George Leef asks in his latest Martin Center column whether law school represents the worst possible higher education investment.

For decades, law school was a growth industry. Back in 1970, there were 146 law schools with an enrollment of 78,000 students; by 2013, there were 201 schools, enrolling 139,000 students. Enrollment peaked in 2010 at 147,000. (For the current year, it seems that enrollments will probably remain level with last year.)

By 2015, we were seeing articles such as this one in the Wall Street Journal: “Fewer and Fewer Students are Applying to Law School.” A number of law schools have closed since 2017, including Valparaiso, Whittier, Savannah, Arizona Summit, and Charlotte. More are on thin ice.

Evidently, many prospective law students were figuring out that the high cost of three years of study necessary to earn a JD just wasn’t worth it in a glutted market and were choosing other paths after college.

Just how right they were is highlighted in a new study by the Texas Public Policy Foundation entitled, “Objection! Law schools can be hazardous to students’ financial health.”

The study’s author, Andrew Gillen, explains the approach, “a debt-to-earnings test called Gainful Employment Equivalent (GEE). GEE compares the earnings of recent graduates with the typical borrower’s student loan debt to determine if students can afford their student loan payments.”

What he’s doing is following the method of the “Gainful Employment” regulations that were in place during the Obama administration. Under those regulations, schools could lose eligibility for federal funds if their average student loan figures were too high compared with student earnings after graduation. …

… Following the old Gainful Employment regulations, Gillen divides law schools into three categories: pass (where the typical graduate’s debt payments are no higher than 8.6 percent of earnings), probation (between 8.6 percent and 12.8 percent) and fail (more than 12.8 percent of earnings).

So, how did law schools fare?

Shockingly, 73 percent of the schools for which Gillen was able to get data (168 schools) fail.