The second factor driving tens of thousands of young people to enroll in law school each year is the existence of the federal student loan program. If you want to go to law school, the federal government will, through some combination of Stafford, Perkins, and Graduate PLUS loans, lend you enough money to cover the entire cost of attendance, regardless of the likelihood that you will be able to repay the loan. Professor Barnhizer describes law schools as “‘feed[ing] at the trough’ comprised of federally subsidized student loans.” As long as the federal student loan program continues, even law schools with relatively few students can count on millions of dollars in annual tuition revenue.
Are law schools nevertheless in crisis? No, though most schools are facing financial problems. Professor Paul Campos reported in November 2013 that 80 to 85 percent of ABA-accredited law schools were losing money. Frankly, I’m surprised the number isn’t higher. Egged on by a rankings system that encourages profligacy, law schools ratcheted up their spending between 2002 and 2011, a stretch during which first-year student enrollment averaged over 49,000. With a lot less food in the trough today, all but a few law schools must temporarily operate at a loss unless they drastically cut spending overnight. (Having worked at one for five years, I can tell you that law schools don’t do anything overnight.)
In the end, the challenge to U.S. law schools is fairly straightforward: figure out what the “new normal” is for J.D. enrollment, and cut spending until it is consistent with the tuition revenue the school will receive from that level of enrollment. My prediction — and this is where I’m admittedly out on a limb — is that the new normal for enrollment will not be so low at any ABA-accredited law school that the school simply cannot continue to operate. If, as I (and some others) suspect, we are at or near rock bottom in terms of the overall number of people going to law school, 100% of the ABA-accredited law schools can and will continue to operate. Most of them will have to operate much differently than they did in the recent past: faculty members will retire and won’t be replaced, certain programs within schools will be discontinued, and non-essential spending on perks for professors and students will be cut.
In the end, though, the enviable business model that has sustained U.S. law schools for decades will continue to work its magic. Tens of thousands of young people will ignore Professor Campos’s advice and enroll in law school next year, the year after that, and the year after that. Weissmann will lose his bet, and the long-forgotten Lincoln University will remain the most recently shuttered U.S. law school.