Another for-profit educator about to bite the dust

Faced with declining enrollment and rising costs, The Charleston School of Law could announce as soon as Monday that is won't accept new admissions, the latest sign of trouble in the legal profession.

In a memo this week, owners Robert Carr and George Kosko told faculty and staff that Charleston couldn't "in good faith" enroll another class when the school is spending more money than is coming in. The school cannot assure students they will have access to federal loans for their three-year course of study and isn't sure it will be able to maintain its license.

"We are heartbroken with this situation," they wrote. "It was a dream for the two of us to build an ABA- accredited law school. It was a dream to see it operate for over 12 years and educate more than 1,500 lawyers. While there are those who disagree with our decisions, no one has given us more than empty promises and false hopes."

Andy Brack, a spokesman for Charleston, declined to comment beyond the statement.

Charleston is not the only law school to experience turmoil in recent years. Western Michigan University's Thomas M. Cooley Law School shuttered one of its campuses in a cost-cutting move in 2014, and others have trimmed their full-time faculties.

"I would not be surprised if another for-profit were to close next year," writes Theodore Seto, a professor at Loyola Law School, in an email to CBS MoneyWatch. "Not-for-profits face far less institutional pressure to make money and can therefore survive in much worse environments."

Indeed, a law degree isn't the ticket to prosperity that it was in years past. Graduates from public law schools have on average $84,000 in debt while those attend private schools wind up about $122,000 in the red, according to Atlantic Magazine. Not surprisingly, law school admissions have plummeted from about 30,000 in 2012 to about 20,000 this year.

As CBS MoneyWatch reported this year, law schools were letting in applicants with lower test scores than in the past, making some experts question whether they'd pass the bar exam. According to research by Jerome Organ, a professor at the University of St. Thomas, about 30,000 to 38,000 people entered the legal job market annually between 1982 and 2012. Another 7,000 to 18,000 exited during that same period. The numbers of departures is expected to increase in coming years, while entrants are forecast to drop.

Founded in 2003, Charleston has an enrollment of 362 full-time students, charges yearly tuition of $39.216 and employs 44 full-and part-time faculty. The school doesn't rate in U.S. News and World Report's ranking of law schools.

The school's history has been rocky. According to media reports, the school's owners took out $25 million in profit between 2010 and 2013. InFiLaw Systems, which operates three for-profit law schools tried to buy Charleston a few years ago but ran into opposition from alumni and faculty members.

An advisory panel of the South Carolina Commission on Higher Education recommended that the sale be blocked. The turmoil was so bad at Charleston that one president quit after only being on the job for eight days. An InFiLaw spokeswoman told CBSMoneyWatch has no plans to buy the college

"I have always been of the view that for-profit law schools were the canaries in the coal mine," writes Seto.

Should Charleston decide to shutter its doors permanently, American Bar Association rules would require it to provide a "teach-out" plan for its students so they could complete their studies. An ABA spokesman declined to comment for this story.

"Perhaps the law school's ultimate failure wouldn't be a bad deal for students -- a closed school loan discharge would actually be a blessing for them," according to the Above the Law blog.