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Sunday, December 8, 2013

Public Law School Tuition Cuts Are Less Than Meet the Eye

Matt Leichter, Iowa’s Unimpressive Tuition Cut:

The University of Iowa College of Law’s tuition cut for resident students is getting a slew of good press, so I can’t resist the temptation to be a contrarian buzz-kill. Of the five tuition cuts I’ve been able to document, Iowa’s is only less trivial than Arizona's. Next year resident tuition at Iowa will cost about as much as it did way back in … 2007-2008. Behold.

Public Law School Tuition Cuts (2012 $)

Part of the problem with price deflation is it’s self-sustaining. Even if a school can successfully signal a price cut to applicants, and that hasn’t been established, then potential purchasers are motivated to hold back and wait for its price (or its competitors’) to drop again. Even if you (wrongly) believe that law school significantly increases people’s productivity—and tuition cuts raise the question of what previous students were really paying for—a drop in costs is an increase in the earnings differential per se and therefore worth the wait in many cases. Law schools need students more than potential applicants need law schools.

http://taxprof.typepad.com/taxprof_blog/2013/12/public-law-school.html

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Comments

Mr. Leichter needs to look up "collective action problem" and "prisoner's dilemma."
Sure, it could make sense for potential law school applicants to collectively hold out until tuitions go much lower. But exactly how is anyone going to organize and enforce this? Once tuitions become attractive enough relative to opportunities in the legal field (and competing opportunities elsewhere), applications will rebound, regardless of whether, in theory, tuition could go lower, even much lower.

Posted by: Anon22 | Dec 9, 2013 12:48:10 AM

Anon22, there's no reason that waiting for lower tuition needs to happen collectively. The point is that individual prospective students, acting alone, are likely to defer entering law school until prices drop further. If they continue to defer enrollment, then by definition tuition has not "become attractive enough relative to opportunities in the legal field."

Posted by: Anon63 | Dec 10, 2013 5:35:42 PM