Handling Law School Debt II: A Conversation

BPPshinners-lsat-blog-law-school-debt-conversation
Last week, I gave you some of my own advice about taking on large amounts of debt for law school.

This week, I interviewed some acquaintances who are currently working full time as lawyers at Big Law firms to see how the amount of debt they assumed to attend law school is affecting their lives, post-graduation. You should treat each of these stories as a best-case scenario; they were all employed at graduation in a large market, at firms that paid at the top of the salary band.

You should also view the responses through a lens of the selection bias finding these lawyers entailed – I posted a query on Facebook, so the responses I received were most likely from those who had strong feelings about the student loan situation.

I’ve mixed and matched answers so as to protect the identity of the respondents. They all graduated from HLS with me, but that’s the only identifying information you’ll receive.

As background, everyone who responded here had between $150,000 and $220,000 in outstanding student loans after graduating. They all took jobs that paid between $155,000 and $170,000/year.

Now, to give you an idea of their current living situation, the mechanics of their debt repayment, and their current status:

QUALITY OF LIFE AND DEBT REPAYMENT

Honestly, no one I talked with had a complaint about their living situation after graduation. Everyone lived in a nice apartment, ate well, and was comfortable (if living a bit frugally).

However, their monthly loan repayments and the overall debt burden caused a large amount of stress in their lives.

Almost all were paying half of their net salary to pay down their loans (that’s thousands of dollars a month). They all described the negative impact this had on their lives as “significant.”

All of them spend a significant amount of time each week worrying about the loans. “[I] used to spend at least 1-2 hours a week worrying about it,” was, by far, the most positive response I received to this question.

Another lawyer worried about the debt burden every day. “I had a little calendar taped to my monitor with how many months it would take before I was free.”

“Every second I spend unhappy at work I can credit directly to my loans. And that’s a lot of seconds.”

While most didn’t worry about having enough money to actually make payments, another theme quickly developed: lost opportunity costs. “I never worry about how I will repay my loans. However, I worry every day about how I’m not paying other things. I have nothing saved for retirement; I haven’t put anything towards buying a house, etc…”

When asked at what point they’d have their debt under control and be able to leave their firm job, one respondent stated, “Probably never. Since I won’t be saving money until my loans are taken care of, I’ll probably have to stick with my firm salary for at least a couple years after my loans are gone, just in order to not be five years out of school and starting from zero.”

While financially secure immediately (though universally worried about the future), not a single respondent was excited about their day-to-day life:

“I wasn’t thrilled at my job either (i.e. it was making me miserable), and I definitely used the debt as a crutch/excuse for not addressing the issue.”

“I knew it wasn’t what I wanted to do, but I needed the money to pay down my loans. It was awful and soul-destroying, and I could only hack it for a year, but it did give me a lot of money to pay towards my debt.”

“I was absolutely miserable in my job – like crying-in-the-office-bathroom-at-10 p.m.-on-Sunday-while-I-was-still-working miserable. The ONLY reason I stayed was because of the money to pay down my debt.”

Probably my favorite response recognized the irony of the entire situation: “I’m working at a job I’m not terribly passionate about in order to pay off the loans I took to earn the license to do that job.”

In any case, most were looking at 3-5 years just to get the debt under control, and then several more years to establish a level of savings that would equal what they would have earned had they foregone law school, or attended another school on scholarship.

ADVICE

So what advice do these former law students have for those of you out there who are in the middle of your decision on which school to attend?

“I would tell people to go to a lower-ranked school where you can get scholarships because the prestige of your school is not as important compared to the indentured servitude of paying off your loans. If you can’t get scholarships and you’re going to have to borrow money, you should pick a different career.”

“I went to Harvard because it was Harvard. I could have gone to the University of Virginia, where it would have been warm, and paid NOTHING. Then there would have been a lot more routes open to me at graduation.”

“I attended arguably the best law school in the world. It wasn’t worth what I paid. But a lower tier school that leaves you with a crushing amount of debt and no certain way to pay it off? That’s borderline criminal.”

“For the love of god, don’t go to law school unless you’re certain you want to be a lawyer. Because at the end of three years, you might not have a choice.”

“If I had to do it again, I would go to scholarship school, but only because the drop in prestige was not significant. It’s hard to say, however, if my scale was lower tier.”

“Unless you are going to a top 5 or 10 school, or have scholarships for 100% of the cost guaranteed for all 3 years, don’t go. Or, at least do a serious analysis of how you would pay off $150,000 in loans, while making a salary in the $45k-60k range, and paying living expenses. You’d likely be better off working an entry level position for 3 years, at which time you may have a salary around $45-60k, but wouldn’t have to stress about how to pay off $150k in debt.”

CONCLUSION

When I started writing this article, I had a huge narrative into which I was going to seamlessly weave quotes. I abandoned that when I started receiving responses; I think they speak more for themselves than I could hope to through editing them.

What struck me most was how trapped and unhappy many were with their lives, mostly because of the debt. The amount in loans caused most to take positions that they would otherwise have avoided simply to be able to pay several thousand dollars each month. As one respondent put it, “Being a lawyer is not a terrible job, but working in a big firm is.”

They all had interests in working in the law. One wanted to go into family law; another, public defending. However, the debt forced them to work at a big firm in order to make their payments, and this transformed a career they otherwise would have enjoyed into a miserable slog through three to five years of their lives.

So, to echo what they all said, spend some time to really think about what $150,000 in loans will do to your life and to your options after law school. Recognize that these stories are the best case scenario, and most law students won’t be so lucky as to have a nearly-guaranteed six-figure salary upon graduation. Think about taking that scholarship offer instead of paying full-price at the more prestigious school (as almost everyone above said they would, in retrospect). Maybe even consider starting a career in another field, where three years’ experience with no debt might leave you in a better position than a JD.

And, finally, to end on a positive note, this: “If I hadn’t gone to HLS, I wouldn’t have gotten to meet Matt Shinners, and that would be a f***ing tragedy.” So it’s not all bad.

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