“In the class that Florida Coastal [Law School] admitted in 2013, more than half the students were unlikely to ever pass the bar…More than 90% of the 1,191 students who graduated from InfiLaw schools in 2013 carried educational debt, with a median amount…of $204,000.” — Paul Campos, The Atlantic, September 2014

After reading an article titled “The Law School Scam” in The Atlantic, I wondered how people can decide that making a profit on the backs of unsuspecting students is a good idea? I know the simple answer to that — greed and opportunity. But society enables this to happen because of our flawed set of principles that guide our decisions about education and capitalism.

How Do They Do It?

This article by Paul Campos (which I strongly encourage you to read here) describes how for-profit law schools currently make millions of dollars without ensuring the quality of that from which they have profited.

The majority of the article focuses on a set of three law schools: Florida Coastal, Arizona Summit Law School, and Charlotte School of Law. These schools, run by a private equity firm called Sterling Partners (and operated by its corporate entity InfiLaw), allow students who score in the lowest percentile on the LSAT entrance into their schools and, upon graduation, simply dump these ill-prepared graduates into an economy where only .92% obtain the kind of employment with the kind of salary (over six figures) necessary to make payments on their student loans (which average $200,000 per student). Compare this .92% to the 78% of graduates from Columbia Law School — regularly ranked in the top 5 law schools — who obtain legal jobs with salaries over six figures upon graduation.

The InfiLaw schools claim that instead of hurting students, they are helping them.  According to its self-described mission statement, they are giving students “from historically disadvantaged groups” the opportunity to pursue their dreams of becoming attorneys since many law schools will not accept students with such low LSAT scores. This type of rhetoric may sound appealing, however, it is unlikely the schools are truly benefiting anyone — except the private equity firm. The article explains this in more depth, but the score a student receives on the LSAT predicts with a high degree of probability if that student will be able to pass a state bar exam and therefore be able to practice law.

The American Bar Association clearly states that “a law school shall not admit applicants who do not appear capable…of being admitted to the bar,” and, according to the article, 50% of the students that InfiLaw schools accepts have scores that basically indicate these students will never be able to pass a state bar exam.  These law schools say they are trying to help disadvantaged students by accepting them into their institutions, but with such a low rate of success with students, it can hardly be seen as benevolent.

Students Take On Risk, Law Schools Profit

The article continues as it explains how Sterling Partners takes on none of the risk of accepting these students. Because their students receive federally backed (read: guaranteed) student loan money, the firm profits financially while their graduates end up unable to pay for a degree that, in many cases, is worthless. (If you’re thinking, “This sounds like the subprime-mortgage-lending industry of a decade ago” then, as the article points out, you are correct in assuming it is predatory lending in its most egregious form. At least with a house you can declare bankruptcy; student loans, on the other hand, are non-dischargeable in bankruptcy.) These students are stuck with a bill that 99% of them will never be able to afford. Many of them from already historically disadvantaged demographics.

Where Do We Go From Here?

I know that sometimes regulation is viewed as a negative thing, something which impedes progress or stifles innovation. However, it is this idea that prohibits people from advocating for more accountability and oversight in areas such as for-profit education.

Just because people are willing to pay for something does not mean that we should allow it. We’ve made illegal many activities that we have collectively deemed terrible for society — prostitution, child pornography, child sex trafficking, drugs. However, when it comes to the area of for-profit education (specifically regarding law schools such as the InfiLaw schools), in which many already disadvantaged students spend hundreds of thousands of dollars on an education that will most likely amount to a lifetime of debt and not much else, we give them protection under titles like “free-market capitalism” or “individual choice.”

I know it goes against the very essence of what many of us define as being “American,” but unbridled freedom to choose may not always be what is in our collective best interest as a country. Unfortunately, the InfiLaws schools are just a few of the many schools like them that engage in these types of practices. Something needs to be done about higher education in general (that’s for another post), but I think we could first begin with regulating and reforming how these for-profit schools make their profit to protect the most vulnerable in our society.

Further Reading

To read more about steps being taken to address this issue (although these deal with for-profit colleges and their career programs more than with for-profit law schools specifically) check out these articles:

1. Barack Obama Cracks Down on For-profit Colleges (provides a general look at both sides of the “Gainful Employment” regulation)

Best quote from this article: “Though students at for-profit colleges make up only 13 percent of the total higher education population, they account for nearly half of all loan defaults, according to the Education Department.”

2. Obama Rule Unfairly Targets Disadvantaged Students (shares a different perspective on the proposed regulation and argues that all higher education institutions be subject to the same regulations)

Best quote from this article: “The administration also ought to consider reforming the student loan program [in general] to make sure all students, regardless of the type of school they enroll in, take on only reasonable debts in order to discourage default.”

3. Gainful Employment Regulation (Proposed Amendment) (outlines actual regulation — very long read, but if you really want to know what the proposal says, read it!)

Specifies which programs would be affected: “GE programs [career training programs] include nearly all educational programs at for-profit institutions of higher education, as well as non-degree programs at public and private non-profit institutions such as community colleges.”