One problematic feature of institutional decision making in particular is that the effects of a decision often don't begin to be felt fully until several years later. Taking this lag effect into account is both difficult and essential. Consider the relationship between law school tuition rates and law graduate debt.
The relationship between tuition and debt is is not complex: increases in tuition have basically a one to one relationship with increases in law school debt. (This isn't surprising given that increases at the margin in the cost of law school are going to be almost completely debt-financed). Here's how the lag effect works in regard to how much law school debt current 1L will carry, on average, when their first payments on that debt are due six months after graduation:
(1) The mean amount of law school loans taken out by 2011 graduates who took out loans was about $105,000. (This NLJ story reports the average for private schools was $124,950 while that public schools it was $75,728. About 65% of law school graduates graduate from private schools. In addition the public school debt figure is probably understated because of things like Georgia State reporting an average graduate debt of $19,971, which is obviously a single-year figure. Months ago I spoke to Bob Morse at U.S. News about correcting this number, which it continues to post on its website, along with equally ludicrous figures for Drexel, Southern, and Texas Southern. It's curious that in these litigious times the administrations of these schools continue to do nothing about correcting the only public record regarding the average debt of their graduates).
(2) Law school tuition and law graduate debt have been climbing by an average of 6% per year. If we estimate conservatively that the growth rate in these figures for the current 1L class will be 5%, this yields a mean amount of law school loans taken out for this class of $128,000.
(3) The current 1L class is the first that will graduate without the benefit of subsidized Stafford loans, on which the government paid the accrued interest on the first $8,500 per year (this benefit was eliminated this past summer). This change has now been incorporated into GULC's handy online debt calculator, which reveals that the $128,000 in law school loans which will be taken out by the average current 1L will result in a total debt of $151,588 when the first payment comes due. This will require monthly payments of $1,791 on the standard ten-year repayment plan, and $1,110 per month on the extended 25-year plan (the latter will require the graduate to make $333,003 in payments over the course of the loans).
(4) These figures don't include other educational debt. If the average 1L is carrying $20,000 in educational loans at the beginning of law school (payment is deferred on such loans while the student is in school, but interest accrues on them), then the average current 1L at the average ABA-accredited law school who graduates with educational debt is going to have around $175,000 in such debt when he or she receives his or her bar results. (The median debt figure for the current 1L class will be somewhat higher. Indeed it's quite possible that half of current 1Ls will be carrying at least $200,000 in educational debt when their first loan payments come due).
How many law schools are generating short and long-term employment outcomes that make accruing $175,000 in educational debt a reasonable investment? To put it another way, what percentage of current 1Ls are going to have to go into IBR -- assuming it still exists -- three years from now? IBR is a form of "soft" default, or if you prefer a kind of quasi-bankruptcy for educational debt. If it's the "solution" to this problem, then law schools themselves are bankrupt, in both a metaphorical and literal sense.