Law School Deans, Law Schools, Student Loans

Law School Over-Promises Financial Aid; Will Have $2.4 Million Shortfall Over Three Years

It finally looks like the out-of-control cost of legal education came back to bite a law school in the behind.

A scandal is erupting at the Brandeis School of Law at the University of Louisville. The law school reportedly made more financial aid commitments than the school had a budget for. Brandeis blew their financial aid budget by more than 100%. That is, they promised more than double the money the school had budgeted.

Louisville Law’s assistant dean of admissions, Brandon Hamilton, has resigned. It appears that Hamilton may have been offering more money to students who had not yet decided on an Louisville in order to entice them to matriculate.

Maybe if Louisville had done more to contain tuition costs it wouldn’t have felt pressured to throw so much financial aid money at students to make their education cost effective?

The Louisville Courier-Journal has the details of this bizarre situation:

The Brandeis School of Law had budgeted $550,000 in aid for first-year students starting next month but instead made offers that totaled more than $1.3 million for one year, confirmed university spokesman Mark Hebert.

He said the school will make good on the offers for all three years that the students remain in law school because “it is the right thing to do.”

As a result, however, the school will run up a shortfall of about $2.4 million over that period that it will have to make up, he said. If it cannot, cuts may be required in scholarships offered to first-year students next year, or to other programs, Hebert said.

I know law types aren’t good with math, but it seems pretty hard to not notice the difference between $550,000 and $1.3 million.

It feels like the discrepancy is too big of an error to happen accidentally. Louisville is looking into the matter:

Hebert said the university is conducting an internal investigation to see how the overbudgeting happened…

“All we can say is that he resigned and we are looking into it,” Hebert said. “At this time, we do not know of any criminal conduct but we are reviewing the entire matter and seeing where it takes us.”

The over-budgeting occurred “during the tenure of Jim Chen, who was the law school’s dean from 2007 through earlier this year.” Regular Above the Law readers will recognize Dean Chen. Chen did some work showing that law graduates need to earn up to six times whatever they borrowed to finance their education in order to be a financially sound homeowner in the future. As dean, it seems that Chen understood the deleterious effect high law school tuition could have on law graduates.

The Courier-Journal didn’t report whether these budgetary excesses were in the form of scholarships to law students (which students don’t have to pay back) or loans to students (which will of course come due to crippling effect at some point in time). But they did say that 108 of 140 incoming Louisville law students received some sort of financial assistance. That’s how the game is played at this part of the U.S. News Rankings (Louisville is ranked #89) — students are given grants or better loan packages in exchange for going to Louisville instead of a school ranked a few spots higher.

Brandeis Law officials have promised to make good on all of the financial promises made to the students. Initially, the school will try to cover the shortfall through more fundraising. But these mistakes could mean a greatly reduced financial aid pool for future classes at Louisville Law.

This debacle is not making Louisville alums feel good about their school. Said one tipster:

As an alum of this school, I can attest to the fact that it is very poorly run. It’s a shame, because, in my opinion, the quality of legal education is not the problem at U of L–it’s the people running the show.

Law school is so expensive that even law schools go into debt when they try to make it affordable. Maybe somebody should look into fundamentally reforming the way legal education is financed in this country.

U of L law overpromised $2.4M worth of scholarships over three years [Louisville Courier-Journal]

Earlier: Don’t Defend Your Law School Until You’re Earning Three Times Its Yearly Tuition

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