Finally, Law Students Start Demanding A Price Cut

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Prairie populism is apparently alive and well, but now it’s law students, not farmers, throwing their collective weight against the entrenched élite. The Iowa student bar association is supporting a proposal to lower out-of-state tuition at Iowa’s only public law school, The University of Iowa College Of Law, by nearly $8,000. This story comes by way of the Press-Citizen.

The student association’s president was quoted, saying, “the value of a law degree is elevated when a school can attract students from out-of-state. Improving the law school benefits in-state and out-of-state students.” Now, I think what he is implying here is that if you lower price, more students will come because economics. This is the kind of clear thinking that, unfortunately, has eluded most of those in charge at law school.

As applications to law school continue falling through the floor, plenty of schools have offered greater discounts via scholarships. It’s been a relatively effective way to tempt students.

These scholarships, however, go solely to top candidates, leaving the bulk of the remaining class with a bigger bill. The less fortunate group, in addition to paying their own tuition costs, has had to cross-subsidize the cost of these beefed-up scholarships. This explains in part why the base tuition at most law schools has actually risen continually despite declining interest. Only a tiny handful of schools have actually dialed back tuition to give a cost break to everyone.

RELATED: How To Take Advantage Of Desperate Law Schools

Schools view the scholarships-only strategy as a way of weathering out the storm while things return to return to normal. The assumption is that the recent flight from law school is just part of a normal cycle, and students will start flocking back soon. Glancing at this chart of law school applicants over the years, it sort of supports that view (although things are getting pretty crazy at the end there, in 2010-2013):

applicantdata
If you look at the blue peaks, it looks like applicants just kind of come and go. They’ll come back soon, right? Wrong. In actuality, law schools have been driving would-be law students away with a stick for years now, pricing more and more of them out of the game.

The following chart instead shows law applicants as a percentage of that year’s crop of college graduates. When you view it this way, applications to law school have declined pretty much consistently since 1991:

Law School Applicants as a Percentage of That
(source)

This information comes from law school professor Deborah Merritt. Writing for taxprofblog, she says, “College graduates have been losing interest in law school–compared to other graduate programs or workplace opportunities–for the last twenty years.” The cause? Price. Merritt notes that over this same time frame, law school has more than doubled in price (yes, that’s accounting for inflation). Meanwhile, salaries haven’t risen nearly that fast.

Law schools’ current policy of weathering out the storm isn’t going to work long-term. This isn’t a storm at all. It’s just an ongoing problem with the way they are pricing their product. The price keeps going up, less of the market buys. It’s also, by the way, a terrible way to restrict entry to the field. If we want fewer lawyers in the world, we should do it by reserving entrance to the most talented, not pricing people out.

The current scheme simply doesn’t work, either–one law professor recently estimated that 85% of law schools are currently losing money.

To respond, schools have to cut costs and charge less in order to stay profitable on a smaller scale. It’s sounds easy, but it’s not. Still, it just has to happen.

For University of Iowa, we aren’t talking about a huge jump. Out-of-state tuition would go from roughly 47k a year down to 39k. However, this cut, and the cost-reductions that would have to come with it, would certainly count as progress. The regents of University of Iowa are expected to vote on this at a Dec. 4 meeting. Let’s hope they bring their thinking caps and make the right decision.

Otherwise, pretty soon, the law student’s association is going to start looking like this:

Yes, that’s a Beauty and The Beast GIF.

For our readers, potential law students, I would take keen notice of events like this. There is the possibility that base tuition will come down at many schools in the very near future. It might behoove you to hold off on going for a couple years while this all shakes out. However, as I wrote recently, you can ensure your relative safety in the mean time by making sure you are part of the group that gets big scholarships.

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