Sunday, May 1, 2011

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."

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The Times gets it right most of the time on law school misbehavior but, I agree that I am not sure what the punch line is on this one.

Posted by: Jeff | May 1, 2011 9:40:06 AM

Two issues not covered help to put this practice in perspective:

1. Only non-top schools tie merit scholarships to performance in law school. Harvard, Yale, and Stanford by and large don't offer them at all, and the next 10-15 schools which all do offer them have either no or no meaningful mark to hit, i.e., the curve will be a 3.3 and you have to maintain a 2.0.

2. Schools that do tie performance to merit aid do so in crafty (one might say underhanded) ways. For example, offering 25% of the class merit aid and then putting them all in the same section and letting the curve take care of things.

Posted by: Greg | May 1, 2011 10:42:52 AM

Law professors might be indulged their self-serving bias; it's not easy for them to recognize the the point when it involves self-scrutiny or evaluation of practices that lead directly to safeguarding (or improving) faculty salaries & recognition at the expense of pulling the wool over the eyes of easily duped 0Ls or leading to 1Ls' undertaking crippling debt to finish out a lower-tier law school.

What's wrong with requiring the school to disclose, in the admissions acceptance/grant letter how many students on grants will be competing to retain them and what probable number of those grant-funded 1Ls will predictably fail to keep them -- not because they are not B students but because a major point of the curve is to defund at least a third of them and force them into the decision to undertake crippling debt?

Posted by: santamonicashrew | May 2, 2011 8:55:57 AM

To quote from the article: "At Golden Gate and other law schools nationwide, students are graded on a curve, which carefully rations the number of A’s and B’s, as well as C’s and D’s, awarded each semester. That all but ensures that a certain number of students — at Golden Gate, it could be in the realm of 70 students this year — will lose their scholarships and wind up paying full tuition in their second and third years."

So if 50% of the students are given merit scholarships that require them to maintain a GPA above 3.0, but the grading curve guarantees that only 30% of students will get a 3.0 or above, then it is a mathematical certainty that some students will lose their scholarships no matter how hard they work, no matter how smart they are, and no matter how much they deserve them.

The article points out that in order for students to know what the odds are that they will keep their scholarships, they need to know what the curve is, and what percentage of students have been offered the scholarship. I agree with the article that this information should be more easily available to students.

Posted by: Jennifer | May 2, 2011 2:59:29 PM

The blogger, Mr. Lipshaw, misses the point hilariously.

If you let your customers believe they have a fair chance when they do not, you are a conman playing people for suckers or a carney running a crooked betting game. These law schools offer scholarships to students knowing that, say, two-thirds of the scholarships are going to be lost in the second and third years...but conceal that information from the students.

Disclosure is the answer. There is no way a student could learn the crucial and material facts about scholarship withdrawal unless the school revealed them. The schools conceal the information because they need to be deceptive for the con to work. No one with half a brain would take a scholarship that they knew was going to be one year long.

Posted by: Lowellguy | May 4, 2011 6:04:59 PM

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