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University of Minnesota law school subsidy soars as applications drop

ST. PAUL—Still suffering from a steep drop in student applications, the University of Minnesota School of Law says it can't balance its budget without even more help from the rest of the university.

Since 2012-13, the U has given the law school $39.9 million to cover budget shortfalls. The ongoing annual subsidy has reached $7.5 million.

President Eric Kaler is proposing to increase the yearly subsidy to $12 million by 2020-21, while also covering a $1.9 million shortfall next year.

The law school has seen its applications fall by more than half since 2010 as the nationwide trend away from legal education has hit the Midwest especially hard.

Rather than admitting lower-quality applicants, the U has stuck to its high standards in order to maintain its place as the No. 20 law school in the country, according to U.S. News and World Report.

The school's J.D. enrollment fell to 555 this year from 752 five years earlier, and it had to step up financial aid offers to field that class.

To offset the drastically shrinking revenue, Dean Garry Jenkins said the school has cut $6.3 million in recurring expenses since 2014. The number of faculty is down 21 percent and staff 14 percent.

It hasn't been enough.

Before leaving for another job in 2016, former dean David Wippman predicted the law school would stop losing money by 2019, and regents OK'd a plan to get there.

But the law school market hasn't rebounded as quickly as expected. Jenkins told regents Thursday that the additional money from the U — $3.6 million, $3.2 million and $4.5 million in the next three years — should eliminate the school's structural deficit.

"The law school is finally making strides to maximize revenue and control costs while maintaining the reputation of the school," Provost Karen Hanson said.

Hanson convened a committee to study the law school's financial strategy. The group concluded the school's finances would only worsen if they either raised or lowered their admissions standards.

It would take too much financial aid to recruit a stronger class, they found, and admitting more marginal students would cause a drop in the school's ranking, further reducing applications.

Regent Darrin Rosha was not convinced.

"If you continue to shrink the class in order to maintain the ranking, it's a little bit like buying a trophy. We need to go out and earn these students to balance our budget so we're not asking some undergraduate from Cokato to subsidize one of our professional schools," he said.

Regent David McMillan said he's fine with a short-term boost in the U's support of its law school but wants to see more signs of progress.

"The cost of this subsidy is beginning to get to the point where it's too painful for other elements of the university to continue to bear," he said.

Regents will vote on next year's budget in June.

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