Is law school a riskier investment for minority students?

With most law students graduating with educational debt loads approaching $100k yet facing, on average, only a 55% chance of finding full-time employment working in a JD required job nine months after graduation, law school is turning out to be a bum deal for too many grads. But are some students faring worse than others when it comes to expected debt load and job prospects after graduating?  Professor Deborah Jones Merritt over at Inside the Law School Scam has taken a look at the numbers and concluded "yes" with respect to minority students. Here's what she found:

The evidence I've found shows:  (1) Black and Hispanic law graduates bear more debt than White graduates, although Asian graduates carry less.  (2) Graduates of all three minority groups are less likely to pass the bar exam than White graduates.  (3) Some law schools, especially those with poor outcomes, play upon “access” and “anti-elitism” themes to attract minority tuition dollars to campus. These are warning signs that minority law graduates, as a group, are suffering even more than White ones.    

. . . .

Race and Debt:  NALP and the American Bar Foundation have been conducting a national study of lawyers admitted to the bar in 2000.  That study, After the JD, provides the most comprehensive evidence we have about the careers of new attorneys.  Only 4.5% of the Black lawyers in that study graduated from law school debt-free; for Hispanic lawyers, the figure was 6.0%.  White lawyers were three times more likely than their Black and Hispanic classmates to graduate without law school loans:  17.3% of them did.  Asian students were the most successful at avoiding loans, with 19.9% graduating debt-free.  (See Table 10.1 on p. 81 for all debt figures reported here.)

Among students who borrowed, Blacks and Hispanics shouldered slightly more debt than Whites at graduation.  Median debt for these groups (excluding those without loans) was $73,000 for Hispanics; $72,000 for Blacks; and $70,000 for Whites.  Asian students had the lowest debt, with a median of $60,000.  Remember that all of these figures are for students who graduated in 2000; the numbers would be considerably higher today, after the last decade's ramp-up in tuition.

These racial differences in debt load persisted for years after graduation.  At the seven-year mark, almost half of Asian lawyers (46.8%) had paid off their loans; more than a third (37.0%) of White graduates were similarly debt free.  But far fewer Black and Hispanic lawyers shared that financial fortune:  Just 17.0% and 28.9%, respectively, were debt-free.  Black and Hispanic attorneys were also more likely to struggle with supersized debts:  15.1% of Black attorneys—more than one in seven—still owed more than $100,000 seven years after law school graduation; 10.5% of Hispanic graduates fell in the same category.  For Asians and Whites, the percentages carrying these large debts were just 6.9 and 7.7.

But all of these graduates had at least passed the bar.

Bar Passage:  California, the state that administers the most bar exams, reports pass rates by race.  For July 2011, the pass rates for first-time test-takers were:

• White test-takers:                    75.4%
• Asian test-takers:                    67.3%
• Hispanic test-takers:               55.3%
• Black test-takers:                    45.7%
• Other minority test-takers:      59.0%

California allows graduates of unaccredited law schools, as well as apprentices who "read the law," to take the bar exam, but those differences do not account for the racial disparities.  The same California report breaks down bar results by educational preparation--with the same racial patterns in each group.

New York, the nation's second-largest administrator of bar exams, reports similar racial disparities in bar passage.  A study reviewing New York's July 2005 exam reported the following pass rates for first-time takers:

• Caucasian/White test-takers:                   86.8%
• Asian/Pacific Islander test-takers:           80.1%
• Hispanic/Latino test-takers:                    69.6%
•  Black/African American test-takers:      54.0%
• [No “Other” group reported]

 Candidates who fail the bar can retake the test, and many pass on subsequent attempts.  But both the California and New York data show that race differences remain even after retakes.  A national study from the 1990s reaches the same conclusion.

How many of these minority graduates, who will never practice law, owe law school debt?  How high is that debt?  I have not been able to find statistics on that—the debt figures reported above cover only graduates who passed a bar exam.  But individual law schools know how many of their graduates fail the bar and how much federal debt they owe.

You can continue reading Professor Merritt's analysis here.

(jbl).