Paul L. Caron

Wednesday, February 19, 2020

Muller: Are Most Law Schools Losing A Million Dollars a Year?

Derek Muller (Pepperdine), Are Most Law Schools Losing a Million Dollars a Year?:

MullerI tracked down 990 data for 14 law schools. Nine of these law schools reported seven-figure losses (“revenue less expenses”) for at least one of the last two fiscal years. The median loss in 2017 was $1.5 million; the median loss in 2018 was $720,000. My goal isn’t to call out particular schools in this post, so I anonymized the schools.

You’ll notice that some schools experienced dramatic swings from one year to another. A sizeable gift, a sale of property, a restructuring of debt are all among the possible reasons why one year’s net revenue may have increased significantly; a tranche of funds for faculty buyouts or scholarships may decreased it; a sharp swing in student enrollment may shift it in one direction or another. That might limit the value of making any overall comparisons.

Now, of course, the caveats. 990 data comes mostly from stand-alone law schools, which are not representative of all law schools.

(University 990 data typically doesn’t break out sub-units like law schools.)

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Two anecdotes:

- I forget what the exact number the University of Minnesota Law School copped to losing over the last decade, but it was into the eight figure range.

- My law school, which pled dire poverty to justify large annual tuition increases with minimal tuition discounting when I was there, now has a median discount of like $40k and more than a quarter of the student body is getting a full ride or greater. So either its earlier pleas of poverty were horsesh*t designed to indebt us to our eyeballs, the school is now really in the red discounting the law degree down to its true worth (i.e. next to nothing), or the school is being nigh completely underwritten by the parent university at this point.

Posted by: Unemployed Northeastern | Feb 19, 2020 2:04:05 PM