The Responsibility of Yale Law School for the Rise of Tuition Nationwide--And What It Can do to Help

Brian Tamanaha

Yale Law Professors Akhil Reed Amar and Ian Ayres (a fellow Balkinization contributor) recently posted a thoughtful essay on Slate noting the problems with tuition and debt. Tuition at private law schools has more than doubled in real terms in the past quarter century, average debt among law graduates is approaching $100,000, many graduates are not getting jobs as lawyers, and many who do get lawyer jobs do not earn enough to manage their monthly loan payments. Their main proposal, which they are urging their dean to implement, is to encourage law schools to offer law students a one-half tuition rebate to drop out of law school after the first year. By then, students will know whether they are interested in a legal career and their likelihood of landing a decent-paying job.

That’s an easy offer for Yale to make, as Amar and Ayres acknowledge, because few Yale law students will take it. In addition, Yale already takes in plenty of transfer students at the end of the first year (about 10% of the class), which will allow it to easily recoup the cost of the handful of students who walk away with the one-half refund. Realistically speaking, few other law schools can afford to make such an offer.

If Yale law professors really want to make a difference for law students across the country, they must lobby their dean on the issue of tuition. Yale bears a direct responsibility for the rise in law school tuition noted by Professors Amar and Ayres at the outset of their piece.

First some numbers. From 1985 through 2009, resident tuition at public law schools increased by a staggering 820 percent—from $2,006 to $18,472 (non-resident tuition increased by 543 percent, from $4,724 to $30,413)—while tuition at private law schools went up by 375 percent—from $7,526 to $35,743. These increases far outstripped the rate of inflation. Had tuition merely kept pace with inflation, average resident tuition at public law schools today would be $3,945, less than a fourth of what it is, and average private school tuition would be $14,800, less than half of what it is. Law school would still be affordable if law schools had not extracted such a large premium over inflation.

Now let’s look at Yale. Tuition at Yale Law School was $12,450 in 1987; in 1999 it was $26,950; in 2011 it was $50,750—an increase of nearly $24,000 in just the last dozen years. Factoring in projected living expenses ($18,900), Yale students without scholarships (half of the class) who commenced their legal studies in 2010 will pay more than $200,000 to obtain their law degree. If the recent rate of increase continues, ten years hence tuition at Yale Law School will exceed $70,000 annually. That might sound impossible, but ten years ago many would have scoffed at the suggestion that that tuition at Yale would be $50,000 today.

Why is Yale law school responsible for the rise in tuition nationwide? As Henry Riggs, the former president of Harvey Mudd College, explains, “Tuition in the private higher-education industry is a classic example of price leadership—the ‘top players’ define the sticker price and all others follow suit.” Universities and law schools show the same pricing patterns: elite institutions charge the most, and others are priced below them in rough correlation with their ranking (with the exception that non-elite law schools in large legal markets are able to tack on a premium owing to their location). Tuition varies in relation to prestige—not costs—because the perceived value of the education affects how much students (and their parents) are willing to pay for it.

When Yale (and other uber-elites) raised its tuition each and every year by a significant amount, every other law school in the country rose as well under its wings. Law schools have raised their tuition every year because every other law school was doing the same, and students kept coming.

Yale bears special responsibility for the simple reason that it is the most elite law school and it ramped up tuition without restraint. By heedlessly raising tuition, other elites were able to do the same, and everyone else followed. If Yale had increased tuition by “only” $10,000 in the past decade, it is likely that average law school tuition nationwide would be $10,000 lower today. That is because other elite law schools could not price themselves significantly above Yale (Columbia tuition would not be at $50,000 today if Yale was at $40,000), and non-elite law schools could not price themselves above the elites. Tuition increases overall would have been more restrained.

Professors at elite law schools might ease their conscience about the extraordinary tuition increases in the past two decades by pointing to their generous loan forgiveness programs, made possible by the substantial wealth of their institutions. This of no help, however, to the 45,000 law students (annually) at the 190 or so law schools that offer little debt relief—students whose debt went up as a result of the tuition increases of the elites.

The folks at Yale can respond that they have exercised restraint, in the sense that they could charge much higher tuition and still fill their seats with the very best students. That is correct. Yale would still have students (from wealthy families) clamoring to get it even if its tuition was $70,000 today. But this response is valid only if uber-elite law schools deny any obligation to consider the broader social consequences of their actions.

Now, in fairness to Yale, it must be said that other law schools could have and should have restrained their own tuition increases. Yale is top of the line, charging top of the line prices that still give value to its students. Few law schools are in its league, however, and by jacking up their tuition along with Yale, other law schools, particularly non-elite private law schools, have come to charge far in excess of the value of their degree. Yale is not morally responsible for the actions of other law schools which followed their lead. Nonetheless, what happened was predictable and observable, and here we are.

The negative consequences of this extend beyond the mountainous debt many law graduates now bear. The most harmful social consequence wrought by law schools in the past two decades is the creation of an enormous economic barrier to a legal career.

A disheartening irony lies in this: The mantra of progressives is social justice; key aspects of social justice are equal opportunity for all, and access to law; most law professors on elite faculties (including at Yale) are progressives; by greedily raising tuition, however, elite law schools, and all the rest of us, have worked against social justice to an extent that might exceed all the aggregate good accomplished for progressive causes by liberals on law faculties. Students from middle class and poor families who are frightened by the size of the expected debt will not go to law school. We all but force graduates to seek corporate law jobs to manage their debt payments and our tuition-scholarship matrix has helped the wealthy consolidate their grip on elite legal positions.

The harm has already been done. If Yale law professors want to make a real difference going forward, they are uniquely situated to have an outsized effect: they can lobby their dean to declare a five year tuition freeze effective immediately. That would be a dramatic statement with industry-wide ramifications. Anything less than that is tinkering.
Posted 12:05 AM by Brian Tamanaha [link]