Thursday, May 11, 2006

A Peculiar Fairness Issue Brewing In Law Schools

Brian Tamanaha

An annual rite of spring in law schools is the (quiet) announcement of tuition increases for the new academic year. Tuition goes up every year in law schools around the country, generally in a range between 5% and 10%; sometimes less, sometimes more, but rarely not at all. At my own institution, to offer one example, tuition has about doubled in the past decade.

Deans have plenty of explanations for this: the exploding costs of technology and libraries; the expenses of running clinics, holding conferences, and retaining and attracting big name faculty; increasing scholarships for students; problems with fundraising in hard times; and public schools subjected to budget cuts from legislatures. This is all true (and let's not leave out large increases in Dean salaries).

We might also, in a moment of candor, add that we each increase tuition because every other law school is increasing tuition as well, so why not go with it. And students keep showing up at the door, at least so far.

One has to wonder, however, how long this can continue, as we collectively sprint past $30,000 per year (not counting expenses) and beyond. The economic value of a law degree for graduates from elite law schools, and for top students from non-elite law schools, would seem to handily justify the price. A law degree for these favored individuals is a ticket to $130,000+ starting salaries in corporate law firms, with the prospect of much more down the line.

But what about the overwhelming majority of law graduates (all those not in the favored categories above) for whom a law degree offers a far lower earning potential? There is a large separation in the practicing bar, superbly documented in Heinz, et. al., Urban Lawyers (Chicago 2005). Corporate lawyers are doing well, but, while tuition keeps going up, salaries for the rest of the lawyers out there have decreased in real terms.

This brings me to the fairness issue. A peculiar system has developed in many non-elite institutions, in which the students most likely to make the least money end up subsidizing the legal education of the students most likely to make the most money.

The way "merit" scholarships work, students with high LSAT scores--which law schools covet in the effort to shape their profile for the purposes of U.S. News rankings--get large discounts (with some paying no tuition at all). It is not the case, of course, that high LSAT students always rank at the top of the first year class, or that the lower LSAT students end up at the bottom half of the class. But when it does happen (often enough), the result is that the lowest ranked students pay full price, while the highest ranked students pay much less. And the lowest ranked students get the worst paying jobs (and sometimes no job), while the highest ranked students get the best paying jobs.

This system is understandable--and one can come up with an argument that the lower students benefit from the system as well because maximizing the LSAT profile of the law school enhances the value of their degree (though that does not mean they will make any more money)--but it is also, well, perverse.

Elite schools are off the hook on this, because they don't have the same dynamic, but any law school outside the top twenty will have some version of it.


While I doubt anything can slow the US News & World Report induced tide, I agree that this is a dreadful system. I previously worked at a law school where most students piled up huge debts. A handful of students got plum jobs each year, and in many cases, these were indeed the students who paid the least tuition. The others got low-paying law jobs, or low-paying non-law jobs.

I think that for the most part, this is a very real phenomenon, and as strange as you describe. But the general world you're describing is one in which every student's goal is to maximize income. What about students whose dream careers lie in government and nonprofit work - the 'public interest kids'"? For them, elite schools without merit scholarships and with poor loan repayment programs are a terrible deal. For those students, taking scholarships at lower-ranked schools may be the only way to ever afford the job they want.

This could all be solved, or at least made better, by decreasing the amount of "straight" merit scholarships, and increasing the funding for scholarships for high numbers AND high financial need, or high numbers AND a proven dedication to public service (going beyond those who say "I want to work for the ACLU" to those with impressive experience). Then it seems we would be subsidizing those who really need it, either because they don't have money now or won't have as much in the future. But perhaps it would cause a slight slippage in those precious US News medians...

I think this captures only part of the dynamic.

For example, what about the fact that the high earners are more likely to give money back to the school, so the school is better for all (given that tuition pays only a fraction of total education costs).

Also, what about the fact that the few who raise the prestige level of the school (by U.S. News and otherwise) thus have the effect of:
a. increasing the chances that the school will some day be elite and
b. increase the earning potential of lower ranked students at those schools

Finally, consider that some top students could use the money as well. In fact, a top student that picks a non-top school in order to get a merit scholarship might very well need the money, even if earning capacity is greater.

A problem with "need based" scholarships is that they can be gamed. Because of the age of the applicants, no parental financial information (let alone grand-parent information) is gathered and a student may well present a "needy" profile when in fact there is little need at all. Further, for a student who works for a couple of years to "save up" for law school is penalized for his or her industry and thrift.

That isn't to say that there aren't students who have very genuine needs. In theory part-time programs are one answer, but they are, in general, looked down upon by ivy league types. (After all, that's how Warren Burger got his education and who wants more of his type!) And, one could make an argument that law school budgets are bloated (compare the ratio of faculty and of support staff for most law schools today with the ratios in the 1950s--and in those years law schools were able to educate very successful lawyers and judges. Of course the faculty course load was a lot higher, and who wants those bad old days again.) Some selective pruning in costs might give, in effect, a scholarship to every student.

I'm not sure how the tale you tell (which I don't doubt is true) is any different from that told in other disciplines. My niece just graduated magna cum laude from a good university, has been admitted to the top PhD program in her field, is being paid to get her PhD (financial aid well in excess of tuition, fees, and books), and will probably get a plum job offer if she performs as expected. Her fiancee graduated closer to the middle of his class from the same university, did not get into a top program in his field, is only getting enough financial aid to cover the difference between resident and nonresident tuition, and will be lucky to get a teaching job (probably at a community college or as an adjunct) in the same state as my niece.

Nearly twenty years ago, I was offered a $20K/yr.- plus-tuition-and-fees fellowship from a top 20 Ph.D program. I don't think they were trying to game the U.S. News rankings (if they even existed), I think they were trying to get me to come there rather than pay to go one of the more highly-ranked program where I had been accepted.

What's wrong with rewarding merit?

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I'm assuming that for a certain range of LSAT scores (I'll posit 160+), any student has a chance to go to a lesser school on the cheap (lesser being relative to his/her own LSAT, measured by the USNews rankings) or pay the full amount to go to a more highly ranked school. If I'm right it seems like the fairness issue is less compelling that the post suggests since it represents a reasoned decision made by the student. Students might often make poor decisions, but that seems neither here nor there.

Obviously a significant chunk of actual and potential law students fall out of the scholarship range (whatever it actually is). Even for them, though, the incentives of the current system are about right, trumping concerns about fairness. Lord knows there's no need to entice more people into law school, particularly those that are least likely to end up as successful lawyers.

Assume that LSAT proxies grades, which together proxy legal ability; why shouldn't the less-able subsidize the education of the more-able? If the system, as it is, induces more competent people to enter the practicing bar and contribute in whatever way they wish, isn't it better?

Additionally, merit scholarships for the best and brightest free their hands to NOT pursue corporate law if the wish, in effect allowing them to consider so-called "public interest" law as an alternative career path.

How is this a "fairness" issue at all? The tuition at law schools is known in advance. Many students with low LSAT scores, low GPAs, or both, are happy to pay it (and would gladly pay far more to attend schools that did not accept them--a friend of a friend swore she would pay "millions" for a Yale degree). This is nothing more than schools sweetening the deal for the best students they admit. "Need based" scholarships make no sense for professional schools.

I'm confused. Under what definition of the word fair are you operating? If fairness in terms of scholarships at law schools is defined as "the rewards ought to be doled out to those with best numbers," what is happening is perfectly fine. If fairness is defined as a Rawlsian ideal that society ought be organized so that those who are most disadvantaged ought to be the beneficiaries of social policy, well then you're right. I'm not sure how you expect the definition of "fairness" under which you operate to be the universal one.

Furthermore, if we look at this in strictly value-for-value terms (even leaving the value of a boost in US News rankings aside), it's not so unfair even under your own definition of the term. The students with scholarships are bringing in pretty high value for everyone in the school. I am not a lawyer, but I've done some LSAT's for fun (geek, I know) and they seem to be a decent measure of intelligence. Given that LSAT's are likely correlated with intelligence and high levels of knowledge, aren't the students with high LSAT's (and hence scholarships), providing a benefit to the other students? I would think that everyone benefits by having lots of smart people around. I'm not sure what monetary value we ought to associate to this, but I think that at this point, we're just haggling over price.

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