University of Louisville law school scholarship SNAFU

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adwolfson
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University of Louisville law school scholarship SNAFU

Postby adwolfson » Tue Jul 17, 2012 9:41 pm

I am writing a story for the Louisville Courier-Journal about how the admissions director at University of Louisville Brandeis School of Law had $550,000 in scholarship money to offer to first years starting next month -- but promised $1.3 million in scholarships -- $800,000 more than he had to offer!!! The admissions director resigned yesterday but the school decided to honor its offers -- not just this year, but for all three years that the new students stay in school. That adds up to $2.4 million more than it had budgeted. About 110 of 140 incoming students got more than the were supposed to, including some who got scholarships when they weren't supposed to get them at all. Trying to hear from some incoming U of L students about what they thought of their offers and whether they seemed more generous than you expected. You do NOT have to give any money back. I guess the university had to make good on the pledges for get sued by students who chose that school in reliance on the offer. Thanks. Andy Wolfson. awolfson@courier-journal.com or 502-582-7189.

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MormonChristian
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Re: University of Louisville law school scholarship SNAFU

Postby MormonChristian » Tue Jul 17, 2012 9:45 pm

adwolfson wrote:I am writing a story for the Louisville Courier-Journal about how the admissions director at University of Louisville Brandeis School of Law had $550,000 in scholarship money to offer to first years starting next month -- but promised $1.3 million in scholarships -- $800,000 more than he had to offer!!! The admissions director resigned yesterday but the school decided to honor its offers -- not just this year, but for all three years that the new students stay in school. That adds up to $2.4 million more than it had budgeted. About 110 of 140 incoming students got more than the were supposed to, including some who got scholarships when they weren't supposed to get them at all. Trying to hear from some incoming U of L students about what they thought of their offers and whether they seemed more generous than you expected. You do NOT have to give any money back. I guess the university had to make good on the pledges for get sued by students who chose that school in reliance on the offer. Thanks. Andy Wolfson. awolfson@courier-journal.com or 502-582-7189.



How do you miscalculate $2.4 million?

HellOnHeels
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Re: University of Louisville law school scholarship SNAFU

Postby HellOnHeels » Tue Jul 17, 2012 9:48 pm

i think most schools give out more money than what they have, assuming that some of the students won't decide to go to the school.

but maybe the school gave out scholarships too good to be true, and most of the students accepted them?

CanadianWolf
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Re: University of Louisville law school scholarship SNAFU

Postby CanadianWolf » Tue Jul 17, 2012 9:48 pm

What was/is the yield on those offered admission with scholarship money ?

It's not unusual to make more offers than a school can absorb since the percentage that accept the offers & actually matriculate is far less than 100%.

For example: For the entering class in 2009 for the University of Louisville Louis D. Brandeis School of Law 1255 applied, 465 were accepted and 141 enrolled making the yield about 30%.

If only 30% accepted their Louisville Law scholarship offer, then only about $390,000 per year of scholarship money was committed. Additionally, scholarships can be lost if the law school imposed stipulations to retain the scholarship during the students' second & third years of law school. Therefore, if $550,000 of scholarship money was available each year, then Louisville Law could tolerate a 42.3% yield. Furthermore, if the scholarship carried a class rank or grade stipulation requirement, then many would lose their scholarships for their second and/or third year of law school.

Maybe the admissions/financial aid officer knew what he was doing in an ultra-competitive year for getting law school applicants to enroll.

CanadianWolf
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Re: University of Louisville law school scholarship SNAFU

Postby CanadianWolf » Tue Jul 17, 2012 10:12 pm

Louisville is considered a second tier law school since it is not ranked among the top 50 US law schools; Louisville is ranked #89. Employment prospects for those earning a law degree from the University of Louisville are not good.

First Tier law schools such as #23 Washington University in St. Louis, #20 George Washington University & #19 University of Minnesota have had to extend many very generous scholarship offers in an attempt to fill their incoming law class this Fall. None of these highly ranked law schools expect anywhere near a 100% yield of admitted students with scholarships.

Mr. Wolfson: Hopefully you understand that scholarship offers from low ranked law schools are not rare & are, more often than not, turned down so that the applicant can attend a higher ranked law school which sports much better employment opportunities for its law graduates.
Also, law schools are highly profitable in most cases. A student who receives a full tuition scholarship for one year, but has to pay full tuition for years two & three due to scholarship retention stipulations, is a profitable student for the law school. If Louisville Law's stipulation is just to maintain a 2.0 GPA (not flunk out), then it comes down to a matter of yield with respect to whether or not Louisville Law will have to pay out more in scholarship award money than authorized.
Last edited by CanadianWolf on Tue Jul 17, 2012 10:35 pm, edited 1 time in total.

CanadianWolf
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Re: University of Louisville law school scholarship SNAFU

Postby CanadianWolf » Tue Jul 17, 2012 10:28 pm

Although your post that started this thread is not clear, assume that 110 of the expected 140 incoming law students received scholarship awards. Dividing $1,300,000 by 110 equals $11,818 scholarship per student.

Tuition last year at Louisville Law was $16,716 for residents of Kentucky and almost double that figure for non-residents ($32,128). The law school still earns tuition dollars per each student. Often tuition rises, but retained scholarships remain the same.

Hopefully the OP will return to this thread rather than just waiting for calls & e-mails.

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dingbat
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Re: University of Louisville law school scholarship SNAFU

Postby dingbat » Tue Jul 17, 2012 11:00 pm

CanadianWolf wrote:Although your post that started this thread is not clear, assume that 110 of the expected 140 incoming law students received scholarship awards. Dividing $1,300,000 by 110 equals $11,818 scholarship per student.

Tuition last year at Louisville Law was $16,716 for residents of Kentucky and almost double that figure for non-residents ($32,128). The law school still earns tuition dollars per each student.

This post is a red herring.

Assuming your numbers are correct, the law school would charge $2,340,220 sticker if all students are residents or $4,497,920 if all are out of state. I don't know how many are out of state, but let's assume half for calculation purposes, so a total of $3,409,070. Minus the scholarship, these 140 students will generate $2,109,070 of revenue. Now, how much do you think it'll cost the school to educate these students?
Think of the resources required: faculty, support staff, IT, custodial services, business maintenance, etc. that's not a lot of money left to pay for all this.

The conventional wisdom that law schools are a cash cow is a not true across the board. I once was privy to the finances of a reputable T1 and it turned out that the law school generated a loss every year - the business school was the big money maker there.

CanadianWolf
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Re: University of Louisville law school scholarship SNAFU

Postby CanadianWolf » Tue Jul 17, 2012 11:02 pm

A red-herring ???? That post is factual. I think that you're reading too much into that post. But, to answer your question, if half of the incoming students are non-residents, then the cost of running the law school is less than $2,107,000. (If all were paying in-state rates & no scholarships were offered, tuition intake at last year's in-state rate would be 140 x $16,716 = $2,340,240.)

P.S. As reported for the 2009-2010 academic year, 70% were residents.

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dingbat
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Re: University of Louisville law school scholarship SNAFU

Postby dingbat » Tue Jul 17, 2012 11:51 pm

70% resident means 140*.70*$16,716 = $1,638,168
30% non-resident 140*.30*$32,128 = $1,349,376
Total = $2,987,544
Minus $1,300,000 scholarships = $1,687,544

14.4 student to faculty ratio as of 2009 means about 10 faculty members are required.
Basic research shows me that salaries for law school professors range from about $115k to $242k per year (not including superstars). Let's assume that each of those 10 faculties makes the bottom of that range, $115k (T2 in a small market with low cost of living).
That means $1,150,000 in salaries required to teach those students.

$537,544 left for support staff, overhead (building repairs, technology, marketing), and the dean (admittedly, these costs will be shared with students from prior years). While it would require far more work than I plan on doing on a late tuesday night, I'm fairly certain the school will not be breaking even this year. However, the university as a whole has been running at a fairly big loss for at least the last two years

on a separate note, the school brought in a total of $173 million in revenue from tuition. Based on the above calculation of sticker and the previously reported typical scholarship budget, the $8.5 million that the law school would normally bring in is chicken feed, especially considering that the total revenue of the school is $591 million (tuition accounts for only about 30% of total revenue)

(yes, I've just been reading their financial statements)

CanadianWolf
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Re: University of Louisville law school scholarship SNAFU

Postby CanadianWolf » Wed Jul 18, 2012 10:39 am

@dingbat: I would rather read your article on this topic than that which is going to appear in the Louisville paper. :D

delusional
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Re: University of Louisville law school scholarship SNAFU

Postby delusional » Wed Jul 18, 2012 10:45 am

I know less than nothing about journalism, but how can it be ethical to post an assumption and ask people who agree to come forward?

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dingbat
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Re: University of Louisville law school scholarship SNAFU

Postby dingbat » Wed Jul 18, 2012 11:00 am

CanadianWolf wrote:@dingbat: I would rather read your article on this topic than that which is going to appear in the Louisville paper. :D

When I quit work next month and have the time, I'm gonna start an "ask dingbat financial questions" type of thread.
I'm also considering building a financial model to answer the question "is law school worth it?"

MrAnon
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Re: University of Louisville law school scholarship SNAFU

Postby MrAnon » Wed Jul 18, 2012 11:09 am

Hey wolfson, the real story is declining enrollment and student interest at all of these second tier law schools. The admissions people are stuck between a rock and a hard place. Make generous scholarship offers they cannot possibly fulfill in order to prop up the composition of the incoming student body, or be honest about what they have to offer and watch their school drop like a stone in the rankings, while other schools lie to game the rankings for themselves.

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dingbat
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Re: University of Louisville law school scholarship SNAFU

Postby dingbat » Wed Jul 18, 2012 11:34 am

adwolfson wrote:I am writing a story for the Louisville Courier-Journal about how the admissions director at University of Louisville Brandeis School of Law had $550,000 in scholarship money to offer to first years starting next month -- but promised $1.3 million in scholarships -- $800,000 more than he had to offer!!! The admissions director resigned yesterday but the school decided to honor its offers -- not just this year, but for all three years that the new students stay in school. That adds up to $2.4 million more than it had budgeted. About 110 of 140 incoming students got more than the were supposed to, including some who got scholarships when they weren't supposed to get them at all. Trying to hear from some incoming U of L students about what they thought of their offers and whether they seemed more generous than you expected. You do NOT have to give any money back. I guess the university had to make good on the pledges for get sued by students who chose that school in reliance on the offer. Thanks. Andy Wolfson. awolfson@courier-journal.com or 502-582-7189.

If you do some research, 10 or 20 years ago a top medical school had miscalculated their yield a ratio as well, resulting in far more students than they had places. The result was that the school offered full scholarships to students who deferred a year. Might make a nice example to counterbalance the story.

Also, Mr.Anon is right, law school enrollment is facing double digit (percentage) declines for the past few years. This puts law schools in a difficult position:

1) less applicants in general
2) old yield ratios not reflective of current climate
3) more waitlist movement (top school miscalculated yield, accepts students from waitlist; lower ranked school loses students it thought were locked in, needs to pull more from waitlist; repeat)
4) prospective students demanding more scholarship money (they may have competing offers, they're nervous about the cost of law school, or they've gone online and learned that other students with similar stats were offered higher scholarships)

Most schools have had trouble adjusting. Some schools are having serious trouble filling up their classes. So far, the law schools have been treating this as a temporary fluctuation; however, the size of the decrease is bigger than anticipated. At this point, it is too early to know if it is a structural shift, as opposed to a cyclical decrease. Regardless, if the current trend continues, more schools are going to get into trouble, so the real question is, which school is next?




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