The Price of Excellence: A Discussion Document

Never Enough

On February 13, the U of T Law administration sent students a discussion document about tuition and financial aid. The document stated that, with “the Province’s contribution stagnant, students have had to shoulder a significantly greater burden.” We’ve been told that our program needs to grow by 4.6% annually and that professor salaries increase because of contracts negotiated university-wide.

None of this is false, but it’s not a complete explanation either.

In 2001, Ron Daniels—then Dean of the law school—wrote an article for the National Post called “The Price of Excellence.” In it, he set out his vision to transform U of T Law into a world-class institution. American-style high tuition fees would allow the school to recruit elite professors, fund clinics and specialty programs, and provide for robust financial aid. In large part, Daniels achieved this vision. For better or worse, we are the school Daniels sought to make us.

Next year, tuition for incoming 1Ls exceeds $30,000. A lot of students don’t know what to think about this issue. They are worried about high tuition, but they want to hear both sides of the debate. The goals of this Tuition Special in this issue of UV are to (1) tell the full story of how and why tuition got so high, (2) fact-check claims made by the administration about what we are getting for our money, and (3) to share some student perspectives on where we go from here.

This piece is well-researched. The UV editorial board has interviewed faculty and staff. We’ve reviewed Committee Reports, the UV archives, and other public documents for data. We’ve read and taken notes on 20 years of Faculty Council minutes.

How We Got Here

Dean Daniels’ Vision

In 1995, Ron Daniels became Dean of the Faculty of Law. The same year, the Mike Harris Ontario government severely cut funding for professional schools. The law school’s operating budget was slashed by 15%.

Unable to rely on provincial support, and with tuition rates regulated by the provincial government, Daniels looked to raise money where he could. The school created 16 endowed chairs – faculty positions funded through alumni donations.

In 1998, the Harris government deregulated tuition fees for professional schools. U of T Law could charge what it wanted, provided that 30% of tuition increases were earmarked for financial aid programs.

Now able to significantly expand the school’s resources through tuition increases, Daniels began to argue for a much more ambitious goal. By 2000, Daniels was frequently urging Faculty Council to move towards higher tuition fees in order to compete with elite American law schools.

On March 22, 2000, Daniels noted that U of T tuition was only a fifth of its US peer group. On October 4, 2000, Daniels argued that U of T needed to significantly raise professor salaries to make them competitive with US law schools.

The Idea in Theory

The idea behind Daniels’ vision was grounded in economic theory. To attract the top professors, you have to pay competitive salaries. To pay high salaries, along with additional clinics and programs, you have to charge high tuition.

Dean Daniels stated that he is committed to achieving salary parity with the top ten international institutions

(Faculty Council Minutes – January 24, 2001)

How do you charge high tuition without decreasing accessibility? The goal is to make students pursuing high paying corporate law jobs pay full price, while subsidizing the students who will go on to low income careers with significant positive externalities (jobs in poverty law, environmental law, etc.).

You can subsidize students in two ways. The first option is ‘front end’ relief, i.e. loans and bursaries that immediately reduce the cost. This type of relief is criticized as ‘regressive,’ insofar as it often goes to students who land high paying jobs and therefore never needed the money. The second option is ‘back end’ relief, whereby you make everyone pay full price, but reduce the debt burden based on students’ career choices. Back end relief is economically more efficient because you distribute the limited subsidies to those who need them the most.

To work in practice, a back end debt relief program needs to be well-funded, so that students can actually have a sizable portion of their debt covered. Since back end benefits are distributed over a longer period of time (e.g. ten years), such a program also needs to be seen as reliable. Otherwise, students cannot make career choices without having to worry that their coverage could decrease in the future.

Implementation

On January 24, 2001, Dean Daniels stood before Faculty Council and declared his goal of achieving salary parity with the top ten law schools in the world. This would disincentivize professors from leaving U of T Law for the US, and more importantly, would help attract top international (American) researchers.

A year later, a task force (chaired by Daniels) unveiled a five-year plan to radically restructure the law school. The plan called for yearly tuition increases of $2,000, eventually bringing tuition to $22,000 by 2007. The new Back-End Debt Relief Program (BDRP), modelled closely after a similar program at Stanford, was promised to ensure that accessibility would not be a problem.

Some Faculty members claimed they didn’t feel they could publicly oppose the plan. One anonymous Faculty Council member was quoted in the National Post as stating that “[t]he people who are pre-tenure are worried about their future… they feel they will be ostracized by their peers if they actively oppose it.” In a 2002 UV article, Professor Hudson Janisch claimed that “young, untenured professors are not prepared to speak out.”

Others had no problem with Daniels’ vision, but were concerned that he was implementing his plan too quickly.

A year later, on February 14, 2002, Faculty Council gathered in the Solarium to vote on Daniels’ plan. Students packed around the edges of the room to watch the vote. The plan was easily approved by a count of 37-13. Ten out of thirteen students voted against it. Thirty-nine out of forty two professors voted for it.

“Public education is dead” said Professor Patrick Macklem, after the vote. “I don’t welcome it, but it’s a fact.”

The relationship between the administration and its students grew tense. Students made signs and protested in front of Falconer. Some even made buttons that read “Killing Daniels will only make him stronger.”

A New Premier and a New Dean

The Daniels’ tuition increases came to a temporary halt in 2003 when Dalton McGuinty’s Liberal Party took power in Ontario. McGuinty froze tuition rates, now at $16,000 at the law school, for three years while his government decided on a new regulatory framework. It eventually settled on the framework that exists today: professional schools could increase tuition by 8% annually for incoming students, and 4% annually for existing students.

In 2005, Dean Daniels unexpectedly left U of T Law to become Provost of the University of Pennsylvania Law School.  Mayo Moran, who had been Associate Dean under Daniels, was appointed Dean shortly thereafter. In an interview with Ultra Vires in January 2006, Dean Moran acknowledged the difficulties “between the Dean’s office and the students” and promised to improve communication. She also promised to be “modest” on tuition.

Since then, Dean Moran has increased tuition by the maximum allowable amount every year. The administration has not communicated any plans change course.

Putting it all Together

We pay high tuition because our faculty elected to pursue Daniels’ vision of excellence. No one expects additional money from the province. University-wide contract negotiations do not explain why many professor salaries have doubled over the past ten years. Faculty salaries go up because professors voted to drastically increase them.

When the administration says that it has no choice to raise tuition by the maximum amount just to cover its costs, that’s because it already chose to increase costs no matter what.

Are the costs worth it? Is the administration making all the right decisions? That’s the normative debate we need to have. But we can’t have it until we all know how and why we got here.

What Do Your Tuition Dollars Really Get You?

Fact-Checking the Administration’s Claims

Classes

More Upper Year Courses?

The administration likes to cite our high faculty student ratio. The problem is that this ratio is virtually meaningless. Many full-time professors teach very few (if any) classes.

We have more than 130 upper year course offerings, but many of these are taught by adjuncts (practitioners) who are paid much less than full-time faculty and often give back their pay as a donation to the school.

High tuition does not fully explain our variety of upper year courses. Our proximity to practitioners at downtown firms is a major factor.

Classes are Getting Bigger

The number of JDs at our school has been growing steadily. The average size of the 1L class has increased by 14.1 students, and the average number of transfer students has increased by 24.7 students. This translates to an eventual increase of over 90 students at our school (three cohorts plus two years of transfer students).

Figures from Admissions Committee Reports.

1L classes have gotten more crowded. Faculty Council recently voted on reducing Administrative Law from four sections of 50 students to two sections of 100 students. This plan was narrowly voted down.

What about small groups? They’ve been around since 1972 – long before tuition was deregulated – and have always been roughly 15 students per group.

Financial Aid is Inadequate

Back-End Debt Relief

BDRP is a complicated program, but the idea is simple.

Upon graduation, if you earn below a certain threshold, the law school will help you pay off your debts. They do this by giving you a new loan that you use to pay off your existing loans plus interest, and then forgive (i.e. erase) this new debt you owe them. They do this because the school cannot directly forgive loans you’ve taken out from other institutions.

All of this takes place over a ten year timeframe – they assume you are paying off your debts (principal + interest) over ten years. For each year you are eligible for the BDRP (i.e. your income is low enough that you qualify), the school will lend you the money to help you make your payments for that year. In each year of the program, the school then forgives a portion of the total they’ve lent you to pay off your debts. In the tenth year of the program they forgive 100% of what you owe them.

The problem is that there is no guarantee that the school will lend you enough money to make your full payment in any given year. There is a fixed amount of financial aid set aside for BDRP each year, and if too many people are eligible for the program that year, the benefits paid out are capped.

This is not just a possibility, it happened last year.

ADDENDUM: After conducting interviews with Faculty and staff (including an interview with Dean Moran), in which they confirmed that BDRP benefits were capped last year, Alexis Archbold emailed UV at 4:37 pm on Friday March 22 with a surprise update. The administration met, took another look at their numbers and suddenly discovered they will be able to meet “the actual needs” of last year’s BDRP participants after all. The question to ask yourself is, why did they only realize this after they found out UV was writing this piece?

Diluting Financial Aid per Capita

In its Discussion Document, the administration cites the total size of the Financial Aid pot (which is then divided into front-end and back-end relief). But this assumes that the size of the student body stays constant.

As we’ve shown, however, the size of the student body is not constant.

Financial aid increased from $2,054,737 in 2006/07 to $2,696,780 in 2011/12. But, according to our calculations, the total number of students increased by roughly 30 over this same time period. Financial aid per capita increased by $870 – but tuition increased by $8,109.

This means that the school is only admitting extra students who do not require financial aid (raising questions about accessibility) or that financial aid is not keeping pace with tuition.

Keep in mind that Financial Aid covers front-end and back-end relief. A larger student body means a larger number of graduates eligible for BDRP. This threatens to put additional strain on an already weak program.

Looking Forward

The administration needs to own-up to its plan from ten years ago. It needs to stop blaming the province, and stop pretending that it has no control over its long-term costs.

There’s nothing wrong with excellence. U of T Law is a good school. We have high placement rates on Bay Street and there are lots of clinics and other opportunities. Our professors publish a lot, often in prestigious American journals.

But since students are now funding the administration’s vision, it’s imperative that we vigorously question whether or not we’re getting good value for our tuition dollars. We have to demand better communication and better information. The price of excellence is high for students and faculty alike.