Facing A Decline In Enrollment, Law School Seeks Federal Loan For Some Debt Relief

What would you do if enrollment at your law school had declined by 33% since 2011?

(Photo by Jared C. Benedict/Wikimedia Commons)

(Photo by Jared C. Benedict/Wikimedia Commons)

What would you do if enrollment at your law school had declined by 33% since 2011?

It certainly isn’t an enviable position to be in, but that is what is facing administrators at Vermont Law School. Though the enrollment rates have leveled off, the decrease in the amount of students paying tuition has left financial issues the school is still dealing with. VLS has a renowned environmental law program and is the only law school in the state of Vermont, but that hasn’t stopped it from hitting on hard times.

One possible solution the school is trying is applying for a $15 million loan from the USDA’s Rural Development Community Facilities Direct Loan Program, which, at a lower interest rate than the $13.5 million in loans they currently have, would mean a reduction in the $1.2 million they pay annually to service the loans.

The USDA program may strike those unfamiliar with the institution as an awkward fit for a law school, but let’s not forget that Vermont Law School holds the distinction of being the American law school that is the furthest from a stop light (27 miles away). Ted Brady, state director of Vermont and New Hampshire for USDA Rural Development, agrees that VLS may just be a good fit for the program, as reported by VT Digger:

“Institutions of higher education are especially vital to rural communities,” Brady said. “Vermont Law School is a great example of an essential community facility that not only provides a vital service to Vermonters, but also anchors the community’s economy and culture.”

Their loan application includes provisions for a land-lease transaction for its 15-acre campus with a separate entity, VLS Campus Holdings LLC. According to Lorraine Atwood, vice president of finance at the school, VLS would continue to own the land and the buildings that make up the law school.

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According to USDA guidelines for the loan VLS is seeking, a qualifying institution “provides an essential service to the local community for the orderly development of the community in a primarily rural area, and does not include private, commercial or business undertakings.”

The town where VLS is located, Royalton, is in favor of the plan, with the local Selectboard issuing unanimous support for it at a recent meeting. The oldest law school building is the town’s old schoolhouse and health of the small town is interwoven with that of the law school:

The school operates the South Royalton Legal Clinic for low-income residents, a state library, a community day care center, and a fitness center, all of which are open to the community. It also has joint agreements with the town that support joint infrastructure and employs 135 faculty, not counting adjunct professors.

Hopefully this move will be able to right the VLS ship.

VERMONT LAW SCHOOL SEEKING FEDERAL LOAN TO EASE DEBT COSTS [VT Digger / Valley News via Morning Docket; TaxProf Blog]

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Kathryn Rubino is an editor at Above the Law. Feel free to email her with any tips, questions, or comments and follow her on Twitter (@Kathryn1).