More Expensive Law Schools Attract More Students

Law schools that charge more for tuition tend to enroll more students, a new study finds.
As reported by Law.com, the study, by Amy Li of University of Northern Colorado, finds that increased tuition costs actually correlate to higher enrollment at many private law schools.
“Although the literature on undergraduate price sensitivity suggests that students make enrollment decisions based on sticker price as well as net price, results from the present study suggest that price sensitivity does not fully translate to law school students,” Li writes.
Methodology
To conduct the study, Li gathered data from both the ABA and the Law School Admission Council. Data included information on tuition and fees, scholarships, applicants, and enrollment over a nine-year period from 2006 to 2015.
Li’s sample for the study included 194 law schools out of the 204 ABA-approved law schools. The study excluded a few schools due to missing or inconsistently reported data, being part of an institution that started a branch campus, merged with another, closed down, or were located in Puerto Rico.
Student Willing To Pay More To Attend Mid-Tier Law Schools
In her study, Li found that students were more likely to pay higher out-of-pocket prices to attend mid-tier law schools, despite the lower employment prospects of graduating from said law schools.
At mid-tier law schools, Li says, higher net costs correlated to higher first-year enrollments.
“Despite the greater risk of employment uncertainty associated with graduating from a lower-tiered law school, students continue to enroll at such law schools even when costs are higher, which is a phenomenon that warrants further research,” Li writes.
Moreover, Li also found there was no correlation between published tuition and fees and how many applicants a school attracted. This is especially true for prestigious top tier law schools.
“A practical implication of results from this study is that law schools in the top and second tiers are in a coveted position where they seem to be able to increase costs (at reasonable levels) and still attract similar numbers of applicants and first-year students,” Li writes. “Because it does not appear that students are substantially dissuaded from applying or enrolling due to price increases, highly selective law schools should be confident that they can increase prices and continue to attract a large pool of students.”
What Does This Mean?
There are a few implications behind Li’s study.
For one, Li says, it seems that theories around undergraduate sensitivity to tuition prices do not necessarily pertain to law school.
“One possibility is that law school is a fundamentally different pursuit than college and one that elicits greater commitment,” Li writes. “Students tend to be older and more professionally established. Once students have decided that they intend to go to law school, an increase in published tuition prices is not going affect their decision to apply. Moreover, once the student has been accepted to law school, a change in the net cost is not going to deter the student from enrolling.”
Another important aspect to note: the possibility to finance a legal education.
“Another explanation for the lack of support for price sensitivity (where enrollments decline when costs increase) could be that law school students are more knowledgeable about options to finance their legal education, and an increase in cost will not incentivize them to forgo enrollment,” Li writes.
According to the ABA, 90% of students take out loans to finance their legal education. Additionally, loan repayment options such as the Public Service Loan Forgiveness program and the Income-Based Repayment Plan are available to law graduates.
“Students who choose to apply to and enroll in law school may be knowledgeable enough about their borrowing and loan repayment options that increases in the sticker price and net price of law school do not substantially alter decisions,” Li writes.
Sources: Law.com, AccessLex Institute Research Paper, American Bar Association