S&P Report on Declining Quality of Law Schools Forum

[vuthy]

Nothing shocking here, but interesting to see how S&P rates law schools. Would be great to see their full list; they only reveal a few specific names here.

http://online.wsj.com/public/resources/ ... credit.pdf

[ph14]

Nothing shocking here, but interesting to see how S&P rates law schools. Would be great to see their full list; they only reveal a few specific names here.

http://online.wsj.com/public/resources/ ... credit.pdf

Very interesting. Also funny to see the LSAT demand graph. This year's 3Ls took the LSAT during its absolute peak. If we all waited until this year, we'd all be better off: in at better schools or more scholarship money.

[sinfiery]

Looks like someone's trying to shutdown rumors of NY to 190

[AntipodeanPhil]

Interesting that Thomas Jefferson is currently the only law school with junk bond status (although with a BBB/negative rating, Cooley is getting awfully close).

I was also interested to read that TJLS is not meeting the covenants on its debt - and doesn't anticipate doing so for another five years. Apparently it has been granted waivers for the violations, but that should still be a very bad sign for anyone considering TJLS. It sounds like TJLS actually needs to increase its enrollment, or its revenue per student, to be able to make its debt payments without difficulties.

Thomas Jefferson School of Law, Calif. Countering the overall trend, Thomas Jefferson School of Law (B+/Negative)
had expanded enrollment until a slight decline for fall 2013 and has historically generated positive operations on a
full-accrual basis. However, operating surpluses have not boosted financial resources fast enough and, as a result, the
law school has violated its balance sheet covenants for fiscal 2012 and fiscal 2013. Management does not anticipate
meeting the financial covenants until 2018; violation of the covenants cannot result in an acceleration of the debt,
however. We believe the law school's large amount of debt and very high debt service, which resulted from the
construction of a new facility that the school put into service during 2011, are credit weaknesses. In our opinion, there
is also enrollment risk given the declining number of law students nationally and recent weakness in headcount that
will likely compress operating margins, particularly since the school has no track record of fundraising.