Sunday, December 8, 2013
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.
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.