Even the best and the brightest have their Achilles’ heel. For many law school students, that weakness comes in the form of financial mismanagement. Dealing with massive student debt while trying to seek employment can feel very overwhelming.
But don’t despair!
With financial discipline, you can pay off your loans while still enjoying a good quality of life.
Financial discipline, however, also means flexibility, and that may mean relocating to an area with a lower cost of living.
That’s what “Tony” did after graduating from law school in 2014 with student debt totaling $145k. Now, just four years later, the 33-year-old has whittled his debt below $100k. He hopes to pay off the entire debt in seven years, with a monthly payment of approximately $1,800. While he did refinance his debt at a lower rate, it’s his own commitment to paying down his loan that’s made the greatest difference. The young attorney also owns a home and recently had a child with his girlfriend.
He now works in commercial litigation for a Dallas, Texas law firm. Tony likes his job, puts in between 55 and 65 hours per week, and hopes to make partner within six years. If everything works out, he’ll make partner and pay off his law school loans in roughly the same timeframe.
Once that $1,800 a month payment is no longer necessary for student loans, he plans to start investing. Right now, because of his student debt and mortgage, he has little in the way of investments outside of his 401(k). He also knows that his new child will add considerable expense.
Tony grew up in New England, the son of immigrants. All of his undergraduate student debt has been paid off. During college, he decided to go to law school, the first in his family to do so. When his current firm hired him, he had the choice between working in their Dallas or New York office. He chose the former, partly because the cost of living is so much cheaper in Texas. “In two years, I bought a house and paid down my loan. There’s no way I could do that in New York,” he says.
When asked if would have done anything differently, Tony replies that he would have tried harder to get a scholarship for law school. “I worked during law school, so I didn't have to take out loans to ‘live’ -rent, food, etc. - which I think helped reduce the amount I borrowed. If I received a scholarship to cover all or most of tuition, I would be in better shape now. Other than that, I wouldn't change a thing,” he says.
He advises those considering a law career to get some life experience before going to law school. “Get out in the ‘real world’ and get an appreciation for paying bills - rent, phone, undergraduate loans, car - and understand the quality of life you want to have,” he says, noting he took three years off, and when he was faced with the price tag of three years in law school, made an informed decision to take on the debt.
According to Tony, “[Law school] is a financial risk, but I think going into law school understanding what $100k plus in student loans may mean for you individually will help you develop a financial plan for the future and the discipline to stick with it.”
Get out in the ‘real world’ and get an appreciation for paying bills - rent, phone, undergraduate loans, car - and understand the quality of life you want to have