Monday, October 26, 2009

The Law School's Endowment is Down

A tipster points out that the Law School's endowment has decreased approximately 20%.

Last year, in 2008, the endowment "exceeded" $354.4 million. In 2009, that endowment was "in excess of" $282.2 million (NB: these links open a *.pdf file; the numbers are summed up on p. 5 of the report).

While this decrease is steep, it's hardly surprising given what happened in the market. And it's certainly a much less precipitous drop than some facing other universities (30% at Harvard - and it doesn't appear that Harvard has a separate endowment - the 30% hit in the endowment has caused some serious cuts in Cambridge). Perhaps this is a testament to the Law School's continued high rates of alumni giving?

On a possibly but not necessarily related note,we wrote in the Law Weekly last week that the Law School is working to enhance its Loan Repayment Assistance Program (LRAP), which will hopefully make it even more competitive with those offered by the schools with whom UVA competes for students:

[Professor] Ryan also noted that, unrelated to the Law and Public Service Program, the Law School’s Loan Forgiveness Program is being re-tooled. The changes “will lift the salary cap currently in existence, and raise the amount . . . given.” He added, “Details are in the works, but I can tell you that [the new LRAP program] will be more generous than the current one.”

We support this, but we hope that it won't cause an undue strain on the budget / endowment, and won't lead to ever-more-onerous increases in tuition. Hopefully, details on the new program will be released soon.

Related:
University of Virginia School of Law Annual Report 2008 [Virginia Law]
University of Virginia School of Law Annual Report 2009 [Virginia Law]
Virginia Loan Repayment Assistance Program [Virginia Law]
Law School Lunches Public Interest Program [Law Weekly]

17 comments:

Anonymous said...

It's my understanding that the current LRAP doesn't HAVE a salary cap.

Rule 12 (f) said...

Technically no, effectively yes: once one-half of the amount your income exceeds 35k becomes greater than your annual loan payment, you basically are out of the program, as I understand it. Perhaps this is what is changing.

Anonymous said...

12(f) -- sorry, could you explain that again? Perhaps put it in the article as an EDIT w/ an example of what this means if say you have 100k debt and earn 45k in your job (or something)

Rule 12 (f) said...

As I understand the current plan, if you make 35k or more, you are presumed to put one half of the amount greater than 35k to make whatever your lenders determine your annual loan payment to be. LRAP will pick up whatever is left.

So, if your loan payment is 12k, and you make 45k, the numbers would break down like this: your income exceeds 35k by 10k, and you will be required to use 1/2 that amount (5k) to pay your loans. The remaining amount of your loan payment (7k) will be covered by LRAP.

Note what happens when you reach a level of 59k: your income exceeds 35k by 24k, and you use half of this amount (12k) to pay your loans, which covers the entire amount of the loan payment for that year. There is nothing left for the LRAP program to cover, so you obviously don't get anything. So for someone with 12k of loan payments a year, the effective cap is 59k of annual income.

Your eligibility for the program and how much you get is reevaluated each year (to reflect possible changes in your salary and annual payment amount).

Anonymous said...

Re: alumni giving, I think UVA (and all other law schools) will really feel the effects of the economy over the next 2-3 years. As recent grads have trouble finding firm jobs and those who are 3-4 years out cope with layoffs and pay cuts, alumni contributions are bound to fall off steeply. That doesn't even consider the "emotional" side of it: if UVA Law didn't get me a good job, why would I donate money? (not my opinion, but I can understand it.)

Anonymous said...

thanks 12f, that makes sense

Anonymous said...

8:59

Exactly, alumni donations could get ugly real fast. With probably 50% of the 2L class unemployed and numerous other discussed employment difficulties, tuition is bound to increase. Even if the 2L and future classes become "gainfully" employed, it will likely be PI or something lower paying, decreasing the amount they might be able to donate.

Anonymous said...

8:59 and 10:41,

But how much of the bulk of alumni donations come from people fresh out of school? I realize that by percentages recent classes donate at high rates, but are they donating very much? I don't have stats on this, but intuitively I would think that people much further in their careers make up the vast majority of net donations.

Anonymous said...

11:05

I guess the argument is what happens when a handful of connected classes get hit hard economically? Can they recover and eventually have enough effective earning power to donate substantially to UVA in let's say 15-20 years?

Not sure what is going to happen with firmless 2Ls, no-offered 3Ls, laid off 1st year associates, etc. With the economy stagnant for the next 1-2 years, will firm hiring be much better in the next few years? The 2012 & 2013 classes are banking on substantially better odds, but who knows...

Before this entire mess, people in this position were seen as pariahs. Will the mentality over these individuals change in terms of future firm opportunities for these individuals?

Anonymous said...

they should cut professor salaries. they make more money than they are worth.

Anonymous said...

12:20,

I agree the current and recent classes will quite likely be sub par for donation amounts, both in the next decade and long term. My response was more geared against the notion that alumni donations as a whole will drop off rapidly ("over the next 2-3 years" & "could get ugly real fast"). I just don't think the effects felt by recent classes will have too devastating an effect on the overall fundraising, causing some immediate noticeable increase in tuition because of it (hopefully other factors will smooth over the donations drop for the long term). But, like I said before, I do not have hard statistics on where the bulk of money comes from and could just as easily be mistaken.

Anonymous said...

Well my job prospects are down at least 85% and may never recover ...

Anonymous said...

I would echo the sentiments regarding professor/faculty pay.

In particular, I think faculty like Martha Ballenger and Cary Bennett are making far more than their worth, particularly given the low cost of living in this area.

Click here for an xo thread that uncovered the salaries paid to Law School profs/faculty: http://www.autoadmit.com/thread.php?thread_id=1119049&mc=70&forum_id=2&PHPSESSID=c6922bf9936f6fcde90e0c4e9df0842e#13074265

Anonymous said...

Oh, and Dooley's salary is outright highway robbery. That guy hasn't been a decent teacher or researcher since this decade began.

Anonymous said...

The 150k future-crushing donation I've already made to this place is sufficient for a lifetime.

Anonymous said...

6:10, you think the school is going to administer itself? they don't make that much, and they're the ones you want to target for cuts?

Anonymous said...

11:14,

The school won't "administer itself" but these people do a poor job (see every year Cary Bennett's rambling e-mails filled with excuses for why LawReg doesn't work this time) and receive way too much money for it. $90k? That's twice what the average household in the US makes. One law school "administrator" whose job doesn't entail that much work is not deserving.