By Karen Sloan, From The National Law Journal

Tuition at top law schools surpasses $55K per year.

Tuition at U.S. law schools continues to increase even as demand for law degrees declines. And the increases are particularly pronounced at the elite schools that send the most graduates into the nation’s largest law firms.

Columbia last year set annual tuition at $60,274 and Cornell Law School was not far behind. Altogether, 10 law schools charge more than $55,000 a year. It was just five years ago that Columbia, Cornell and Yale first crossed the $50,000 tuition mark.

Average tuition among all American Bar Association-accredited law schools rose from $32,227 in 2011 to $35,312 in 2014 — a nearly 10 percent increase. (That figure is based on data released by the ABA.) Tuition rose even faster among the elite schools. The National Law Journal’s annual Go-To Law Schools identified 10 schools that sent the highest percentage of 2014 graduates to the largest 250 firms in the country. These schools increased tuition on average from $49,907 in 2011 to $56,292 — almost 13 percent. A small number of schools have announced freezes or reductions, but they are outliers.

Columbia administrators contend the education is worth it. “We believe that a Columbia Law School education is an excellent investment in a bright future,” said Elizabeth Schmaltz, executive director of communications and public affairs.

Northwestern University School of Law, which ranks in the Top 10 both in large-firm hiring and tuition, has made a concerted effort to limit tuition increases, said Kirston Fortune, assistant dean for marketing and communications. The school had the lowest percentage increase among top schools, she added. Northwestern’s tuition is now $56,434, up nearly 9 percent from 2011.

WILLING TO PAY

Despite handwringing over affordability, most law schools raise their official tuition prices annually. The counterintuitive phenomenon of ever-rising list tuition when legal education is struggling to draw students illustrates two key points, law professors who track law school enrollment and cost trends said. The first is that listed tuition and what most students pay are two different things, due to behind-the-scenes discounting. Second, students are willing to pay premium prices to attend schools like Columbia, Cornell and the University of Pennsylvania Law School, which send more than of half their graduates into associate jobs at large firms.

“These are schools where the economic return on investment makes the most sense,” said Jerome Organ, a professor at the University of St. Thomas School of Law who tracks law school costs and other trends. “Clearly, there are people who are paying a lot for what they perceive as value.”

In a survey, Organ found that a significant percentage of law school applicants would rather pay more to attend a top-ranked law school than less with scholarship assistance at a less prestigious school. A high list price hasn’t hurt Columbia; the school last year attracted five applicants for every offer or admission it made.

“There will always be a superelite sector of the academy that can charge more or less what they want, with the understanding that they will have to discount to get the students they really want,” said Bernard Burk (left), a University of North Carolina School of Law professor who monitors postgraduate employment.

Not everyone is sanguine about the situation. “It’s ridiculous. I don’t care what the employment outcomes are,” said Kyle McEntee, executive director of Law School Transparency; the organization provides cost and employment data to prospective law students. “This philosophy is wrong, and it has been for a long time. Pricing has followed a willingness-to-pay model, and I think that’s unconscionable in higher education.”

Still, between the two-thirds of Col­umbia graduates who take high-paying associate jobs at firms, and the many others who go on to public service careers that make them eligible for loan payment assistance, most will repay their student loans within 10 years, said Brian Tamanaha, a law professor at Washington University in St. Louis School of Law and author of the book, “Failing Law Schools.”

Again, list price doesn’t tell the whole story. Applicants have become savvy about researching financial aid options and leveraging scholarship offers, Burk said. A higher list price gives schools room to discount on the back end.

Cornell’s listed tuition increased by nearly 12 percent between 2011 and 2014, but net tuition hardly budged because of increased scholarship money, dean Eduardo Peñalver (left) said. “Because of the significant scholarships we grant, the overall cost for many of our students is well below our published tuition. In recent years we have increased our scholarship aid at a much faster rate that we have increased tuition.”

At Columbia, more than 43 percent of J.D. students this year received financial grants averaging $15,000, Schmaltz said. Moreover, the school subsidizes student housing to make living in New York more affordable.

The University of Pennsylvania, with the third-highest tuition among the top Go-To Law Schools at $56,916, has increased grants and scholarships by 40 percent in four years, said associate dean for communications Steve Barnes. Administrators kept class sizes small and offer tuition guarantees for students who spend their summers in public-interest jobs, he said.

Organ examined scholarship trends at the top 10 schools between 2011 and 2013 (the ABA’s 2014 scholarship data are not yet available) and found that, on the whole, financial aid has not completely offset the growth in listed tuitions. At all but two of those schools, more than half the student body pays full tuition, Organ found. “Is most of the 13 percent increase [in list tuition among the top 10 Go-To Law Schools] accounted for in increased scholarships? I would say no, it’s not,” he said. “Some of it is, but not dollar-for-dollar.”

Is there a point when law school tuitions will simply become too high? Tamanaha wasn’t sure, but projected that three years of tuition and living expenses at the priciest schools will total $300,000 within five years.

“Legal educators like to assert that the long-term return on a law degree is worth the high cost, but even they must admit that many law graduates do not reap the full earnings premium, and as the price rises more and more will suffer negative returns,” he said. “Law schools must begin planning for a future in which annual increases in tuition are not automatic.”

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