Can Law School Financial Aid Be a Bad Thing? Yes, If You Don’t Understand Why it’s Being Offered

I used to get a lot of my news from Captivate elevator screens.  Then I thought I’d add Twitter.  For some things, those sources really are better than The New York Times.  Lately, I’ve noticed the thrill that many prospective law students in Twitter nation experience when a law school offers them scholarships.  I see why—in addition to being a welcome relief from bruising law school tuition costs, it’s also felt as a validation that all the hard work that students have put in to get to law school has paid off.   So it’s great.  What could possibly be wrong?

For my clients applying to law school, I make sure that I get one thing on the table early:  law schools are bureaucratic businesses.  That basic fact—and it is a fact—has a lot of implications for the application process and any law school student’s education and post-law school career prospects.

It also carries a lot of freight in understanding law schools’ scholarship and other merit-based financial aid decisions.  First, what it doesn’t mean.  It doesn’t mean that law schools or their representatives—even those who offer you money—are your friends.  That’s a hard thing to understand for some prospective law students, particularly those who, like me, value personal relationships above all else.  It’s even harder to understand because many law school employees are genuinely nice people.

But as offerors of admission or money, they’re part of a business that’s making business decisions.  Moreover, they’re part of a bureaucracy.  In any bureaucracy, there are very few people with executive authority, and not many more with flexibility in implementing decisions.  Most bureaucrats, nice or not, are doing a well-defined job with limited discretion to change the rules.  That’s not a criticism.  This is a mass society and couldn’t function without most organizations being bureaucratized.  While I have a lot of freedom in how I manage Advise-In Solutions, that distinctly non-bureaucratic approach also means we don’t have a mass-market, impersonal business.  That’s by choice (see valuing personal relationships, above) but it’s not a choice law schools can make.  They have to be bureaucracies and that means that law school admissions and financial aid personnel are simply carrying out higher-level or committee decisions.

So, prospective law students aren’t getting financial aid on the basis of friendship or even much knowledge of that student (beyond the few pieces of paper that are part of an application package).  Those few pieces of paper that are the basis for merit financial aid decisions.  And why, if you are a recipient of some of the largesse, you may ask, are they offering me this amount of money?  It’s not personal—that isn’t what bureaucratic businesses do.  So, why?

Simple.  Any law school will offer a given prospect the amount of money, within the limits of the possible, that the school believes will be sufficient to stop that student from attending a more attractive law school.  That’s it.  Law schools make their decisions in the same way as employers who really want an employee whom the employer knows has better options do.  Employers juice salary, perks and benefits to keep that prospect from going to the competition.  Law schools offer more or less money and greater or fewer conditions to that money.  The academy isn’t a “higher calling” in that sense.  It can be a great thing but it’s a business.  If a law school wants you in its entering class but is confident it can have you without giving you any money, it won’t give you money.  If it thinks you will likely have options that you consider better, it will toss some or a lot of cash (with or without restrictions) your way in an effort to hold onto you.

Does that mean that the offer should be declined?   Of course not.  But it changes the calculus that some prospective students are inclined to employ.  Here are some questions.  What is the likelihood that the money you get now in effect trades down your future career opportunities?  How much future income or career flexibility are you likely giving up to take this money now?  And that’s without even thinking about the possibility of “trading up” your law school financial aid to a more desirable school (a sometimes risky strategy that should only be employed truthfully, carefully, and with the help of a first-rate advisor who knows the negotiating ropes).

In other words, you should approach accepting financial aid the same way law schools approach their decision to offer it—as a business decision.  Nothing more, nothing less (by the way, your enjoyment of law school should, I tell my clients, be part of that calculus; it’s worth different weights to different clients, so we work to value it for each of them).

When the inputs and calculations are all in, you may end up accepting some money, a lot of money, or none at all.  Nearly all of my Yale Law School classmates, I would guess, turned down substantial money offers from several schools to attend Yale.  I know none who regret that; I certainly don’t.  Others, I’m sure, made a different judgment.  Nothing wrong with either decision, so long as it was made after carefully considering long-term happiness and career potential.  The key point is that free money isn’t free; it’s potentially, though not necessarily, costly in the long run.  When you’re investing for a career and a life, a little bit of money up front is just that, a little bit of money, one factor among many—some more important, some less.

~ by Kyle Pasewark at Advise-in Solutions on July 19, 2010.

4 Responses to “Can Law School Financial Aid Be a Bad Thing? Yes, If You Don’t Understand Why it’s Being Offered”

  1. […]             –target your law school applications carefully and strategically, understanding what post-graduation opportunities they are likely to yield (including any recent changes to how those law schools operate or are perceived, such as changes to grading systems) and financial aid packages they are likely to offer, and calibrate the value of any financial aid with those post-graduation opportunities; […]

  2. […] should ask law schools you’re considering about their success in this tight market and how much merit-based financial aid should figure into your decision (and how you can leverage it between schools).  You will also […]

  3. […] your potential debt load, you should also be clear about the “costs” of financial aid from law schools.  Financial aid is a great thing and can significantly reduce your future […]

  4. […] schools are businesses and they’re offering you money because they think that you may well have admission opportunities at better law schools than theirs.  There’s simply no other reason for a law school to offer you cash.  […]

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