June 18, 2015

ABA task force proposes reforms for legal education financing

CHICAGO, June 19, 2015 – A report released today by an American Bar Association presidential task force calls for enhanced law student debt counseling, wider collection and publication of law school financial data and innovation at law schools to lower costs for students while maintaining sound educational programs.

The report of the ABA Task Force on the Financing of Legal Education documents law school enrollment declines, tuition increases and growing student debt. The task force notes that the financial challenges facing legal education largely affect higher education in general, and it cautions against acting reflexively in an evolving marketplace that is improving in some respects.

The report notes that tuition hikes are slowing and that tuition discounting, largely through merit-based grants and scholarships, is widespread and growing. The task force found that the roughly 2 percent default rate on loans for law school is lower than the default rate on loans for bachelor's, master's, doctoral and other degrees.

On debt counseling, the report states that it "is obviously important that students who borrow student loans to fund their legal education be informed consumers." It calls on the ABA's independent law school accrediting body to require schools to provide debt counseling services that exceed those now required by the U.S. Department of Education. The report also encourages publication of simplified disclosures about educational loans and repayment options for students.

A second set of recommendations stems from the task force's concern about the scarcity of relevant data. The report calls on the ABA's accrediting agency to collect and release more information from law schools, including expenditure and revenue data, and information on the amount and percentage of financial aid distributed based on need or merit.

Innovation is the report's third approach for improving the financial health of law schools, their students and graduates. The task force offers examples of operational improvements at law schools and urges the ABA's accrediting body to encourage experimentation at law schools to reduce cost and improve value. It also encourages groups to research and share information on law school cost, student debt, job prospects and related issues, with an emphasis on promoting a diverse legal profession.

"This is a critical time for legal education in the evolving legal marketplace, so a thorough, credible examination of legal education financing issues is more important than ever," said ABA president William C. Hubbard. "The ABA Task Force on the Financing of Legal Education has studied the complex issues and produced thoughtful recommendations for consideration."

The 15-member task force, established in May 2014, is chaired by former ABA president Dennis W. Archer. A vote on adoption of the task force recommendations is planned for the next ABA House of Delegates meeting Aug. 3-4 in Chicago. The task force report is available online here.

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