Valparaiso University announced Tuesday that Valparaiso Law School will close following an unsuccessful attempt to transfer the law school to Middle Tennessee State University.

The law school is working with the Higher Learning Commission and the American Bar Association to develop a teach-out plan that will ensure the remaining 100 second- and third-year students finish their degrees.

That plan could take a number of forms, according to Mark Heckler, president of Valparaiso University in northwestern Indiana. Once approved, the plan will dictate the timeline for the school’s closure.

“We really need to spend time with the accreditors, spend time with the students to talk about our options with how to proceed,” he said.

In 2017, Valparaiso Law School announced that it would no longer admit new students. Remaining students have the option to transfer out of the law school, and current faculty and staff have signed an agreement with the university to stay until the end of this academic year, which included an “incentive for them to stay,” Heckler said.

One potential teach-out arrangement would be to retain a group of faculty members to teach the level-three curriculum that remaining students will need to graduate after this year. Valparaiso is one of six law schools in the greater Chicago area, and another option would be to have students complete their coursework at one of the nearby law schools and transfer the credits back so that Valparaiso can confer their degrees.

The Board of Directors of Valparaiso University ultimately made the decision to close the law school.

“This has been an extremely difficult decision and is the result of several years of careful discernment,” Frederick Kraegel, chairman of the Board of Directors of Valparaiso University, said in a press release. “We have explored a number of strategic alternatives. Despite these efforts, we have not been able to achieve a more positive outcome.”

The closure was announced less than a month after the Tennessee Higher Education Commission rejected a proposal to transfer the law school to Middle Tennessee State. The law school announced its intent to transfer in June. At the time, there was some speculation about whether Tennessee needed another law school in addition to the six the state already has. Such concerns ultimately influenced the commission’s decision; Nashville Public Radio reported that several lawyers and law schools in Memphis and Knoxville who consulted on the commission's decision were concerned about a potentially watered-down law school market in the state.

Heckler met with law students and faculty on Monday and said that given the Tennessee commission’s decision, they were not surprised by the closure announcement.

“I think especially the faculty and staff understood that this would be the only option for the board,” Heckler said. “Students had been following each of the steps here on Middle Tennessee, and I think they too had reached that conclusion. It doesn’t make it any easier. Everybody here is very sad, very disappointed.”

The university will convene a task force in the spring to determine how best to use the law school buildings.

Valparaiso is not the first law school to close its doors in recent years -- Whittier Law School announced its plans to close in 2017. The external pressures facing Whittier and Valparaiso are similar: there is less demand for law degrees, and the student applicant pool is less impressive than it used to be.

The 2008 recession hit the law market hard, said Kyle McEntee, executive director of Law School Transparency, a consumer advocacy nonprofit.

“Law schools, for a long time, were able to expand without regard for any market pressure,” McEntee said. “They had access to a student loan system where students could borrow as much as they needed to get through law school. They operated with a presumption that law school was a ticket to financial security.”

After the recession, this was no longer the case. According to Law School Transparency data, legal education enrollment peaked in 2010 at 52,000 students and took a sharp decline through 2014. Since, enrollment numbers have plateaued around 37,000 students, but the enrollment decline caused a “financial shock” to the law school system, McEntee said.

“Law schools were forced make enrollment decisions,” he said. “Many schools made choices to enroll people who had no business being in law school. Their predictors showed a high likelihood of [those students] not passing the bar exam, which makes it textbook exploitation.”

Valparaiso Law School was one of those schools. In 2016, the ABA sanctioned the school for admitting students who were unlikely to succeed.

“When you have fewer students applying to law schools, there’s a cascading effect,” Heckler said. Elite law schools began to enroll less qualified applicants, causing middle-tier schools like Valparaiso to reach even lower.

The number of law school applicants has also steadily declined since 2003, and, in 2016, 42,800 of 52,800 applicants were admitted to law school. Admissions standards have relaxed significantly; in 2003-04, the national acceptance rate was 55.6 percent, and it peaked at 78.1 percent in 2013-14. In 2015-16, it was 75.8 percent.

McEntee said more law schools are likely to close.

"I do think we’ll see more school closures. I will not predict which ones they are, because it depends on a number of factors including support from a central university and their desire to see a school stay open, or support from the state," he said. "It’s the independent schools that are really struggling most. Will we see a well-regarded regional school close? It wouldn't surprise me."