Hunger Games

May 4th, 2015 / By Deborah J. Merritt

Professors Michael Simkovic and D.A. Jeremy Telman have both written posts (here and here) praising the use of conditional scholarships for law students. Neither opposes the ABA’s recent rule, which requires greater transparency about forfeiture rates for these scholarships, but neither sees much value in the rule. Telman doubts that disclosure will affect student decisions, while Simkovic suggests that any concern over conditional scholarships was “yet another example of critics applying a double standard to paint law schools in the worst possible light.”

In reaching these conclusions, the posts compare law school conditional scholarships to similar awards at the college level. In the latter context, conditional scholarships promote matriculation, academic achievement, and on-time graduation. Neither writer, however, acknowledges a key distinction between colleges and law schools that administer these awards. At most colleges, conditional scholarships encourage all recipients to succeed. It is possible for all scholarship students to obtain the GPA and credit hours required to maintain the scholarship–and the college hopes that they will.

Some law schools play a very different game with conditional scholarships. These schools impose conditions that, because of mandatory curves in required first-year courses, a significant percentage of recipients will fail to meet. It is mathematically impossible for all scholarship recipients to keep their awards at these schools, and the percentage who will fail is quite predictable to the schools. These are hunger-game scholarships.

How Many Losers?

According to the ABA’s website, 124 law schools awarded conditional scholarships in academic year 2013-14. Eight of those programs were quite small, awarding fewer than 10 conditional scholarships and imposing almost no forfeitures. Sixteen schools, however, showed both a substantial number of conditional scholarships and a forfeiture rate of 50% or higher. At another 26 schools, the forfeiture rate fell between one-third and one-half.

Did these schools do a “poor job predicting which admitted students would excel in law school,” as Telman suggests? Probably not, unless they are perpetually bad at predictions. Forfeiture rates were high at most of these schools in 2011-12 and 2012-13 as well as in 2013-14. The other possibility that Telman suggests seems much more likely: These “law schools were playing a US News game, trying to get higher LSATs into the door without having to offer them three-year scholarships.”

Is there anything wrong with that? I see three problems. Two of them have been alleviated by the ABA rule, but I describe them to underscore the importance of that rule.

Information Asymmetry

The ABA rule addressed a marked information asymmetry between applicants and law schools. As Telman and Simkovic note, many colleges operate conditional scholarship programs and students understand those programs. That, however, was part of the problem. Law school grading is very different from college grading, and many students didn’t understand the difference when they accepted conditional scholarships.

A few years ago, a bright college woman was part of a group of law students I encountered at a coffee shop. The college student was interested in attending law school, and all of us encouraged her ambitions. Then the college student raised a question: “I don’t understand why law school is so competitive,” she asked. “It’s not like there’s a quota on the number of A’s or anything.”

The rest of us inhaled deeply as we prepared to explain the facts of law school life to her. In fact, there is a quota on A’s in first-year (and many upper-level) courses. There’s also a quota on B’s. And because of those quotas, there’s an effective quota on the number of students who will be able to maintain conditional scholarships.

The law schools understand the mathematics of this quite well, but many college students don’t. They are more accustomed to objective grading scales (85% of correct answers merits a B, no matter how many students reach that score) or very loose curves. Even a student who read the Wikipedia entry on law school grading curves, which Telman touts, wouldn’t understand the intersection of the curve with an all-required first year and conditional scholarships. (And shouldn’t a good college education teach them to distrust Wikipedia?)

The ABA rule has greatly reduced this asymmetry. Will it make a difference to prospective students? Professor Telman thinks not, but I disagree. We’ll see how application and matriculation rates work out at schools with the highest scholarship forfeiture rates.

Hidden Agendas

The second defect in conditional scholarship programs is the extent to which they allow schools to claim they are serving students when they are really serving their own interests. The goals cited by Professors Telman and Simkovic (i.e., encouraging students to study hard and to finish their degrees on time) are largely irrelevant in law school. Our students already work hard and finish their degrees on time. Law review membership, academic prizes, and employer preferences provide plenty of motivation for those goals.

If law schools truly wanted to assure hard work in law school, they wouldn’t award conditional scholarships to first-years. Instead, they would save some of their scholarship money to hand out as graduation prizes for the students who earned the highest grades during their final “slack off” semester of law school.

Similarly, if law schools want to encourage students to try law school with little risk, there are better options than high-forfeiture conditional scholarships. We could, for example, award a master’s degree at the end of the first year. The promise of that degree, with its opt-out option, might draw more students to law school than conditional scholarships.

Conditional scholarship programs with high forfeiture rates have one overriding goal: to secure the highest possible revenue for the school, along with the best possible LSAT and UGPA profiles. This is a game in which the odds greatly favor the house and, as long as schools could hide their forfeiture rates, it was unlikely that bettors would properly estimate those odds.

The ABA’s disclosure rule, along with the discussion prompting it, has made clear that many law school conditional scholarship programs exist to benefit schools, not students. When academic institutions engage in self-interested behavior, they should be upfront about those motives–not paper over their goals with proclamations of student interest.

Promoting Competition

My final objection to high-forfeiture conditional scholarships is one that the ABA rule did not cure. These scholarships increase the stress and competitiveness of an already stressful environment. Stress is not something that we should just “get over” or that students should “[wo]man up to.” Stress makes people sick, angry, and prone to substance abuse or mental illness. It can also impair their professional judgment, hurting both clients and lawyers.

I serve on the board of directors of the Ohio Lawyers Assistance Program (OLAP). That’s an organization, similar to ones in most states, that provides confidential assistance to law students or lawyers with alcohol, drug, or mental health problems. The demand for OLAP’s services is high–and we only see the people who realize they have a problem and are willing to seek treatment.

Many aspects of law practice are stressful. Working long hours is stressful. Responding to unbalanced clients is stressful. Losing a dispute is stressful. Unpaid bills are stressful. We don’t need to add to these stresses by increasing the stress level in law school. Contrary to some popular conceptions, increased stress doesn’t improve your ability to handle stress; it just makes you more likely to fall apart.

Helping Ourselves

I see little indication that conditional scholarships help students. The same money distributed evenly among recipients probably would better serve student interests. I’m not sure that these scholarships will even continue to serve law school interests. Law school finished sixth in a recent ranking of graduate degrees, not because our salaries are lower than those in the top five fields but because our stress level is higher. Some very smart people don’t want to waste hours dealing with manufactured stress.

In fact, that college student I mentioned earlier? She decided to take her career ambitions and graduate tuition dollars elsewhere.