How Good It Looked

Start with the strange part. As I write this, in the middle of 2026, law school has never looked healthier.

Applications are surging. The 2025 cycle drew about 18 percent more applicants than the year before, and 22 percent more applications. That’s the biggest applicant pool in over a decade.¹ The 2026 cycle kept climbing on top of that record pool.² One recent August LSAT sitting drew roughly 26,000 people, up 18 percent in a single year and close to 60 percent above August 2023.³ Admissions offices are full. Scholarship budgets are growing. Deans are giving speeches that end on the word “momentum.”

If this were all you looked at, you’d think writing a book about collapse was crazy.

But I’ve seen this before, and so has anyone who was paying attention in 2010.

Back then, the 2008 financial crisis drove people into law school. It always works that way. When the job market is scary, a graduate degree feels safe, and law has long been the safe choice for the smart and the unsure. Applications climbed to a peak of 87,900 in 2010.⁴ Schools read the surge as the new normal, so they grew their class sizes, added faculty, and, some of them, built.

Then it broke. By 2013, the applicant pool had fallen to 59,400. It kept falling, bottoming out near 54,000 a couple of years later, a drop of roughly a third in 3 years.⁴ Schools that had grown into the boom spent the next decade cutting and discounting and scrambling. Some never recovered.

It already happened, and the new forces weren’t even in the room

The last bust deserves more than a sentence, because it didn’t just shrink schools. It closed them.

Between 2016 and 2020, at least 7 ABA-accredited law schools shut down or stopped enrolling. (ABA stands for American Bar Association, the national body that approves law schools.) Indiana Tech opened a brand-new law school in 2013, right at the top of the boom. It shut in June 2017, 4 years and a reported 20 million dollars later.⁵ Charlotte School of Law, a for-profit school, lost access to federal student loans and closed in August 2017.⁵ Whittier Law School, in Southern California, announced in 2017 that it would stop enrolling and teach out the students it already had.⁵ Valparaiso stopped admitting a new class in 2018 and wound down by 2020. Arizona Summit and Savannah Law School both went under in 2018. Concordia’s law school in Idaho closed in 2020.⁶

Those schools shared a profile. Tuition-dependent, meaning they ran almost entirely on what students paid. Lower in the rankings. Weak job outcomes for graduates. No endowment (a school’s savings fund) to absorb a bad year. When the applicant pool fell and discounting climbed, there was nothing underneath them, so they stopped enrolling rather than shrinking.

And that wave happened in the mild version of this story. A normal cyclical downturn, with the federal loan spigot wide open the whole way through. The demographic cliff, the test-optional pricing chaos, the new bar exam, the accreditation fractures, and AI hadn’t arrived yet. The simple bust still closed 7 schools. The next one arrives with 8 new forces stacked on top, while the safety net that held last time is being pulled out.

So when I say a third of law schools are financially exposed, I’m not inventing something new. I’m describing a base rate, under conditions that just got worse.

That’s what people miss about a surge. It feels like safety, and a boom is exactly when the worst-positioned schools expand hardest, borrow the most, and talk themselves into believing the line only goes up. The bigger the boom, the more there is to fall.

Now look at why people are flooding in this time, because it’s almost too on-the-nose. Applicants tell LSAC (the company that runs the LSAT) they’re coming partly because the political climate makes them want to fight for something, and partly because AI is making every other career feel unstable, so a law degree looks solid.⁷ Read that second reason again. A generation is running into law school to escape AI, and a lot of them will graduate in 2028 and 2029 into a legal job market that AI is already reshaping. They’re running straight toward the thing they’re trying to escape. That gets its own chapter.

2026 differs from 2010 in one way that matters, and it’s worse. In 2010, even wounded schools could keep the lights on with loan money while they waited for the next wave.

This boom is going to crash into the forces this book is about, all arriving together, while the loan money narrows in 2026. The applicant pool is about to shrink for reasons that have nothing to do with the economy; it’s about how many babies were born after 2008. The tool schools use to price their scholarships is breaking. The bar exam is changing. States are walking away from the national accreditation system. And the entry-level jobs that justified the whole bet are being quietly automated.

The schools filling their seats right now, discounting hard to land the biggest classes they can, borrowing against enrollment guesses that assume the good times hold, are doing in 2026 exactly what the doomed schools of 2013 did in 2010. So when you hear that applications are at a decade high, remember what the same headline meant in 2010. In hindsight, today’s numbers are going to look like the setup.

Let me show you the first force that pulls the floor out. It starts with a loan program most people have never heard of.

The people who saw it coming, and got buried

They were right. That’s the honest starting point, and if this book doesn’t say it plainly, it doesn’t deserve to be taken seriously.

Between 2011 and 2013, a small group of critics published books arguing that American law schools were running a broken model on borrowed time. They had the data, and a few had the insider credentials that should have made legal academia take them seriously. They mostly got ignored, and then the market ran their faces into the pavement.

Brian Tamanaha, a law professor at Washington University, published Failing Law Schools in 2012. He made the cleanest structural diagnosis in the bunch. The whole high-tuition machine, he argued, rested on the federal government’s willingness to lend any admitted student every dollar of their cost of attendance, with no underwriting and no questions about whether the degree would ever pay off. That loan program, Tamanaha argued, was “more aptly perceived as a funding program for law schools, with students serving as conduits.”⁸ Remove the uncapped federal guarantee, and the price falls toward what students can actually borrow and repay. He even sketched the fix, a federal loan cap for each school. In 2026, Congress passed exactly that. Tamanaha wrote the policy the 2026 budget law would follow, 14 years before anyone pulled the lever.

Paul Campos, a law professor at the University of Colorado, had been running an anonymous blog called “Inside the Law School Scam.” He turned that material into a book, Don’t Go to Law School (Unless), also in 2012.⁹ His case was grimmer in some ways. By his math, only 20 to 30 percent of law graduates got a positive-NPV degree (meaning the degree paid off financially). The other 70 to 80 percent would have been better off financially if they hadn’t enrolled. The schools survived anyway, Campos argued, because the federal loan program kept them solvent no matter what happened to the people who graduated. And none of it was a secret conspiracy; the business model operated in public.

Steven Harper, a retired Kirkland & Ellis partner who later taught at Northwestern, named a different part of the trap in The Lawyer Bubble, published in 2013.¹⁰ He focused on the US News rankings machine. It pushed schools to buy high LSAT scores with merit scholarships, and to pay for those scholarships, schools charged close to sticker price to students with lower scores. Then they called the whole thing meritocracy. Harper noted that the correlation (the statistical link) between LSAT score and first-year law school grades, across 189 schools, sat at a median of 0.36. Real but modest. Schools were bidding heavily on a signal that did less predictive work than the price implied. The rankings had also remade hiring. Firms hired at the top of the pyramid far faster than they promoted, billing entry-level associates’ work at a steep markup while keeping the partner level lean. When the market slowed, the first-year class was the first thing firms cut.

Glenn Reynolds, a law professor at the University of Tennessee, took a wider frame in The Higher Education Bubble, a short pamphlet published in 2012.¹¹ His argument ran to all of higher education, but the mechanism was the same. Government-backed credit let buyers pay ever-rising prices, and prices rose to absorb whatever the subsidy covered. Pull the subsidy, and the revenue the inflation built deflates with it. He put the adjustment sequence plainly: denial, then discounting, then mergers, then closures. The schools hit first are modest-reputation, low-endowment, high-tuition private schools, which is the school profile this book keeps returning to.

Walter Olson, a senior fellow at the Cato Institute, came at it from a different angle in Schools for Misrule in 2011.¹² His main target was the ideological content of legal academia, a project this book has no interest in. But buried in that argument was the most useful historical precedent in the whole literature. Olson noted that ABA accreditation had worked like a cartel (a group that controls the market to keep prices high) since the mid-20th century. It set a cost floor from outside the market by requiring tenured faculty, minimum student-to-faculty ratios, and administrative infrastructure that no school could trim without losing its ability to produce licensed lawyers. He cited the AMA’s precedent. (The AMA is the American Medical Association, the equivalent body for medicine.) When medical-school accreditation standards tightened in the early 20th century, about half of the nation’s 160 medical schools closed or merged. Reynolds and Olson write from a right-of-center, libertarian perspective, and their broader politics aren’t the point here. Their cost mechanics and their accreditation analysis stand on their own.

So there were 5 writers, 5 books, 2011 to 2013, all pointing at structural rot in the same system. They should have been right.

Then 2018 happened. Applications climbed back. The 2021 post-pandemic surge was larger still. LSAT volumes recovered and ran past their prior peaks. Medians (the middle score in a group) tightened at schools that had been circling the drain, and they refilled their classes. Only a handful actually closed during the long trough. By the time the 2025 surge hit, most people in legal education had quietly filed the critics under “people who cried wolf.” The critics got a decade of being wrong.

The honest account is that they were right about the machine and wrong about the timing. They correctly identified the column holding up the whole high-tuition structure, the uncapped federal loan guarantee, and they correctly argued that removing it would force a price collapse. They just assumed the market would do the removing. It didn’t. Congress left the spigot open. 2 good application cycles gave every struggling school cover to say the critics had misread the fundamentals. The rebound was real, and it also bought every school another decade to borrow more, build more, and lock in the cost structure that becomes a trap the moment revenue falls.

This book parts ways with that shelf in one place.

Each of those writers saw 1 force. Tamanaha saw the loan column. Campos saw the demand-side scam. Harper saw the rankings trap and the associate pyramid. Reynolds saw the subsidy-inflates-price mechanism across all of higher ed. Olson saw the accreditation cartel. None of them, writing in 2011 to 2013, could have seen the demographic cliff that the 2008 birth decline will carve into the applicant pool in the late 2020s. They couldn’t have seen the test-optional pricing chaos the ABA’s 2024 vote set off by breaking the 1 common yardstick the scholarship market ran on, or the NextGen bar exam launching in July 2026 with a design and scope that prior bar prep can’t fully address, or states like Texas and Florida walking away from the ABA’s national accreditation authority, or AI sitting inside every major law firm, quietly handling the document review, first-draft work, and research that once justified the entry-level hiring classes Harper described.

And none of them saw what happens when all of these arrive at once, on the 1 column Tamanaha correctly identified, at the moment that column is finally being cut.

A system carries 1 shock, sometimes 2. The critics of 2012 were watching 1 load on the bridge. In 2026, the load Tamanaha named is finally being applied, at the same moment as 8 others that didn’t exist when he wrote. This is a different argument, built on their foundation but not bounded by what they could see from 2012.

The critics earned the diagnostic credit. They were early. This book is the stress test of what happens when their timing finally arrives, with company.

Watch: why schools' bad news is applicants' leverage

Bad News For Law Schools, Good News for You

This chapter is from Anyone Can Beat the Law School Collapse by Steve Schwartz, LSAT Coach and Founder of LSAT Unplugged. I've been coaching the LSAT since 2005.

Published July 28, 2026.