Average tuition at private law schools has increased from under $8,000 in 1985 to around $40,000 this year, growing at more than twice the rate of inflation. Graduates have an average law school debt load of over $100,000. This has become an extremely troubling trend as the job market for law school graduates has declined.
Many factors have contributed to this trend, but none more than the impact of competitive forces in general, and the U.S. News & World Report rankings in particular. I suspect that before the rankings began, schools could have charged considerably more, but self-retraint prevented that. In one sense, what U.S. News has done is to incentivize law schools to lose that self-restraint. This is not to "blame" U.S. News or to deny reponsility for our own decisions. However, in order to understand why schools have increased tuition so much, we must carefully consider the effects of U.S. News.
Why U,S. News Matters
Rankings are widespread in higher education. In legal education, rankings seem to have more influence than in other disciplines (this may be why tuition has increased at a somewhat higher rate at law schools than in higher education in general). Perhaps this is because law in particular, is a hierarchichal, status-conscious profession. In some disciplines, there are more or less credible rankings done by several different entities, which dilutes the impact of any one of them. While there are a number of rankings of law schools, none has nearly as much influence as U.S. News.
Too many legal educators become obsessed with U.S. News. I have seen a few deans campaign for their position promising to game the system to move their school up. Others have issued a press release when they move a handful of spots (needless to say, there is usually silence when a school moves down).
But you do not have to be obsessed with U.S. News to feel its force. All of our constituencies - university presidents and trustees, faculty, students, alumni and employers - care to some extent about our standing in the world as reflected in the rankings. I have been dean when my school has moved up and when it has moved down; I can tell you that moving up is much better.
Prospective and current students are willing to pay a great deal more tuition to attend a higher ranked school, at least when the difference is more than a few spots. My school is currently ranked 67 in U.S. News. Virtually no one who is accepted by a school in the top 50 chooses to enroll with us, even though we are likely offering them a substantial scholarship. Choosing to enroll in a top 50 school may cause a student to incur as much as $90,000 in additional debt. They do so presumably because they think it will be good for their careers. In the other direction, hardly anyone we accept chooses to enroll in a school ranked below around 90. In addition, many students give up scholarships after the first year to transfer to a higher ranked school.
How U.S. News Increases Costs
Law schools have always cared about the prestige that comes from being highly regarded by judges, lawyers, students and legal academics. Soon after U.S. News began ranking law schools in 1989, it became the most visible indicator of prestige. It did not take schools long to begin trying to affect the various factors that go into the ranking. The most heavily-weighted factor is the reputation survey sent to four members of each school's faculty. Schools have tried many things to increase their standing in that survey, including glossy mailings hailing their accomplishments, increasing the amount of scholarship produced by their faculties (which has been achieved by increasing the size of the faculty, reducing the teaching expectations of some faculty and recruiting highly regarded scholars from other schools). Not surprisingly, with most schools following the same pattern, very few have actually succeeded in raising their reputation survey ratings. But this effort has been a major cost driver.
The grades and LSAT scores of incoming students are also major factors in U.S. News. As a result, schools pay more attention to these credentials than ever. Many schools now spend massive sums on scholarships aimed at luring students with higher credentials. The proliferationi of these merit scholarhsips has unfortunately contributed to a major reduction in need-based financial aid. And it has encouraged schools to increase tuition overall to pay for these scholarships.
Let me pause here for a moment to describe how hard it is to resist these trends. Imagine you were dean of a law school some time after U.S. News took hold. Soon you realize that you are losing many of the best type of students you had been attracting in recent years. Why? Because another school in your city or region, ranked around where you are, has begun offering them large merit scholarships. You could choose to ignore the trend and allow the quality of your student body to decline. Or you could begin to offer such merit scholarships yourself. If there is a viable third choice, I don't know what it is.
The focus on recruiting highly credentialed students has also been a cause of another big factor in law school tuition increases: the expansion of law school administrative staffs. Departments that provide valuable student services - career services, student affairs, financial aid, technology - have grown rapidly in the rankings era.
A final example of U.S. News' influence on tuition (although there are many more) is that 10% of its ranking methodology is based on expenditures per student. How this relates to quality U.S. News does not say. But if you spend more on your students, you do better in the ranking. For deans, this has been a very valuable tool in convincing universities to charge less overhead to law schools (the law school as "cash cow" is largely a thing of the past). But it also provides an incentive to raise tuition and spend more.
What Might The Future Hold?
Will law schools begin to cut tuition? With demand for our services down, and with great competition between schools, that would seem logical. However, higher education does not seem to follow this aspect of supply and demand. Very few schools have frozen tuition. Many other schools have slowed tuition increases to around the rate of inflation. Schools are continuing to aggressively court segments of applicants with merit scholarships. I know of no law school, though, that has reduced nominal tuition.
An explanation for this is that charging somewhat less than competitors does not really accomplish much for a school. My school's tuition has gone up more slowly than Chicago-Kent's and DePaul's, our two major competitors in Chicago. As a result, our tuition is now about $2500 less than either school. Because we all offer scholarships to our most desirable applicants, and they tend to look at bottom-line costs, this does not help us attract those students. It does mean that students paying full tuition will incur $7500 less debt over their law school career, but I see no evidence that this really affects their decisions.
Law schools are getting smaller, but as I have discussed, this has a lot to do with rankings. There is no similar self-interest in cutting tuition and even if there were, doing both that and enrolling fewer students would be extremely difficult. It is unlikely that a dean could convince his or her university to accept such a recommendation.
It is possible that external forces will force tuition down. The federal goverment might make eligibility for federal student loans depend on cost-control measures. If more states follow the path of the state of Washington and licence people without a J.D. to do some of the work that until now only lawyers could do, there will be downward pressure on tuition. If the ABA liberalizes its accreditation standards requiring fewer in-class hours or fewer full time faculty, for example), big changes might occur in the cost of legal education (the ABA Standards will be the topic of my next column).
In your upcoming post on the ABA standards, could you address the role that deans and professors play in that process?
For years I've heard the conventional wisdom that the ABA's regulation of law schools has been captured by deans and professors from mid- to lower-ranked schools. (That certainly is plausible from the basic theories of how regulation works.) A glance at the current membership of the Standards Review Committee appears to confirm that.
Is it a case of regulatory capture? Do the deans and professors have a conflict of interest? Why has that cohort of deans and professors gravitated to the SRC? What and whose interests are the members of the SRC furthering?
Posted by: Anon | February 15, 2013 at 12:19 PM
This analysis, like many others like, misses an important reason why law schools are particularly senstivie and vulnerable to "rankings". That reason is that it is so easy to gain admission to an ABA-accredited law school. Consider medical education. It is extremely difficult to get into an accredited M.D. program. As a result, there is a fair presumption that any student who has managed to get into any med school is very smart, self-disciplined and motivated. The same presumption isn't reasonable based on admission to just any law school. Law schools need rankings, in a way and to a degree that medical schools don't, to signal the quality of their students. Mere admission to a law school is simply not a sufficient marker -- certainly not as strong a marker as the plain fact of admission to a medical school. This is the unfortunate result of the ABA's failure to regulate the legal profession as wisely as the AMA has regulated medical education (which is perhaps inevitable, given that the ABA regulators are lawyers and the AMA regulators are people smart enough to get into medical school!) To a lesser extent, it is also the fault of state bar examiners who fail to erect a high enough intellectual barrier to entry. With respect to tuition, you don't hear about a debt crisis for new doctors because their earning power is far greater than that of the average new lawyer. The answer is obvious: fewer law schools, with a consequent reduction in the number of lawyers but also a consequent increase in the intellectual prowess of the average law student, all of which will lead to increased earning power for new lawyers. Will there be collateral damage for law schools, universities and law professors at institutions that don't make the cut? Of course. But this is a bubble that has burst, and such damage is inevitable.
Posted by: Harsh T. Ruth | February 15, 2013 at 02:45 PM
My goodness, who would have thought the AMAs program of professional birth control to keep physician salaries high is laudatory.
Posted by: Jeffrey Harrison | February 15, 2013 at 02:51 PM
Well, Jeffrey, in fact there is much to commend it. By limiting the number of medical schools, the AMA helps insure that only the smartest and most self-disciplined students will become doctors. Obviously this doesn't mean that there are no bad doctors, but it's hard to argue that at the low end you will find doctors as incompetent and mercenary as you will find lawyers. At the same time, doctors who go hundreds of thousands of dollars into debt for their degrees find themselves able to get jobs that reward them for their hard work and allow them to pay off that debt. It is painfully clear that thousands of law students can't say the same thing.
Posted by: Harsh T. Ruth | February 15, 2013 at 03:52 PM
It is indeed mostly deans and professors from non-elite schools that gravitate to ABA and AALS work. It is also, more specifically, deans and professors from non-elite schools who do not enjoy a strong reputation among their colleagues for either scholarship or, to a slightly lesser extent, teaching excellence. They are the folks who eagerly chair the faculty committees and agree to oversee the special projects and who self-identify as the governing core of the law school's faculty. Lots and lots of service, some adequate teaching, plenty of contact with student organizations, and no distinguished scholarship (or demonstrated sophisticated understanding of the law) at all. They have, however, retained a strong personal professional ambition.
For these folks, ABA/AALS work is like catnip. Free travel, free hotels, free fancy meals, attendance at meetings and events at which serious sounding issues are on the agenda and each participant implicitly assures the others in myriad ways that they are all quite big deals. Public posturing as national leaders of legal education - all without ever having to show any real intellectual chops about the law itself, or stand for any vote conferring that status upon them. Many of the external trappings of a big deal, national, leadership role - all for the admission price of simply going along, getting along, not rocking the boat, and participating reasonably in the mutual fantasy that this is high end work being done by first caliber professionals in their field. A confederacy of mediocrity.
And the result has been much as you might expect. They are not the only cause, but the ABA/AALS types in our business have been a significant reason why the legal education industry as a whole as driven itself, full speed, right into a wall that should have been seen coming for at least the last 5-7 years.
Posted by: Anonymous | February 15, 2013 at 04:43 PM
Harsh T. Ruth - Your obsession with intelligence, and the concomitant insecurity that must drive it, means either that you were sued successfully by a lawyer, or outperformed in college by a number of classmates who went to law school. I feel bad for you, of course, but you really need to get over it, or the rest of your life will be equally unpleasant. Envy is corrosive.
Posted by: Pushkin | February 16, 2013 at 04:00 PM
>>students paying full tuition will incur $7500 less debt over their law school career, but I see no evidence that this really affects their decisions.
Students are incurring, on average, around $125,000 in debt. Of course $7,500 doesn't affect their decisions. Why woud it? It's only a 6% difference in total debt. That's about $100/month on a 10 year repayment plan, and $50/month on a longer plan.
This reminds me of the discussion awhile back when Steve Diamond tried to claim that Santa Clara was signigicantly cheaper than Stanford. If you can't measure the difference in double digit percentages, it really doesn't matter.
Posted by: john | February 17, 2013 at 12:16 PM
The U.S. World News rankings have impacted the rising costs of law school education. But there are many factors in addition to rankings which contributed to the situation we now face. 1) It is not necessarily that there are too many lawyers (although I admit some argument can be made there), but that there are too many lawyers trying to do the same thing -- work for BigLaw and corporate entities. I do believe some of the fantasy about working at BigLaw has been driven by the rankings chase. Students are therefore groomed to have an unrealistic impression of what work is available and what salaries they can earn as lawyers. There are plenty of people in our country who need lawyers, but they cannot afford to pay $450 an hour. I think the elite law schools also have a hand in creating this environment.
2) I find it interesting that law firms now argue they want new hires who know how to practice law when they come in the door. For over 25 years the clinical legal education movement has encouraged, cajoled, and pushed law schools to include more practical skills training. While the situation has improved lately, overall law schools resisted the effort to teach more skill based courses. Skills based education is expensive and it is not clear that BigLaw valued graduates who came to them with skills (before...maybe they are starting to now). If BigLaw did not value it, then the law schools did not value it.
3) The salary compensation for graduates of elite law schools is not sustainable and does not reflect the value of their work, yet it does drive the fantasy goal of becoming a new hire with an outsized salary.
4) The switch to law student as "consumer" as opposed to law student as a professional aspirant has been disastrous. Inflating grading curves so students can "look" competitive with students from higher ranked institutions produces a student class that expects an "A" when the work product is usually of the "C" level and has no true understanding of the value or quality of their work product.
Finally, reducing the number of law schools may be a good thing, but that will not ensure you get a higher caliber of law student. Most elite schools still have legacy. Our profession does not get good marks for diversity, not on racial diversity nor in gender diversity. The ABA is consistently monitoring this issue and although we are making progress we still lag behind every other profession on diversity issues. Whatever is done to address the problems our profession faces, and we will have to do a variety of things, let us not just simply assume less will give us better. Less may only perpetrate the already too high level of elitism.
Posted by: Michelle Jacobs | February 20, 2013 at 06:29 PM
Michelle-
I attended a top 6 law school. Not a single person in my family ever attended an elite or private college. Half of them never attended college at all. I attended a public high school and public college. A number of my friends, both ORM and URM, came from extremely poor backgrounds.
Most of my friends got in to my highly competitive law school because they scored in the mid to high 170s on their LSAT and had A- averages in college. We can debate whether they were able to achieve these things because they came from upper middle or middle class backgrounds and had stable home lives and good school districts. But to say that legacy admissions is common at elite law schools is ridiculous. If that was the case, there would be no way my school could post 25-75 LSAT medians above 170.
What is elitist is how law schools ranked from #1 all the way to unranked school with 33% job placement expect law students to go 150-200K in debt to attend those schools. Law schools could not function without a large amount of federal loan subsidies- subsidies that fall on the backs of lower-middle and middle class students like myself. Methinks you would not be so social justice oriented if tomorrow the DOE capped every law school's tuition at $15,000 in order to keep poor and middle-class students from being saddled with enormous loan debts.
Posted by: BoredJD | February 20, 2013 at 07:43 PM
@ BoredJD
Just because you and your friends did not have legacy admission is not to say legacy admissions do not exist or are not common. Nor does your experience provide you with any data that reflects on whether legacy admissions are common or not. At any rate, having spent ten years on the admissions committee of a state law school I can say that the legacy situation does exist and can present tensions within a committee when the committee is trying to fill the seats for a class.
I have not thought through the idea of capping tuition as a way to make law school affordable. I do know at my undergraduate institution, an elite school,herculean steps have been taken to raise money for student financial aid so that as many undergraduate students as possible can graduate debt free. I would like to see our institutions engage in more discussion about how we can make it possible for students of lower and middle incomes to be able to go to law school.
Posted by: Michelle Jacobs | March 01, 2013 at 11:57 AM