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Law School Debt
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March 4th, 2010Career, Great Recession, Law School
Come spring 44,000 law students will graduate with their JD and what will the overwhelming majority have in common? Debt to the tune of $76,563. That is the estimated average law school debt. Actually, those figures were for 2004-2005 and Forbes puts that number at $100,000. Mint puts it at $92,937 in their interactive Student Loans by the Numbers guide. Of course, this is in addition to any debt accrued from undergrad and graduate school. According to the American Bar Association, the average tuition and fees for a private law school rose from $16,798 in 1995 to $26,952 in 2004, including a 5 percent jump from the $25,574 tuition average in 2003. To help pay for that education, students attending private law school borrowed an average of $76,563 in 2004-2005, according to the ABA.
I always stayed away from debt because I wanted to know that after Law School where and what I decided to do would be my own choice. That choice should only be dictated by my personal preference (and the job market) and not how much I must make to meet my monthly debt payments.
Having such a huge debt means that students will not only forego an ideal job for one that pays the most, but research shows that student loans will cause 44% to delay buying a house while 28% will delay having children per Mint’s data.
I don’t believe in the concept of good debt versus bad debt because I think all debt is debt. Debt for education is not necessarily good because it is for education. It will only be financially benficial if it will increase your earning power in a significant manner for the amount your paid for the education plus the amount of money you lost by staying out of the job market while pursuing the education. I think the term ”good debt” causes people to skip the careful analysis that they should be doing whenever they take on any kind of debt.
Do you agree with the concept of good debt and bad debt?
Tags: Average law school debt, debt, Good debt v. Bad Debt, Graduating with Debt, Law School, law school debt, Student Loans
6 responses to “Law School Debt” 
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I’m with you, debt, is debt, is DEBT. I have heard people using the term “investment” to describe good debt. I guess…
Investing Newbie´s last blog ..WWYD
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I do believe in good and bad debt… but I don’t think that you can say things like, “all educational debt is good.” I wouldn’t call going to art school for $100,000 so that you can potentially make $20,0000 such great debt. I think it’s all relative. Plus, educational loans are usually at a low interest rate, come in reasonable monthly bills, and don’t reflect poorly upon your credit.
Kasey at Thrifty Little Blog´s last blog ..Moooore Great Closets -
The vast majority of us don’t have the luxury of “staying away from [educational] debt.” I’m one of those graduates who will emerge with 100k. And in prior years the vast majority of my classmates were coming out and making 120k+ salaries. The debt load is much more sobering now because of the state of the legal market.
I believe that educational debt is good debt, but I agree with Kasey that not all of it is good. I’m not thrilled with the amount of debt I have, but considering I have the potential to make much more than what I’ve racked up… I look at it as good debt, a good investment in myself and my future.
Sunflowers´s last blog ..1099s and W-2s -
I believe there is good debt and bad debt to an extent…
Debt is good if it generates a profit for you. So debt to buy rental properties is okay imho… Taking debt to manage seasonal financial for small business needs is okay, but definitely less desirable…
But most debts are to risky for my taste. That said, mortgages are at extremely low interest rates right now…
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Ronnie March 5th, 2010 at 14:49
First, I do not believe in good debt vs. bad debt. In my opinion, all debt is just that–debt, and it needs to be repaid. If anything, educational debt is the WORST debt because of its non-dischargeable nature.
Second, and this isn’t personal, but I am sick and tired of students whining about having to take a certain level job to pay their loans. Really? STOP IT!
I say this as someone who graduated law school from Georgetown with $205,000 in debt, more than TWICE the average. I was unemployed from May 2005 (graduation) through August 2006, doing whatever contract position I could get my hands on in the meantime. I worked part-time at Sephora because I had to pay my rent, and I had ZERO savings to speak of.
Do you know how many payments I missed? NONE! Absolutely not one payment has ever been missed on account of my lack of employment, and when I started working, I was making $60k, which ain’t that much when you owe $205k. And that didn’t include my car loan, since I was now working 30 miles away from home.
Sorry I ranted on, but that is one of my soapbox issues. It is more than possible to pay loans at lower salaries. It is a matter of prioritizing, and it can be done.
And I will say, I’ve delayed buying a house, but it’s not because of my loans. It’s because of my other unsecured debt. And I’ve delayed having kids because, well, I’m not married yet. But we aren’t using the loans as a reason not to have children or buy a home. And for the record, my boyfriend has close to $300k in student loans, so between us we’re already at $500k.
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I would say that there’s debt, and then there’s really bad debt. The former being incurred as the “best option” (going to college, buying a home), and the latter being more a la Confessions of a Shopaholic…
Debt is never good, but is less of an evil if there’s an actual long-term benefit…
Caity´s last blog ..Networking
Investing Newbie March 5th, 2010 at 12:58