Paul L. Caron

Thursday, April 19, 2012

LSAC Jacks Up Fees 15-31% to Students in Light of Decline in LSAT Test Takers

LSACNational Law Journal, LSAT Volume is Down, So Fees Are Going Up, by Karen Sloan:

Taking the Law School Admission Test is getting more expensive. The Law School Admission Council, which administers the test, has raised the testing fee from $139 to $160 — a 15% increase.

A significant decline in LSAT test takers in recent years prompted the increase for the 2012-13 testing cycle, Daniel Bernstine, the council's president [2009 salary: $635,694], announced in a newsletter. The council typically raises the fee in line with inflation, with the annual increases during the past 10 years falling between 2% and 5%. "It is now time for us to correct our fees in light of new volume realities, and to align them more closely with the true value of those services to law schools and their applicants....,"

The number of tests administered peaked during the 2009-10 cycle at 171,514. It fell by nearly 10% the following year, and by another 16% during the 2011-12 cycle.

The LSAT fee isn't the only cost going up. The cost to applicants of using the council's Credential Assembly Service, a centralized system that allows law school applicants to easily apply to a number of schools, is going from $124 to $155 — a 20% increase. Past increases have ranged from zero to 3%.

Additionally, applicants will pay $21 for each school applied to — an increase from the current $16 [an increase of 31%].

Council administrators said that the level of service provided to applicants has grown over time — making the process more convenient and worth the extra money.

[LSAC reported $51,298,416 of revenue on its 2009 Form 990.]

LSAT Blog, LSAT Test Registration Fee Increase: Why?:

In a normal, well-functioning market, when demand decreases, prices drop accordingly. However, when it comes to the fees associated with attending law school, the reverse is happening. What's going on? ...

Now that interest in law school is dropping (from an all-time high of 602,252 applications in 2010 to a projected 484,576 in 2012), LSAC needs more money in order to fulfill the purpose for which it exists. Rather than trying to get that money primarily from law schools, or by attracting new applicants, LSAC's squeezing it from the applicants who've chosen to stick around.

However, "the beatings will continue until morale improves" may not be the most effective strategy. While LSAC is the only game in town when it comes to law school admissions, applicants do have other options for post-undergraduate opportunities.

(It's worth noting that top business schools began accepting scores from the relatively cheaper GRE as a GMAT alternative in 2006. The Graduate Management Admission Council hasn't raised the price of the GMAT since 2005. Perhaps the competition has kept the price from rising.)

In a shrinking market, both LSAC and law schools are in desperate need of more law school applicants to stay afloat. Law schools, in particular, are looking to maintain their admission standards and keep the tuition dollars coming in. They can make far more money per student than LSAC can.

Maybe, just maybe, law schools should be picking up more of LSAC's expenses, rather than law school applicants.

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Funny that folks distinguish the LSAC from law schools themselves. The LSAC is a membership non-profit and the members are all accredited U.S. and Canadian law schools. Most law school folks also don't realize that, in addition to the costs of producing a first-rate standardized test, a large chunk of the costs incurred by LSAC are subsidies or services that directly benefit its law school members or that function as transfers to assist prospective applicants from disadvantaged groups. In this sense, the LSAC really is (as Nate notes in his comment) like a utility for law schools. So, LSAC "rates" will naturally want to move in ways that look like utility rates. The fundamental question is this: would law schools be willing to give up the services LSAC provides in return for a true "market" model of LSAT and credential assembly pricing to law school applicants? My guess is that most Deans who look at it closely would answer "no".

Posted by: Lionheart | Apr 24, 2012 10:28:30 AM

As you say, LSAC is the only game in town. At what price can they charge before the "goose squeal too loud", or potential applicants don't apply to law school because of the cost of the admissions test. I would estimate that price somewhere between $500 and $1,000

Posted by: JJW | Apr 20, 2012 6:53:56 AM

Or maybe it might be a good idea for the law schools to set their own tests.

With their own professors grading them.

The whole LSAT world is collapsing and the smart schools will take advantage of the market opportunity to find their own version of the best and the brightest (to quote my idiot vice-dean, Robert Pritchard, on opening day at UofT.).

Posted by: Jay Currie | Apr 19, 2012 11:26:30 PM

Oddly, that's like utility rates. When demand goes up, rates go up due to the law of supply and demand. When demand goes down, rates go up because they still have to pay fixed costs. In the case of the LSAC, those "fixed" costs are probably administrators/bureaucrats.

Posted by: Nate Whilk | Apr 19, 2012 7:10:41 PM