The Irony of Requiring Meritorious Performance to Maintain a Law School Merit Scholarship

Posted by Jeff Lipshaw

Sarcasm and curmudgeon alert.  An article on the front page of the Sunday Business section in today's New York Times brought to light the hidden truth that many law school merit scholarships actually require the recipient to (gasp!) maintain a record of academic merit in law school to maintain the scholarship after the first year. 

I'm still not quite sure I understood what point the article was trying to make.  I don't think there's anything unusual about schools using merit-based scholarships to raise the profile of the student body; when I was in high school in the late 60s and early 70s, Michigan State offered all National Merit Finalists a free ride.   I was on the board of directors of a prep school and our admissions office did it for promising 8th graders.  Nor do I see how it's unfair to make the retention of a scholarship, based on the idea of one's academic merit, dependent on maintaining meritorious status.  At least that way the school is really buying merit, and not just an LSAT score!  Moreover, assuming the scholarship are full rides, the student isn't out of pocket; merely out of the investment (such as it was) of the year's time.

Somewhere deep in the article you get to what I suppose the point is, full disclosure. 

Of course, there is nothing inherently wrong with incentives that ask students to earn strong grades in exchange for a break on tuition. But given that students are often shocked when their scholarships disappear, there are some basic questions about good faith and full disclosure here — an irony, given that those topics are covered in law school.

It's hard to argue with disclosure, particularly in this context, where the scholarship has conditions, and you might not attend the school on account of them.  I suppose this triggered my cynic-o-meter: one student's revelation "that she was surrounded by dozens of students just as motivated to get a 3.0 as she was."  Really?  Should that have been disclosed?  "Caution:  law school is competitive."

But I've always been something of a "disclosure as remedy" skeptic, at least when the disclosure goes to one individual undoubtedly burdened by all the usual cognitive biases (i.e., I'm not an efficient capital market hypothesis zealot, but I feel better about disclosure as remedy when there are thousands of people reading and pricing the disclosures for me).  It's easy enough to create a scholarship contract with a bold-faced all capitals paragraph that says:  THE CONDITION OF THIS SCHOLARSHIP IS THE MAINTENANCE OF CLASS STANDING IN THE TOP THIRD OF OUR CLASS GIVEN THE MANDATORY GRADING CURVES TO WHICH ALL STUDENTS ARE SUBJECT. 

But how far does disclosure have to go? To take the example in the article, a student turns down paying full tuition to go, say, to Hastings, a top 100 school, in favor of getting a tuition-free education at Golden Gate, no doubt a fine institution but not carrying the same reputational gravitas as Hastings.  Seems to me you pay your money (or, as here, not pay) and take your chances.  Isn't the more serious issue taking a full paying student at the lower end of the admissions scale, and having the benefit of $30-40K in tuition with the very real possibility that the student (a) won't make it until the second year, (b) won't graduate, or (c) won't find a job?  Even there, do we really need to disclose to students that schools have curves, students at the bottom get bad grades, and despite the student's having paid the tuition, there's no guarantee the student will earn the degree?  I have this image of one's acceptance letter carrying warning decals that make it look like my lawn mower or, at the very least, like my Starbucks cup.  "CAUTION:  THE BEVERAGE YOU ARE ABOUT TO DRINK IS HOT, THE SCHOOL YOU ARE ABOUT TO ATTEND HAS COMPETITIVE STUDENTS, THE LIFE YOU ARE ABOUT TO LEAD IS UNCERTAIN, AND THERE'S NO WAY OUT."