Friday, February 15, 2013
Average tuition at private law schools has increased from under $8,000 in 1985 to around $40,000 this year, growing at more than twice the rate of inflation. Graduates have an average law school debt load of over $100,000. This has become an extremely troubling trend as the job market for law school graduates has declined.
Many factors have contributed to this trend, but none more than the impact of competitive forces in general, and the U.S. News & World Report rankings in particular. I suspect that before the rankings began, schools could have charged considerably more, but self-retraint prevented that. In one sense, what U.S. News has done is to incentivize law schools to lose that self-restraint. This is not to "blame" U.S. News or to deny reponsility for our own decisions. However, in order to understand why schools have increased tuition so much, we must carefully consider the effects of U.S. News. ...
Will law schools begin to cut tuition? With demand for our services down, and with great competition between schools, that would seem logical. However, higher education does not seem to follow this aspect of supply and demand. Very few schools have frozen tuition. Many other schools have slowed tuition increases to around the rate of inflation. Schools are continuing to aggressively court segments of applicants with merit scholarships. I know of no law school, though, that has reduced nominal tuition. An explanation for this is that charging somewhat less than competitors does not really accomplish much for a school. ...
Law schools are getting smaller, but as I have discussed, this has a lot to do with rankings. There is no similar self-interest in cutting tuition and even if there were, doing both that and enrolling fewer students would be extremely difficult. It is unlikely that a dean could convince his or her university to accept such a recommendation.
It is possible that external forces will force tuition down. The federal goverment might make eligibility for federal student loans depend on cost-control measures. If more states follow the path of the state of Washington and licence people without a J.D. to do some of the work that until now only lawyers could do, there will be downward pressure on tuition. If the ABA liberalizes its accreditation standards requiring fewer in-class hours or fewer full time faculty, for example), big changes might occur in the cost of legal education.