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Saturday, August 18, 2012

NLJ: Law Schools Jack Up Tuition 4%-6% Despite 14% Decline in Applicants

National Law Journal:  Tuition Is Still Growing:  Despite Lagging Law School Applications, It Vastly Exceeds Inflation:

It's Supply and Demand 101: When demand for a product drops, prices fall to lure back buyers. But this fundamental law of economics doesn't apply to law schools. The number of applicants to U.S. law schools declined drastically during the past two years, yet the average tuition this fall will climb by more than double the rate of inflation.

Average tuition and fees at private law schools will increase approximately 4% over last year to $40,585, according to an examination of published rates by The National Law Journal. That's the first time private-school rates have crossed the $40,000 threshold. In-state resident students at public law schools will see a 6% increase on average, to approximately $23,590. Inflation is running at about 1.7%.

The tuition increases come at a tenuous time for legal education. Nationwide, the number of applicants has declined a cumulative 25% during the past two years, and some law schools have responded by slashing the size of their incoming classes. Growing debt loads and declining job prospects have been major factors taking the shine off a J.D. ...

Twelve law schools — all public — posted double-digit increases. The highest percentage climb this year was at the University of the District of Columbia David A. Clarke School of Law, at 19%, although its tuition and fees will remain among the lowest in the country at $11,265. The University of California, Davis School of Law and the University of California Hastings College of the Law plan the largest dollar increases this year, each topping $3,000.

The tuition increases would seem to ignore the U.S. News & World Report rankings — small and large percentage tuition increases appear to be fairly evenly distributed among high- and low-ranking law schools.

"I'm not shocked by the numbers, but I'm horrified," said Ohio State University Michael E. Moritz College of Law professor Deborah Jones Merritt, who has begun blogging on University of Colorado law professor Paul Campos' blog Inside the Law School Scam. "It's professionally irresponsible. Law schools have a responsibility to our students and their futures, which includes not raising prices as much as we can." ...

Of course, a law school's listed tuition doesn't tell the full story. Anecdotal evidence suggests that scholarship money is more plentiful than ever this year as law schools compete to fill their seats. For example, the University of Illinois College of Law has offered some scholarship money to every admitted student. ... The growth of scholarship money, meanwhile, is exacerbating a phenomenon ... [referred to] as the "Reverse Robin Hood" — admitted students with the lowest academic credentials pay tuition and end up subsidizing educational costs for the highest-performing students.

NLJ Chart 1

National Law Journal, What Deans Have to Say About Tuition:

Law schools' tuition increases will range as high as 19% this fall, with private schools averaging a 4% bump and public schools increasing by an average 6%. The National Law Journal spoke with deans about the factors driving their schools' tuition levels.

  • Drexel (Roger Dennis)
  • Florida (Robert Jerry)
  • Syracuse (Hannah Arterian)
  • UNLV (Nancy Rapoport)

Update:  Deborah Jones Merritt (Ohio State), News of the Day:

It's time for law schools to wake up and smell the burning toaster.  We have been raising tuition--substantially--while our applicants have been getting poorer and their job prospects have been dwindling.  We are continuing to raise prices as applicant demand falls.  These are not wise business strategies.  Worse than that, these actions are professionally irresponsible -- in the old-fashioned, non-technical sense of the phrase.

Law school professors and administrators hold the keys to the legal profession:  We decide who gets to enter the profession and how much they pay for that honor.  Over the last three decades, we have continuously raised prices to the point where we take for ourselves most of the economic benefit conferred by a legal education.  For a growing number of graduates, we have exceeded that level; attending law school leaves those graduates worse off financially than they would have been without the degree.

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Comments

Public university major’s in harvesting money, education taxes. University of California Berkeley is nationally ranked #1 public university total academic cost (resident) as a result of the Provost Chancellor goal to ‘charge Californians higher tuition’. UC Berkeley tuition is rising faster than costs at other universities. Cal ranked # 2 in faculty earning potential. Believe it: Harvard College less costly.

University of California negates the promise of equality of opportunity: university access, affordability is farther and farther out of reach. Self-absorbed Chancellor Birgeneau, Provost Breslauer are outspoken for public Cal. ‘charging Californians much higher’ tuition. Chancellor, Provost leave an indelible legacy on access, affordability.

Birgeneau ($450,000) Breslauer ($306,000) like to blame the politicians, since they stopped giving them their demanded funding. The ‘charge Californians higher tuition’ skyrocketed fees by an average 14% per year from 2006 to 2011-12 academic years. If Chancellor Provost had allowed fees to rise at the same rate of inflation over the past 10 years they would still be in reach of most middle income students. Breslauer Bergeneau increase disparities in higher education and defeat the promise of equality of opportunity. An unacceptable legacy.

Additional state tax funding should sunset. The sluggish economy and 10% unemployment devistate family education savings. Simply asking for more taxes to fund self-absorbed Cal.senior leadership, old inefficient higher education practices, excessive faculty staff compensation and burdensome bonuses, is not the answer.

UC Berkeley is to maximize access to the widest number of Californians at a reasonable cost. Birgeneau’s Breslauer’s ‘charge Californians higher’ tuition’ denies middle income families the transformative value of Cal.

The California dream: keep it alive and well. Fire (honorably retire) Provost George W Breslauer. Birgeneau resigned.

Opinions? UC Board of Regents marsha.kelman@ucop.edu Calif. State Senators, Assembly members.

Posted by: Milan Moravec | Aug 18, 2012 4:45:50 PM

U.C. Berkeley is the number 1 ranked university in many things. You can see U.S. News rankings for Berkeley here:

http://colleges.usnews.rankingsandreviews.com/best-colleges/university-of-california-berkeley-110635/overall-rankings

They have the best law school of any public university, (U. VA. is very good, but not quite as good as Berkeley). They have the best business program, the best engineering program, the best computer science program, the best programs in many hard sciences. They are without a doubt the best public university in the country, and one of the best universities in the country, period.

That costs money to maintain.

If top faculty are not recruited and given adequate resources, they will leave. Many already have amid budget cuts.

Compare the cost of U.C. Berkeley to comparably ranked private law schools--NYU, U Penn, Chicago, etc. The costs are well in line with the quality.

If you want tuition to keep going up--or quality to go down--then by all means, reduce public support. The money will have to come from somewhere, and the only alternative to tax revenue is tuition.

So if you really want to pay more in tuition so that people richer than you and your family can pay less in taxes, by all means, vote Republican!

Or course, Berkeley isn't doing anything to reduce social mobility. They are increasing it, because a degree from Berkeley pays for itself many times over.

And if you don't want to pay for quality, you can always go to a community college. They are cheap, the education is low quality, and the graduates don't do very well.

You get what you pay for.

Posted by: Anon | Aug 18, 2012 7:59:58 PM

And yes, public support for higher education has declined dramatically in California. Between 2004 and 2010 (after adjusting for inflation) state and local government support for higher education per full time student declined 13.7 percent.

California ranks very low in it's level of support for higher education--29th, even though California is one of the richest states in the country. To put this into context, Mississippi, the poorest state in the Country, provides more public support per student than California.

However, the fraction of the cost of higher education borne by students (net tuition as a percent of higher education revenue) is exceptionally low in California--only 23 percent, the 5th lowest in the country.

It's increased dramatically over the last 6 years from 15% in 2004, because of local and state government cutbacks.

The Census Bureau has all of the data on their website. See for yourself.

Posted by: Anon | Aug 18, 2012 8:12:05 PM

As for the claim that management salaries are driving tuition increases:
http://budget.universityofcalifornia.edu/?page_id=5#compensation
------
Myth: The real problem is the salaries being given to UC senior managers.

Fact: Senior management salaries represent less than 1 percent of the total payroll at UC. Salaries have been frozen for the senior management group, and bonuses or incentive payments have been canceled or deferred.

Senior managers are subject to the furlough program, which went into effect on Sept. 1. The furlough days are based on a sliding scale ranging from 11 to 24 days, with those making the highest salaries taking the greatest number of days off without pay. The unpaid furlough days amount to pay reductions of 4 to 10 percent. Senior managers, regardless of the level of their pay reduction, will only be allowed to take off a maximum of 10 days.

UC has continued to hire personnel to fill certain mission-critical positions. For example, the university recently hired a chief financial officer, at a salary well below the going rate for CFOs, to ensure strong financial management and help lead the search for additional savings.

Another individual was asked to fill two vice presidential positions, but to do it for the salary of one, which saved the university $320,000.

There is an important difference between a “raise” and a promotion into a position with broader responsibilities (as when a faculty member takes on the responsibilities of a dean). Most compensation actions coming to the Board of Regents are either new hires or promotions to fill critical vacancies.

The university needs to be able to pay market wages to attract and retain quality people. Job markets are different for different employment groups. All groups deserve respect and a competitive wage, but the university will need to pay more for certain jobs than it does for others.

The university has been working to address market gaps across the institution. For example, salaries for UC service workers are now comparable to and, in some cases, higher than similar positions in the California State University system.

-----
Myth: Senior-level salaries are the cause of rising student fees.

Fact: Student fee increases are the direct result of failing state investment in higher education. Financial aid resources are being expanded to help reduce the impact.

The primary reason student fees rise is related to the level of funding UC receives – or doesn’t receive – from the state. Nearly every fee increase for the last 19 years has been directly related to a reduction in state funding. The decline in the state’s funding for per-student education at UC – from 78 percent of the total cost of education in 1990 to 48 percent today – has been partially addressed by student fee increases. No one likes it, but it has been necessary to maintain the quality of the academic program and student services.

UC works to administer an aggressive financial aid program to reduce the impact of fee increases for many students. In 2008-09 more than half of UC undergraduates received grant and scholarship assistance, averaging $11,100 per student.

And UC remains a national leader in its enrollment of low-income students: More than one-third receive federal Pell Grants. In 2009, UC created the Blue and Gold Opportunity Plan. This financial aid program ensures that grants will cover systemwide fees for California resident undergraduate students with financial need and household incomes of $70,000 or lower in 2010-11. Due to expansions of financial aid programs and federal tax credits, undergraduate students with family incomes below $180,000 will experience financial resource increases to cover the full amount of the mid-year 2009-10 fee increases.

Posted by: Anon | Aug 18, 2012 8:28:57 PM

Ah,

The Anon troll reveals a layer - he works in the UC system (who the hell else would know or care this much about their system?). Perhaps Dean Chemerinsky is trolling TaxProf in a vain attempt to support his horribly ill-advised venture in Irvine.

Posted by: Ah - | Aug 19, 2012 10:17:27 AM

"They have the best law school of any public university, (U. VA. is very good, but not quite as good as Berkeley). "

UVA >>>> Boalt. It isn't even close. And at least UVA is trying to control costs. Want more welfare and debt? Vote Democrat.

"Or course, Berkeley isn't doing anything to reduce social mobility. They are increasing it, because a degree from Berkeley pays for itself many times over."

I think you mean "of" course, but for the 40% or so of Boalt grads that aren't working or are working at school funded jobs, they will never have a career.

I agree we get what we pay for, pensions and welfare for the intelligentsia that couldn't work a private sector job if their life depended on it. Do you really think the professor at Boalt specializing in Law and Gender Identity would ever get a real job at Latham?

Posted by: UVAgrad | Aug 19, 2012 11:29:44 AM

UVa Grad,

I fully support your school pride, and I think UVa is a great school. But let's look at the numbers. For the last 5 years, Berkeley has either outranked or tied U.Va on U.S. News rankings. Berkeley has far more SSRN downloads and is higher on Leiter citation rankings.

Most importantly, Berkeley does better on NLJ 250 big firm placements, so the idea that U.Va. is better for business law is simply not consistent with the data.

U.Va is wonderful on all of these measures, and is a fine school. But Berkeley is even better.

You can see the bios of the U.C. Berkeley faculty for yourself. Many of the faculty have significant private sector experience, at firms equal to or better than Latham, or at corporate clients that hired the likes of Latham. Many also have government experience--in both Democratic and Republican administrations--including John Yoo of the infamous Bush administration "Torture Memo."

So the idea that Berkeley is some kind of refuge for left wing politics is really quite out of touch with reality.

Posted by: Anon | Aug 19, 2012 1:22:13 PM

The UVA deckchair provides a much better view than the UC Berkeley deckchair.

Posted by: Anonymous | Aug 19, 2012 4:23:34 PM

Anon,

"Literary theorist" Judith Butler is paid nearly $237,000 by UC Berkeley. (http://www.sacbee.com/statepay/)

Now tell me UC students aren't prize fools making a small in-group of faculty and administrators rich.

Posted by: FC | Aug 19, 2012 5:42:06 PM

Thanks for the update, taxprof. Excellent points as always from DJM. Much better than anything that Anon writes.

Posted by: Anonymous | Aug 19, 2012 6:56:00 PM

You can see the breakdown of U.C.'s budget here:

http://budget.universityofcalifornia.edu/?page_id=1120

Most of the revenue comes from the medical center and government research contracts, not student tuition, which accounts for only 13% of revenue.

As for Ms. Butler's salary, She brought in the $1.5 million Mellon award.
http://berkeley.edu/news/media/releases/2009/03/19_butler.shtml
So external funding is covering her salary, an then some. Is there any evidence that her compensation is out of line with that of her peers at other institutions, or that she does not attract enough students or grants to more than offset the cost of her compensation? Columbia just offered her a position, presumably at equal or greater pay, so her compensation seems to be at the market rate for her services.
http://www.capitalnewyork.com/article/culture/2010/11/760690/professor-trouble-post-structuralist-star-judith-butler-headed-columb

You can see information about UC compensation here:
http://www.dailynexus.com/2011-09-23/uc-faculty-scrutinizes-salaries/

The highest paid individual is the football coach ($2.3 million), not anyone who does anything remotely academic.

The highest paid academic is a nobel prize winning medical researcher, who earn one third as much as the football coach.

Why is the football coach paid so much?

Because the students and alumni donors care more about being entertained by muscle-bound young men in colorful uniforms chasing and slamming into each other than about curing Alzheimer's disease or Parkinson's.

I'm not sure I understand their priorities, but perhaps Ms. Butler's research can shed some light on it.

Posted by: Anon | Aug 20, 2012 4:08:39 AM

watch this as to why college is so expensive.

http://www.youtube.com/watch?v=FDiIhG9L0MA23:00 to 30:00

Posted by: zman | Aug 21, 2012 12:43:23 PM