Tuesday, May 10, 2011

The Slow Down.

"The message" has resonated with law schools who are slowing down the rapid expansion of past decades past because they now realize that law schools may not be so profitable. University of Delaware has put the kibosh on opening a law school after consulting..... drum roll, please!  

The ABA.
Delaware acted after talking to American Bar Association officials, who have noted a drop in both student interest and law-firm placement. Delaware also reviewed state plans to cut back higher-education subsidies.
Wow.  Truth Serum?  What happened?  I guess they've gotten the message loud and clear.

Also, if you went to school in the 90s as I did, you may already know a new building has always been a traditional and surefire way to join the first tier.  Not anymore it seems.  Drexel has decided against building a new facility:

The university concluded a law school would initially lose $160 million a year.
"We are not prepared to ask the Board for approval to incur that kind of deficit," according to a report by a committee assembled by UD president Patrick Harker that studied the proposal.
Did anyone here know that universities were rated, the same way that mortgage backed securities were? A lot of good that did us, by the way.  That Moody's... they are so honest!  
I didn't know they were rated, but I guess it makes sense, since Universities are primarily money making machines.  Never mind that most don't have shareholders--we all know that there are investors who are interested in the likelihood of a good return on the investment.  Well, now that you know, what do you think the rating for Drexel is?  It went from AAA to AA last week.  Still a better investment that most junk bonds, but worth noting.  Moody's reasons for the downward slide?

The university, which grew rapidly and raised academic standards under then-president Constantine 'Taki' Papadakis, faces "escalating" debt and "tepid financial resource growth," Moody's says. While Drexel's tuition income is "solid," other high-rated schools have "stronger cash flow."
Anyone willing to wager bets as to when this over-valued behemoth will go under?  Let's hope it's soon.

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