Student Loan Debt Burdens New Generation of Lawyers
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UPDATED: Jul 16, 2013
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The Student Debt Crisis has reached massive proportions now that is has surpassed $1 trillion.
However, one group of graduates is suffering more than any other. That group is the graduating class of law students around the country.
While the average individual student loan debt per borrower is now in excess of $30,000, that figure doesn’t accurately depict how drastically high it can be for law students who frequently take on six figures worth of student loan debt to complete their studies.
To learn more about lawyers and law students’ student loan debt burdens, loans.org spoke with several current and former law students.
A Gargantuan Debt Burden
While many recent graduates are still struggling to repay their student loan debt, so are plenty of current full-time lawyers.
Washington criminal defense and personal injury lawyer, Breckan Scott, told loans.org that she still has $150,000 worth of student loan debt. In fact, she continues to get calls from college loan debt collectors. Her situation is so dire that she has stopped answering their calls.
Having been forced to try establishing a law practice without any type of business loan financing due to her student loan debt, Scott instead plans to pay off her educational debt using compensation from successful verdicts and settlements. Fortunately, her practice is reaching the point where she no longer has to sell personal items on craigslist just to pay bills or make rent payments in time.
Ideally, a consolidation program would let her make manageable payments. She would no longer ignore her debt collectors under such a plan.
Unfortunately, Scott isn’t the only working lawyer who is grappling with college loan debt.
Teisha Powell, a Florida Foreclosure Lawyer and real estate attorney, told loans.org that after graduating with six figures worth of student loan debt, she was so scared she could not sleep. Fortunately, she was able to start her own business, albeit five years after graduating.
Her experience has prompted her to warn law students that even though lawyering is a prestigious and often-times lucrative career, those who pursue it may not make six figures worth of income for some time. Worse, the “big jobs” may even require up to 12-hour-days in the office.
Now, Powell thinks that students should be prepared to “hustle” upon graduation since very few people get a decent job within the first three years.
“The road to success will not be easy,” she said.
Debt Repayment Anxiety
Brian Harris, a law student at Willamette University, told loans.org that, as a law student nearing graduation, his anxiety has only been increasing.
“With the poor job opportunities, I have no idea how I can make an adequate living as an attorney,” he said. “I decided that a law degree was not going to cut it, therefore, I decided to pursue an MBA in addition to my law degree. Of course that meant yet another year of school, thus even more debt.”
Even though he was anxious with his piling law school debt, Harris feels confident that the addition of an MBA will be an asset that will improve his job prospects.
Similar to Powell though, he warns law students that firms have little desire to hire recent graduates since most law schools fail to teach even basic job skills.
Having relieved his anxiety by cross-educating himself with an MBA, Harris believes he is one of the lucky ones since he received a scholarship allowing himself to borrow a relatively low amount of money — for a law student, that is. Harris will owe over $60,000 upon graduation, but compared to his friends, he feels that he is much better off.
Despite the amount of debt he has incurred, Harris has no intention of pursuing a career in law and said he intends to direct his talent elsewhere.
Global Competition and Culpable Colleges
Shane Fischer, attorney at law, told loans.org that part of the reason for the ongoing difficulties facing law school students is technology. Law firms used to hire rookie associates for $60,000 a year, but Fischer says they now outsource their research and writing to lawyers in India for pennies.
But lack of demand and current jobs aside, Fischer feels popular culture is also at fault for this current deluge of unemployed lawyers. He blames the media for portraying all law school graduates as Ivy League lawyers who begin at prestigious big-city law firms earning $160,000 a year. Unfortunately, Fischer says such experiences belong to less than 1 percent of all graduates in the country.
“The media doesn’t want to mention the graduate of a small, private, non-prestigious law school going to the Public Defender’s Office for $35,000 a year because it is not exciting and does not fit with the public perceptions of attorneys,” he said. “As a result, potential students (and parents of potential students) think that they too will make $160,000 straight out of school. In reality, very few grads ever make anywhere near that kind of money.”
Even universities are guilty in Fischer’s eyes.
A friend of Fischer’s works in the administration of an expensive private university. That source told him that schools use the profits from law programs to fund money-losing operations in other parts of the university. This leads to lawyers flooding the job market in a society overburdened with law school graduates. Starting salaries then decline due to simple supply and demand.
Despite these guilty sources, this current attorney-at-law does not pardon the individual student. Fischer partially blames the actual student loan borrowers themselves for acquiring such high levels of debt.
Most law students are ignorant about money, claims Fischer, since they are fresh out of college and lack life experiences. Couple that inexperience with the notion that many parents front the educational bills for these prospective lawyers, and we see a generation of financially uneducated graduates as a result.
The experiences of these lawyers and law students aside, not everyone agrees that law school debt is wholly unmanageable, or even necessary.
Manageable College Loan Debt
Andy Josuweit, the CEO of Student Loan Hero, told loans.org that he frequently works with lawyers who have six-figure debt in the range of $250,000 to $400,000. He advises them on their best courses of action to take.
Lawyers with heavy debt are advised to look into the Income-Based Repayment programs provided by the federal government. Under these programs, borrowers can make lower payments until their job situations improve, in effect, keeping their heads above water.
Some people are fortunate enough to have family to rely upon rather than federal programs.
Katherine Ernst, a budding novelist, graduated from Loyola New Orleans. Despite finishing her law studies with $115,000 in debt, her husband’s assistance has allowed her to redirect her efforts from being a lawyer to becoming a writer.
Even though Ernst graduated sixth in her class, she was unemployed for one year and her student loan debt gained interest during deferment. While she earned high marks in law school, she hated the day-to-day practice of law. However, she had little choice but to continue working thanks to her high debt load.
Eventually, her husband, whom she met in law school, provided for her and has continued to help her reach her dream of becoming a novelist.
She counts herself among the lucky ones, knowing full well that many of her own friends have defaulted on their student loan debt. Her experience has changed her. She now warns everyone she knows not to go to law school unless they do so without borrowing student loans.
“It’s too much of a gamble,” said Ernst. “If you go to school and you end up not liking being a lawyer, you’re stuck in the profession like an indentured servant and no one should give up their freedom in exchange for a degree.”
Even though heavy student loan debt can make most anyone feel like an indentured servant, some schools help out by offering financial aid to students.
Shielding Students from Student Loan Debt
Afam Onyema, a graduate from Harvard University and Stanford Law School, told loans.org that he declined several six-figure income offers from corporate law firms in order to work with his father’s African foundation that builds schools and hospitals.
He is able to work in a philanthropic organization because he negotiated a generous financial aid package from Stanford. As a result, Stanford now pays 80 percent of his student loan debt through a repayment assistance program.
“I never really thought I’d work for a nonprofit full time. It didn’t seem like it was feasible,” Onyema said.
While Stanford clearly threw a lifesaver to Onyema in the form of a generous financial aid program, countless other law students are on their own in the stormy waters of the Student Debt Bubble.