NY Times: Law Schools Award Merit Scholarships to Recruit Students (and Goose U.S. News Ranking), And Then Take Them Away With Rigid Grading Curves

New York Times, Law Students Lose the Grant Game as Schools Win:

Like a lot of other college seniors, Alexandra Leumer got her introduction to the heady and hazardous world of law school scholarships in the form of a letter bearing very good news. The Golden Gate University School of Law in San Francisco had admitted her, the letter stated, and it had awarded her a merit scholarship of $30,000 a year — enough to cover the full cost of tuition.

To keep her grant, all that Ms. Leumer had to do was maintain a grade-point average of 3.0 or above — a B or better. If she dipped below that number at the end of either the first or the second year, the letter explained, she would lose her scholarship for good. “I didn’t give it much thought,” she said. “I didn’t think it would be a challenge.”

Her grades and test scores were well above the median at Golden Gate, which then languished in the bottom 25% of the U.S. News and World Report annual rankings of law schools.

How hard could a 3.0 be? Really hard, it turned out. That might have been obvious if Golden Gate published a statistic that law schools are loath to share: the number of first-year students who lose their merit scholarships. That figure is not in the literature sent to prospective Golden Gate students or on its Web site.

But it’s a number worth knowing. At Golden Gate and other law schools nationwide, students are graded on a curve, which carefully rations the number of A’s and B’s, as well as C’s and D’s, awarded each semester. That all but ensures that a certain number of students — at Golden Gate, it could be in the realm of 70 students this year — will lose their scholarships and wind up paying full tuition in their second and third years.

Why would a school offer more scholarships than it planned to renew?

The short answer is this: to build the best class that money can buy, and with it, prestige. But these grant programs often succeed at the expense of students, who in many cases figure out the perils of the merit scholarship game far too late. ...

Nobody knows exactly how many law school students nationwide lose scholarships each year — no oversight body tallies that figure — but what’s clear is that American law schools have quietly gone on a giveaway binge in the last decade. In 2009, the most recent year for which the ABA has data, 38,000 of 145,000 law school students — more than one in four — were on merit scholarships. The total tab for all schools in all three years: more than $500 million.

It’s a huge sum, particularly when you realize that merit scholarships were exceptionally rare at law schools a mere generation ago. But given that many students lose their grants after the first year, the question is this: What exactly are law schools buying with all of that money? ...

[A] lot of schools regard the rankings as their best chance to establish a place in the educational hierarchy, which has implications for the quality of students that apply, the caliber of law firms that come to recruit, and more. Striving for a high U.S. News ranking consumes the bulk of the marketing budget of a vast number of schools.

Which is where scholarships come in.

The algorithm used by U.S. News puts a heavy emphasis on college grade-point averages and Law School Admission Test scores. Together, those two numbers determine about 22%of a school’s ranking. The bar passage rate, which correlates strongly with undergraduate GPA’s and LSAT scores, is worth an additional two points in the algorithm. In short, students’ academic credentials determine close to a quarter of a school’s rank — the largest factor that schools can directly control.

So the point of most merit scholarship programs, [University of St. Thomas law professor Jerry] Organ said, isn’t merely to tempt prospective students who might otherwise not attend, though that clearly is one result. “What law schools are buying is higher GPA’s and LSATs,” Professor Organ said. In other words, the schools are buying smarter students to enhance their cachet and rise in the rankings. ...

Some elite schools don’t give any merit scholarships, and some give them conditioned only on maintaining good academic standing — which translates to “don’t flunk out.” But merit stipulations — or stips, as they are known by students — are used by 80% of law schools for which information is publicly available, Professor Organ found.

And it’s not just institutions in the bottom half of the U.S. News rankings. If your school is ranked 35th, perhaps you’re gunning for No. 30 and you can see No. 40 creeping up in the rear-view mirror. ...

The Wayne State University Law School in Detroit tells merit scholarship winners in congratulations letters that they will need a 3.25 G.P.A. to keep their grants, worth nearly $25,000 a year. That means students need to wind up in the top third of their class. But that information isn’t in the letter. ... [D]isclosing exactly how hard it is to get a 3.25 could diminish Wayne State’s appeal to students the school wants most, which could have real repercussions. So many schools are packed so tightly together in the U.S. News rankings that even minuscule gains and losses have an impact.

In the most recent U.S. News rankings, released in March, the median LSAT score at Baylor Law School in Waco, Tex., stood at 162, up two points from the previous year. But that small uptick is part of the reason the school rose to No. 56 in the rankings — up eight spots on the list of 190. How many of Baylor’s 1L’s are on merit scholarships? 90%, according to David Swenson, a professor who helped design Baylor’s grant program. Given the GPA requirements, he added, 8 out of 10 of those students can expect to keep the money next year. “It was an accident,” said Professor Swenson, when asked why the school offered more scholarships this year than it is likely to renew. A greater number of 1L’s than expected enrolled at Baylor last fall, he explained, making it the largest class in the school’s history. ...

As common as GPA requirements are, they often barely register in applicants’ deliberations. The very human tendency to overestimate one’s talents is part of the problem. Like the children of Garrison Keillor’s fictional Lake Wobegon, all incoming 1L’s seem to believe that they are above average.

Consider what happens at Chicago-Kent, the school that offers students less scholarship money ($9,000) if they want it guaranteed, and more ($15,000) if they can clear the 3.25 G.P.A. hurdle. Ninety percent opt for the larger and riskier sum, according to school officials. A “significant” number later lose their scholarships, says the school’s dean, Harold J. Krent. “The real issue is that students don’t think about this decision in the sophisticated way that you’d like them to,” he added. “A lot of students think, ‘Well, worst comes to worst, I’ll borrow the money,’ without realizing how painful it is to pay that money back over time.”

Credit Chicago-Kent with forcing students to consider a trade-off, at least for a moment. Other schools phrase their scholarship offers in lump-sum terms that seem to encourage wishful thinking.

“The maximum value of your merit scholarship is $105,914 over the course of your three years of full-time study,” read an offer from the George Washington University Law School. A few paragraphs later, it said “as long as you maintain a 3.0 cumulative G.P.A.” ...

Combine the optimism of students and the enticing language of law schools, then toss in the curve, and an inevitable result is legions of irate and disappointed 1L’s.

Popular student mythology has it that the ABA requires law schools to grade them on a curve. Not so.  But by loading up 1L’s with curved classes, Golden Gate and other schools all but ensure that the first year of law school is far more difficult than the two that follow. Which is another way of saying that for many merit grant winners, law school becomes easier, but only after it is too late. ...

A lot of livid graduates and some slightly mortified professors have lately been contending that law schools are misleading prospective students about the marketability of a doctor of jurisprudence.

But the ABA seems unaware of the issues raised by merit grants. Its annual survey of law schools is granular enough to ask for the number of hours the library is open, but it doesn’t ask how many students lose their scholarships each year.

The schools already know that number. Why not publish it?

“That is a good question, a legitimate question,” said Bucky Askew, who directs the ABA division that accredits schools. “It hasn’t been an issue brought to our attention. Nobody has written us, contacted us, to say, ‘This needs to be on the table.’ ”

Why is merit scholarship retention not part of the U.S. News data haul? “The main reason is that we haven’t thought about it,” said Robert Morse, who oversees the rankings. “It’s not a great answer, but it’s an honest answer.”

Then Mr. Morse thought about it. “This isn’t meant to be sarcastic,” he said, “but these students are going to law school and they need to learn to read the fine print.”

In a forthcoming paper, Professor Organ proposes a simple system of greater disclosure that, among other figures, would detail the number and percentage of students on scholarships in all three years.

(Hat Tip: Ann Murphy.) Professor Organ's paper is The Impact of Scholarship Programs on the Culture of Law School. Here is the abstract:

Law schools use scholarship programs to attract a variety of students, but many times such programs are driven by a desire to generate the “best” possible class profile based on LSAT and GPA, given that these factors play a significant role in the U.S. News and World Report rankings. This article documents the two types of scholarship programs widely in use among law schools in the United States – competitive renewal programs (in use at over 75% of law schools for which information was available) and non-competitive renewal programs (in use at fewer than 25% of the law schools for which information was available). It demonstrates why a competitive renewal program may be attractive (in terms of generating an entering class with a better LSAT and GPA profile), but also discusses some of the ways in which this type of program may have pernicious impacts on the learning community within the law school – the culture of the law school. It also makes recommendations for greater transparency and clarity when law schools make scholarship offers so that potential students can make better informed judgments regarding the investment they will be making when they choose a law school.

Update: Merit Scholarships, Grading Curves & US News as Law School Bait and Switch