The Atlantic - The Law-School Scam
This long-form article focuses on three for-profit law schools run by a private equity firm. The firm, Sterling Partners, bought three law schools as many as 10 years ago and have since then ramped up the number of admitted students, tuition prices, and lowered admission standards. The author makes the case that policy-making enabled this kind of reckless offering: the Federal Direct PLUS Loan Program, which allowed nearly unlimited loan-making from the US federal government to students for all expenses relating to higher education, was extended in 2006. The program effectively allowed colleges to raise costs and assume their students will just take more PLUS loans to cover them, while the loans themselves won't be owed to the college but to a third party (the US government). The other side of the article looks at the prospects of graduates from these particular for-profit law schools, using both actual and projected data. The likelihood of many of the graduates passing the bar is low, and the actual reported data about employment is very discouraging (over 25% unemployment). The American Bar Association has recently (within the past 4 years) required posting employment data of their graduates 9-months past graduation. However, some schools game this requirement by providing their graduates with 9-month post-graduation "jobs", usually funded by the school (i.e. students' tuition). Thus a small-scale pyramid system whereby current students support recently graduated ones in order to entice more students to matriculate! The article ends by pointing out the structural similarities between these featured for-profit institutions and many middle- to bottom-rung non-profit ones. Ultimately the kind of federal loan structure that enabled the for-profit ones is enabling traditional higher education as well.
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