A clue to the question can be found in a working paper published by Jim Chen, the former Dean of Brandeis School of Law this week titled “Scholarships at Risk: The Mathematics of Merit Stipulations in Law School Finanacial Aid.”
Jim quotes from the article by David Segal published in 2011 in NY Times, “Nobody knows exactly how many law school students nationwide lose scholarships each year — no oversight body tallies that figure — but what’s clear is that American law schools have quietly gone on a giveaway binge in the last decade. In 2009, the most recent year for which the American Bar Association has data, 38,000 of 145,000 law school students — more than one in four — were on merit scholarships. The total tab for all schools in all three years: more than $500 million.”
And Jim shows that relying on merit scholarships is done by an entirely wrong manner by students. By the use of elaborate mathematical formulae and economic statistics, Jim shows in his paper that the face value, or the value that a student should actually expect from merit scholarships is five-ninths (or about 60%) of the actual worth of the scholarship.
While most of the paper is meticulous mathematics and may be difficult for ordinary students to digest, the conclusion of the paper is worth noting ad verbatim:
“As the twin forces of competition and technology tighten their grip on the legal services industry in the United States, the personal return on investment in legal education continues to decline. That fall from bourgeois comfort may yet become more precipitous than law schools can bear. In the meanwhile, however, the very existence of financial aid subject to merit stipulations, to say nothing of the rapid spread in this practice among American law schools, suggests that law schools are willing to shift squarely to their students the bulk of the economic risk inherent in entering their profession.”