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Practice Management

: Chuck Newton

The LSAT Scam

By Chuck Newton

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I think I am not the only one that is getting tired of the profit making motive of non-profits off the backs of those that can least afford it. Nowhere is this more true than in the education industry.

First, we must deal with the investigation of big Bush and GOP supporter, Catherine B. Reynolds, apparently using her influence, and government guarantees, for extravagant purchases and self-dealing with her non-profit run student loan company, EduCap. According to the Washington Post the non-profit company bought a Gulstream jet worth about $30 million that she uses to fly friends and relatives around the world. The company's foundation also donated, for example, $9 million dollars to a non-profit run by her husband, Wayne Reynolds, that then paid his for-profit management company $1.7 million. All the while EduCap has been charging students up to 18% interest (near credit card levels) for student loans.

Now, probably not as bad but certainly in the same category, we learn of the LSAT money from the blog Lessig.

As the blog points out, to get into law school you must take the LSAT, which is administered by the non-profit LSAC. However, to get copies of the old tests to prepare for the exam, a student has to go through a test prep company, which are usually for-profit. And, according to Steve Schwartz of the LSAT Blog, LSAC receives $194 for each student who receives a full set of the exams. Since the LSAC does not print the test, the money is pure profit. Of course, the for-profit companies sell these test for a huge multiple over what is paid to the LSAC.

What is next, charitable hospitals that do not perform any outward charity to the poor? Oh right, that is already the case.

Full post as published by Chuck Newton on May 19, 2009 (boomark / email).