Skip to content

August 6, 2013

Reflections on ABA Task Force Report, I: It’s the economics, stupid!

by Dan Rodriguez

One “highlight” (their words) of the report is the following:

“Law school education is funded through a complex system of tuition, discounting, and loans. Schools announce standard tuition rates, and then chase students with high LSAT scores by offering substantial discounts without much regard to financial need. Other students receive little if any benefit from discounting and must rely mainly on borrowing to finance their education. The net result is that students whose credentials (and likely job prospects) are the weakest incur large debt to sustain the school budget and enable higher-credentialed students to attend at little cost. These practices drive up both tuition and debt, and they are in need of serious re-­‐engineering.”

There is much to this observation, an observation that is unpacked in more detail elsewhere in the report.  Without question, most law schools are deploying tuition revenue to provide merit-based aid to a segment of the student body.  This represents, any way you slice it, some considerable redistribution from one group of students to another group.  We should be upfront about what we do; and, if and insofar as there are justifications for the practice, we should be transparent and self-critical.

In that spirit . . . let me offer a few thoughts about the practice and its critique:

1. Merit-based aid is not intrinsically suspect.  Law schools pursue the “top” students in order to improve their academic program and, as well, their academic reputation.  Prospective law students look to law schools with an eye — and more than one eye! — toward their academic stature and prestige.  No law school of which I am aware has eschewed scrupulous pursuit of prestige; and law schools remain relentlessly committed to admitting the best credentialed students they can.  Where things get off the rails is where the definition of “best credentialed” becomes excessively narrow.  Here the Task Force makes an assumption, not unwarranted, but exaggerated.  Merit-based aid is awarded, to the best of my knowledge and certainly in my law school, on the basis of various criteria.  LSATs matter; so does GPA.  Work experience matters greatly.  So does diversity, in its myriad forms.  We are committed to an admissions process which looks not only at marginal criteria — “is this particular student especially stellar?” — but at the configuration of the class as a whole.  Law schools frequently, and I would go so far as to say typically, look at a variety of factors (again, numerical credentials mattering greatly to be sure) in awarding their merit aid.  Let’s have a fully-informed discussion, based upon real data and “true confessions” from law schools about how aid is distributed before we jump quickly to the conclusion, as the Task Force does, that the system is corrupt or at least deeply flawed;

2. But let’s get to the core question of how law schools deal with student need.  Here we have a problem on our hands, and the Task Force rightly hones in on this problem.  Quite simply, there is seldom enough aid money to go around and law schools do indeed prioritize merit aid when making these choices.  Need is addressed principally through student loans.  And thus the cycle of high student indebtedness is reinforced, seemingly with no end in sight.  The Task Force, and other critics, are quite right to push law schools — all law schools — to consider how to deal with student need more constructively.  Loans cannot be the panacea here.  The only sound road ahead, in my view, is for law schools to pursue actively and tirelessly funding from outside tuition to support, through scholarships and equivalent support, students who have the right stuff, but who are priced out of the law school market.  There is no panacea here either, but there are sources to which we all need to look.  One place, of course, is major fundraising from alumni and friends of law schools.  Not a new idea of course, but the pressures on current and prospective law students make systematic, large-scale fundraising an imperative.  To put a finer point on it, law school deans who will not or cannot raise significant dollars for their law school should be asking the hard question, and indeed leading the debate, about whether the economic model of their law school can be sustained.

For the public law schools, there are some hard questions which legislators in the states must answer regarding the level and durability of commitment to public legal education can be maintained.  There is a bad pact at work here:  Law schools use students’ tuition to subsidize their programs and to allocate aid (often to those less needy); and legislators avoid their own commitments to public education by shifting the burden onto the law schools and universities.  This is not sustainable.  While the ABA Task Force focuses its ire on the law schools, there are real questions to be addressed to legislatures, to lawyer alumni who are in a position to help address the predicament of student debt and financial need, and to other segments of society who have a stake in law schools succeeding.

Is this blame the victim?  Not at all.  We should say, candidly, that the solution to these deep financial problems lies in concerted action by law schools, legislatures, alumni, and other stakeholders.  Students are not the problem; rather, they are future of our profession and that future is a bleak one if we leave the needy ones without access to high-quality legal education;

3. A central problem is the high rate of tuition.  That’s absolutely right.  Law schools need to think strategically and transparently about how they are going to deal with the fundamental fact that high levels of tuition, in circumstances where aid resources are limited, are keeping needy students from attending law school.  We have made some modest efforts in this regard.  Maybe too modest.  But I welcome other law schools to make at least equivalent steps to moderating tuition increases or even considering lowering tuition.  (And if there are some efforts underway which I have missed, I would be glad to know about them).  Still and all, law schools are differently situated.  It is seldom useful to look at the matter wholly across the board.  What we want to know is not necessarily why LAW SCHOOLS charge such high rates, but why one or another law school (private or public) charges what they do.  In the main, it is the discount rate — the actual charge to the students over the sticker price — that illuminates the key issue.  In an effort to describe an omnibus problem, the Task Force report elides this more nuanced set of considerations.

The Task Force is to be commended for shedding additional light on the problem.  My essential point is that the problem is more complex than can be captured in the objection that “law schools redistribute student tuition for noxious reasons.”

Read more from Legal Education

Comments are closed.