Gainful employment rule could harm law schools

Imagine law schools whose graduates diversify the profession, contribute to the public good and have among the lowest loan repayment default rates. And now, imagine if those law schools were shut down because of a misguided and misinformed federal regulation?

That’s what would happen if the U.S. Department of Education applies a rule designed for for-profit vocational schools to a very different sector: proprietary law schools that have been accredited by the American Bar Association. 

{mosads}The rule requires that, in order to qualify for federal student aid, a program must lead to “gainful employment.”  That term, in turn, is reduced to a single – and questionable – metric, whereby graduates’ estimated annual loan payment must be lower than 20 percent of their discretionary income or eight percent of their total earnings during the third and fourth years after they complete their course of study.

If a program exceeds these “debt to earnings” ratios, it risks losing eligibility for all federal student aid – a virtual death sentence for a college or university. 

This rule applies almost exclusively to for-profit institutions. It was motivated by concerns that students at these schools were incurring debt they could not repay because they could not find good paying jobs after graduating. 

While this is admittedly a problem at some 2-year, 4-year, and vocational schools, the Department’s solution casts the net too wide and is sure to bring about unintended and detrimental consequences. Indeed, the rule shouldn’t be applied on a “one-size-fits-all” basis to programs ranging from culinary schools to law schools. Among other things, the rule ignores the fact that the earnings of graduates of “first professional degree” programs – such as doctors and lawyers – increase exponentially over time. The rule measures “debt to earnings” long before those with professional degrees will tap their higher earnings to pay down their student loans.

It is worth noting that if the GE rule were to apply to all ABA-accredited law schools, some well-regarded private, non-profit law schools would fail. Furthermore, if applied to law schools, this rule would encourage institutions to exclude applicants and even dismiss students who would have to borrow significant sums to finance their legal education. In short, the students who would be shut out or kicked out of law schools would be disproportionately from low-income families, including many from racial and ethnic minorities, as well as those opting for government and public service after graduation. The last thing the nation needs is to make the legal profession less representative or supportive of a changing America.

Instead of burdening law schools with misplaced regulations, the Education Department should follow the lead of the ABA.

One of the ABA’s primary responsibilities is to accredit law schools, ensuring that they are providing an appropriate program of legal education and are investing in faculty, students and facilities.

ABA-accredited law schools must meet rigorous standards and disclose extensive information about admissions standards, tuition and fees and employment data, enabling applicants to make informed decisions. The ABA requires schools to show that they are preparing students to pass the bar and obtain licenses to practice law.

I can personally attest to the quality and practice-ready education offered at one such law school, Florida Coastal, from which my son, a successful practitioner, graduated. Florida Coastal is one of three ABA-approved proprietary schools in the InfiLaw System.

In the academic years 2009-12, InfiLaw schools accounted for 1.5 percent of all matriculating students among the 201 ABA-accredited law schools. Yet InfiLaw schools accounted for more than 5 percent of all minority matriculates at these schools. Moreover, students at all InfiLaw schools devote significant hours to pro bono programs, and approximately 25 percent of graduates choose careers in public service. The proposed “gainful employment” rule threatens the continued existence of these schools and their contribution toward righting the wrongs of decades of non-inclusive behavior by law schools and the profession.

I strongly believe Congress should take a closer look at this rule, and, at the very least, exempt ABA-accredited law schools from the same. Otherwise, I fear that imposing the “gainful employment” rule on such schools will deprive the legal profession of the diverse and public-spirited professionals that the nation needs.

Barnett is a partner (retired) in the law firm of Holland & Knight LLP and served as president of the American Bar Association (2000-2001), member of the ABA Board of Governors and as the first woman to serve as chair of the ABA House of Delegates. She is a member of the National Policy Board of The InfiLaw System.