This is pretty serious. File it under higher ed bubble.
Staci Zaretsky of Above the Law reported.
Troubled Law School Defaults On Its Bonds, May Be Forced To Cease Operations
While it’s true that things have been spiraling downwards for law schools since the Great Recession, it wasn’t until 2011 that things really got out of hand. That was when the very first class action lawsuit about deceptive employment statistics was filed against the Thomas Jefferson School of Law. Little did we know that it would prove to be a harbinger of doom for the school.
About a year ago, we brought our readers the sad news that TJSL had conducted faculty and staff layoffs in an effort to free up funds. Not only had it suffered a blow to its enrollment, but it was also struggling to pay off the $133 million debt it accumulated after opening its new campus building in 2011.
To make matters infinitely worse, in December 2013, Standard and Poor’s released news that it had downgraded the credit ratings of a slew of stand-alone law schools. TJSL was one of the downtrodden schools whose credit standing was downgraded to B+, junk bond status with a negative outlook.
Now, we’ve got news that could have disastrous effects for the law school. It seems that TJSL has defaulted on its bonds, and it may be unable to remain in operation due to its financial predicament…
Troubled Law School Defaults On Its Bonds, May Be Forced To Cease Operations (Above the Law)