New Rules Bring Transparency to Law School Costs and Earnings

Introduction
 

Aspiring lawyers are set to make more informed decisions when selecting their law schools, thanks to the U.S. Department of Education's recent announcement on September 27th. The department is rolling out new regulations encompassing graduate programs, focusing on law schools. These rules aim to enhance transparency regarding earning potential, program costs, and borrowing aspects for prospective students.
 
Key Reporting Requirements
 
Under the new regulations, law schools must disclose vital financial information, including
 
1. Total Cost of Attendance
2. Average Amount Borrowed for Tuition
3. Typical Graduate Earnings
 
All this valuable data will be centralized and accessible through a dedicated Education Department website. Furthermore, programs displaying high levels of student debt and low graduate earnings over two years will face a fresh disclosure mandate. This additional requirement is designed to ensure that prospective students fully grasp the associated risks.
 
Unprecedented Centralization of Data
 
This move to centralize financial figures and correlate them with applicants' future income prospects is groundbreaking. Aaron Taylor, the executive director of AccessLex Institute’s Center for Legal Education Excellence, described it as "unprecedented." Even though much of this data is scattered across various sources, this consolidation will simplify the decision-making process for aspiring legal professionals.
 
Data Collection and Public Availability
 
Starting in July 2024, the Education Department will collect the newly mandated data, making it available to the public via its online platform. This website will also provide information on licensing requirements, including bar admissions for lawyers.
 
Disclosure Thresholds
 
For programs that fall below the established debt-to-earning threshold, the disclosure requirement will take effect in 2026.
 
Schools in Focus
 
A May analysis of Education Department data conducted by Notre Dame law professor Derek Muller identified schools with high debt-to-income ratios. Notable mentions included Western Michigan University Cooley Law School, Atlanta's John Marshall Law School, and Appalachian School of Law. These institutions have yet to respond to inquiries about the new regulations. In contrast, according to Muller's study, Harvard Law School boasted the lowest debt-to-income ratio.
 
Addressing Student Debt Concerns
 
High student debt loads have long been a concern within the legal profession. A 2020 survey by the American Bar Association found that more than 75% of young lawyers surveyed carried at least $100,000 in student loans upon graduation. Over half of respondents had accumulated over $150,000 in student debt, with one in four owing $200,000 or more. Many young lawyers cited student debt impacting life decisions, such as delaying marriage, parenthood, or homeownership.
 
American Bar Association's Role
 
In recent years, the American Bar Association has increased its demands on law schools to provide more comprehensive information about the types of jobs their graduates secure. However, the school-specific data on their website does not include average debt loads or graduate earnings, although such information can be found elsewhere.
 
Anticipated Impact
 
The newly available data from the Education Department is expected to have a far-reaching impact. Aaron Taylor anticipates that it may find its way into ranking lists and become a point of pride for schools rated favorably within the framework. This development represents a significant stride toward greater transparency and informed decision-making within the legal education landscape.