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September 18, 2017

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anon

The question is: What does the ABA do?

How many young lives need to be damaged by the bottom feeders?

There are a bunch of schools in the same rank as this one.

The DOE must step in. It is the only way to get something done. Turn off the federal loan spigot for the bottom feeders and this unbelievable outrage will quickly be resolved.

David Frakt

The DOE under this administration is extremely unlikely to act to "turn off the federal loan spigot" as it did to Charlotte School of Law in the last weeks of the prior administration. Although the ABA has been very slow to act, they did do the right thing by placing Arizona Summit and Charlotte on probation. I agree that there are several other schools that have had exploitative admissions practices resulting in high attrition and low bar passage rates that should also be sanctioned.

anon

David

I'm not sure you are correct about "this administration" being so much worse in that it will be less likely to act than that last one was.

After all, this entire law school crisis really came to a head under the last administration. How would you characterize the actions of the last administration?

Effective? Aggressive? Comprehensive? Enlightened? Without fault? Worthy of worship?

How many law schools were found ineligible by the DOE under the last administration?

As Ross Perot once said, if you got one penny, and you get another, that's a 100% increase, but you still only got two cents.

There's something in the water here in the FL that just makes it impossible for some not to jump on the political bandwagon to score cheap points before a partisan readership.

How about sticking to the facts that are demonstrable? Political prognostication is not the issue here, I would say.

[M][a][c][K]

When Florida Coastal converts to non-profit, which mean Inflaw washing its hands of the investment, are Infilaw or Sterling Partners going to return any of the money the dividended themselves since 2004, forgive any loans to Florida Coastal, stop charging fees? Oh silly me! Of course not!

Enrique Guerra Pujol

Minor quibble: Isn't Ave Maria located in Naples?

Kyle McEntee

brackets, it is not clear that Infilaw will be washing its hands of its investment in the pending transaction. There's a chance they are creative -- eluding gainful employment regs, while maintaining a steady flow of money from the school through a management contract. Consider Kaplan's deal with Purdue.

Let me be clear. That is my informed suspicion, but I do not know the details of the pending transaction.

David Frakt

anon -

I am happy to discuss demonstrable facts. It is true that the law school “crisis”, of declining enrollment, declining standards and declining bar passage rates occurred during President Obama’s tenure, although the Obama Administration is hardly to blame for law schools admitting unqualified students. Eventually, the DOE did step in and threaten to suspend the ABA from accreditation unless the ABA started enforcing its own rules, and this pressure, along with pressure from groups like Law School Transparency (I am the Chair of LST’s National Advisory Council), eventually drove the ABA to start more aggressive enforcement, with several schools sanctioned, including Charlotte School of Law.

In the waning days of the Administration, the DOE took the unprecedented step of revoking Charlotte School of Law’s access to federal funds, which contributed to the school’s demise.

It is not simply my opinion that this administration is likely to be far-friendlier to the for-profit education sector. This was InfiLaw’s view as well, which characterized the revocation of their access to federal funds as political, and appealed, with some success, to the new administration for relief:


Devos Offers a Lifeline to For Profit Law School That Hired Her Former Advisor

https://www.bloomberg.com/news/articles/2017-08-02/devos-offers-a-lifeline-to-for-profit-law-school-that-hired-her-former-adviser

Any observer of American politics knows that the Republican party (and Trump is no exception) generally portrays itself as “pro-business” and “anti-regulation” as opposed to the Democratic orientation towards being “pro-consumer”. This is reflected, for example, in the widespread Republican antipathy towards the Consumer Financial Protection Bureau.

See, e.g., Consumer Protection: Why do Republicans hate the CFPB so much?

http://www.latimes.com/business/hiltzik/la-fi-mh-cfpb-republicans-20150723-column.html

Consumer Watchdog Faces Attack by House Republicans
https://www.nytimes.com/2017/02/09/us/politics/consumer-financial-protection-bureau-republicans.html?mcubz=1&_r=0

From the moment of President Trump's election, and especially after his selection of Betsy Devos as Secretary of DOE, it has been presumed that this Administration was likely to be far friendlier to the for-profit education sector.

For-Profit Colleges Look to Donald Trump for a Pass

https://www.wsj.com/articles/for-profit-colleges-look-to-donald-trump-for-a-pass-1480680001

For-Profit College Industry Eyes Resurgence Under Trump Administration

https://consumerist.com/2016/12/02/for-profit-college-industry-eyes-resurgence-under-trump-administration/

For-Profit Schools, an Obama Target, See New Day Under Trump

https://www.nytimes.com/2017/02/20/business/for-profit-education-trump-devos.html?mcubz=1

For-Profit Education Stocks Will Surge Under Trump
https://seekingalpha.com/article/4036148-profit-education-stocks-will-surge-trump

“with Donald Trump about to enter the White House, the regulatory environment for the for-profit universities should indeed radically improve, and their stocks should boom as their regulatory and legal headwinds ease tremendously. Investors can profit from this trend by buying the shares of the for-profit education companies that survived the Obama years, including Apollo, Bridgepoint, and American Public Education”


And, indeed, they have already proven to be so.

"The Trump administration is suspending two key rules from the Obama administration that were intended to protect students from predatory for-profit colleges, saying it will soon start the process to write its own regulations.

The move made Wednesday by Education Secretary Betsy DeVos was a victory for Republican lawmakers and for-profit colleges that had lobbied against the rules. Critics denounced it, accusing the administration of essentially selling out students to help for-profit colleges stay in business."

https://www.washingtonpost.com/news/answer-sheet/wp/2017/06/14/betsy-devos-delays-2-obama-era-rules-designed-to-protect-students-from-predatory-for-profit-colleges/?utm_term=.ef56bfb15c9f

This "pause" in enforcing the Gainful Employment rule could specifically benefit Florida Coastal, which failed the DOE Gainful Employment test last year and would have lost federal funding if it failed again under the Obama-era rules. Indeed, it was, in part, fear of failing the gainful employment test a second time and losing federal funds that has driven Florida Coastal and Arizona Summit to seek to convert to non-profit status.

[M][a][c][K]

Kyle - I suspect the management agreement and a very large loan at above market interest rates (bad credit risk after all) may be part of the pan. And of course, the management and consulting services and interest and loan repayments are costs, not profits.

Deep State Special Legal Counsel

Come on now, it ain't that bad....I know a PI guy who was a furniture salesman or something, got divorced and started a new career later in life. He chose this school because he could sit on the beach reading Prosser and Keeton while looking at the "babes in their bathing suits." His words. If I was to become sick, sore and disabled as a result of the negligence of another, I wou8ld retain this attorney. Everybody knows and loves him....he is the life of the party and can schmooze with the best of 'em. Isn't that what effective representation is all about? Getting along with others.

anon

David

Point taken. But, for all of the citations, it all boils down to action: and, if I'm reading your post correctly, the DOE took the major step, during the eight years of the prior administration, when the crisis was at its very worst, with respect to ONE LAW SCHOOL. Big deal.

My point was that the ABA has been mainly ineffective in achieving any meaningful action with respect to the worst offenders by failing to enforce its toothless standards, but that the DOE pressure was very effective. My point was that the DOE should do more.

Your response was, essentially, that the prior administration was great on this point and the current one will be hopeless.

Ok, fine. Everybody here in the FL is applauding this brilliant insight that the Republicans run on less regulation and the Democrats run on more (in practice, Democrats are VERY forgiving of their patrons: see, e.g., Wall Street consequences for the 2008 debacle and Bernie's frequent references to the reasons for that shameful lack of action; and, spare us references to Dodd Frank and the CPFB, please: do you really think that much has changed in the world of Wall Street?).

Back to business. Let's call for the DOE to do more. Can we not agree?

Scott Fruehwald

Compare Florida Coastal to FIU, which ranked no. 1 for the 4th year in a row. FIU has a rigorous educational program, which uses proven techniques from general educational schiolartship. FIU proves that if a law school wants to significantly raise its passing score, it can. Google Louis Schulze SSRN to see how they did it. He also posted about FIU's methods on this blog last year.

David Frakt

Anon - I call upon the DOE to do more. (But I'm not holding my breath.)

Scott F - FIU has done wonderfully, and deserves great credit. I'll even give a shout out to Alex Acosta my friend and law school classmate, who is, gasp, a REPUBLICAN! FIU's improvements came under his leadership as Dean before he became Secretary of Labor. And, of course, even more credit goes to the students, faculty and academic support staff who put in the hard work. But, it is important to keep in mind that FIU started with students with at least reasonable aptitude. Their entering class numbers in 2014 (3.76/3.58/3.08 and 158/156/151). Under my LSAT risk bands model, this means they had very few high risk students (LSAT 149 and below/the bottom 40% of LSAT takers), so theoretically, virtually everyone they admitted had the aptitude to succeed. What is impressive about FIU's performance is that they have outperformed Florida and Florida State, which admitted students with substantially higher academic credentials, especially at the bottom of the class in 2014 (Florida 3.68/3.50/3.26 161/158/155)(Florida State 3.64/3/43/3.22 161/159/156).

Deep State Special Legal Counsel

All of this talk about closing law schools is the sin of frivolity during dreadful times. We have major earth quakes striking Mexico, two unpredictable immature leaders playing nuclear games, name calling (Rocket Man), the rise of neo-Nazism, major destructive hurricanes costing billions and Congress once again playing with the health care of my family.... Let the market decide Florida Costal's fate or any other law school.

anon

A broken clock is right, sometimes twice a day.

Remove the federal subsidies that the law school enterprise so rapaciously feeds on, and let the market decide.

Deep State Special Legal Counsel

anon,

Student loans level the playing field so that everyone is equal in the market place. Academically qualified students of all stripes deserve a chance.

The market will ultimately decide whether their choices were good. If there are no legal jobs or an over saturation of attorneys, schools will close naturally. Unless of course, the students are being artificially manipulated. The real issue is good data and speaking to currently practicing, struggling attorneys which is most of the market today.

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