I wanted to draw attention to this article on ATL about the outgoing Dean of the University of Baltimore Law School. Here's a guy who took a law school from 170 (out of about 200) to 117 and seems to be getting the boot because he is daring to complain when the University "re-appropriates" 45% of the of the tuition paid by law students and diverts it to other University programs. It's also surprising that the Dean provided actual, precise numbers - and that they are stunning. As stated by the Dean, the most recent "tuition increase generated $1,455,650 in additional revenue. Of that amount, the School of Law budget increased by only $80,774." That is, in addition to diverting 45% overall, of the recent increase in tuition, the University diverted about 96% of it.
I want to draw attention to this because lots of angry recent law grads complain about their tuition going up so drastically over the last few years. However, they usually point to the Dean's salary or the salary of the professors as responsible for the increase. Now, there is certainly an element of truth there, but a very significant (and often overlooked) driver of increased tuition is that the law school tuition dollars are "stolen" by the University.
If I were paying law school tuition right now, I would be very pissed to learn that 45% of what I am paying does not even go to the law school. I would really question the value of the tuition that I was paying. I would be even more pissed when I learned that 96% of the most recent tuition increase did not even go to the law school.
Similarly, I think that this raises some real concerns for lenders (especially the federal government). When you stop and think about it, the government is lending a student say $20,000/year for law school - but the University is diverting $9,000 to other purposes. If this were a government contract (which a school loan effectively is) having a government contractor divert 45% of the contract price to pay for something other than the contract can be known by a very clear term - "Contract fraud".