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

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 have the opportunity to attend law school 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 for free or discounted. Before you get jealous, realize that these students found themselves in this enviable position because they worked hard for it. They excelled in college, on their applications, and perhaps most importantly—on their LSAT scores.

The Choice

For some, the decision is brutally simple. You’ll go to the highest-ranked law school you can get into, regardless of cost. There’s nothing wrong with that per se, assuming you aren’t motivated by 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. 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, 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.

In Terms of Grades...

From a purely economic perspective, the cost of attending a top law school is what 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.

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, our hypothetical 1L should ideally have above-median grades.  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).

Making the Decision

So, when does it make sense to take the money and run? It’s a deeply personal decision that depends on several factors. How risk-averse are you? Where would you like to practice after graduation? What do you want to do with your law degree? What’s your attitude toward debt in general? Among many others.

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

  • Dillard at UVA

  • Root-Tilden-Kern at NYU

  • 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:

  • You got a full ride at your Bargain option.

  • 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:

  • US News Law School Rankings

  • Above The Law

• 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 personal choice. With that said, take the advice above with a grain of salt. At the very least, it should provide a starting point for your decision-making process.