A law professor has directed me to a document that offers a fairly comprehensive look at the current and projected budget at UC-Hastings. The document combines a fiscal overview of the school's current situation with a strategic five-year plan going forward. Hastings is in a bit of an unusual position among well-ranked schools in that it's not part of a larger university campus, so there appears to be no cross-subsidization between it and other academic departments, i.e., part of the law school's revenues aren't being spent in the English department. That aside, this is an unusual opportunity to study in detail the financial structure of a large first-tier law school public law school.
*While total applications to the school fell by 28% between 2003 and 2011, nominal tuition revenue nearly doubled over the same period, going from $24 million to $46 million. In-state tuition has gone from $21,000 per year in 2004 to nearly $47,000 this coming fall.
*This academic year, the school nominally took in $46.5 million in tuition, but in fact only collected $33.45 million, because of cross-subsidized "scholarships." This made the mean tuition paid by students $27,107, while the median was $40,000 for in-state and $49,000 for out of state students. Here we have a stark example of the reverse Robin Hood principle at work -- by which the half of the class which are less likely to get well-paying legal jobs, or any jobs at all, subsidize the half of the class getting "merit" scholarships.
Hastings has almost no real scholarships, i.e., endowed
private money donated to offset tuition costs. In 2011 the school distributed
$361,000 in such scholarships, i.e., an average of less than $300 per
*This past academic year Hastings students borrowed $23,151,000 in Stafford and Perkins federal loans, and $20,141,000 in GRADPLUS and private loans. We can be confident that the percentage of the latter figure that was made up by private loans was trivial, meaning that Hastings students borrowed around $43 million in federal loan money. This means Hastings students took out 28.6% more in federal loans than they paid in total tuition. On average, Hastings students borrowed just over $35,000 each. This suggests that something close to 100% of the $27.1K per student in tuition Hastings actually collected was federally debt financed, i.e., almost no one is laying out any cash for law school tuition.
*While the class of 2011 graduated with an average of $102,000 in law school debt, current Hastings 2Ls, taking into account interest accrued during law school and tuition increases, will graduate with an average of around $130,000 in law school debt (This is my projection rather than something in the budget).
* The school is raising tuition 15% for the coming academic year, and plans to raise it 5% per year for the next four years after that. (This will put in-state tuition at about $57,000 per year four years from now). The justification for this, fiscally speaking, is that Hastings is cutting its JD class size by 20%. These tuition increases, along with a 25-student increase in the size of the international LLM program and 12 students added by a new MSL in Health Law, will allow the school (assuming that it can continue to fill its projected classes) to increase nominal tuition revenue from $46 million to $59 million despite the decrease in the size of the JD class.
*Tuition makes up 53% of the school's operating revenue. The rest comes from state appropriations (14%), investments (13%), auxiliary enterprises ( 12%; this includes things like renting space in the school's physical plant, parking, and bookstore revenues), private gifts (5%), grants and contracts (1%) and other revenues (2%). This past academic year operating revenue exceeded expenditures by $10.5 million. Over the past eight years the school has averaged about a three million dollar per year surplus in net revenues versus expenses. (The school lost around one million dollars in 2008 and nearly nine million in 2009, apparently as a result of state appropriations cuts).
*Despite the fact that revenues exceeded expenditures by nearly 20% over the past fiscal year, the school is cutting $2.2 million in operating costs "primarily through the elimination of 20% of the non-academic staff through layoffs or elimination of vacant positions."
*59% of the school's operating expenses are taken up by salaries and benefits ($31.2 million). Utilities, supplies and services make up 17%, auxiliary expenses are 11%, depreciation is 4%, and interest on debt is 3%.
Note that there's literally not a word in this detailed 60-page strategic five year planning document regarding what an economist would call "outputs." Hastings has doubled in real terms the nominal price of what it's selling, at a time when the demand for its product is crashing. Under such circumstances, one would think that the matter of whether the school's graduates are getting a reasonable -- or indeed any -- net return on the skyrocketing cost of their investment would at least be mentioned. It isn't.
That fact alone tells us a great deal about what actually does and doesn't count inside the law school bubble.