ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Monday, May 4, 2015

Another Transparency Issue: Conditional Merit-Based Scholarships

ScholarOne of the ways in which law schools are allegedly inadequately transparent is in the award of merit scholarships conditional on the students’ achievement of a certain grade point average (GPA), usually 3.0, in law school.  The New York Times set the ball rolling back in 2011, with this article about a law student who lost her scholarship when she only managed a 2.967 GPA.  Law school critics allege that such conditional merit scholarships are a “bait and switch.”  It is an odd claim.  Law schools offer conditional merit scholarships for the same reasons colleges offer them, and there are no claims that the terms of the scholarship are unclear.  Why are law students assumed to be incapable of looking into standard grade normalizations curves for the first year? 

The real mystery is why conditional scholarships for law students come in for so much criticism when they seem to be generally regarded as valuable and successful on the undergraduate level.   The scholarships are, as their name suggests, conditional, and it would be completely unreasonable to continue to grant students merit scholarships when their performance in law school has been disappointing.  Students who lose their merit scholarship have gotten their first year of legal education for free, so what is their harm?  I think the claim for harm is derivative of the larger (and largely baseless) claim that law schools do not benefit their students.

 The Critique

Jerry Organ published an interesting article criticizing competitive scholarships and recommending best practices for the law schools that use them, including better disclosure of scholarship retention rates.  Law School Transparency proposed a new ABA standard that would require all law schools to publish on their websites data about the percentage of students who were able to retain their scholarships after the first year.  

As readers of this blog should know, disclosure is no panacea.  Professor Organ was able to find information about how scholarships work at 160 law schools.  That means that the information was out there.  Since Professor Organ was able to gather information about 160 law schools, it should not be difficult for students to gather relevant information about the one law school that they are considering attending.  Many students can find their law school’s curve by looking on Wikipedia.   Since a lot rides on the decision, one would expect students to investigate, especially since the investigation might not take more than a few mouse clicks.

If law schools were more aggressive and sat down with students offered conditional scholarships and walked them all through the statistics, would anything change?  Would a student choose not to go to law school because she had been told that there was a 50/50 chance that she would lose her scholarship after year 1?  I doubt it.  She would feel confident that she would be one of the successful students and, even if not, she would still have enjoyed a year’s free tuition.


The Model, Drawing on Conditional Fellowship Programs for College Students

In the undergraduate setting, conditional scholarships have many desirable effects.  They attract deserving students to college who otherwise would not be able to afford tuition, and then once in college, the students respond to the incentives of the conditional scholarship in predictable ways.  They take more classes if that is what they are required to do and take fewer classes if doing so helps them maintain the GPA they need to retain their scholarships.  They also seem to work harder to make certain that they retain their GPA. 

For example, some conditional scholarships require students to take a certain number of credits each year.  Others have no such requirement.  In On Money and Motivation, Judith Scott Clayton looked at recipients of West Virginia’s PROMISE scholarships, which cover students’ tuition and fees if they maintain a certain GPA.  In order to retain their scholarships, students have to earn 30 or more credits per year in their first three years.   Professor Scott Clayton found that PROMISE scholarship recipients were 25% more likely than other students to earn 30 or more credits in their freshman year and in the subsequent two years of college. In Georgia, which offers similar HOPE grants but without the minimum credit threshold, HOPE grantees were 9.3% less likely than other students to take a full 30-credit course load as freshmen.   PROMISE incentivizes students to take full loads.  HOPE incentivizes students to focus on their GPAs, even at the cost of taking an extra year to graduate.

Both Professor Scott Clayton’s study and an earlier one in the Journal of Labor Economicsby a group of Georgia scholars who focused on the HOPE program show that undergraduates respond to incentives in another predictable way.  Merit scholarships increase student enrollments.  They incentivize students to go to college who would not do so without the conditional scholarships.

But the studies do not capture other rational behavior that might be less desirable. Undergraduates may shop around for “gut” courses or instructors that can help them retain their fellowships without maximizing the quality of their educational experiences.  They may shop around for majors as well, changing from a demanding but long-term remunerative major to a less demanding and less useful major in order to retain the scholarship.  Still, there do not seem to be many voices  denouncing undergraduate merit scholarships as a bait and switch.  

Why Don’t Law Students Behave Like Undergraduates

One would expect that law students would be more sophisticated and more motivated to do well in law school, since law school class rank is likely more highly correlated with success in the job market than is undergraduate class rank.   But the optimism bias plagues people at all levels of sophistication and motivation.  The assumption seems to be that if law schools did a better job disclosing the conditionality of the merit scholarships, students would make different choices.  But it seems far more likely that students are behaving like consumers who shop for the best combination of prestige and affordability that the market in law school admissions has to offer them.  They are not turning down better offers in favor of conditional merit scholarships.  They are going to the best law school that they could get into and afford. 

 When students do well enough in their first year and transfer to another school, law schools don’t get to claim that the students have pulled a bait and switch.  We don’t moan about lost tuition dollars or point out how we had become invested in our students’ success, although we have.  We understand that they have to look out for their own best interests, and we wish them success in their careers.

Still, let’s deal with the toughest cases.  Let’s assume that most students who lose their conditional scholarships lose them after their first year of law school.  A law student’s options are more limited than an undergraduate’s if she needs a 3.0 to keep her fellowship, and her GPA after the first semester is 2.8.  Undergraduates can drop classes if they think they are going to do poorly or switch to pass/fail to eliminate the risk that outlier grades will drop them below the cutoff.  First-year law students cannot drop classes, take incompletes or take required courses pass/fail.  Nor do they have the freedom that college students have to shop around for a course or an instructor whose liberal grading policies will enable them to get over the GPA bar.   Most first-year students do not get to choose their professors.

In addition, undergraduate courses usually have multiple assessments before the final exam or project.  Undergraduates know which way the wind is blowing grade-wise and can take remedial measures long before the hammer falls.  Many law professors still give winner-take-all final exams.  Students have no idea going into the final exam how they will fare.  Certainly their first set of grades should give students on provisional scholarships notice that they may be in danger of losing the scholarship, but that does not mean they can figure out how to repair their transcripts sufficiently to get them over the GPA threshold in the Spring semester.

This does not mean that there is nothing law students can do to get up over the GPA threshold.  There are always tried and true solutions like working harder, studying more, talking to professors, doing more practice exams, etc.  I also think it is on the whole a good thing if law school conditional scholarships do a better job tracking academic achievement than undergraduate conditional scholarships.

So, where does this leave us? 

Probably pretty close to where we ought to be.  Conditional scholarships should incentivize law students to meet the GPA thresholds, and if they cannot do so, it would make no sense for them to keep their scholarships when stronger students still have to pay their own way.  In 2013, the ABA Journal identified 25 schools at which merit scholarship retention rates were 50% or less.   We do not know why this happened.  One possibility is that some law schools were playing a US News game, trying to get higher LSATs into the door without having to offer them three-year scholarships.  The other possibility is that those schools did a poor job predicting which admitted students would excel in law school.   Even if law schools were offering merit-based scholarships knowing that half of the recipients would lose them, what is the harm?  The worst that could happen to students who could not maintain a B average is that they have gotten a year of law school for free. 

One difference that might account for the different responses to conditional fellowships at the undergraduate and law school levels is the perceived value of the two enterprises.  Critics of legal education have persuaded themselves (and others) that law school is a “scam.”  It is thus a terrible thing when unsuspecting students are tricked into going to law school when they might do other things with their lives.  But few people question the value of a college education, so the very same conditional scholarships that incentivize to attend and work hard to remain in college seem an unalloyed good. 

As I have pointed out elsewhere, Michael Simkovic’s and Frank McIntyre’s work demonstrates that law school is also a good investment for most students.  If you, like me, are persuaded by peer-reviewed scholarship that uses high-quality data, relies on tested methodologies used in labor economics and is the most rigorous empirical study on the subject matter, you will think that offering students the chance to go to law school for free for at least one year for thing is a good thing.  The side that thinks a free year of law school is a bad thing tends to rely on unrepresentative anecdotes and selective data sets.

Students who lose their merit-based scholarships for law school will have to choose whether to continue through two more years of law school at full price, transfer to a less expensive law school, or reconsider career options.  It is good to have choices. It makes sense for law schools to continue to use conditional merit scholarships to attract students, and most likely, those students will benefit from the opportunities created by those fellowships, whether they enjoy those benefits for one year or three.

Links to Related Posts:

The Current Series 

X: Siloing: The Next Unneeded Import from Undergraduate Education
IX: Legal Education in the News and on the Blogosphere
VIII: Myanna Dellinger, Caveat Emptor and Law School Transparency
VII: Myanna Dellinger, On Issue-Spotting and Hiding the Ball
VI: Issue Spotting: A Response to a Comment
V: Did Legal Education Take a Wrong Turn in Separating Skills and Doctrine?
IV: What Is the Place of Core Doctrinal Teaching and Scholarship in the New Curriculum?
III: My Advice to Law School Transparency: Declare Victory and Move On
II: SLOs and Why I Hide the Ball (and Why You Don't Have To)
I: Why Is the Legal Academy Incapable of Standing Up for Itself? 

Related Posts form 2012:

Thoughts on Curricular Reform VI: Preparing the Academically Adrift for Practice
Thoughts on Curricular Reform V: A Coordinated Curriculum and Academic Freedom
Thoughts on Curricular Reform IV: The Place of Scholarship in the 21st Century Legal Academy
Thoughts On Curricular Reform III: The Costs of Change
Thoughts on Curricular Reform II: Teaching Materials
Thoughts on Curricular Reform I: The Problem

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Hi Jeremy,

I'm trying to work through this claim that you make: "Professor Organ was able to find information about how scholarships work at 160 law schools."

I looked into Professor Organ's paper, and this seems to be the relevant section:

"Based on a review of publicly available information regarding law schools and their scholarship programs, this article classifies scholarship programs at 160 law schools. Of these 160 law schools, it appears that 122—over 75 percent—have some type of “competitive” scholarship program while only thirty one—fewer than 20 percent—have a “non-competitive” scholarship program. Notably, only four of these 160 schools had any information posted on their webpages indicating renewal rates on scholarships."

He was able to find out something about scholarships at 160 schools, but he doesn't really know 'how they work' at all of them. He could only figure it out for 35 schools -- the 31 without conditional scholarships and the 4 that disclosed the condition.

[Also, are you aware that your site has an auto-refresh feature that causes the page to reload every few minutes? Maybe there's some good purpose for that, but the only one I'm aware of is to inflate page counts.]

Posted by: Derek Tokaz | May 4, 2015 12:51:54 PM

Thanks for this post.

1. When you talk to students, they worry that some schools engage in "section stacking." That is, they worry that students with conditional scholarships are put in the same first year sections as a means for culling scholarships. Do you have any information about whether that's true or that's just an urban myth?

2. Organ's paper showed that some schools have huge rates of non-retention of scholarships -- far above the ordinary rates that most schools have. How is that happening? Is that fully disclosed to students?

Posted by: John Steele | May 4, 2015 2:49:41 PM

To answer Derek's question, I am aware that the blog refreshes, and I have no idea why it does so. We are part of a larger blog empire, and the ways of the Blog Emperor are mysterious.

To answer John's questions: 1. I have no information about whether it's true that schools engage in section stacking, but my gut says urban myth. As I've said before, I have never seen evidence of any bad faith on the part of law school administrations. Plenty of human-all-too-human bad decisions but no dirty tricks.

My gut also says that the existence of the myth suggests that students already possess information about their chances of keeping their conditional scholarships, and they could likely get more, including information about "section stacking" by asking for it, directly, from their law school administrations.

2. I already stated in the main post two theories about what might be going on at the law schools that had very low scholarship retention rates. This is an area where transparency would be helpful, but I hope and expect that they have already been shamed into changing their ways to the extent that they can.

Posted by: Jeremy Telman | May 4, 2015 3:09:42 PM

Jeremy, thanks for replying.

These days, my "guts" and other peoples' "guts" may not be enough. I noticed that Jerome Organ's study showed that the following schools had less than or equal to 40% retention rates: Akron (21%); St. Mary’s (21%) ; Howard (24%); St. Thomas in Florida (24%); Texas Wesleyan (28%); George Mason (32%); Rutgers-Camden (32%); Barry (39%); Florida A&M (40%); Santa Clara (40%).

Still, going with "guts," I can't imagine that those schools were unaware of, and didn't track those remarkably low rates. Do you, or Organ, or anyone else, have explanations of what was going on inside those schools? If not, why should we expect applicants to have known?

Posted by: John Steele | May 4, 2015 3:36:30 PM


(1) On a hunch, I switched over to IE, where I don't have an ad blocker, and sure enough, the site runs Google AdSense. Automatic refresh violates the AdSense policy. See here:

(2) But, that's all beside the point. My real question was how you reached the conclusion that Organ was able to tell how scholarships work at 160 schools when his own paper says he only figured it out for 35 schools. He knew 122 had conditions, but only at 4 did he know what the conditions were (plus 31 without conditions).

And I have a few other points that I think would be useful to address in this conversation:

(3) Has anyone argued against conditional scholarships generally? I know there are complaints about lack of disclosure of the finer details of the scholarships, but I'm unaware of any complaints about there being conditions.

(4) You ask what the harm is in having a free year in law school, and I believe you're oversimplifying the situation quite a bit. When they're getting scholarship offers, most students aren't deciding between Law School and Not Law School. Instead, they're deciding between Law School A and Law School B. And, it's possible they've received scholarships from both. Don't the conditions matter a whole lot then? Yes, transferring is always an option, but the student won't likely have a scholarship at the second school, and transferring comes with a whole host of other issues (moving expenses, loss of academic and professional network, etc).

(5) When talking about the free year in law school, you seem to have ignored that the opportunity cost. Someone with a full ride is going to forego a year of work. Because they're not working, they're likely to debt finance their living expenses. That free year is not entirely free. At the end of it the student could had instead a year of work experience and some money in the bank instead of $15,000 in debt.

(6) Finally, I should note that of course not all scholarships are for the full amount. In fact, most are not. I received a $10,000 scholarship to NYU, which meant I'd be paying about $30,000 still. Don't you think the conditions and retention rate would be very important to know?

(7) I'm going to just repeat (3) here. I've just finished grading papers, and it's the type of turn I try to keep my freshman from taking. If you're going to ascribe an opinion to the other side of the argument, it really helps to identify who has actually made that argument. Who has argued against conditional scholarships in general?

Posted by: Derek Tokaz | May 5, 2015 4:31:46 AM

John, I didn't read Prof. Organ's paper and I'm not a stats guy, but one easy answer would be to compare the number of students awarded merit scholarships in the first instance. Perhaps the schools you name are simply more likely to offer a greater percentage of their class a conditional scholarship upon admission. If that's true, they'd (likely) have a lower retention rate than schools that offered a smaller percentage of their incoming class similar scholarships.

Because I largely agree with Jeremy, I think the more interesting question is whether schools are somehow acting improperly if they "take advantage" of potential students' optimism bias, but don't do anything possibly more nefarious like "section stacking."

Posted by: Matthew Bruckner | May 5, 2015 5:44:47 AM

Matthew, thanks. I've been a hawk in terms of keeping an eye on law schools, but fwiw it's my view that if the law schools are transparent about scholarship retention, employment outcomes, etc., we should expect applicants to make decisions in their own best interest and shouldn't worry about the choices they make for themselves. At that point, other sources (LST, NYT, blogs) will ably fill the vacuum and provide info to undergrads and applicants.

As for those schools that top the list of non-retention, I trust that everyone familiar with legal education will see the name of those schools and draw their own conclusions as to what's going on.

Posted by: John Steele | May 5, 2015 8:56:22 AM

There is an important difference between law schools and undergraduate schools, in that undergrad schools (afaik) do not have mandatory curves. Thus, it is at least theoretically possible that all recipients can keep their conditional scholarships if they work hard enough, even if many do not.

In contrast, most law schools have mandatory curves. At some, according to the NYTimes article, this means that a good number of conditional scholarship recipients will fail to reach the benchmark, no matter how hard they work.

I suppose a determined and statistics-savvy applicant could figure that out in advance, but the case for more transparency is nonetheless compelling.

Posted by: Steven Lubet | May 5, 2015 11:23:08 AM

Jeremy, I'm curious- what percentage of your incoming students do you think know that your law school grades on a curve? What percentage of those could tell you roughly (within 15%) what the curve is?

Posted by: BoredJD | May 6, 2015 7:49:22 AM

Professor Telman, per Lubet's comment above - Valparaiso University School of Law, your current employer, has revoked 30-40% of conditional scholarships in recent years while handing out fewer and fewer scholarships to boot on those same years.

It is fine and good to debate policy at a high level, especially when the results of that debate do not affect you directly. However, "section stacking" cuts against the rhetoric and displays that less than high-minded ideals are at work here and elsewhere.

Posted by: dupednontraditional | May 6, 2015 7:54:14 AM

Jeremy: "As I've said before, I have never seen evidence of any bad faith on the part of law school administrations."

Counting everybody with any sort of job as 'employed'; only counting certain jobs for salary statistics.

At this point many law school administrations exhibit bad faith.

Posted by: Barry | May 6, 2015 9:59:37 AM

John: "These days, my "guts" and other peoples' "guts" may not be enough. I noticed that Jerome Organ's study showed that the following schools had less than or equal to 40% retention rates: Akron (21%); St. Mary’s (21%) ; Howard (24%); St. Thomas in Florida (24%); Texas Wesleyan (28%); George Mason (32%); Rutgers-Camden (32%); Barry (39%); Florida A&M (40%); Santa Clara (40%). "

What I notice is that only a couple of those schools are worth going to for any price.

And Santa Clara is a school which, IIRC, had a sudden, massive and totally unexplained drop in the percentage of grads who were listed as 'unemployed, not seeking work'. This drop occurred precisely when ABA rule changes no longer favored binning unemployed grads in that category.

BTW, Jeremy - I'd count what SC did as 'bad faith'. Unless there's a reason, and Steven Diamond didn't have one, even after repeated challenges.

Posted by: Barry | May 6, 2015 10:03:06 AM

Bear with me: this is a lengthy post written up during my lunch break, but I think I can shed some light on Valparaiso law school and how well my classmates and I understood the grading system, scholarships, and employment prospects prior to attending. I went from there starting in the Fall of 2011 and graduated last May.

One of the big reasons I chose Valparaiso was that they offered me a substantial scholarship (which I later learned was subsidized by my lower credentialed friends and classmates), and that the conditions were what I thought at the time to be a manageable 3.0. Comparing that to another similarly ranked school that had a top 1/3 stipulation, I thought going to the school with the 3.0 stipulation was a no-brainer.

I recall a conversation that my mother and I had with one of the admissions staff, in which she asked how many people were given scholarships to the school. The answer was that that is not something that the school shares. Just a year or two later the ABA required law schools to provide detailed data on scholarships, the amount of scholarships, and the amount of revoked scholarships. When we asked how the economy was, we were told that it was "tough" (in 2011). "Tough" turned out to mean that less than 50% of the graduates gained a full-time, bar-passage required job within 9 months. My class was able to almost hit that elusive 50% mark by 10 months, but that isn't very reassuring to my many friends and classmates who were either unable to pass the bar or able to find full-time legal work.

It wasn't until the 1L introductory week that I realized that a 3.0 stipulation is actually a 1/3 stipulation. I remember the day that then-Professor Adams painstakingly tried to explain the way grades were given out at Valparaiso. It was a complicated affair, with only a certain amount of A's given, a wider range of B's "allowed," and C's, and maybe a few D's.

I asked someone in the financial aid department how hard it was to maintain a 3.0, and I was told something to the effect that I shouldn't worry too much because the school wouldn't have given the scholarship to me if they didn't think I could maintain it. According to self-published data, 14 of my 47 classmates which entered with a scholarship had it revoked. Those who were K-JD's who hadn't done much research into the nuts and bolts of law school were shocked when we realized that our grades were based off of one exam, and that very little feedback was provided as to how well we had learned the material. Grading appeared random as well, though there were a segment of my classmates who mastered the art of the law school test early on. Fortunately I was able to maintain my scholarship all three years.

I also didn't learn until late 1L year that the law school's curve was set below 3.0, and that it was something around 2.75. That's right, the median GPA at Valparaiso was less than a B. According to alums that I talked to who had graduated 20 and 30 years before us, the median GPA used to be even lower. One person I talked to said that valedictorian in his or her class was in the 3.1-3.2 range. I suspect that the GPA is set so low to discourage transfer students, which is a significant problem for the school, as the other two accredited law schools in Indiana not named Notre Dame siphon off a sizable portion of each 1L class, and a side effect is to eliminate scholarships.

I was never able to take a class with Mr. Telman, as my interests were in the criminal law field, but he was highly regarded by my friends and classmates, both as a teacher and as a person.

I respectfully disagree with Mr. Tellman that my class understood prior to beginning school, implicitly or otherwise, the way that the law school grading interacts with conditional scholarships, which is exacerbated by the randomness of grading below the very best students. Law review spots were dominated by those with scholarships, as well as the best externships and internships. The ultimate result is that the students with the least cost of law school usually receive the best outcomes.

Since I have been a 1L the law school has drastically increased the number of scholarships that were given out to 1L students, even as admission standards have plummeted to some of the lowest in the nation. Students who would not have been accepted 5 years ago are now entering the law school with discounts that students with much better LSAT's and GPA's would not have received.

To the school's credit, the 509 disclosure web page is well-organized and the data is mostly there (the data for the amount of scholarships revoked for the 1L class when I was a 3L is still missing). However, I believe that most students that apply there, and indeed I was the same, would not know what to do with the data without significant investment in reading the blogs or visiting websites such as Top Law Schools. Data without analysis by independent people is limited in its usefulness. Optimism bias and overwhelming trust in law school administration and faculty in prospective students, in my experience, tend not to fade until the end of 1L year. And by then, the sunk-cost fallacy is alive and kicking.

Thank you for your patience.

Posted by: Steven Cichon | May 8, 2015 11:03:57 AM

Steven, I wonder if your class could crowd source the issue of section stacking. That is, would it be possible to contact members of your 1L class, ask them their first year section and ask them if they had conditional scholarships? (By way of example, the students at UC-Berkeley Law had long complained that the supposedly random numbers given out for registration priority each semester were not at all random. The administration long asserted they were random. The students crowd sourced the problem and proved that students who had applied to a UC for undergrad were systematically given better priority for registering for law school classes each semester.) Valpo is a private school and a FOIA request is not an option. But it would be fascinating to see if your class had section stacking.

Posted by: John Steele | May 8, 2015 2:11:05 PM