Two publications, City Journal, published by New York's Manhattan Institute, and JDJournal, which specializes in law-related issues, are essentially playing taps for San Diego's debt-plagued Thomas Jefferson School of Law.
The school moved into a fancy new, eight-story building in early 2011. Now it has $133 million in tax-exempt bonds headed for default, says City Journal, and that was "predictable, even inevitable," says the publication. Jefferson's bonds have a junk rating. "From 2007 to 2013, Thomas Jefferson raised its acceptance rate from 45 percent to 81 percent — essentially open admissions — but enrollment still declined," says City Journal.
As the Reader has been reporting, Thomas Jefferson consistently has a very low bar-exam pass rate among California's 21 accredited law schools. "The actual placement rate for Thomas Jefferson graduates in full-time legal positions within nine months of graduation is [close] to 25 percent," says City Journal.
JDJournal explains that "the school has agreed to give its building to bondholders. The school has already assigned all of its cash assets to its bondholders...the law school is likely to lose its building and cease operations."
Says City Journal, "When the bondholders' forbearance agreement with Thomas Jefferson ends in October, the law school may have to suspend operations if it cannot resume debt repayments...the diminishing viability of Thomas Jefferson's business model makes a happy outcome unlikely."