Paul L. Caron

Tuesday, June 19, 2012

Tamanaha: How and Why Law Schools Take From the 99% to Give to the 1%

The Daily Beast op-ed, Law Schools Fudge Numbers, Disregard Ethics to Increase Their Ranking, by Brian Tamanaha (Washington U.):

Law schools will always manipulate whatever metric U.S. News employs in its ranking, ethics be damned. But ethics for the moment aside, the most harmful consequences wrought by these machinations lie beneath the surface. To increase their LSAT medians, law schools have shifted the bulk of scholarship awards away from need-based to merit-based. In other words, students from wealthy families used to pay full price, while students from less well-off families would receive scholarships. Now those who score below the median on the LSAT are the ones paying full fare, while those who score above get financial aid, whether or not they need it.

It’s a reverse-Robin Hood redistribution scheme: Since well-off students tend to do better on the LSAT due to advantages throughout their education (including their ability to afford test prep courses that improve their LSAT score), the students likely to earn the least in their careers end up defraying the educational expenses of the students who will earn the most. This manner of allocating scholarships also systematically funnels students from wealthy families to higher-ranked schools and students from middle-class families to lower-ranked schools (you can forget about the poor). ...

It is inevitable that the elite legal positions in the coming generation —- in the Supreme Court, Justice Department, corporate bar, and law professoriate —- will be dominated by children of the wealthy. Pursuing prestige and revenue without heed to the consequences, legal educators are responsible for this. Yes, the rankings are a part of it, but in the end they are just numbers; human beings choose how to use —- or misuse -— them. The sad irony is that many law professors are liberals who claim to fight for the less privileged in society, yet through our own conduct we are further enhancing the advantages of the one percent.

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Essentially, the posted "sticker price" for a school is wildly different than the effective average sticker price. It's a bimodal distribution of tuition that reflects the bimodal (or trimodal if you include unemployed JDs) salary distribution of entry-level legal jobs.

There really is no need for this smoke and mirrors game. Instead of transferring money from lower-credentialed students to higher-credentialed students, just lower sticker price for everyone and fund scholarships some other way.

Posted by: BoredJD | Jun 22, 2012 11:05:31 AM

If it were the school's own money, coming out of endowment funds, there would be no problem with this; it would be a valid policy choice to support high-achieving students. But here, the schools are essentially adopting a policy that transfers federal student loan money from well-credentialed students to those with lesser numbers. It keeps tuition high in the process, adds to the overall debt burden of graduates, and will cost taxpayers more in the end. Look at the Hastings CFO report (available here: UC Hastings is pretty typical of the schools that follow this policy, and it is taking in $43 million a year in federal student loans and distributing $13.1 million a year as "grants" to well credentialed students. That is 30% of school's federal-loan revenue. If the government wants to use its funds to subsidized students with high LSAT scores it should do so directly through the political process--letting the school act as a middleman creates a typical "other people's money" scenario.

Posted by: CBR | Jun 20, 2012 9:23:25 AM

So why did Tamanaha leave a "99 percent" school to go to a "1 percent" school?

Posted by: michael livingston | Jun 20, 2012 3:21:30 AM

What's the problem? Merit is rewarded. Tuition fees are not used to redistribute income or for social engineering. Wealth is being transferred from one generation to the next through education and competence, rather than trust funds. This is good news.

Posted by: DEK | Jun 19, 2012 3:42:52 PM

Are the scholarships set up to assist low income applicants, or are they set up to reward scholastic achievement? If we are interested in rewarding excellence and investing in success, it would seem 'scholar'ships should support superior 'scholars'.

Posted by: Owain | Jun 19, 2012 9:22:56 AM

Really missing the point. All college educations cost the same. So the ones with high starting salaries cost the same as the ones with low starting salaries. If student loans were like other loans where future value is considered when determining the amount of the loan, then the lower paying ones would get less loan money.

So the worthless college degrees that many students pursue, students who continue on life to become 99%ers, actually subsidize the 1%ers' education!

Posted by: sgmstv | Jun 19, 2012 9:05:39 AM

The key question here is, what should be the goal of law school admissions?
One plausible goal, which used to be the American standard, was to attract the students who would make the best attorneys, namely, the applicants that seemed best and brightest.
Another plausible goal is to help the poor and the unqualified to improve themselves.
The effect of merit based admissions is to encourage the best credentialed to apply which furthers the first goal. It also encourages all applicants to work hard to become well credentialed.
The aim of need based scholarships is to further the second goal. Unfortunately encouraging less qualified students sometimes fails to achieve that goal, producing some students who fail to graduate and others who make less successful lawyers, at the expense of their clientele.

Posted by: Daniel | Jun 19, 2012 9:02:49 AM

Law schools are paying for what they want and, in this rare instance, they want merit. I think it's refreshing.

Posted by: DRJ | Jun 19, 2012 8:03:47 AM

In the full article, Tamanaha first blames the role of the LSAT in the rankings because students from rich families can afford prep classes and do better.

Then he blames U. Ill. for admitting students based on their grades and not their LSAT scores to move up in the rankings.

So is the problem that it is unethical to use the LSAT? Or is the problem that it is unethical to NOT use the LSAT?

Or are law schools just unethical no matter what they do because Tamanaha said so?

Posted by: Anon | Jun 19, 2012 6:46:22 AM

Does this mean Tamanaha will be donating all of the proceeds of his book, plus his research stipend, plus the value of the charitable deduction to create scholarships for academically mediocre students from poor families to attend law school?

How will he pick the students who receive the scholarship? Only the neediest and most academically mediocre need apply?

Posted by: Anon | Jun 19, 2012 6:35:59 AM

Tamanaha can't seem to decide what he believes, other than law schools are evil. Especially law schools that are lower ranked than his.

Law school are bad because:

A. They charge too much and their students don't make enough money. The lower ranked law schools are especially bad because their students, on average, make less money.

B. They charge too little and offer too much scholarship to the smartest students, who go on to make too much money. The lower ranked law schools are especially bad because they do the most to offer scholarships to the smart students, who go on to make as much money as the students from the top law schools, and with lower debts.

C. The top schools are especially bad, because they accept money from students who are both smart and rich instead of accepting more students who are either poor or academically mediocre (or both!)

Posted by: Anon | Jun 19, 2012 6:26:28 AM