The Debt Burden of Law School

The Debt Burden of Law School

The majority of attorneys begin their law careers with substantial student debt. Without proper planning, this debt affects every aspect of their professional and private lives for decades. Here’s how some young attorneys are coping with debt burdens while building their careers. Names have been changed to protect their privacy.

Without proper planning, this debt affects every aspect of their professional and private lives for decades.

White-Shoe to Hedge Fund

“Chris,” 30, graduated from the University of Chicago Law School in 2012 and soon landed a job at a prestigious, white-shoe New York City law firm. After 2.5 years, he left that job to become in-house counsel at a hedge fund.

Why? “I didn’t want to work 70 hours a week until I died,” he says. While he started out making $170k a year at the law firm and made $210k including his bonus, his new position didn’t offer him any more money. However, he works just 50 hours a week, and that was the draw.

Chris - who came from a relatively low-income family and was the first to attend college, let alone law school – had minimal debt after earning his bachelor’s degree.

He currently has $168k in student loans -- all from law school. Even though he’s paid well, between debt and the cost of renting in New York City, his financial future is still in flux. The idea of marrying and having a family isn’t on his radar, and probably won’t be for several more years.

“Debt and living in New York City makes family formation out of reach,” he says. Down the road, he’d like to try something different, such as government work, politics or academia, fields with “more of a sense of mission.”

Chris’ advice for anyone contemplating law school: either go to an excellent law school or have someone else pay for it.

The latter doesn’t necessarily mean a free ride, but there’s no point getting into substantial debt for a second-tier school. In hindsight, that’s what he would have done – attend law school on scholarship.

Taking It Slow

As the mother of two young daughters, “Helena,” 31, is taking it slow when it comes to her career. An associate at a Florida law firm, she works on civil defense and workers’ compensation cases.

After graduating from law school, in May 2011, she gave birth to her oldest child at the end of the year. That means she’s needed a work/life balance from the start of her legal career, and her firm offers that. “It’s a family-oriented firm,” she says. “The salary is not as high, but I have the flexibility I need. It’s a great job, and I like it, but I can also enjoy life.”

There are a lot of women in the practice, and most of them have children. Although she had a great experience at a private university, loans for private law schools are considerably larger. If she had it to do over again, Helena might have opted for a public school/university. At graduation, her loans totaled $113k. With refinancing and consolidation, her loan total is currently $97k. By the time she’s 45, the loan should be paid off. She also hopes to have another child within the next five years.

Elections Have Consequences

For a 32-year-old New York City attorney working in commercial real estate litigation, the election of Donald Trump caused her to reconsider career plans.

“Kate,” as we’ll call her, figured she would make partner at her firm within two or three years. However, her five-year plan has changed. She intends to have a child or two within that time period, and wants to change jobs and focus on civil rights litigation or working for a group like Planned Parenthood. “I don’t intend to stay on the partner track,” she says. “I had been planning to until the election.”

While her law school debt is considerable-$250k- she recently refinanced and lowered her rate from 7 percent to 4 percent. Her husband also makes a significant income and the two have a substantial amount in savings.

Kate was a “K through JD,” going straight from college to law school. In retrospect, she wishes she had taken a break between college and law school and gotten some real-world work experience.

“I would have been a better law school student,” according to Kate. She also wouldn’t have taken out so many loans. Her advice to anyone contemplating law school: “Earn some money before you go, and don’t take out loans.”

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GenLex Staff
GenLex is an online magazine geared towards encouraging and inspiring the next generation of world-class attorneys. This publication aims to supply young lawyers with early career guidance, insight into the profession, early publishing experience, and an opportunity to network. The GenLex staff is comprised of new and seasoned lawyers as well as others in the legal field.