Speaking of Financing Legal Education…

So the ABA has promptly acted on the Task Force on the Future of Legal Education’s recommendation to convene a new task force to investigate the financing of legal education. I think the stakes for this task force are going to be higher than for the previous one because its focus is more specific and it will have to address concrete questions like what impact the federal loan program has on law school costs. Its mission?

The task force is charged with looking at the cost of legal education for students, the financing of law schools, student loans and educational debt. It will also consider current practices of law schools regarding the use of merit scholarships, tuition discounting and need-based aid.

To commemorate the task force, here’s some info on tuition and discounting from the Official Guide for the 2012-13 academic year, the most recent one for which data are available. Notably, the average private law school lost many students who were paying full tuition.

Mean No. Full-Time Private Law School Students by Grant Received

This translated into a sudden loss of $215 million in revenue from full-time students for private law schools, which comes to about $1.9 million per school on average.

Aggregate Revenue From Full-Time Private Law School Students Paying Full-Tuition

As a result, the percentage of full-time students paying full tuition at the average private law school fell below 44 percent, a loss of about 10 percentage points since 2001. Public law schools follow the same trend.

Percent Full-Time Law Students Paying Full Tuition

Increasingly, the stated tuition price is not indicative of what the first year of legal education really costs.

That’s all for now.

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[Updated for comments below, here are the first two charts with lines excluding the top 20 private law schools by U.S. News ranking.

Mean No. Full-Time Private Law School Students by Grant Received Aggregrate Revenue From Full-Time Private Law School Students Paying Full TuitionThe decline in students receiving no grants is slightly steeper when you exclude the top 20 (~-3%). Same goes for aggregate revenue from full-time students paying full tuition.]

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9 Responses

  1. […] Related: Matt Leichter has some fascinating graphs regarding shrinking law school revenues here. […]

  2. I’d love to see a version of this that excludes the T20.

    • If you specify “this” I might be able to indulge you, but I’m backlogged with work. Although, the reason I’m only showing private schools in these charts is that the Official Guide doesn’t specify how many students are paying resident or non-resident tuition. Then again, for a lot of the public law schools in the T20 there’s no longer a distinction.

      • Sorry for the ambiguity. I meant the first two charts. I suspect that the highest ranked private schools are not seeing the same trend in terms of tuition loss and the overall downward trend may actually be even more sharp for most law schools (sharper the lower you get).

        I understand if the backlog means you don’t have time. It’s mostly just curiosity on my part. Thanks for responding!

      • Shouldn’t be too much of a problem. Just refresh my recollection on which schools are in the T15-T20 and it shouldn’t take too much time.

  3. I’m not surprised, but thanks, Matt, for proving this!

    This also shows that when looking at student counts dropping, we see average tuition dropping, which will compound the problem. For example:

    When both go to 80%, gross revenue goes to 0.8*0.8 = 64%.
    When both go to 70%, gross revenue goes to 0.7*0.7 = 49%.

    And at the same time the very large fixed costs do not go down. On the way up, law schools profited richly from the fact that they could both raise tuition with no consequences (to them), and that adding 5% or 10% extra students in a class didn’t increase their costs by anywhere near that percentage.

    They will now face the downside.

  4. The USN T-20 private schools are: Yale, Harvard, Stanford, Columbia, U Chicago, NYU, U. Penn., Duke, Northwestern, Cornell, Georgetown, Vanderbilt, Wash. U. St. Louis, Emory, GW, and USC (Gould). Thanks!

    • Former Editor, I’ve updated the post with the charts you requested. I don’t think they say much, except that the T-20 account for a large proportion of the aggregate tuition haul, which is unsurprising given HLS’s, NYU’s, Columbia’s, and GULC’s monster enrollments. One thing I noticed is that less than 15% of Duke’s and Vanderbilt’s students pay full tuition now.

      • I agree. I’m surprised not to see a steeper decline outside of the T-20. I wonder if that indicates that those arguing that the T-20 aren’t have similar enrollment problems to schools outside the T-20 are off base.

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