There’s been no shortage of hand-wringing over the high cost of a law degree, but it turns out that hefty tuition prices aren’t a major factor in where aspiring lawyers opt to enroll.
That’s the takeaway from a new paper examining whether rising costs impact the number of people who apply and enroll in law school. Author Amy Li, a professor in the University of Northern Colorado’s department of leadership, policy and development, found that not only is there no correlation between lower costs and the number of applicants and matriculants at individual schools, but that increased costs correlate to higher enrollment at many private law schools. Put another way, enrollment tends to get bigger when schools charge more for tuition and fees, counterintuitive as that may seem.
“The findings highlight the willingness of students to apply to and enroll at law schools despite increases in tuition and fees,” Li wrote in her paper, “Dollars and Sense: Student Price Sensitivity to Law School Tuition.” “This study reveals that there is in fact, a lack of price sensitivity in legal education.”
She gathered data from the American Bar Association and the Law School Admission Council on tuition and fees, scholarships, applicants and enrollment from 2006 to 2015 and ran a statistical analysis to identify correlations.
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Law students may understand that their employment prospects are the best at elite law schools that charge the most, Li theorized, and thus are willing to pay top dollar. Or law students may feel more comfortable paying for the school they want because they are older and more established than undergraduates, she speculated. Law students may also be savvier than undergraduates about federal loan repayment options such as income-based repayment—which limits monthly payments to a percentage of their income—and public service loan forgiveness, Li wrote.
“Law schools can’t be thought of traditionally from the supply and demand economic perspective,” Li said in an interview Thursday. “The product students are getting is more complex than an iPhone. It’s a complicated endeavor and students still see value in it and are willing to shoulder more of the costs themselves in hopes that it will pay off in the future.”
Legal education’s apparent imperviousness to price pressures comes at a time when attending law school for a year costs more than the average annual household income in the United States, Li’s paper noted. In-state tuition and living expenses runs an average $45,000 at public law schools, while that figure climbs to more than $67,000 at private law schools. (The average household income was about $59,000 in 2016.)
Li’s research, which was funded by AccessLex Institute—a nonprofit that advocates for access and affordability in legal education—suggested that legal education is not subject to the same price sensitivity as undergraduate education. Studies have shown that college enrollment tends to decrease when prices increase. Her paper is the first to examine the price sensitivity of law students, though she noted that further research is needed to identify why legal education doesn’t follow the undergraduate trend.
It’s worth noting that law school enrollment has dropped precipitously over the past eight years and is only beginning to recover. Admissions officials said admitted students have been aggressively negotiating scholarship packages in recent years, despite Li’s findings.
Li hypothesized that higher tuition and fees would result in fewer applicants and matriculants, consistent with undergraduate trends. But the numbers contradicted her theory.
Li found that there was no relationship between published tuition and fees and number of applicants schools attracted. Higher tuition did not dissuade people from applying. She then looked at net tuition—the average cost students paid after scholarships—to see if schools with lower costs enrolled more students. The opposite proved true. Law schools with higher net costs had larger first-year classes. For every $1,000 a school raised tuition annually, they enrolled one additional student, on average.
Li then looked to see if this insensitivity to price held true across all tiers of law schools. She separated schools into five tiers based on their median LSAT scores, and then ran the cost and enrollment. She found no relationship between net costs and enrollment at schools in the first, second and fifth tiers. However, she found a positive relationship between higher costs and enrollment at schools in the third and fourth tiers. That is, higher net costs correlated to higher first-year enrollment at those mid-tier schools.
“Students were more willing to pay higher out-of-pocket prices to attend less prestigious law schools, even though the employment prospects of graduating from such law schools were less certain,” Li wrote. “Nevertheless, this relationship did not hold for the lowest tier of law schools, tier 5, where median LSAT scores were less than 150. Evidently, students were not willing to pay more to attend the lowest tier of law schools, although these law schools also did not observe declines in enrollment when net costs increased.”
That finding is “surprising,” according to the article, given that graduates of schools in that third and fourth tier generally face more unemployment uncertainty than graduates of higher tier law schools.