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Another sad story

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Now sit right back and you’ll hear a tale, a tale of a fateful trip.

Well, not really.

In the summer of 1995, Joel Seligman left his position on the University of Michigan law school faculty to become dean of the University of Arizona’s law school. I had dinner with him that fall at his new Tuscon home — it was my idea of a mansion — and went to an Arizona football game with him the next day. Seligman was pitching his new school, and he spoke of his hopes of getting a “transformational gift” from the father of someone who had just graduated.

His hopes were realized three years later, when James Rogers pledged the mind-boggling sum of $115 million to his own and his son’s alma mater. It was at the time by far the largest gift anyone had made to a law school.

When you have as much money as I do, you can’t spend it on yourself,” said Rogers, 60, owner of the Las Vegas-based Sunbelt Communications media empire. ”After investing in your own business, giving money to education is the best investment you can make. If everybody did what I did, we would be the best educated people in the world.” . . .

The main objective of Rogers’ gift is to hold down the cost of attending the law school, while bolstering its faculty with more top-level legal scholars, said Joel Seligman, UA law school dean.

UA is 40th among American law schools, according to U.S. News & World Report’s 1998 ratings.

Its tuition – $4,538 per year for Arizona residents and $11,490 for non-residents – is among the five lowest of the top 50 law schools.

”We’ll soon have the lowest tuition in the top 50. We’ll be the best value in legal education,” said Seligman, who announced yesterday that he plans to step down.

How’d that work out?

It worked out great for Seligman, who parlayed his fund-raising coup into the deanship at Washington University St. Louis’s law school, and from there to the presidency of the University of Rochester, where three years ago his compensation was just under one million per year.

It worked out nicely for Rogers, who got the law school named for him (“look on my works, ye mighty, and despair!”), and then went on to be appointed the chancellor of the entire Nevada university system, although his four-decade-long post-law student background in higher education consisted solely of having given immense piles of cash to various institutions. (BTW Rogers made his fortune the old-fashioned way, by acquiring property rights in the enormous income stream generated by a government-created and protected monopoly, in the form television broadcasting licenses).

As for future law students at the University of Arizona, who were supposed to benefit from Rogers’ largesse in the form of cheap tuition and increased institutional pre$tige . . .

Amazingly (this is a rhetorical device, there’s really nothing surprising about it) resident tuition began to skyrocket at the law school almost before the ink was dry on Rogers’ gift, doubling over the next five years, and then doubling again in the next five after that, so that by 2009 it had risen from $4,538 to $20,895. Non-resident tuition also went through the roof, albeit not quite as quickly in percentage terms, rising from $11,490 to $35,807.

2008 and 2009 were the years of the Great Recession, so the university’s administrators decided to give students a break by . . . raising tuition even faster, so that by 2012 resident tuition was $27,272 — six times higher than thirteen years earlier, when Rogers made the largest gift in the history of American law schools in order to keep tuition at the school affordable — while raising non-resident tuition to a cool $42,283.

What did all this activity do to the law school’s revenue streams? Well in 1998 the school was generating about $2.5 million per year from tuition along with another few hundred thousand in gift income.

By 2012, massive tuition hikes, along Rogers’ gifts and those of others (he gave $50 million over 20 years, along $15 million in matching gifts to those from other donors, and he left a $50 million endowment bequest in his estate), had increased the school’s annual revenue from tuition and gifts alone to around $15 million.

Of course the other intended effect from the opening up this immense faucet — really more of a water-cannon — of cash flow was that it would rocket the law school toward the top of the national rankings:

Yale, Stanford, Harvard and . . . Arizona?

Communications mogul James E. Rogers hopes the University of Arizona will be mentioned among those elite law schools after he more than doubled his gift to UA yesterday to $130 million.

”This will put Arizona’s law school on the map,” Rogers said yesterday. ”It will signal that it’s a law school on the move.”

Oh well.

Arizona’s ranking actually fell between 1998 and 2012, from 40 to 43, and it never rose higher than 38th at any point during these years. In effect the school’s ranking didn’t move at all, nor did the entrance qualifications of its students, or their bar passage rates, or really anything else that’s measurable, other than the school’s radically enhanced revenue stream, and its faculty-student ratio, which went from 14.2 to 10.5 to 1. (I suspect the school’s administrator to student ratio improved much more drastically, but that information isn’t publicly available).

What happened? Did the university’s central administration decide to use the income from Rogers’ gifts to replace some or all of the school’s share of the university’s state tax support? That’s possible, but note that, despite being in a very right-wing state, the University of Arizona’s state appropriations rose from $259 million in 1998 to $362 million in 2007 and $464 million in 2012. So if the university was cutting the law school’s tax subsidy, it was doing so in a context in which the university’s overall subsidy was growing — which would have been a very audacious move, given that $50 million of Rogers’ gift was in the form of a bequest, and could thus be revoked by him at any time. (He died last summer).

In any case, the massive increase in the school’s operating budget, enabled by the combination of radical tuition hikes and Rogers’ gifts, resulted in nothing tangible for the school’s students beyond greatly increased debt loads that averaged, with accrued interest, more than $100,000 in 2013.

Indeed, reacting to plunging applicant numbers, in 2013 Arizona became the first ABA law school in memory to actually cut tuition, from $27,292 to $24,396 for residents, and from $42,902 to $38,856 for non-residents. This apparently didn’t move the needle much, at least in regard to non-residents, as the school slashed non-resident tuition by 30% last spring.

Anyway, this series of events illustrates nicely how empty the administrative rationale is that law schools, at least, have to constantly jack up tuition and grovel before robber barons in order to “compete” in the “rankings.” It also illustrates how little of what is called “affordability” by higher ed administrators has to do with the degree to which higher ed costs are subsidized, since more money just means more spending, at least until the marks customers students actually start to rebel.

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