Tuition Data

2016: Full-Time Students Paying Full Tuition Fell by 2.4 Percentage Points

Discussions of law-school costs are incomplete if they do not include discounts some students receive, usually as merit scholarships paid for by their full-tuition-paying classmates. The topic is salient today because Congress is considering limiting the amount law students can borrow from the federal government. If the PROSPER Act passes, then it’s likely law schools would need to reorganize their cost structures—notably by reducing scholarships and their full price tags. To analyze the phenomenon of discounting, I focus on the ABA’s 509 information reports’ scholarship data. This information lags the academic year by one year, so as of the 2017-18 academic year, we now have data on 2016-17. One new drawback this year is that law schools that closed or stopped accepting new students before 2017 did not provide scholarship data for 2016, so the picture is slightly distorted.

In 2016, the proportion of full-time students paying full tuition fell by 2.4 percentage points from 28.1 percent to 25.7 percent at the average law school not in Puerto Rico. At the median law school less than one-quarter of students pay full tuition.

The proportion of students paying full tuition has fallen considerably over the years. At the turn of the century, more than half of students paid full cost; now about a quarter do.

At the average private law school, which don’t price discriminate in favor of resident students, the number of students receiving grants ranging between half tuition and full tuition now exceeds the number paying full tuition. Many more receive a grant worth less-than-half tuition.

One advantage of knowing how many full-time students pay full tuition is that we can estimate the total revenue they generate for private law schools, except Brigham Young University, which charges LDS students less.

Since 2011, the peak year, inflation-adjusted revenue from full-tuition-paying full-time students has fallen 55 percent. Since 2001, the last year for which data are available, the drop is 35 percent. In 2016, the median private law school’s full-tuition revenue was $3.8 million, down from $12.2 million in 2011. In 2001, the median was $9 million. This is quite a precipitous decline.

So how substantially are private law schools discounting? The best way to answer that question is by treating the sticker price at private law schools as the independent variable, and treating as the dependent variable their tuition after subtracting their median grant (median-discounted tuition “MDT”). First I divide private law schools into full tuition quintiles and give their mean averages. Then I take mean of the MDTs within each quintile.

We find that the MDT at the most expensive law schools is about as much as full tuition at the cheapest private law schools. Meanwhile, schools in the fourth quintile now discount to the level that third quintile law schools do. This indicates pretty fierce competition for students. MDTs at the bottom four-fifths of law schools are converging with one another while diverging from the most expensive schools.

That’s all for now.

Information on this topic from previous years:

2017: Full-Time Private Law School Tuition Up 3.2 Percent

Full-time tuition costs at private law schools rose an average 3.2 percent before adjusting for inflation. The rate is about half a point higher than last year’s increase, but it’s still well below the typical 5 percent rate before the Great Recession. For comparison, 2012 and 2013 saw increases of 3.7 percent and 3.6 percent, respectively. I focus on private law-school tuition because public law schools receive varying degrees of state subsidies, so they do not reflect the already distorted legal-education market’s prices.

Here’s what the dispersion of full-time private and full-time public (residential) tuition looks like going back to 1996:

Last year I pondered whether the public law school at the 25th percentile would begin charging more than the Stafford Loan limit of $20,500. It’s still one thousand dollars shy of it—in fact, it fell by $200 after adjusting for inflation. As of now, 10 percent of private law schools (12) charge more than $60,000, with the maximum at $67,564 (Columbia). It was only back in 2012 that the top 10 percent charged over $50,000 in nominal dollars, +$10,000 in five years.

In 2017, the median private law school charged $47,071 (between Pace and Suffolk); the mean was $46,843.

Unusually, costs grew consistently among private law schools. If we separate the law schools into quintiles, here’re the increases at the mean of each quintile.

From 2014-16, the tuition increases were stacked towards the high end, which was consistent with the prediction that the cheaper law schools were so fiscally crunched that they couldn’t afford to raise their costs any more. 2017 clearly breaks that trend, and along with its moderate mean increase the growth is distributed fairly evenly among private law schools.

The following private law schools raised their tuition charges by more than 5 percent:

  • Widener (Delaware) (+12.0%)
  • Liberty (+10.8%)
  • La Verne (+10.2%)
  • Elon (+10.0%)
  • Brooklyn (+9.8%)
  • Belmont (+8.9%)
  • John Marshall (Atlanta) (+5.9%)
  • Mississippi College (+5.6%)
  • Mitchell|Hamline (+5.5%)
  • Capital (+5.4%)

I would be cruel to ignore private law schools that cut their full tuition, so here’s that meager list:

  • University of Tulsa (-33.6%)
  • Howard University (-10.4%)
  • Santa Clara University (-3.4%)
  • Whittier Law School (-2.2%)
  • Arizona Summit (-0.3%)

Yes, Tulsa’s one-third slash is the largest nominal tuition cut I can find going back to 1996. It beat Indiana Tech’s (-31.1 percent) last year (fat lot of good that did) and Ohio Northern’s (-26.4 percent) in 2014. Howard’s is fairly significant as well, particularly because in 2016 it raised tuition by 10.9 percent. Big raspberries go to Elon University which extended its students a -12.1 percent cut in 2015 only to mostly reverse it with a 10 percent hike this year.

Nine private law schools kept their full-tuition tags flat (Golden Gate, University of the Pacific, Western State, Ave Maria, St. Thomas (FL), Mercer, Illinois Institute of Technology, Western New England, and Vermont). Barry increased its costs by … $1.

Here are public law schools that cut their costs to resident students:

  • University of Illinois (-7.8%)
  • University of D.C. (-5.6%)
  • University of New Mexico (-5.3%)
  • Texas Tech University (-1.1%)

I note that D.C. and New Mexico both increased their costs last year by more than these decreases.

Overall, the size and character of the increases at private law schools was the same as last year, they were just distributed more evenly among law schools. The phenomenon of nominal tuition cuts is still marginal, and some schools appear to reverse their cuts shortly after instituting them.

Going forward, the thing to look out for is if Congress passes the PROSPER Act, which would cap federal loans to law students at $28,500 and fix a lifetime cap of $150,000 per student. If it does, then I predict that law schools will respond by serious restructuring: eliminating merit scholarships, slashing tuition to $28,500 plus whatever private lenders are willing to lend out, and getting rid of many faculty and their perks. I’m also sure many central universities will use the PROSPER Act as an opportunity to shut down their money-losing law schools.

Of course, this all assumes that the Bennett hypothesis is true, but AccessLex-funded research falsified it, so we all know law schools will raise their prices forever.

Full-time tuition costs don’t necessarily indicate what students are actually charged, but they do show how much rent law schools can extract from the government’s loan programs.

Information on this topic from prior years:

2015: Full-Time Law Students Paying Full Tuition Fell ~5 Percentage Points (Again)

As with 2014, the proportion of full-time law students paying full freight fell substantially at the average law school not in Puerto Rico. In 2015, the last year for which data are available, the average was 28.1 percent, down from 32.9 percent. In 2011, the average was 20 points higher.

percent-full-time-law-students-paying-full-tuition

A decade ago, more than half of law students paid full tuition; now, not even one in three does.

At the average private law school, nearly as many students who received half-to-full tuition grants paid nothing at all. Those numbers might have converged this year, but the crunch in students has decelerated, so they may have leveled off. Nevertheless, law schools must be losing a lot of money.

no-full-time-private-law-school-students-per-school-by-grant-received

Indeed, in 2015, revenue from full-time students paying full tuition is now half its peak in 2011. At freestanding private law schools, including the for-profits, it’s fallen to one third. In 2001 the median private law school made $9.0 million on these students. In 2015, it took in $4.3 million.

aggregate-revenue-from-full-time-private-law-school-students-paying-full-tuition

So how substantially are law schools discounting? Here’s what tuition discounted by the median grant looks like at private law schools by the mean of their full tuition quintiles. It’s a mouthful, but the idea here is to set full tuition as the independent variable and let the discounted tuition float.

full-time-private-law-school-tuition-and-median-discounted-tuition-by-tuition-quintile-mean

We find that law schools charging in the fourth quintile of full tuition (~$49,000) discount so much that they’re cheaper than the median discounted tuition of the third full-tuition quintile (~$45,000). Meanwhile, the gap between private law schools in the fifth quintile (~$56,500) and the rest is widening. What’s also obvious is how much more law schools are willing to charge students paying full freight.

Information on this topic from previous years:

2016: Full-Time Private Law School Tuition Up 2.7 Percent

Full-time tuition costs at private law schools rose an average 2.7 percent before adjusting for inflation. The rate is about 1 percent higher than the last two years’ increases, but it’s still below the typical 5 percent rate before the Great Recession. I focus on private law-school tuition because public law schools receive varying degrees of state subsidies, so they do not reflect the already distorted legal market’s prices.

Here’s what the dispersion of full-time private and full-time public (residential) tuition looks like going back to 1996:

full-time-law-school-tuition-dispersion-excl-p-r-constant

I don’t have much to say about this that I haven’t before, but it appears that the 25th percentile public law school will soon charge more than the Stafford loan limit, which has been set at $20,500 for several years now. The limit is important because it indicates when students will need to rely on other funds to pay for their legal educations, including Grad PLUS loans, which can also go to students’ living expenses. Since 1996, Stafford loans have lost about a third of their value to inflation.

Notably costs are still widening, so after chopping up the law schools into quintiles, here’s the increases for the mean of each quintile.

full-time-private-law-school-tuition-increases-by-tuition-quintile-mean-current

The chart depicts at least three straight years of top-heavy tuition increases: The more expensive law schools are becoming more expensive—4 percent more among the top 20 percent of law schools. Two years ago, Columbia Law School became the first to charge more than $60,000, and it now costs more than $65,000. This year six other law schools joined the 60k club: NYU, Cornell, Penn, Chicago, Harvard, and USC. These seven schools raised their full-time costs by 3.8 percent on average, but theirs weren’t the largest increases. The following nine law schools raised their full-time tuition by more than 5 percent: Loyola (Calif.) (+5.4%), Michigan State (+5.5%), WMU Cooley (+6.1%), Faulkner (+6.6%), Lincoln Memorial (+6.8%), Tulsa (+7.0%), Charlotte (+7.1%), Willamette (+9.6%), and Howard (+10.9%).

It would be unfair of me not to acknowledge the handful of private law schools that cut their full-time charges: Campbell (-0.4%), Capital (-5.2%), Dayton (-6.4%), and Indiana Tech (-31.1%). Fourteen private law schools held their costs flat: New York Law School, Chicago-Kent, Brooklyn, Suffolk, Loyola (La.), Western State, Ave Maria, Western New England, Detroit, Valparaiso, Barry, Oklahoma City, Mississippi College, and Elon.

Yes, I notice that two failing law schools, Indiana Tech and Charlotte, both dealt with their incipient problems by slashing and hiking costs, respectively. For Indiana Tech, it didn’t translate into more matriculants.

Finally, 19 public law schools cut or held their residential tuition with the two most notable ones being Texas A&M (-15.4%) and UC Hastings (-9.1%). Akron, Cincinnati, and Toledo also didn’t raise their tuition, so along with Capital and Dayton that makes five of nine Ohio law schools that stand out in tuition control.

Full-time tuition costs don’t necessarily indicate what students are actually charged, but they do show how much rent law schools can extract from the government’s loan programs. For many law schools that ability is fading.

Information on this topic from prior years:

So Just How Far Off Were My Tuition Projections?

Back in February 2011 I made a bold prediction: Full-time tuition costs at private ABA law schools would increase.

Talk about sticking to your guns and throwing conventional wisdom out the window!

But enough self-congratulations and I-told-you-sos. I offered projections for each law school, which proved so popular that a handful of Web sites even reported on them, motivating me to update them annually. Although I’m always pleased to receive positive press, I ceased making new projections when it became clear that tuition growth was going to slow down due to the applicant crash. (Also, the methodology posts were mind-numbing to write.) No tweaks to the methodology would create accurate results, so that was that. Nevertheless, time has passed; we’ve caught up to the first projections, and I’m curious how far off (or on?) they were. Maybe we’ll learn a lesson.

My original projection methodology estimated that mean-average private-law-school tuition (excluding the two private Puerto Rico schools, as always) would rise from $38,097 in 2010 to $47,598 (25 percent) by the 2015-16 academic year. Later, I believed that methodology produced results that were too inaccurate, so I revised it, giving a mean-average tuition of $46,341 (22 percent) by 2015.

These growth rates are impressive, and when I offered them I chose not to adjust them to inflation because I didn’t want to predict inflation and I was convinced that consumer-price inflation wasn’t really playing much of a role in law-school tuition anyway. In fact, the consumer price index has only risen by 8.7 percent in this five-year time period. In hindsight it may’ve been appropriate to compare tuition to the CPI’s higher-education cost index, but I think no one is worse off.

So how did I do? Thanks to the ABA’s 509 information reports, I get $44,413 mean-average tuition at the private law schools that were around in 2010—and were private law schools in 2010, for some have been socialized, e.g. Texas A&M, which used to be Texas Wesleyan. On average, tuition is 17 percent higher than 2010, so my average was high by 4 percent. Yikes, but at least the savings went to law students.

But as we learned once again recently, the mean average isn’t useful without the dispersion. Yeah, that damn average is made up of real observations that may indicate patterns of their own. So here’s the variance.

Percent Variance of Projected Private-Law-School Tuition (2015)

You can see there are a few outliers, which I’ll go into, but overall, the horizontal zero line cuts fairly closely through the body of the points. In fact, the median projection was off by less than 3 percent. Variances below the zero line, however, tend to clump together more.

So who are these outliers?

No. 1 is La Verne (82.5%), which gave up on merit scholarships a few years back in favor of flat costs for all. I figured it’d charge $48,027 in 2015, but in fact it cost $26,323. You can take this as evidence that tuition can’t go up forever.

No. 2 is the school I thought would’ve been number 1, Faulkner (45.6%), which doubled its price tag within a few years of receiving ABA accreditation. This was certain to throw off my methodology, so no one believed it would cost $51,045 today. Still, I didn’t expect it to go up by only 13 percent since 2010 ($35,050). That barely beats inflation.

No. 3 is a school I didn’t expect to see on the list, Ohio Northern (41.5%), which cut its tuition from $31,264 in 2010 to $26,030. I thought it’d charge only $36,820.

No. 4 is another unexpected tuition reducer, Roger Williams (33.3%), which costs $34,596 now rather than the $46,128 I expected.

Nos. 5 and 6, Elon (24.8%) and New Hampshire (23.2%), barely raised their tuition at all, so it’s no wonder their projections were off.

No. 7 is another tuition reducer on the list, Brooklyn (23.1%), now $46,176 when I thought it’d be $56,862. It charges only 1 percent less than in 2010, and that’s nominal dollars.

I’m not going through the rest, but the one law school I expected to see further up was New England (11.5%) because like Faulkner it raised its costs by quite a bit in the mid-2000s. I guess it just kept going. Finally, among the for-profits, Arizona Summit, Atlanta’s John Marshall, Charleston, and Charlotte all came in below their projections by at least 10 percent. Florida Coastal and Western State overshot theirs by about 5 percent.

The bottom-end variances aren’t as noteworthy, but congratulations are in order to the most expensive law school in the land, Columbia (-3.7%), for raising its costs more than I thought. A bunch of other expensive, well-regarded law schools also outdid my methodology. Good job. Not.

However, that lone dot way below the zero line at $47,980 is … WMU Cooley (-23.4%). I thought it would charge only $36,680. I’m not in the mood to research why it jacked its price tag so much, but it probably has to do with the school’s large part-time program. Maybe it’s trying to deter people from the full-time program?

Overall, I would’ve guessed the median variance would’ve been over 3 percent, but in general the projections tended to skew higher rather than find their marks. Meanwhile, I count 28 law schools (about one-fourth of them) that varied from their projection within the -2-to-2 percent band. That’s about $900 at the median law school.

In all, there was a nugget of accuracy to the initial projections, but I don’t take credit for predicting that; rather, I was right that the projections would overshoot reality. Private law schools slowed their tuition increases over the last five years. That’s small potatoes for the students though.

Below the fold, here’s a list of private law schools by cumulative cost increase between 2010 and 2015, along with information on their projected 2015 tuition.

(more…)

Full-Time Students Paying Full Tuition Fell ~5 Percentage Points in 2014

Once upon a time, more than half of law students at the typical law school paid full tuition.

But that fairy tale is now over. Behold:

Percent Full-Time Law Students Paying Full Tuition

I’m astonished. Now, only about a third of law students at the average law school pay full tuition. These schools must be hemorrhaging money given how much they’re fighting over applicants.

At the average private law school in 2014, there were more students who received less-than-half tuition grants than there were students given a full bill. It appears that in a couple years, even the half-to-full-tuition crowd will outnumber the full freighters—and this is last year’s data!

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

Speaking of hemorrhaging money, in 2014, full-time law students paying full tuition only contributed $1 billion to private law schools. This year, it’s probably less.

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

Finally, here’s what tuition discounted by the median grant looks like at private law schools by the mean of their full tuition quintiles. The idea here is to set full tuition as the independent variable and let the discounted tuition float.

Full-Time Private Law School Tuition and Median Discounted Tuition by Tuition Quintile Mean

Percent Private Law School Students Receiving Median Grant by Full Tuition Quintile Mean

Last year, the mean discounted tuition among law schools in the second full-tuition quintile was lower than the third’s, meaning second-quintile schools are discounting much more than schools that nominally charge less. I think it’s trivial, but it indicates pricing competition.

That’s all for now.

Site Update 2015-06-01: Law School Cost Data Page

If you want to know why I haven’t been posting so often, it’s that I’ve been procrastinating! Woo!

I did, however, find time to update the comprehensive Law School Cost Data (1996-) page. Most of the effort is just revisiting law schools’ Web sites to ensure I have their full names correctly. As usual I forgot that law schools have a tendency to place images of attractive women on their main pages, so that wasn’t a total exercise in tediousness.

One thing to note that readers might not know is that even though Lincoln Memorial was accredited after the data submission deadline for 2014, it does have a 509 Information Report (pdf). However, its data are not included in the ABA’s required disclosures Web site, so if you’re into law school data, you’ll need to get that file separately and incorporate it into your spreadsheets.

Peace.