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

Monday, October 30, 2017

Private Law School Tuition Discount Rate Rose To 39% In 2016

Tuition DiscountingAccessLex Institute & National Association of College and University Business Officers, Tuition Discounting Study of Private Law Schools:

The practice of tuition discounting — providing institutional aid to select students to offset the price of attending a college or university — is widespread in higher education, and its use has increased over the past few decades. NACUBO annually collects tuition discount rates and other data related to discounting among undergraduates at private nonprofit institutions, but very little is known about discounting practices at law schools or other graduate/professional programs.

The 2016 NACUBO/AccessLex Tuition Discounting Study of Private Law Schools was commissioned by AccessLex Institute in part to provide more recent information on tuition discounting practices at law schools, and to measure the effects of discounting on law schools’ finances. The use of institutional grant aid to attract and retain law students has become even more important, as many programs have had to grapple with declines in their numbers of applicants and enrollments. This challenging context has prompted law schools to implement a variety of practices and policies to raise their enrollments, including increasing their financial aid expenditures.

The data in this brief are based on a tuition discounting survey NACUBO sent to 113 U.S.-based private nonprofit law schools, all accredited by the American Bar Association (ABA). Because only 36 of these schools responded to the survey, the findings should be interpreted in context and with caution towards applying them too broadly. Nonetheless, the results provide compelling data for discussion of tuition discounting and other financial aid practices at law schools and present a foundation for future discussion and research efforts.

Key findings include:

  • The overall average institutional tuition discount rate — essentially, the percentage of tuition and fee revenue schools used to fund their institutional grant aid programs — for participating law schools for all students enrolled in JD programs rose from 35 percent in Fall 2015 to 39 percent in Fall 2016.

Figure 9A

  • The participating law schools were divided into two groups: high and low tuition. The tuition discount at high tuition law schools increased from 33 percent in Fall 2015 to 38 percent in Fall 2016; over the same time, low tuition law schools experienced an increase from 37 percent to 39 percent.
  • Among first-year law school students (1Ls), the overall average tuition discount rate declined from 46 percent in Fall 2015 to 41 percent in Fall 2016. However, this varies by tuition group. Law schools in the high tuition group had a 1L discount rate that rose slightly from 41 percent in Fall 2015 to 42 percent in 2016. Low tuition law schools experienced a sharp 1L tuition discount rate decline over this period, from 51 percent to 39 percent.
  • About two-thirds of all JD students and three-quarters of 1Ls received institutional grant aid, on average, across all participating law schools. The student discount rate (the average institutional grant award as a percentage of the listed tuition and fee price) for all JD students rose slightly from 47 percent in Fall 2015 to 48 percent in Fall 2016. Over the same time, the average student tuition discount rate for 1Ls across participating institutions fell from 58 percent to 50 percent.
  • Rising discount rates appear to have had an impact on net tuition revenue. On average across all participating institutions, the net tuition revenue for all JD students in current dollars was essentially unchanged at about $30,000 per student in both 2015 and 2016. In inflation-adjusted terms, this represents a decline in net tuition dollars.
  • However, the average net tuition revenue from 1Ls across all participating institutions rose over the same time, from nearly $25,000 to slightly more than $27,000. Less than one third of institutional scholarships, fellowships and grant expenditures at participating law schools was funded by endowment earnings. The remainder was derived from tuition revenue, annual gifts and other unspecified funds.
  • About half of the law schools that responded to the survey reported a decrease in 1L enrollment from Fall 2013 to Fall 2016. The rate of change varied by tuition group, with only 38 percent of schools in the high tuition group reporting an enrollment decline, compared with 56 percent of schools in the low tuition group.
  • In addition, many of the responding schools reported falling demand (87 percent), increased competition (80 percent) and price sensitivity (73 percent) as reasons for decreases in 1L enrollment. The law schools that experienced an increase in their numbers of 1Ls attributed their gains to improved recruitment (88 percent) and increases in aid (69 percent).
  • Respondents were asked about strategies used to increase net tuition revenue. On average, participating law schools indicated plans to use new recruitment strategies (83 percent); improve their academic programs (61 percent); and change their student financial aid packages (58 percent).

When considering the trends in this brief, it is important to note that responding institutions may not be representative of all private nonprofit law schools. Still, this brief provides a basis for beginning to understand patterns of tuition discounting practices at private law schools.

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