Law Students do NOT Lose the Grant Game as Schools Win

New York Times business writer David Segal is fast becoming journalism's expert on law students and law school. That's good, because we need one -- although I love David Lat, Elie Mystal at Above the Law has been a pretty sorry oracle. Segal, in case you don't know him, is the author of January's excellent and on-point article entitled "Is Law School a Losing Game?" Over the weekend, he published another detailed piece entitled, "Law Students Lose the Grant Game as Schools Win."

This weekend's piece points out something that most lawyers and law students either know or intuit, which is that lower-ranked law schools attempt to boost their U.S. News & World Report rankings by using merit-based grants as a carrot to entice students with high LSAT/GPA's. In a typical arrangement, the student is allowed to keep a partial or full scholarship through all three years of law school, contingent on the student's ability to maintain, say, a 3.0 GPA. If the student fails to do so, the grant or scholarship goes away and the student begins paying the same price as his or her peers. Because schools know that the grade curve means not all of these students will be able to maintain the grades they need, the schools are able to offer more three-year scholarships than they will in fact pay for three years. In short, the thesis of Segal's article is this: students "lose the grant game" because although everyone who accepts a grant or scholarship enters law school expecting to graduate with a high GPA, not all do; law schools "win the grant game" by using students' irrational optimism about their own scholastic abilities to advance the school's status in the rankings. Although it is true that both sides are gambling (students on their grades, schools on the rate of grant-program attrition), in Segal's view the house (i.e., the school) generally has better odds because it both set the grade curve and holds crucial data, like the average number of students who lose their scholarships each year. As a result, the casual reader of the article comes away with the nagging feeling that students are victims, and that schools are engaging in what can only be called exploitation.

I don't buy it. I do buy that 'average' schools use this tactic to purchase entice 'above-average' students. And I do buy that some, perhaps many, grant-getters experience unexpected and genuine hardship when they start paying full tuition because they are unable to maintain their GPA's. What I don't buy is that these particular students are victims of their law schools.

Here is why. First, of what have these students been deprived? The ability to attend law school for free even though they are ultimately average law students? That hardly strikes me as an entitlement. Remember: students who fail to maintain their grades and lose their scholarships are no worse off than their peers. It means only that they will start paying the same price as everyone else. Put another way, a student's decision to accept this type of scholarship is really a risk-free bet on their own ability -- win, and get free money; lose and be no worse off than their non-betting peers. (You may say that a student who accepts a scholarship in return for going to the lower-ranked school gives up unique opportunities at the 'better' schools that likely accepted them. It's a fair point -- and not explored in the article -- but my suspicion is that a student who does not maintain a 3.0 at a lower-ranked school is unlikely to have benefitted from the marginal increase in value at a better-ranked school. That's harsh, I know, but it's also likely true.)

If you think that was harsh of me, wait until you hear my second observation: at some point, these students (who want to be lawyers -- i.e., represent other people's vital interests) need to read the fine print. A good time to start is when their own careers and tens of thousands of their own dollars are on the line. To be told "all you have to do for $80,000 in scholarships is maintain a 3.0" ought to make a prudent, college-educated person wonder, "exactly why are they willing to give me eighty grand?" or at the very least, "just how hard will it be to maintain a 3.0 at this place?"

So, there's my take on Segal's latest article. I think that in this case he's barking up the wrong tree. I do appreciate the attention he is paying to law schools and to the plight of law students who are currently being ground to pieces by the current, cruel shift in supply and demand in the market for young lawyers. Many law students are victims. Some are victims of schools' promises about employment. Some are victims of the great shrinking economy of the late 2000's. Some are victims of their own apathy ("well . . . might as well go to law school") or of their own inability to critically examine a dominant cultural message ("a law degree is versatile and will always have value"). But students who are offered free money to get good grades, and who lose that money because they end up without them, aren't victims at all. They're ordinary speculators who placed a risk-free bet on their ability to compete in an unfamiliar environment, lost, and ended up no worse than the rest of the pack. (Better, actually, because they got that first year for free.) I realize people will disagree with me. Or worse. That's okay. I do feel for students who made a prediction about their future, and even acted in financial reliance upon it, only to find themselves somewhere they never planned to be. But in my view that experience, however painful, doesn't necessarily mean they are victims of their law school.

Anyway, part of what I hope this post does is shed some light on whether students at Boalt feel our own school's financial aid practices are predatory. I have my own views on this (and in light of the above they may actually surprise you) but I hope to hear first from the anonymous masses. Fire away.