Paul L. Caron

Tuesday, May 29, 2018

University Of Minnesota Law School Seeks $3.6 Million Increase In Subsidy To Maintain Top 20 Ranking

Minnesota LogoFollowing up on my previous post:  Minnesota Star-Tribune, University of Minnesota Law School Seeks Subsidies to Maintain Top Ranking; Regents Bemoan Repeated Requests After Years of Shrinking Enrollment

For six years, the University of Minnesota law school has been struggling to make ends meet in the face of a historic drop in enrollment.

Now it’s asking the Board of Regents for an extra $3.6 million next year to help cover its red ink. And that has triggered a debate about how much the U is willing to spend to ensure that it remains one of the nation’s top-ranked law schools.

Garry Jenkins, the dean, is quick to point out that things are starting to look up for the law school. Applications are up and tuition dollars are on the rebound for the first time in years, he said. But he and other university leaders say the extra funds are needed to get through a few more lean years and maintain the quality of the law school, which is No. 20 of 194 schools on the influential U.S. News and World Report ranking. ...

But some regents are growing weary of the law school’s repeated requests for help, after pumping in $17 million in subsidies to cover its year-end deficits since 2013.

“Don’t get me wrong, I want to be in the top 20,” said Regent Michael Hsu. “I’d rather be in the top 10 if we could pull it off. But the question is, at what cost?”

In his proposed budget, U President Eric Kaler is calling for a one-time infusion of $1.9 million, plus a $1.7 million increase in its annual appropriation, to help balance the law school’s budget next year. The regents are scheduled to vote on the request June 8. ...

The U law school faced a dilemma, Jenkins explained: remain highly selective and enroll fewer students, or lower its admission standards, which would fill more seats but hurt its national ranking. The U chose to preserve its reputation as a top-flight school, and its entering class shrank by almost a third, from 259 students to 176, between 2010 and 2016.

To save money, the law school laid off staff, eliminated programs and even cut pay for tenured faculty, according to Jenkins, who became dean in 2016.

“We’ve cut about $6.7 million from our budget,” he said. “But we can’t solve this problem through cuts alone.”

The law school started asking the regents for help in 2013 and has since received a total of $17 million in one-time transfers, along with an extra $7.5 million in annual appropriations.

Two years ago, the regents were assured that the end of the crisis was in sight. David Wippman, who was then dean, predicted that the law school would be back on its feet, and the subsidies would end, by 2020. But now, officials say that was overly optimistic. ...

Some regents vented their frustration at a meeting May 10, when they were briefed on the law school’s latest request.

“The bottom line for me is the cost of this subsidy,” said David McMillan, the board chair. “[It’s] beginning to get to the point where it’s too painful for other elements of the university to continue to bear.”

He noted his “sympathy for the plight they’re in,” but added that his patience was wearing thin. “In short, I’m in for a little bit longer, but not much.”

Darrin Rosha, a regent who graduated from the U law school in 1996, said the school needs to find ways to solve its financial problems “so we’re not asking some undergraduate from Cokato to subsidize one of our professional schools.”

MPR News, Law School Reckoning: University of Minnesota Wants More Subsidies to Stay Selective:

The University of Minnesota Law School is still trying to recover from a big dip in enrollment. And the university's Board of Regents is weighing how best to help the law school while not taking too much from the university's other programs. ...

According to numbers provided by the university, applications to law schools nationwide fell 36 percent between 2010 and 2017, and fell by 53 percent at the U over that same period. Through that decline the U of M was faced with a difficult decision — increase the number of students, or keep their admissions standards high and accept smaller classes

The U chose to maintain its standards, and continue to be ranked in the top 20 law schools in the country. ...

Since 2012, the U of M's central administration has been helping the law school with a yearly subsidy that's now grown to around $7.5 million a year. And earlier this month, Jenkins had to ask for another increase in that subsidy over the next three years.

The plan, presented to the university's Board of Regents in early May, would slowly increase the subsidy a total of $4.5 million to the law school through fiscal year 2021. A report given to the regents projects the school would have a structurally balanced budget and reserves to cover tuition revenue fluctuations by 2023.

At a May 10 meeting, a number of regents said they were unhappy with the law school's request for more money. Especially as the U administration is also proposing a two percent hike in resident tuition for Twin Cities undergraduates.

"The bottom line for me is the cost of this subsidy ... is beginning to get to the point where it's too painful for other elements of the university to continue to bear," said Regent David McMillan. He said he wants the law school to do well, but doesn't want to see a subsidy continue to grow. ...

Some regents also asked why the school doesn't lower its standards a bit to allow more students in and bring in more tuition revenue. But some students argue keeping the U selective is a better move.

"That's undoubtedly a signal to smart, hardworking students around the country," said Devin Driscoll, a 2018 law school grad, who went to college and worked in Rhode Island before coming to Minnesota. "Once they come here they find this is an amazing place to work and to play and to raise a family. And I do agree that maintaining our status as a top 20 law school should be a goal."

University Provost Karen Hanson said the law school's reputation is a strength for the entire university. "If we can we need to fix the financial problem in a way that doesn't jettison an important, high-quality component of our university," she said. "We have to balance our budget, but the mission of the university is not the budget, the mission is research and service." ...

The Board of Regents will vote on the overall school budget, including funding for the law school, at its meeting next month.

Diverse Issues in Higher Education, University of Minnesota Law School Requests Funding Increase

Prior TaxProf Blog coverage:

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If you need a subsidy to stay in the Top 20, you're not in the Top 20.

Posted by: mike livingston | May 29, 2018 7:31:35 AM

@Mike Livingston,

I doubt U Minn is alone here. I took a look at Georgetown Law's 2011 and 2017 ABA Form 509s the other day; the large increase in students receiving tuition discounts is, on its face, costing them several million dollars in revenue.

Posted by: Unemployed Northeastern | May 29, 2018 9:00:05 AM

Given that USN&WR's law school rankings weights "faculty salaries" as 20% of a school's ranking, you gotta pay up to get up (the ladder).

Time for UMinn to close the law school. This is NOT a game for public institutions.

Posted by: Kneave Riggall | May 29, 2018 1:36:54 PM