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Working Paper: The State of For-Profit Law Schools

 In “Proprietary Law Schools and the Marketization of Access to Justice,” Riaz Tejani explores the evolution of a for-profit institution pseudonymously titled New Delta School of Law. Tejani, a professor of legal studies at the University of Illinois, finds that New Delta weds a strategy of emancipatory marketing with a bottom-line concentration on profits:  New Delta, on the one hand, aggressively markets itself to low-income students as a path to prosperity and recognition and, on the other, generates outsized returns for its private equity investors. To win respect as well as accreditation, Tejani writes, New Delta appointed former executives of the American Bar Association to its board; to keep students from transferring to more reputable law schools after their first year, New Delta radically revised the standard 1L curriculum of Contracts, Property, Torts, Civil Procedure, Constitutional Law, and Legal Research and Writing to make transferring nearly impossible; to silence dissent, New Delta fired professors critical of these reforms and replaced them with visiting professors.

By Riaz Tejani
Working Paper No. 228
National Center for the Study of Privatization in Education

For-profit universities like Corinthian, DeVry, Education Management, Strayer, and the University of Phoenix were long Wall Street darlings until revelations several years ago of high student dropout and loan default rates led attorneys general in states across the country to launch fraud investigations. The U.S. Department of Education followed up in 2015 with “gainful employment” requirements, stipulating that the average annual loan payment not exceed 20 percent of discretionary income earned by graduates. Corinthian went bankrupt while DeVry, Education Management, Strayer, the University of Phoenix, and many more for-profit universities saw their revenues shrink and their valuations plummet.

For-profit law schools have likewise incurred scrutiny but to a far less degree, as they constitute a minute portion of the commercial tertiary sector. Only six of the nation’s 230 law schools are run as commercial ventures. Student default rates are nevertheless high, as many graduates fail to pass their bar exams and as many of those who do pass fail to find remunerative jobs.

 In “Proprietary Law Schools and the Marketization of Access to Justice,” Riaz Tejani explores the evolution of a for-profit institution pseudonymously titled New Delta School of Law. Tejani, a professor of legal studies at the University of Illinois, finds that New Delta weds a strategy of emancipatory marketing with a bottom-line concentration on profits:  New Delta, on the one hand, aggressively markets itself to low-income students as a path to prosperity and recognition and, on the other, generates outsized returns for its private equity investors. To win respect as well as accreditation, Tejani writes, New Delta appointed former executives of the American Bar Association to its board; to keep students from transferring to more reputable law schools after their first year, New Delta radically revised the standard 1L curriculum of Contracts, Property, Torts, Civil Procedure, Constitutional Law, and Legal Research and Writing to make transferring nearly impossible; to silence dissent, New Delta fired professors critical of these reforms and replaced them with visiting professors.

Placing his detailed account of the workings of New Delta in the context of political and economic theory, Tejani sheds new light on the nature of for-profit tertiary education and raises significant questions about U.S. education policy.

View paper

Published Tuesday, Apr. 5, 2016

Working Paper: The State of For-Profit Law Schools

By Riaz Tejani
Working Paper No. 228
National Center for the Study of Privatization in Education

For-profit universities like Corinthian, DeVry, Education Management, Strayer, and the University of Phoenix were long Wall Street darlings until revelations several years ago of high student dropout and loan default rates led attorneys general in states across the country to launch fraud investigations. The U.S. Department of Education followed up in 2015 with “gainful employment” requirements, stipulating that the average annual loan payment not exceed 20 percent of discretionary income earned by graduates. Corinthian went bankrupt while DeVry, Education Management, Strayer, the University of Phoenix, and many more for-profit universities saw their revenues shrink and their valuations plummet.

For-profit law schools have likewise incurred scrutiny but to a far less degree, as they constitute a minute portion of the commercial tertiary sector. Only six of the nation’s 230 law schools are run as commercial ventures. Student default rates are nevertheless high, as many graduates fail to pass their bar exams and as many of those who do pass fail to find remunerative jobs.

 In “Proprietary Law Schools and the Marketization of Access to Justice,” Riaz Tejani explores the evolution of a for-profit institution pseudonymously titled New Delta School of Law. Tejani, a professor of legal studies at the University of Illinois, finds that New Delta weds a strategy of emancipatory marketing with a bottom-line concentration on profits:  New Delta, on the one hand, aggressively markets itself to low-income students as a path to prosperity and recognition and, on the other, generates outsized returns for its private equity investors. To win respect as well as accreditation, Tejani writes, New Delta appointed former executives of the American Bar Association to its board; to keep students from transferring to more reputable law schools after their first year, New Delta radically revised the standard 1L curriculum of Contracts, Property, Torts, Civil Procedure, Constitutional Law, and Legal Research and Writing to make transferring nearly impossible; to silence dissent, New Delta fired professors critical of these reforms and replaced them with visiting professors.

Placing his detailed account of the workings of New Delta in the context of political and economic theory, Tejani sheds new light on the nature of for-profit tertiary education and raises significant questions about U.S. education policy.

View paper

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