How high will the sticker price go?

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cotiger
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How high will the sticker price go?

Postby cotiger » Tue Oct 22, 2013 6:42 pm

While law school isn't worth sticker debt to me, a lot of students clearly feel otherwise. The percentage of students paying full tuition has fallen over the past few years, but it's still around 50%:

Image

Obviously it's only that high because it's easy to get a loan from the government. Still, when given access to the cash, a ton of people show that they think it's worth it.

Because of the ability for schools to price discriminate using scholarships, the sticker cost is likely to increase even if the average cost decreases. Sticker will likely increase until practically no one is willing to pay it. So my question for those who are willing to pay sticker.. what is the maximum amount you would be willing to pay before law school was no longer worth the cost?

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justonemoregame
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Re: How high will the sticker price go?

Postby justonemoregame » Tue Oct 22, 2013 6:58 pm

These numbers are terrifying - demand aid, or don't go

BeautifulSW
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Re: How high will the sticker price go?

Postby BeautifulSW » Tue Oct 22, 2013 9:21 pm

Depends on the school, of course, but it's possible that average tuition has peaked. The collapse in the applicant pool looks pretty serious to me.

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cotiger
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Re: How high will the sticker price go?

Postby cotiger » Tue Oct 22, 2013 10:16 pm

BeautifulSW wrote:Depends on the school, of course, but it's possible that average tuition has peaked. The collapse in the applicant pool looks pretty serious to me.


This being TLS, I'm really just interested in T14. Don't know that there's too many people here who would take sticker outside T14, anyway.

Almost half of T14 students pay full tuition, so there's likely many people here who will eventually pay sticker. I'm really just curious what the upper bound of COA is, considering it's ~270k now.. 400k? 500k?

I know that it will vary between HYS/CCN/lower T14. So would people who are ok with current sticker still attend at, say, 500/400/300? Higher?

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guano
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Re: How high will the sticker price go?

Postby guano » Tue Oct 22, 2013 10:22 pm

Legal education may currently be in decline, but the response is not lowering of tuition, but rather an increase in students with schollies and a decrease in enrollment. I see no reason why sticker would go down, and can imagine it going up to mitigate revenue loss.

There are people who are happy to pay sticker even at crappy schools like Cooley, which includes kids with rich parents, uninformed people who think law school is a golden ticket, and those who don't care about racking up high loans. (And let's not forget section stacking all the scholly kids with stips)

TL:DR a school can raise sticker tuition on those who don't care in order to provide scholarships to the more price-conscious

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cotiger
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Re: How high will the sticker price go?

Postby cotiger » Tue Oct 22, 2013 10:47 pm

guano wrote:Legal education may currently be in decline, but the response is not lowering of tuition, but rather an increase in students with schollies and a decrease in enrollment. I see no reason why sticker would go down, and can imagine it going up to mitigate revenue loss.

There are people who are happy to pay sticker even at crappy schools like Cooley, which includes kids with rich parents, uninformed people who think law school is a golden ticket, and those who don't care about racking up high loans. (And let's not forget section stacking all the scholly kids with stips)

TL:DR a school can raise sticker tuition on those who don't care in order to provide scholarships to the more price-conscious


I know. Thus,

cotiger wrote:Because of the ability for schools to price discriminate using scholarships, the sticker cost is likely to increase even if the average cost decreases.


But at a certain point, it has to stop. If sticker was $5mil, even uninformed people with rich parents who thought law was a golden ticket and didn't care about high debt would presumably stop going if they didn't get a scholarship.

The people on this site aren't uninformed, and the number of parents who are willing and able to shell out a quarter mil over three years is limited. Looking through threads from previous cycles shows a sizable number of people on this site who eventually pay sticker. I'm curious about how much they and the current 0Ls who would be willing to pay sticker if they got zero scholly money think going to T3 or T6 or T14 is worth.

Due to the ability for price discrimination, that should eventually determine what the upper end of the sticker price will be.

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cinephile
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Re: How high will the sticker price go?

Postby cinephile » Wed Oct 23, 2013 7:27 am

I can see sticker price rising to 99k a year, but no further. I think seeing 6 figures per year for school will be too much for people to handle, but we'll approach it for sure.

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Ramius
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Re: How high will the sticker price go?

Postby Ramius » Wed Oct 23, 2013 7:53 am

cinephile wrote:I can see sticker price rising to 99k a year, but no further. I think seeing 6 figures per year for school will be too much for people to handle, but we'll approach it for sure.


Is this based on some psychological response? You might not be wrong, but I don't see irrational people (namely people who are willing to pay sticker at already astronomical prices) seeing much difference between 95k/year and 100k/year. Also consider that most people don't look at COA, they look at tuition only. So while tuition could potentially stall at 99k/year, that would probably equate to 120k/year, give or take a few thousand.

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guano
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Re: How high will the sticker price go?

Postby guano » Wed Oct 23, 2013 8:12 am

matthewsean85 wrote:
cinephile wrote:I can see sticker price rising to 99k a year, but no further. I think seeing 6 figures per year for school will be too much for people to handle, but we'll approach it for sure.


Is this based on some psychological response? You might not be wrong, but I don't see irrational people (namely people who are willing to pay sticker at already astronomical prices) seeing much difference between 95k/year and 100k/year. Also consider that most people don't look at COA, they look at tuition only. So while tuition could potentially stall at 99k/year, that would probably equate to 120k/year, give or take a few thousand.

Then schools will raise their "facility fees" and "technology fees"

But that will only delay. At some point a school will choose to break the price point and then others will follow. It's just a matter of time (and inflation)

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Ramius
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Re: How high will the sticker price go?

Postby Ramius » Wed Oct 23, 2013 8:35 am

I think the biggest question and the ultimate decider of when tuition will hit a stopping point is when will the government shut down (or at least revise to address this) the cash cow schools are currently suckling at? It'll likely take a case where students are barred from taking out student loans beyond a certain amount that will cause schools to have to rethink their pricing model. Until the government gravy train ends, I don't see schools not cashing in by ever-increasing amounts. It's just too easy.

For the record, I think this will happen sometime in the near future. While the government will never want people to be denied access to higher education, the conversation is in full motion right now about dealing with the student loan crisis and figuring out why such a staggeringly high proportion of students are defaulting on their loans. It's not a hard thing to figure out, but it will just take some time before the government realizes it's not a wage gap or a lack of job creation. It's because people are getting jobs with the degrees they're paying excessively for that cannot service that debt. Something will happen to address this, but I have no idea when.

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guano
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Re: How high will the sticker price go?

Postby guano » Wed Oct 23, 2013 8:39 am

matthewsean85 wrote:I think the biggest question and the ultimate decider of when tuition will hit a stopping point is when will the government shut down (or at least revise to address this) the cash cow schools are currently suckling at? It'll likely take a case where students are barred from taking out student loans beyond a certain amount that will cause schools to have to rethink their pricing model. Until the government gravy train ends, I don't see schools not cashing in by ever-increasing amounts. It's just too easy.

For the record, I think this will happen sometime in the near future. While the government will never want people to be denied access to higher education, the conversation is in full motion right now about dealing with the student loan crisis and figuring out why such a staggeringly high proportion of students are defaulting on their loans. It's not a hard thing to figure out, but it will just take some time before the government realizes it's not a wage gap or a lack of job creation. It's because people are getting jobs with the degrees they're paying excessively for that cannot service that debt. Something will happen to address this, but I have no idea when.

I think that'll be the death knell for a number of TTTs but will only slow down, rather than stop, tuition increases at the T14

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Ramius
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Re: How high will the sticker price go?

Postby Ramius » Wed Oct 23, 2013 8:48 am

guano wrote:
matthewsean85 wrote:I think the biggest question and the ultimate decider of when tuition will hit a stopping point is when will the government shut down (or at least revise to address this) the cash cow schools are currently suckling at? It'll likely take a case where students are barred from taking out student loans beyond a certain amount that will cause schools to have to rethink their pricing model. Until the government gravy train ends, I don't see schools not cashing in by ever-increasing amounts. It's just too easy.

For the record, I think this will happen sometime in the near future. While the government will never want people to be denied access to higher education, the conversation is in full motion right now about dealing with the student loan crisis and figuring out why such a staggeringly high proportion of students are defaulting on their loans. It's not a hard thing to figure out, but it will just take some time before the government realizes it's not a wage gap or a lack of job creation. It's because people are getting jobs with the degrees they're paying excessively for that cannot service that debt. Something will happen to address this, but I have no idea when.

I think that'll be the death knell for a number of TTTs but will only slow down, rather than stop, tuition increases at the T14


Quite possible, but as long as the increases are commensurate with inflation, it'll at least be easier to stomach. The biggest problem with tuition increases in law schools isn't that the tuition is increasing, it's how much more it's increased in comparison to inflation. The past 25 years has seen way too rapid of tuition hikes, but if it returned to a proper yearly increase adjusting for inflation, it won't technically be getting any "worse." This doesn't correct that it's pitiful as it is righ tnow, but at least it'll be back in check, which I would call a small victory.

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guano
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Re: How high will the sticker price go?

Postby guano » Wed Oct 23, 2013 8:53 am

matthewsean85 wrote:
guano wrote:
matthewsean85 wrote:I think the biggest question and the ultimate decider of when tuition will hit a stopping point is when will the government shut down (or at least revise to address this) the cash cow schools are currently suckling at? It'll likely take a case where students are barred from taking out student loans beyond a certain amount that will cause schools to have to rethink their pricing model. Until the government gravy train ends, I don't see schools not cashing in by ever-increasing amounts. It's just too easy.

For the record, I think this will happen sometime in the near future. While the government will never want people to be denied access to higher education, the conversation is in full motion right now about dealing with the student loan crisis and figuring out why such a staggeringly high proportion of students are defaulting on their loans. It's not a hard thing to figure out, but it will just take some time before the government realizes it's not a wage gap or a lack of job creation. It's because people are getting jobs with the degrees they're paying excessively for that cannot service that debt. Something will happen to address this, but I have no idea when.

I think that'll be the death knell for a number of TTTs but will only slow down, rather than stop, tuition increases at the T14


Quite possible, but as long as the increases are commensurate with inflation, it'll at least be easier to stomach. The biggest problem with tuition increases in law schools isn't that the tuition is increasing, it's how much more it's increased in comparison to inflation. The past 25 years has seen way too rapid of tuition hikes, but if it returned to a proper yearly increase adjusting for inflation, it won't technically be getting any "worse." This doesn't correct that it's pitiful as it is righ tnow, but at least it'll be back in check, which I would call a small victory.
oh, to be do naive...

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cinephile
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Re: How high will the sticker price go?

Postby cinephile » Wed Oct 23, 2013 9:04 am

matthewsean85 wrote:
cinephile wrote:I can see sticker price rising to 99k a year, but no further. I think seeing 6 figures per year for school will be too much for people to handle, but we'll approach it for sure.


Is this based on some psychological response? You might not be wrong, but I don't see irrational people (namely people who are willing to pay sticker at already astronomical prices) seeing much difference between 95k/year and 100k/year. Also consider that most people don't look at COA, they look at tuition only. So while tuition could potentially stall at 99k/year, that would probably equate to 120k/year, give or take a few thousand.


Exactly what I meant, the psychological reaction to a 100k sticker price. And of course the COA would be higher but people never consider that. Still, I think a school would have a hard time increasing tuition itself to 100k or more.

Our whole system is ridiculous. I think we should shut down 99% of all institutions of higher education and just have the few remaining become subsidized completely by the government. And I think we should probably cut chemistry and other ridiculous subjects out of our high school curricula and start teaching kids real skills from age 14. I mean, not just plumbers and electricians, but teach kids to become artisan bakers and raise the minimum wage to a living wage. And those are all my feelings at the moment, but this'll never happen.

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Re: How high will the sticker price go?

Postby Ramius » Wed Oct 23, 2013 9:18 am

cinephile wrote:
matthewsean85 wrote:
cinephile wrote:I can see sticker price rising to 99k a year, but no further. I think seeing 6 figures per year for school will be too much for people to handle, but we'll approach it for sure.


Is this based on some psychological response? You might not be wrong, but I don't see irrational people (namely people who are willing to pay sticker at already astronomical prices) seeing much difference between 95k/year and 100k/year. Also consider that most people don't look at COA, they look at tuition only. So while tuition could potentially stall at 99k/year, that would probably equate to 120k/year, give or take a few thousand.


Exactly what I meant, the psychological reaction to a 100k sticker price. And of course the COA would be higher but people never consider that. Still, I think a school would have a hard time increasing tuition itself to 100k or more.

Our whole system is ridiculous. I think we should shut down 99% of all institutions of higher education and just have the few remaining become subsidized completely by the government. And I think we should probably cut chemistry and other ridiculous subjects out of our high school curricula and start teaching kids real skills from age 14. I mean, not just plumbers and electricians, but teach kids to become artisan bakers and raise the minimum wage to a living wage. And those are all my feelings at the moment, but this'll never happen.


Maybe with a Hunger Games-style battle royale where every institution battles for their lives? We can build on this...

Back to the OP. The market will continue to respond while it remains able to bear, but there isn't some magical answer of when/how/what price that will occur at. All we can do is keep perpetuating the message that tuition is excessive and things need to change. Do what you can to expose the "[insert form of higher education] scam" and maybe we can force the decisionmakers into action. And not go somewhere for sticker to begin with.

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guano
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Re: How high will the sticker price go?

Postby guano » Wed Oct 23, 2013 9:19 am

cinephile wrote:
matthewsean85 wrote:
cinephile wrote:I can see sticker price rising to 99k a year, but no further. I think seeing 6 figures per year for school will be too much for people to handle, but we'll approach it for sure.


Is this based on some psychological response? You might not be wrong, but I don't see irrational people (namely people who are willing to pay sticker at already astronomical prices) seeing much difference between 95k/year and 100k/year. Also consider that most people don't look at COA, they look at tuition only. So while tuition could potentially stall at 99k/year, that would probably equate to 120k/year, give or take a few thousand.


Exactly what I meant, the psychological reaction to a 100k sticker price. And of course the COA would be higher but people never consider that. Still, I think a school would have a hard time increasing tuition itself to 100k or more.

Our whole system is ridiculous. I think we should shut down 99% of all institutions of higher education and just have the few remaining become subsidized completely by the government. And I think we should probably cut chemistry and other ridiculous subjects out of our high school curricula and start teaching kids real skills from age 14. I mean, not just plumbers and electricians, but teach kids to become artisan bakers and raise the minimum wage to a living wage. And those are all my feelings at the moment, but this'll never happen.

A) people probably said the same thing about tuition breaking $10,000
B) chemistry is more important than history
C ) freedom of choice

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Tiago Splitter
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Re: How high will the sticker price go?

Postby Tiago Splitter » Wed Oct 23, 2013 10:21 am

guano wrote:A) people probably said the same thing about tuition breaking $10,000

Exactly. Ten years ago 50k tuition sounded absolutely absurd. I think we have a long way to go before sticker price stops rising but fewer and fewer people will be paying anything close to sticker. So I'm not sure it really matters. Most people out there are still shocked and honored by the idea of receiving a $100,000 SCHOLARSHIP!!!!1!! Few of us get that this is just a tuition discount and they'll still charge you too much.

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Re: How high will the sticker price go?

Postby gregfootball2001 » Wed Oct 23, 2013 10:29 am

cotiger wrote:[ Don't know that there's too many people here who would take sticker outside T14, anyway.

I'm getting a couple thousand in scholly to go to Georgia, but I would have paid sticker. I knew I wanted to stay in Atlanta, job prospects aren't bad, low COL in Athens, and 17k/y tuition at in-state sticker.

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Re: How high will the sticker price go?

Postby hephaestus » Wed Oct 23, 2013 10:32 am

Tiago Splitter wrote:
guano wrote:A) people probably said the same thing about tuition breaking $10,000

Exactly. Ten years ago 50k tuition sounded absolutely absurd. I think we have a long way to go before sticker price stops rising but fewer and fewer people will be paying anything close to sticker. So I'm not sure it really matters. Most people out there are still shocked and honored by the idea of receiving a $100,000 SCHOLARSHIP!!!!1!! Few of us get that this is just a tuition discount and they'll still charge you too much.

I think this is spot on. Schools have no incentive to reduce costs. Savvy consumers will deman tuition discounts through "scholarships" or not matriculated. However, there is still a large enough portion of people who blindly follow USNWR and will blindly attend a "Top 25" school at any cost.

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Monochromatic Oeuvre
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Re: How high will the sticker price go?

Postby Monochromatic Oeuvre » Wed Oct 23, 2013 12:03 pm

While the federal government is involved, it won't matter what tuition is. The majority of law students already can't pay back sticker. They suffer no practical consequence for that. It is free money dumped on a government so burdened by debt it barely notices.

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cotiger
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Re: How high will the sticker price go?

Postby cotiger » Wed Oct 23, 2013 2:20 pm

Monochromatic Oeuvre wrote:While the federal government is involved, it won't matter what tuition is. The majority of law students already can't pay back sticker. They suffer no practical consequence for that. It is free money dumped on a government so burdened by debt it barely notices.


Agreed that the feds are the enabler of all this. If schools were the ones who had to give out the loans to their students, we'd see tuition much more in line with the actual outcomes of their graduates.

But so that we don't have to worry about consumers who are already demonstrably irrational, let's just focus on the T14.

Mono, you/your family are going to pay around $250k for CLS. What's the price at which you would've said "thanks but no thanks"? Ultimately, sticker will be determined by what the people schools take off the wait list to fill out their class are willing to pay.

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guano
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Re: How high will the sticker price go?

Postby guano » Wed Oct 23, 2013 4:18 pm

cotiger wrote:
Monochromatic Oeuvre wrote:While the federal government is involved, it won't matter what tuition is. The majority of law students already can't pay back sticker. They suffer no practical consequence for that. It is free money dumped on a government so burdened by debt it barely notices.


Agreed that the feds are the enabler of all this. If schools were the ones who had to give out the loans to their students, we'd see tuition much more in line with the actual outcomes of their graduates.

Yale already does this

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Re: How high will the sticker price go?

Postby IpleadtheFiF » Wed Oct 23, 2013 7:06 pm

cotiger wrote:While law school isn't worth sticker debt to me, a lot of students clearly feel otherwise. The percentage of students paying full tuition has fallen over the past few years, but it's still around 50%:


On a side note, how many of those paying sticker are doing so out-of-pocket? Is there any data about the percentage of law students that pay sticker without taking out loans?

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Re: How high will the sticker price go?

Postby Monochromatic Oeuvre » Wed Oct 23, 2013 7:44 pm

IpleadtheFiF wrote:
cotiger wrote:While law school isn't worth sticker debt to me, a lot of students clearly feel otherwise. The percentage of students paying full tuition has fallen over the past few years, but it's still around 50%:


On a side note, how many of those paying sticker are doing so out-of-pocket? Is there any data about the percentage of law students that pay sticker without taking out loans?


At Harvard this has been rather roughly estimated at about 25%. It's easier to determine something like this at HYS where merit scholarship doesn't get in the way--the number of students not receiving need aid would get you close. I don't know exactly what percentage receive zero need aid but still nonetheless need to take out loans, but presumably students receiving zero need aid are either fully financed or close. Keep in mind the general socioeconomic demographics of elite law schools and that the percentage of the general population who could pay $250k up front is overrepresented in the T14.

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