Harvard for Free?

January 17th, 2016 / By

I rarely vote my ballot for the Harvard Board of Overseers but I may have to do so this year. A group of candidates is running on a two-plank platform: (1) make tuition free for all undergraduates, and (2) disclose information about admissions decisions that would reveal (among other things) the role of race and legacy status in admissions.

Whoa, those are two goals rarely paired. The candidates are similarly diverse. One member of the slate is Ralph Nader, who is known for his far-left views. The other four publicly oppose affirmative action. What should we make of this?


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How Deans Should Game the Above the Law Rankings

May 1st, 2014 / By

The popular legal news website Above the Law just announced its 2014 Top 50 Law School Rankings. ATL’s methodology focuses exclusively on outcomes: only jobs, total cost, and alumni satisfaction matter.

I generally disfavor rankings. Ranking systems appeal to a desire for clear answers even when clear answers don’t exist. Through a simple list format, rankings project the appearance of authority and value even when they provide neither.

Inherent issues aside, ATL’s rankings at least focus on elements that should and do matter to prospective students. As a result, the ATL rankings incentivize schools to act in ways that measurably help students. That’s a welcome change.

If you’re a law school dean that wants to increase its standing in the ATL rankings, here are the two most critical steps:

1. Lower Tuition

The ATL rankings factor in total educational cost, which combines living expenses, tuition, inflation, and the interest accumulated during law school. Unless a law school moves across the country, student living expenses are relatively inflexible. To compete on the education cost metric schools must either lower tuition or convince ATL to use net price instead of sticker price.

In using sticker price, ATL penalizes schools that use a high tuition, high discount model. That’s basically every school (but maybe changing). Schools that shift to a more transparent pricing model will benefit in next year’s rankings without taking in less tuition revenue.

2. Maintain or Reduce Class Size

Although class sizes are not directly measured by the ATL rankings, each employment metric either controls for graduating class size (SCOTUS clerkships; Article III judges) or relies on an employment percentage for which graduating class size is the denominator. Graduating class size is a function of incoming class size, net transfers, and students dropping out or taking longer to finish school than anticipated.

Smaller incoming classes demonstrate a modicum of social and professional responsibility in a visible manner. This buys trust from incoming students. But the urge to take more transfers to generate more revenue must be appealing these days as schools try to make up for lost 1L revenue. After all, transfers pay more, do not impact LSAT or GPA medians, have low marginal cost, and integrate rather silently. Large transfer classes also seem appealing if you believe that enrollment cuts have been too deep—an increasingly common, yet disturbing belief.

Due to ATL’s methodology, schools cannot hide from enrollment levels that adversely affect employment outcomes. Neither can schools make up for over-enrollment by funding jobs for graduates. As such, resisting the temptation to grow enrollment will benefit schools on rankings that unapologetically penalize schools for graduating too many students into a crowded entry-level market.

* * *

Schools game rankings. That’s just a basic fact about modern higher education. At least with ATL’s rankings, gaming the rankings produces measurable, positive results for students and the profession. It sure beats an incentive to burn money on blackacre to secure a higher ranking.

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Colleges Cut Tuition Costs

May 9th, 2013 / By

As the Wall Street Journal reported earlier this week, four-year colleges have been increasing their tuition discounts. According to a survey conducted by the National Association of College and University Business Officers, the average discount rate rose to 45% for this year’s freshmen. On average, therefore, colleges collected a little less than half of their list-price tuition from first-year students. That steep discount caps seven straight years of deepening discounts.

This news provokes several thoughts. First, colleges are caught on the same tuition-scholarship merry-go-round that law schools ride. We raise tuition, then raise scholarships–although never quite as much as tuition. Students pay more, and everyone is confused about what tuition really is.

Second, this tuition-scholarship shuffle transfers money from some students to others. Colleges offer more need-based grants than law schools do, but they provide plenty of “merit” scholarships. Colleges purchase high SAT scores, just as law schools buy impressive LSATs. Some day, I hope, educators will look back at this era and shake their heads at the sordidness of buying scores from paper-and-pencil tests that are taught in high-priced prep courses.

Third, the steady rise in tuition discounts suggests that parents and students are reaching their limit. They either can’t pay any more for higher education or they won’t. Colleges are moderating tuition increases while offering more scholarships.

That leads to a final question: What does this portend for law schools? When these freshmen apply to law school, will they be willing to pay higher tuition because colleges gave them a bigger break? Will their families have some cash in reserve to help fund law school? Or will these price-sensitive students demand even more discounts from law schools?

Responses may differ. Some students may be willing to pay more, while others remain stingy. A lot can happen in both the economy and higher education before these freshmen apply to law school. My guess, however, is that the steadily increasing discount rate for college tuition means that students are more concerned about the value of their higher education. That means that they may examine law school more closely as an investment and that, if they decide to apply, they will expect more discounts.

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Lowering Tuition

April 6th, 2013 / By

The University of Arizona James E. Rogers College of Law is reducing tuition for in-state residents by eleven percent. Non-residents are receiving an eight percent decrease. The Board of Trustees unanimously approved both reductions on Thursday. What does the reduction mean for Arizona and other law schools?

I welcome the tuition reduction, as I’m sure current and prospective students do. Arizona’s cost-cutting is just a small step in rolling back the steep rise in law school tuition, but it’s a worthwhile one. Arizona residents will pay $3,000 less per year for their legal education, while non-residents will pay $3,500 less. If students are borrowing that money, as most do, they will also save interest that accumulates at high rates. A non-resident who is borrowing money to attend the University of Arizona’s law school will save about $12,350 in tuition and interest over three years.

On the other hand, even a savings of $12,500 is relatively small given the overall cost of legal education. The University of Arizona estimates its current cost of attendance as $50,295 a year for residents and $65,306 for nonresidents. That’s a hefty $150,885 to $195,918 for three years. Cutting out $9,000 to $12,500 helps, but it’s a minor assist. As Brian Tamanaha commented, the reduction is not nearly enough to “align cost and economic return for the majority of students.”

The reduction, however, does have two other effects. First, it will help other schools gauge reactions to tuition cuts. Will prospective students respect Arizona’s move as one that, in addition to conveying modest financial benefit, signals a commitment to student interests? Will Arizona attract more and better students through its tuition reduction? Will alumni, employers, and the public similarly applaud Arizona’s attempt to rein in costs?

Or will these audiences see the reduction as a fire sale, suggesting desperation and cheapening Arizona’s reputation? Legal educators have speculated about the latter attitude during the last few years. Arizona’s decision will help test whether this is a realistic fear–or simply one of self interest in resisting tuition reductions.

Second, Arizona’s action represents a small step away from merit scholarships. The school has announced that it will pay for its tuition cuts partly by reducing scholarship awards. Some prospective students (those who would have received high scholarships) thus may pay more with the tuition “cut” than they would have under the status quo. Students who would not have received scholarships, however, will pay less. Overall, the program will ease the “reverse robin hood” effect that many have criticized in today’s law school admissions process. Students with lower LSAT scores may still subsidize higher scoring classmates at the University of Arizona, but the subsidy won’t be quite as large as it was before–or as it may be at other schools.

How will other schools respond to this step toward tuition equity? Many law faculty dislike the current scholarship system, which encourages the purchase of LSAT scores and GPAs to bolster US News rankings. Yet schools have resisted change, worrying that individual action would lead to a lower rank.

With this tuition reduction, Arizona seems willing to risk that step. Will Arizona’s bravery demonstrate that lower tuition, combined with lower scholarships, is possible without losing rank? If Arizona does suffer in the rankings game, will the school adhere to its policy–showing other schools that pedagogic mission sometimes must trump rank? Surely we would all be better off choosing students and awarding financial aid with less obsessive attention to LSAT scores. Either way, I await further reactions to Arizona’s move.

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Tuition Breaks for Externships

January 3rd, 2013 / By

I’ve grown to like the idea of workplace externships. Properly supervised, students can learn quite a bit from an externship. Today’s employers undeniably want that type of proven experience in new hires. Working at an externship also puts a student “on the spot” when an employer wants to hire. Externships won’t create jobs, but they may make a school’s graduates more competitive for the ones that exist.

On the other hand, I’m a bit queasy about charging students tuition while they work somewhere else for free. That seems like a negative wage, rather than a minimum one. When an externship constitutes just part of a student’s course load, and the school charges a flat fee for full-time students, the concern is small. It costs the school something to supervise the externship, the student’s marginal cost may be zero, and we don’t differentiate other credits based on the number of students in the class, the professor’s salary, or other cost factors.

But what about externships that consume an entire semester? Or ones that occur during the summer? For these externships, students pay high fees for the privilege of providing free workplace services. Here, as Northwestern’s Dean Dan Rodriguez suggests on PrawfsBlawg, tuition reductions might be appropriate.

Sure, the school will lose revenue from those students but the market is going to force us to reduce the cost of law school attendance in one way or another. We already subsidize lots of law school credits through scholarships. Reduced-cost externships are just another targeted means of reducing tuition–and it’s a mechanism that might prove quite attractive to students.

Suppose, for example, that a school told every student: “We provide one no-cost summer externship to any student who wants one. We’ll help you find a suitable placement, provide appropriate classroom instruction, and award up to 5 hours of credit–all with no tuition charge to you. You can take advantage of this externship opportunity after either your first or second year; joint degree candidates may use the opportunity during any semester of their degree program.”

To me, that seems like an attractive way to discount tuition. It tells prospective students that a school recognizes the importance of workplace experience and will help every student obtain that opportunity. A strong externship program can also complement a school’s career services office: the ties with externship organizations can yield regular placement opportunities. And alumni are likely workplace supervisors, solidifying their ties with the school.

How much would this cost a school? You would have to include (a) the costs of externship supervisors, including the time they would spend identifying good externship oppportunities; (b) any charges the central university would impose on these subsidized credits; and (c) forgone tuition from students who would use summer credits to graduate a semester early. In past years, relatively few students have used summer credits to graduate early, but that number may increase in coming years.

For full-semester externships the calculus is similar–except that the risk of forgone tuition is closer to certainty. Few students enjoy law school so much that they will stay for a seventh semester. Still, as pressures mount to reduce the cost and length of law school, a no- or reduced-cost externship semester could draw students to a particular law school.

What other costs and benefits do you see? Are there other ways to structure externships to serve students and keep down educational costs?

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ABA Journal Blawg 100 HonoreeLaw School Cafe is a resource for anyone interested in changes in legal education and the legal profession.

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