Law School That Defaulted on Its Bonds May Be Forced To Close
While it’s true that since 2008, the beginning of the Great Recession, law schools haven’t been doing as well as they did in the past, the year 2011 was when things really got out of hand. It was then that the first class action lawsuit about misleading employment statistics was filed against the Thomas Jefferson School of Law. No one could foresee that this would bring the end of the school.
In 2013, law blogs wrote about the layoffs in both faculty and staff at the TJSL which were done in an effort to cut costs and consolidate funds. Not only was the school having a bad enrollment year but it was also finding itself in dire straits after failing to pay off the $133 million debt it accumulated in 2011 after a new campus was built from scratch.
S&P’s reported in 2013 that it had downgraded the credit rating of a couple of stand-alone law schools with TJSL being among them. Having a B+ credit standing did not help at all, marking it with a negative outlook.
On June 26, 2014 The Jefferson School of Law defaulted on its bonds. This information was gleaned from an Event Filing and Consent of Forbearance Agreement. If it does not restructure its financial obligations with its creditors, TJSL will have to close its doors.