Thomas Jefferson School of Law Defaults on its Bonds
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)
Comments
Finally the market actually starts to correct.
Really, the bottom 50 or so law schools SHOULD go out of business. They are flooding the market with sub-standard lawyers, many of whom can’t pass the bar upon graduation (and that’s saying something, because my standard phrase is “any idiot can pass the Bar Exam with proper pre-exam preparation).
A lot of these “4th tier” school’s attendees can’t get accepted anywhere else, but they subjectively think “hey, I WANT to be a lawyer, so I SHOULD be able to go.” What they don’t realize is that when law firms see that “low grade” school on the resume, the file is immediately trashed. That leaves but two options (if they exist). 1.) go back to whatever family business you’re in; or 2.) hang out your own shingle and be a “solo practitioner.”
I did the latter, for reasons unrelated to the school I went to (a mid-second tier, which is rising rapidly in the ranks since it joined a major State University). For the first year licensed, I GROSSED 10K from my law practice. I had almost 5K in start-up expenses. Fortunately I had some assets left over which I could sell to make my loan payments.
Year TWO, it looks like I -might- gross $60K. Maybe. But, my expenses have also increased to almost 15K (new computer, travel for fuel, Continuing Legal Education, Practice Manuals, Office Rental, Office Supplies, etc…).
These low-grade schools promise the moon and stars. Usually all they deliver is a sheet of paper not suitable for framing.