TaxProf Blog

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

Tuesday, May 2, 2017

ABA Task Force Chair:  The Problem Of Law School Discounting — And What To Do About It

Tuition DiscountRandall T. Shepard (Chair, ABA Task Force on the Future of Legal Education), 2016 James P. White Lecture on Legal Education: The Problem of Law School Discounting — How Do We Sustain Equal Opportunity in the Profession?, 50 Ind. L. Rev. 1 (2016):

[M]any schools decided to get ahead of the applicant trend and shrink the size of incoming classes. The number of first-year matriculants shrank by 30% over a period of five years. To maintain even these numbers, many schools admitted students whose applications reflected lower measurable qualifications than those admitted in earlier, happier years. A fair number of schools took actions similar to those private enterprise might take but are pretty rare in education: hiring freezes, staff layoffs, and faculty buy-outs.

There has been yet another shift, driven partly by the drastic decline in demand, and partly by the rising tide of competition, made ever more fierce by the rankings issued each year by U.S. News & World Report (“U.S. News”). This shift has to do with student financial aid. ...

The extent of [tuition] discounts has grown over the last decade, both in law schools and in universities more generally. ... [This] shift away from offering financial aid on the basic of the economic need of the applicant and instead allocating aid on the basis of the applicant’s measurable credentials, particularly the applicant’s score on the Law School Admissions Test (“LSAT”) and grade point average (“GPA”).

This shift away from need-based aid has been going on almost from the moment that U.S. News began to issue rankings. Just twenty years ago, nearly 60% of the financial aid given to law students was based on the financial need of the individual students and their families. There’s reason to believe that as we sit here today, less than 20% is dispensed solely on the basis of need.

While merit aid surpassed need-based aid for the first time during the 1990s, that trend accelerated during the first decade of this century. [Fn: From 1999 to 2000, 56% of all aid was merit-based. A decade later, merit-based aid ballooned to approximately 84% of total aid.]  ... 

Because median LSAT score and median [undergraduate] GPA are so important to the current rankings, law schools have largely abandoned other measures of merit or need in awarding financial aid. This can have the effect of shifting financial aid to those students with LSAT scores that will assist a school in achieving its target median for rankings purposes. The result is that students with the greatest financial need often are relegated to heavy borrowing to attend law school

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