Scholarship vs. Prestige: When to Take the Money and Run?

    Law School Admissions

    6355836713_7ea15f733f_zTwo weeks ago, I wrote a blog titled, A Law Degree Is Worth over $1 Million. Can You Get It for Free? Predictably, we received several questions from former students who actually do have the opportunity to attend law school for free, on a full-ride scholarship. If you think their decision is a no-brainer, think again: oftentimes, the choice is between attending a higher-ranked school at sticker price vs. a lower-ranked school at a discount (or even for free). Before you get jealous, realize that these students found themselves in this enviable position because they worked hard for it: in college, on their applications, and - perhaps most importantly - on their LSAT scores.

    For some, the decision is brutally simple: you'll go to the highest-ranked law school you can get into, regardless of cost. There is nothing wrong with that per se, assuming you aren't motivated by the desire for prestige alone (you can't eat prestige). If your goal is to work at a big law firm, clerk for a feeder judge, enter academia, or do public interest for the DOJ or another highly selective organization, a strong case can be made for choosing a top-14 law school over any lower-ranked school, even with money. Some law firms are extremely selective in their recruitment practices, so if you absolutely must work at Wachtell, you need to go to the right school. Furthermore, if you aren't sure where you'd like to practice after graduation, a national school makes more sense: as the name implies, such a school will not restrict your employment opportunities to a particular city or region. Last, but not least, many of the top law schools have generous loan forgiveness programs, which means that you don't have to sell your soul take a six-figure job in order to repay your student debt. Generally speaking, the better the law school, the better the loan forgiveness program (though you should still read the fine print). Of course, having no debt still beats having to deal with a loan repayment program.

    From a purely economic perspective, the cost of attending a top law school is the cost you pay to mitigate risk. You only have a 1-in-10 chance of being in the top-10% of your 1L class (it sucks, I know). But, the better the school, the less important that is. Harvard, Yale and Stanford don't even have grades. While it is still possible to determine (roughly) where someone stands relative to his or her peers, such distinctions are only meaningful for a minority of law firms and judges. Even in this economy, the average student at Harvard Law can easily get a callback from a BIGLAW firm in NYC. To be competitive for the same job coming out of Cornell, however, our hypothetical 1L should ideally have grades above the median. If he or she is a 1L at Fordham, top-30% seems to be the magic number. Broadly speaking, the further down the law school pecking order you get, the better your grades need to be in order to provide you with the same caliber of employment opportunities (assuming said opportunities even exist at the lower-tier schools).

    So, when does it make sense to take the money and run? It's a deeply personal decision that depends, at least in part, on how risk-averse you are, where you'd like to practice after graduation, what you want to do with your law degree, your attitude toward debt in general, etc. Rationally speaking, it's worth taking the money at a lower ranked school when the anticipated benefit of attending such a school outweighs the opportunity cost of not attending it. Let's say you're making a choice between Fancy Law School (higher ranked, no money) and Bargain Law School (lower ranked, with money). I'd take the money and run if:

    • Both are national (top-14) law schools, you don't have a compelling personal reason for attending Fancy Law School, and received one of the following full scholarships at the Bargain school: Levy at Penn Law, Hamilton Fellowship at Columbia, a Ruby at Chicago Law, Root-Tilden-Kern at NYU, or the like. A caveat: if Fancy Law School is either Harvard or Yale and you plan on pursuing an academic career, no amount of money elsewhere can compensate for the lost opportunity should you reject their offer.
    • Fancy Law School is a lower-ranked national school, whereas Bargain Law School is a highly regarded regional school (Fordham, BU, BC, GW, etc.). Take the money and run if 1) you got a full ride at your Bargain option, and 2) you would be happy to practice in the region where the Bargain school is located.
    • Both are top-50 law schools in the same region, Fancy Law School is a highly regarded regional school, whereas Bargain Law School is a slightly lower ranked school offering a scholarship worth at least 50% their annual tuition. Make sure to check the terms and conditions for renewing your scholarship, and compare the relative merits of both schools using independent sources, such as:
    • Both are top-50 schools but in different regions, and you have no preference for the Fancy Law School region over the Bargain Law School region. However, if the region in which Bargain Law School is located is less desirable than the alternative, then you need to think carefully about whether the trade-off is really worth it, as the Bargain Law School region is likely where you'll end up practicing after graduation.
    • Many would argue that no school outside the top-50 is worth paying sticker price for. Only go to a Tier-2/3 school if you can do it at a deep discount, ideally for free.

    It's worth emphasizing that this is a deeply personal choice, so take the advice above with a grain of salt. At the very least, it should provide a starting point for your decision-making process. If you are faced with a similar dilemma and want our opinion on what you should do, feel free to post the question on our Forum or reply to this Blog post. 

    Good luck!

     

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    Photo courtesy of 401(K) 2012