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Santa Clara Prof Steve Diamond Approaches Escape Velocity

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Yesterday we wrote about how Santa Clara University law professor Steve Diamond was defending his school with some extremely dubious facts. Here are the relevant claims he made in a comment on the Faculty Lounge:

At SCU we have already committed, and have been committed for several decades, to all of the things you suggest - lower salaries, more teaching, more administrative work by faculty and lower tuition than is the norm at schools like Stanford. [...]

We constantly debate those choices and try to find the right balance - which has included in the last few years decisions to freeze salaries, not raise tuition and increase administrative work for faculty.

SCU's sticker price is cheaper than Stanford, by just over $5,000, though SCU is still well north of the $40k mark. But, we pointed out that Stanford grants far more generous scholarships, making the average cost at Stanford in the ball park of $2,000 cheaper than SCU per year.

Steve Diamond responded to this analysis:

[I]n addition to the actual real dollars, not "nominal," ten percent differential with Stanford which adds up over three years, the point being made was that the Stanford tuition pays a much smaller percentage of the actual cost of Stanford because of their substantial endowment and other resources, the benefit of their chosen strategy to serve a certain market in comparison with SCU's. SCU must meet a larger share of its cost from tuition.

This is harder to follow than Erie Doctrine analysis. We'll start with the easy part though, that SCU's cheaper tuition is cumulative over the three years, so instead of being $5k cheaper, it's more like $15k. Except that scholarships are also cumulative. Stanford's median award is $26,000, and that's per year, not divided over 3 years. We don't have Stanford's scholarship retention rate, but generally speaking, elite schools tend to not cut off very many people. On the other hand, 60% of Santa Clara students receiving scholarships have their awards reduced or eliminated. So, over a three year period, Stanford's $2k differential stacks up to $6k, plus an additional difference from scholarship retention.

In other words, professor Diamond, when you multiply a negative number (the tuition differential) by a positive number (year of law school), what you get is a bigger negative number. We know, the maths are hard.

And now for the confusing part of his response:

the point being made was that the Stanford tuition pays a much smaller percentage of the actual cost of Stanford because of their substantial endowment and other resources

Um, no. The point being made was:

lower tuition than is the norm at schools like Stanford

But even with Stanford's tuition making up a smaller portion of its revenues, just what is the point? I suppose you could criticize Stanford for not using its endowment and alumni contributions to lower tuition, but that's not really the point you made. What you pointed out is that when you go to Stanford, other people help subsidize your education. You get more bang for your tuition buck.

 

Finally, we want to turn to one other comment Diamond made in his response. He originally stated that the faculty at SCU had decided "in the last few years" to not raise tuition. We pointed out that tuition has been raised every year since 2007. (We've since found more data showing it's been raised every year since 2005.) Diamonds response was:

The SCU faculty did vote to block a proposed tuition increase recently. Nothing was made up.

There are two readings of this. First, maybe he means that the faculty voted to block tuition hikes, but were overruled, and the hikes went through. If that's the case, his original defense of SCU should have noted that the block of a tuition hike was ineffective. The second reading is that SCU's faculty has blocked a tuition hike for the 2013-14 school year. The data just aren't yet available for that, so we don't know. (We asked Diamond to specify for what year(s) tuition increases were blocked, but have not heard back.)

Since we don't have next year's tuition, let's look back at that claim that Santa Clara has for decades been committed to providing a cheaper education than at schools like Stanford. The recession began with the collapse of the housing and finance industries in 2007. In early 2009 the hit caught up to the legal industry, and we saw the Lathaming. So the first chance schools had to adjust tuition in response to the crippled legal economy would have been for the 2009-2010 school year.

Between 2009-10 and 2012-23, Stanford raised its tuition by $4,749, or 10.76%.

For the same period, Santa Clara saw greater increases both in nominal dollars ($5,640) and in tuition percentage (14.83%).

It would seem that instead of being committed to providing a lower cost education, Santa Clara is trying to catch up to Stanford.

 

All that aside, it is possible Steve Diamond believes in earnest that what he claimed was right. He could have been thinking in terms of nominal tuition rates, and maybe the faculty has blocked a tuition increase in 2013-14. We think he's in outer space, but it's possible that he's just in a low orbit.

Except when he tried to throw a punch at Law School Transparency:

My guess is that LST is really interested in making money not in any serious change, hence its interest in brand recognition. No doubt it will be offering law school applicants some kind of software package that will only add to the cost of going to law school.

In Steve Diamond's world, Santa Clara, which has raised tuition every single year, is committed to not raising tuition, and Law School Transparency, which has never charged for access to its product, is only interested in getting money from its users.

Steve Diamond isn't just flying into outer space, he's approaching escape velocity. And Santa Clara lets this guy teach business law and corporate finance. Lucky for him, he has tenure, but if we were SCU students, we'd under-enroll his classes until he was forced out.


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