Monday, April 6, 2015

It's Math, Baby: Law School Invaluable to Local Community

The Eurotrash charlatans who intend to close down law schools in a nefarious plot to end justice and opportunity, blinded by their churlish ideology, have completely neglected Main Street, U.S.A.

Consider South Royalton, Vermont.  Royalton, Vermont, has a hearty group of 2700 or so pleasant folks.  South Royalton, one of its white flight suburbs, has less than a thousand.  Hermit thrushes and maple trees there are a-plenty, but people are previous few.

It's one thing to close a law school in Boston or Los Angeles, where the local economy can fart and waddle onwards.  But taking a major employer from a bucolic Vermont village is like stealing the axe from a lumberjack:  something's getting cut, and it's likely not what was intended.

Researchers recently found that Vermont Law School had a $30 million impact on the state of Vermont in 2014.  Vermont is the least economically-important state in the entire union, with a GDP of only $30 billion.  That means that Vermont Law School, by its mighty can-do woodsy self, constitutes a tenth of a percent of this state's economy.

You're endangering Vermont, you rabid skunks.

As the report explains:
“The Vermont Law School ... has an economic impact on the state of Vermont economy far larger than what we would normally expect from an institution this size,” the report concludes. “The high proportion of in-state spending gives rise to an additional 245 jobs ... total personal income $19 million, and tax payments of approximately $3 million.”
The school spent $15 million on personnel, and its students spent an additional $12.2 million in the local economy.  With 550 students, that's about $22,000 per year per student.

For as much as scambloggers like to whine about law professor salaries, has it occurred to any of them that those expenses disproportionately benefit the surrounding community?  Read the report:  VLS has a much bigger economic impact on its community than expected.  Why do you think that is?  It's not all just the power of law to bring knowledge and efficiency to the local marketplace.

Now let's crunch some numbers so we can understand this alchemy in full:

Vermont had around 550 students.  According to prior numbers, about 87% of them can be expected to debt finance a part of their legal education, and the average law school indebtedness of those students would be around $139,000.  That means an annual indebtedness per debtor of $46,333.  With 479 of the 550 students estimated to be taking out debt, that amounts to only about $22 million in federal loan money annually going to that area either in tuition to VLS or living expenses spent in the area.

According to its most recently available tax filings, VLS had about $36 million in functional expenses annually, about $7 million of which appears to be handing out grants/scholarships like a super-generous Pez dispenser of jurisprudential love.  According to Moody's, its revenue for FY 2013 was around $28 million with projected further decline in FY 2014, with a "high dependence on student charges," although Moody's notes that the school is " developing new revenue streams by introducing new master's programs to boost enrollment, and seeking new grants and gifts."

So the federal government loans students $22 million or so to hike in the forest and think about legal positivism.  Vermont Law School is able to add on $8 million more of economic benefit by turning a few million in tuition and grants into a few million hypothetical bonus dollars.

Examples of Vermont's positive economic impact aside from its students simply buying things in the local market would be the $1.94 million paid out to a core group of ten (10) officers and faculty members in FY 2012.  These individuals turn around and spend money in the local community, and as they are public servants, one can bet it's being spent in the community itself rather than shoved into dormant retirement accounts or spent outside the state.  I mean, sure, the school uses consultants and accountants from out of state, but no doubt its six-figure employees all stay local when purchasing goods and services.

Now, here's where the real magic comes in.  Over time, those students who borrowed that money pay off that $22 million with income from their lucrative jobs as environmental attorneys plus interest.  So over time, the United States makes a profit from propping up the local South Royalton economy!  Literally everybody wins.  Vermont, and particularly the Royalton area, get a $30 million shot to the economy, as well as the addition of invaluable local legal expertise.  The United States (that's us!) makes money off student loan interest, and the debtors, I mean students, receive an expert legal education in the scenic woods of Vermont!

Put that on your fuckin' flapjacks!

Now, you might ask yourself questions, like:
  • Why should we be in the business of using federal loans to prop up local economies on the backs of student loan debtors to attend an institution with a 54.5% employment score?
  • Since the town isn't able to tax the non-profit school as much as a for-profit commercial enterprise, wouldn't it be a much greater economic impact to subsidize a real-life business to occupy that land?
  • With PAYE/IBR/default, isn't there a good chance that $22 million isn't all going to be paid back?  Were these federal liabilities factored into the analysis, or just ignored because it's not Vermont?
  • Why does VLS's FY 2012 tax return show that Geoffrey Shields was working sixty hours a week when he retired in July of 2012 and had been suffering from non-Hodkin's lymphoma during that time?
  • If the school is confident in its nonprofit mission, why would the school pay a consulting firm to do an economic impact study in the first place?
  • Doesn't any institution that houses hundreds of bodies have an economic impact like this?
  • Aren't economic impact studies commissioned by private parties usually just propaganda to advance a political or financial agenda, like that piffle that pro sports teams put out to justify cheating local governments?
  • If VLS's revenue and enrollment are in decline, don't we have to adjust forward impact numbers significantly downward?
  • Wouldn't it be better to subsidize an institution that makes something useful, as opposed to CLE packets, unread law reviews, and would-be environmental lawyers who practice family law?
  • Wouldn't it be better to subsidize an institution that creates middle class jobs for local people rather than upper class jobs for imports who may get offers to leave?
  • Wouldn't it be better to subsidize an institution that has a positive credit outlook rather than one that borrows from the state with a negative credit outlook?
  • Wouldn't it be better to subsidize an institution that promotes permanent, year-round economic impact in the state?
  • Aren't there simpler, more efficient ways of artificially propping up rural university towns than using the student debt / fourth-tier college / six-figure salary model?
  • If you really want to support the area, couldn't you just cut every resident of the Royalton area an annual stimulus check and cut out all this other funny business and sell the building/land to a more taxable entity?
But such questions would make you a dick who cannot see the value of a law school to a local community.  Go back to New York or something.


  1. This fine study brings public attention to the substantial economic activity that even a small law school generates. Similar studies could make the same point about prisons and superfluous military bases.

    You know, our need for more incarceration, more wars, and more educational debt slavery is not always so apparent. (It is, one might say, a “complex” notion). Studies like this help the public understand that taking some kind of reckless anti-scam position could mean the closure of charming and historic local landmarks like Ye Olde Tavern and Grille.

    1. Always glad to see you promoting more civilized viewpoints.

  2. According to Wikipedia, "Vermont is one of the most racially homogeneous states; 94.3% of its population identified as white in 2010."

    Why is there a white flight district?

  3. White flight isn't just for fleeing minorities, but disreputable whites as well. With absolutely no evidence, I'm guessing some hosers from New Hampshire rolled into Royalton and *poof* there went the neighborhood.

  4. In all seriousness, what about the cost to students and faculty and society due to the depression, drug addiction, alcoholism, and suicides brought on by taking on or enabling students to incur $200,000 in non-dischargeable law school debt to buy something that is worthless or, at best, lands you a job that you will hate?

    1. Worry about the local coffee shop, please. That is what is normal to do. It expresses the truth of the lending and higher educational systems: they are fiscal stimulus programs to the important, favored players, that were supposed to paid for by a special and enormous lifetime tax on graduates.

      And it would have worked too, except that no price can rise forever, and the business cycle exists despite suppression of it. Can't pay, won't pay.

      The silver lining: these latter generations of students have gotten a crash course in economics and civics. The oldies die off eventually, and the mantle of power passes naturally to the next generations whose attitudes and morals have been forged in the fire of abusive systems. It will get better. It's just going to take a long time.

    2. So true. The older generation in power in America today has no morals except selfishness.

  5. Slightly off-topic here: Many will find it highly entertaining to do a Google search for the latest news about Lisa McElroy, the Marie Antoinette of Drexel University's law school.

  6. The real story about VLS's economic impact is how the school (and many like it) has been involved in a kind of reverse Robin Hood wealth transfer, providing huge discounts to best (read: most employable) students while saddling most with unsustainable debt burdens (including the 45.5% of, for instance, 2013 graduates who have yet to find full-time employment). The whole sordid affair was uncovered in this 2013 report to the VLS Student Bar Association:

  7. I wrote the dam girl who penned this article outlining her serious misguided thinking about Vermont law. I've not heard a peep back from here. TLS shows them with 54.5 % employment score and project debt at repayment of $267,592 dollars. Attending this school is financial suicide.

  8. Even when borrowers default, the loans will be repaid eventually. It will just take a longer time. There is no charge off, at least for the federal and federally guaranteed loans.