Post webinar brief - Cost and Aid strategies at Law Schools - Higher Education


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Presenting insights into two key components of student choice, this webinar is a component of Hanover Research's 2013 Achieve Growth series for higher education executives. Part of a series of webinars dedicated to growing and sustaining enrollment, this webinar will present methodologies you can use to determine an optimal cost and aid strategy for your law school. What you'll learn during this segment:
• How to determine student responsiveness to tuition cost, net cost, and aid at your law school compared to your competitors
• Understanding of tools such as tuition cost sensitivity, net cost sensitivity, and tuition discounting benchmarking
• Impacts of selected strategies on specific student populations
• Lessons learned from the use of cost and aid strategies from a Hanover Research partner

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Post webinar brief - Cost and Aid strategies at Law Schools - Higher Education

  1. 1. Research Without Limits™Law School Administration PracticeWEBINAR BRIEFINGJune 2013Featuring Hanover Research partnerAusten Parrish, Interim Dean and Chief Executive Officer ofSouthwestern Law SchoolCost and Aid Strategies:How to Maximize Resultsfor Your Law School©2013 Hanover Research
  2. 2. OVERVIEWThe recent economic downturn has resulted in both students and highereducation institutions reconsidering the way that the cost of a legal educationis approached and addressed. Prior to the onset of the economic recession,students were not particularly price-sensitive shoppers in the law schoolmarket—a trend which held especially true for those considering higher-pricedprivate law schools. Recently, however, the sluggish economic recovery hasdrastically changed the way students approach a legal education. High stickerprices have proven a deterrent even as tuition discounts continue. This has hada significant impact on the business model of law schools, especially thoseheavily dependent on tuition revenue.Presenting insights into strategies taken by law schools to address studentindebtedness and offer tuition discounts, the Cost and Aid Strategies: How toMaximize Results for Your Law School webinar provided a specialized venue forlaw schools to learn about strategies currently used by peer institutions. Thiswebinar, as a component of Hanover Researchs 2013 Achieve Growth seriesfor higher education executives, presented methodologies for law schooladministrators to use to determine an optimal cost and aid strategy at their lawschool.CONTENT & PRESENTERSIn addition to research presented by Amy Moynihan of Hanover Research, thiswebinar featured the perspective of Austen Parrish, Interim Dean and ChiefExecutive Officer of Southwestern Law School.KEY FINDINGSThis webinar explored commonly used law school tuition and cost aidstrategies through the presentation of a selection of the findings of HanoverResearch’s extensive tuition discounting research. To supplement this research,the expert scholar/practitioner perspective of one of Hanover Research’spartners provided the invaluable perspective of a law school administrator.Below we present several of the key findings of the webinar to provideinformation on this topic as well as to explore the complicated intricacies ofinstituting aid strategies at law schools.THE ISSUE OF HIGH STUDENT INDEBTEDNESS HAS PERMEATED THE NEWS INRECENT YEARS.High student indebtedness and the reduced number of law school applicationshas been a common topic in both legal education resources as well as thepopular press. Often critical of law schools and law school tuition rates, manyarticles highlight the high amount of student indebtedness for those who incurdebt, as well as the recent trends of fewer applications and applicants to lawschools.2For inquiries, e-mail or call 202.559.0050Webinar Briefing:Cost and Aid StrategiesJune 2013PRESENTERSAmy MoynihanContent ManagerHanover ResearchMr. Austen ParrishInterim Dean andChief ExecutiveOfficer ofSouthwestern LawSchool“We found the tuitiondiscount studyparticularly helpful tohelp explain to internalstakeholders and theBoard why we wereimplementing changesin our approach totuition and scholarships.The Hanover studyallowed us to create abenchmark for ourtuition discount rate,which we can revisit ona periodic basis. It alsoprovided us with aframework to trackdevelopments over thenext five years aschanges in legaleducation take hold.”-Austen Parrish
  3. 3. 3Webinar Briefing:Cost and Aid StrategiesJune 2013For inquiries, e-mail or call 202.559.0050Some statistics about law school debt and applications to law schools: The Law School Admissions Council reports that as of May 2013, there is a 13.4 percent decrease inapplicants and a 18.8 percent decrease in applications when compared to 2012. The U.S. News & World Report finds that of students who incur law school debt, the average amount of debtis over $100,000 per student. The New York Times reports that law school applications and enrollment is falling, based on data from theLaw School Admission Council. Despite the volatility of application rates over the last few years, tuition costs have climbed steadily,outpacing inflation and making enrollment increasingly costly for students. Forbes reports that the averageprivate law school tuition rose from $23,000 to $40,500 between 2001 and 2011. During that time, theaverage public law school tuition rose from $8,500 to $23,600.The current climate has put pressure on law schools to cut costs, reevaluate programming, and search forinnovative practices to remain financially viable. Some schools have responded better than others, and theseschools in particular provide great ideas for tuition and aid strategies.A KEY FINDING OF RESEARCH EXAMINING THE IMPACT OF TUITION CHANGES ON ENROLLMENT IS THATSTUDENTS ACT LIKE CONSUMERS.While students are responsive to price changes—whether they occur as a result of tuition hikes or changes infinancial aid, students tend to be less sensitive to price than consumers are for many other goods and services.A useful tool for measuring the responsiveness of a student’s enrollment decision to changes in a school’stuition is tuition elasticity, which is measured as the absolute value of the percentage change in enrollmentdivided by the percentage change in cost of going to school (tuition rates). The higher this ratio, the moresensitive enrollment is to changes in tuition costs.THERE ARE A VARIETY OF COMMON TYPES OF AID STRATEGIES IN PRACTICE.Common and trending aid strategies identified through research are: Merit scholarships Merit scholarships awarded on an individual basis to students are a common aid strategy. In thisstrategy, institutions offer awards of varying amounts to students based on a variety ofqualifications, including LSAT scores, undergraduate GPA, and undergraduate institution. Thesescholarships are often not guaranteed past the first year and are often based on the student’s firstyear GPA reaching a certain threshold. The ability of students to negotiate scholarship awards A tuition strategy that is being used more often now is the ability of students to negotiatescholarship awards. This movement towards the negotiation of scholarship offers is coming fromboth students and institutions. Awarding every student a scholarship Some institutions are choosing to award all students a scholarship rather than lower tuition.
  4. 4. 4Webinar Briefing:Cost and Aid StrategiesJune 2013For inquiries, e-mail or call 202.559.0050 Significantly reducing tuition for qualified students Another strategy that can be used is to significantly reduce tuition for qualified students. In thisstrategy, the institution sets a threshold (usually based on LSAT scores and undergraduate GPA) anddiscounts tuition to all accepted students to meet this threshold. This strategy is often used tocompete with a nearby, lesser-expensive, competitor.INSTITUTIONS MUST EXAMINE THE POTENTIAL ADVANTAGES AND CONSEQUENCES OF TUITIONDISCOUNTING STRATEGIES.The use of aid strategies is very context specific and should be considered carefully by institutions to determinethe most beneficial strategy. Several advantages of tuition discounting are: It allows institutions to address student need as lower-income students may be able to enroll at institutionsthey would not otherwise consider as a result of the discount rates offered by these institutions. It allows institutions to shape their student bodies as institutions are able to adjust their academic profilesby using tuition discounts to entice certain students to enroll. It can aid institutions in increasing enrollment.Several identified consequences of tuition discounting are: It may unintentionally reduce student accessibility and affordability. Institutions that pay for discounting by shifting funds from instructional and student services may impedetheir own efforts. The finding that financial factors do not significantly influence the law school choices of many affluentstudents. As such, students receiving large tuition discount offers might have enrolled without suchsignificant discounts or would not have enrolled no matter the discount level. While the actual tuition cost to students may be discounted at significant rates such as 25-30 percent, manypeople, including legislators and other public commentators, often instead refer to the sticker price whendiscussing the cost of a legal education.THE GREAT VALUE IN USING DATA-DRIVEN ANALYSIS TO MAKE DECISIONSDifferences in regional economies, school quality indicators, peer group competition, and studentdemographics (to name a few variables) preclude the identification of an across-the-board tuition pricesensitivity threshold. As a result, determining price sensitivity levels within a particular student market isentirely context-specific. To fully understand its role in its market in Southern California, Southwestern LawSchool commissioned a tuition discounting benchmarking study from Hanover Research that allowedSouthwestern to analyze tuition rates, tuition discounts, and enrollment trends at similarly situated free-standing, independent law schools in urban settings as well as all law schools in Southern California for a periodof five years. Key takeaways from this research for Southwestern Law School focused on the competitiveness ofthe market in California, a comparison of tuition prices paid by students when accounting for tuition discounts,and insights into students’ decision-making processes.
  5. 5. 5Webinar Briefing:Cost and Aid StrategiesJune 2013For inquiries, e-mail or call 202.559.0050Using this data, Southwestern Law School made several shifts in its aid strategy, including: Southwestern moved to flat rate tuition to provide greater stability and predictability for students, and settuition at a rate just below or at the same rate as its main competitors in the region. The institution began allocating more funds to entering student scholarships. The institution added a broader array of scholarship awards, rather than the previous method of offeringeither full or half scholarships. This allowed Southwestern to distribute scholarships to a larger percentage ofthe entering class. Southwestern created an alumni interview program where most students that are awarded a scholarshipare interviewed by alumni before being offered the scholarship. Southwestern decided to retain its relatively low renewal requirements for entering-student scholarships.While other institutions often renew scholarships in the second or third year if the student earns a GPA thatis at or above the curve, Southwestern decided to continue its scholarship renewal GPA at 2.7. A key reasonfor this decision was to allow predictability, so that students could better assess the total cost of a legaleducation before starting the program. Southwestern increased its continuing student scholarships so that each student in the top 30 percent of theclass receives a scholarship. The amount of this scholarship is based on class rank.Southwestern Law School, then, used data-driven analysis to inform its tuition and aid strategy decisions,including the price of tuition, types of scholarships awarded, and the amount of scholarships.POLLING RESULTSSeveral live polls during our webinar provided invaluable information on the aid strategies in practice at theinstitutions of our webinar participants. When asked to identify the top aid strategy that their institutionparticipated in, respondents overwhelmingly responded that merit scholarships were the top type of aid.When asked about the goals of the aid strategies at their institution, 70 percent of participants that respondedidentified the ability to attract higher quality students as a goal of the strategy.QUOTES“By the end of 2011 and the beginning of 2012, as we started to prepare this study and define what our goalswere, there had been a decline in applications to law schools but not as dramatic as we’ve seen this past year.The continued decline in applications this year, however, reinforced what we had been thinking and made theneed to be more strategic in our aid and scholarship decisions more pressing, not less.” –Austen Parrish“We needed a scholarship (tuition discount) strategy that fit with our institutional mission. Southwestern has along connection with the local community. It prides itself on being able to provide access to non-traditional,underrepresented groups and first-generation lawyers. Any strategy adopted needed to be consistent with ourbusiness model and improve competitiveness in the Southern California market, but it also needed to be true toour mission, identity, and institutional values.” –Austen Parrish
  6. 6. 6Webinar Briefing:Cost and Aid StrategiesJune 2013For inquiries, e-mail or call 202.559.0050BIOGRAPHIESAmy Moynihan (Moderator)Amy Moynihan is the Content Manager - Webinar Specialist at Hanover Research. Amy is currently a Ph.D.candidate in Higher Education at The University of Virginia, Curry School of Education. She also holds a M.Ed. inSocial Foundations from The University of Virginia, Curry School of Education and a B.A. from ColumbiaUniversity.Austen ParrishAusten Parrish is the Interim Dean and Chief Executive Officer at Southwestern Law School. From 2008-2012,he served as the schools Vice Dean, and from 2003 to 2010 directed the school’s international and comparativesummer law program at the University of British Columbia’s Faculty of Law in Vancouver, B.C., Canada. Prior tojoining Southwestern, Dean Parrish was an attorney with OMelveny and Myers, where he practiced in bothfederal and state trial and appellate courts. B.A., Political Science/Economics, University of Washington; J.D.,Columbia Law School.“Deans and other leaders at law schools have to be data-driven when making policy decisions.Particularly at a time when the national press and others have called for radical change, its importantto have a good sense of what is really going on. Prudence and good management means we shouldnot make changes that could negatively impact the quality of education or the way we treat ourstudents based only on assumptions or anecdotal evidence.”-Austen Parrish
  7. 7. LEARN MOREHeadquartered in Washington, DC, Hanover Research is a market andinstitutional research firm that provides support to public and private law schoolsacross the US. We partner with law school deans and their leadership teams tohelp them address challenges and make business decisions that affect theirability to fulfill their institutional missions. Broadly, we work to provide solutionsfor law schools in the areas of resource management, student and alumniperformance, academic program management, and recruiting and marketing.To view the recorded webinar, open the following link more information on Hanover Research’s higher education research, see ourblog at learn more about how Hanover Research can provide research for your aidstrategies, check out our capabilities at Administration PracticeResearch Without Limits™Law School Administration Practice©2013 Hanover Research