Articles in Slate and the Times make a convincing psychological and economic argument against discounting tuition, especially outside of super-elite institutions. The data suggest that schools ought to offer fixed, lower, rates which all students pay equally. If widely adopted, no-haggle tuition pricing would be both revenue neutral and significantly more transparent than the current system. So why don’t law schools follow the model? Off the top of my head:
- Student scholarships are donor-magnets; and
- The Prisoner’s Dilemma.
Donor preferences would be a tough nut to crack. In a world of increasingly stretched resources, schools are going to be loath to abandon a tried-and-true way of activating their alumni networks. Except for at those super-elite schools, pitches in support of faculty (scholarly) resources or curricular offerings are often tough sells. I suppose that donors could be channeled into other kinds of student support, but there’s nothing quite as compelling as helping individuals access legal education.
The second problem is also a doozy. Look at what happened to J.C. Penny. However, it’s not as if every day low pricing is impossible. For instance, if the federal government were to condition aid on granular tuition transparency, I think we’d see uniform pricing rather quickly. To see why, imagine a world where all students’ real costs were knowable. There’d be immediately and power leveling pressure from the student body. The easiest solution would be to eliminate discounts but charge a lower real rate. However, I’ve not seen proposals on the table to change accreditation in this direction, and the current system is clearly hostile to a no-discount tuition strategy. Thus, we’re going to continue to live in a world where every student coming in the door pays something different.