Over the last several years I have published two articles focused on net tuition trends across law schools in the period since the Great Recession. Net tuition is an approximation of the tuition per student after accounting for scholarships. The first article focused on the period through 2014-15; the second article focused on the period through 2016-17. This blog posting carries forward the analysis of net tuition trends through the 2018-19 academic year, highlighting that law schools still have not regained much pricing power yet. This blog also looks at likely trends carrying forward from the 2019-20 academic year.
What happened between 2010 and 2016?
The first article, Net Tuition Trends by LSAT Category from 2010 to 2014 with Thoughts on Variable Return on Investment, discussed here on TaxProf Blog, focused on net tuition trends among first-year students in different LSAT categories between 2010 and 2014. It noted that while average net tuition had increased roughly 10% for first-year students with LSATs of 165 or higher and those with less than 145, net tuition had declined significantly (12% or more) for first-year students with LSATs of 155-159 and for those with LSATs 150-154, and had declined modestly for first-year students with LSATs of 160-164 and those with LSATs of 145-149 (roughly 5% and 3% respectively).
The second article, Competitive Coping Strategies in the American Legal Academy: An Empirical Study, discussed here on TaxProf Blog, focused, among other things, on net tuition trends across private law schools between 2010 and 2016, looking at private law schools in three broad categories based on reputation derived largely from entering class credentials. While all three categories of private law schools saw declines in net tuition through 2016, law schools in the middle reputational category saw the largest net tuition decline (roughly 16% compared to roughly 5% for the reputationally strongest law schools and roughly 6% for reputationally weakest law schools). (This study used inflation-adjusted figures in making net tuition calculations.)
What is the simple story between 2010 and 2016? In the face of a declining applicant pool, and an applicant pool that also weakened in terms of the LSAT composition of the applicant pool, law schools became much more competitive in trying to attract students, particularly students with stronger LSAT/GPA profiles, by greatly increasing their scholarship offers. Between 2011 and 2016, the percentage of all law students on scholarship increased from slightly less than 50% to nearly 70%, while the average median grant went from slightly more than $13,000 to nearly $17,000. As a result, as reflected in the two articles identified above, net tuition at the vast majority of law schools declined during this period.
What Happened in 2017-18 and 2018-19?
What has happened since the 2016-17 academic year? Is the tuition discounting that law schools engaged in through 2016-17 sustainable?
The admissions cycle for the 2017-18 academic year did not see a meaningful increase in applicants to law schools (56,400 — roughly the same as in the two previous years). The admissions cycle for the 2018-19 academic year, however, not only saw the first meaningful increase in applicants in several years (60,700 applicants up nearly 8%), it also saw an increase in the relative strength of the applicant pool. (This trend continued into the 2019-20 admissions cycle (63,000 applicants up nearly 4%) with a further strengthening of the applicant pool.)
If one were of the view that the tuition discounting in which law schools have been engaged is “unsustainable,” one might expect that in the face of a growing applicant pool (and particularly an applicant pool that has grown stronger), law schools might take advantage of this increased “demand” to increase net tuition. But the available data suggest that net tuition has increased only modestly across 2017-18 and 2018-19. Somewhat surprisingly, most of that increase was in 2017-18 rather than 2018-19.
Charts 1 and 2 are drawn from the net tuition dataset compiled by Law School Transparency. I downloaded all of the net tuition data for the 2012-13 to 2018-19 academic years to look at changes over time. I focused only on private law schools (given the challenges of calculating net tuition for public law schools with resident and non-resident tuition and an unknown mix of resident students and non-resident students).
I broke the private law schools into four categories based on USNews rankings using the March 2013 published rankings. I then integrated enrollment data to calculate weighted averages for net tuition and changes in net tuition over time across all the law schools in a given rankings category. Note that the net tuition calculations are based on the entire student body, not just first-year students, as the ABA requires law schools to report scholarship and grant data across all JD students.
Chart 1 — Weighted Average Annual Percentage Changes in Net Tuition
Across 109 Private Law Schools in Four Rankings Categories
Between 2013-14 Through 2018-19 (Source: LST Net Tuition Tables)
August 17, 2020 in Jerry Organ, Legal Ed News, Legal Education | Permalink
| Comments (0)