TaxProf Blog

Editor: Paul L. Caron, Dean
Pepperdine University School of Law

Friday, February 17, 2017

Anderson:  Law School Scholarship Policies — Markets Or Social Engineering?

Robert A. Anderson (Pepperdine), Law School Scholarship Policies: Markets or Social Engineering?:

Quite a few law school commentators have been talking about the 2016 annual report of the Law School Survey of Student Engagement (LSSSE). The report provocatively calls law school merit scholarship policies "engines of inequity." In his Foreword, Frank Wu says that law school scholarships cause a "'reverse Robin Hood' revenue model in which the poorest students are being forced to subsidize their wealthier peers." Aaron Taylor parrots virtually the same line word-for-word in his "Director's Message." It's unclear who copied whom. The basic gist of the report is that law school scholarship policies favor students with higher LSATs who tend to have higher socioeconomic backgrounds, etc. The authors see this as a scandalous outcome.

It is true that many students come out of law school hopelessly indebted with poor prospects for financial independence. However, very few students are being "forced" to subsidize anyone, because of some basic facts that the report doesn't mention. The report makes it sound as if a student with a high LSAT will receive scholarships everywhere and a student with a low LSATs will not receive scholarships anywhere. In reality, however, most applicants with a given LSAT will receive a generous scholarship from some schools and will receive no scholarship (or not even be admitted) to other schools. It is the student's choice of whether to attend the higher-ranked school with no scholarship or the lower-ranked school with a scholarship that will determine whether he or she graduates with high debt. Of course, the more prestigious school is enticing, but there's a price to pay for attending it. ...

[W]hether a student graduates with high debt or not is primarily within that student's own control. Students who are willing to attend a less prestigious school will generally graduate with less debt and higher in the class. Because law school prestige tapers off very quickly, attending the best school you can get admitted to regardless of cost is generally only a good strategy at elite schools. Below the top-50 or so schools, it is much better to graduate higher in the class at a lower-ranked law school than vice versa.

The bottom line is that the LSSSE report seems to endorse social engineering perspective that would ignore market forces and pay out scholarship money based on need. The most elite schools with overflowing resources are able to adopt policies like that. But most law schools are not immune to market forces. They exist within markets just like the rest of us. The key for law school applicants to understand the market forces and to make decisions that will pay off for them. If the authors of the report were primarily concerned about student debt load instead of using law schools "engines" of social change, this is the advice they would give to prospective students.

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