchmark for what’s acceptable and not acceptable.”
Paul Schiff Berman, dean of George Washington University Law School, said the ABA should encourage law schools to provide more need-based financial aid and loan forgiveness programs. But setting a hard fast line for how much debt a school can allow a student to take on could make it harder for some people to attend law school.
“My only concern about an absolute debt cutoff number is the potential, depending on what the number is, of pricing lower-income students out of the legal education market,” he said. “If they say no student shall be allowed to take on more than a particular amount of debt, or a law school shall not allow a student to take on more than a particular amount of debt . . . it might hurt lower-income people who need to take out that amount of money to pursue opportunities that a legal education provides.”