How Much Debt is Too Much Debt for Law School
Debt can be a really sticky topic, and law school is really expensive. When is it okay to take on debt to pay for law school? Is there a specific amount that becomes too much debt for law school? I want to go to law school, but I don’t want to take on any debt – can I even go to law school??
Financial stress and anxiety can really mess with your life and is often surrounded by a lot of shame and fear. Some folks are ashamed of the debt they currently hold. Some people make decisions based solely on the fear of debt. Both these feelings very often lead to silence. We don’t talk about these things nearly enough and leave college students to take on potentially $100,000 or more in loans to pay for law school. Today we’re shedding some light on law school debt.
We’re going to be covering three main topics: first, how to evaluate your debt profile; second, when is law school NOT worth the debt, and when it is; and third, how to minimize your debt!
How to Evaluate Your Debt Profile
One of the first steps in determining what law school is financially right for you is evaluating your own debt profile. Are you starting law school with other debts? What type(s) of debt are you currently holding? It’s going to be time to get really real with yourself about your financial situation and your debt.
First, ask yourself these questions: Do you have undergraduate debt? If so, what type of debt are you holding? Did you take federal direct loans or Parent PLUS loans? How much debt do you have from undergraduate school?
If the amount of debt from undergraduate school is high, it’s so much more important to try to keep your law school debt low. As you go out into the world, both your undergraduate and law school debt will be coming with you and can affect your ability to accomplish later goals (buying a house, for example).
Second, what other debt do you currently hold? Is it credit card or commercial debts? Do you need to make child support or alimony payments? Are there any other major medical or financial obligations you need to pay into?
If you’re putting a significant amount of money into either of these categories each month, you’ll want to be extra cautious about adding law school debt into the mix. Having these types of financial responsibilities will also make it much more difficult to save much money during law school. Ideally, when you graduate from law school you really want to be holding just a few types of debt – your student loans, maybe a mortgage, and possibly a car payment. Adding in things like credit card debt and the like is just going to make things more difficult.
Let me be clear though: this does not mean you should give up on going to law school. It just means you’ll need to pay a little more attention to the debt you’re adding to your financial landscape for law school.
When is law school worth the debt? When is it not?
A few quick things before we jump into the actual topic. First, it is okay to take on debt to go to law school. Next, the calculations that we’re going to run through here are going to be a bit different for every single person. Last, if you’re not sure why you want to go to law school, now is definitely the time to figure that out. Knowing where you’re going is key to figuring out how you want to get there.
Once you’ve got a good idea of your own debt, start checking out the median salaries for graduates of the schools that you’re interested in – extra credit if you’ve got an idea of what area of law you’d like to work in! I’m going to shout out a friend of S. Montgomery Admissions Consulting right now, Law School Transparency, that has some really wonderful information available for free for you to check out the “financial” profiles for law schools all over the country. Law School Transparency has compiled the cost of attendance, the employment scores, and, most importantly for us, the median salaries of graduates from each school.
For some applicants, taking on $100,000 to go to law school may seem really scary and maybe not a great financial decision. However, if those applicants are on track (and want) to go to Big Law, are planning to take that loan to go to a school where 80% of the graduates go to Big Law firms and the median salary for graduates is $175,000. The likelihood that someone like this will be able to pay down that student loan quickly is pretty high, so taking out that amount makes sense. But that’s not every applicant.
If you want to work in rural New York as a family law attorney, your salary is probably not going to be $175,000 right out of school. You may not need to (or want to) go to the school that will require you to take out $100,000 in student loans.
The bottom line is that having an idea of what your financial landscape looked like up to now AND what you think it’s going to look like in the future is key to making an informed decision about student loans.
There are many times when it makes sense to take out loans to go to law school. If you know in your soul that you want to work in Big Law, it may make sense for you to take on more debt to go to a school that has great employment outcomes for its graduates, has a high median starting salaries, and is a good fit for you. If you know in your soul that you want to be a public defender and will likely not be making a huge salary, you will want to maximize your scholarship opportunities and minimizing your debt as much as possible.
Say it with me: if the median salary is $50,000, it does not make sense to take out $200,000 to go to that school.
How to Minimize Your Debt
The obvious one first – scholarships. Merit scholarships are a great way for high achieving applicants to cut down on their debt. These are often based on LSAT and GPA metrics. But what if your LSAT is just at the median for a school, or your GPA is a little low? Merit scholarships aren’t the only type of scholarships available. There are tons of outside scholarships and pipeline programs available to law students.
You can check out our list of outside scholarships here. AccessLex also has a very extensive database of scholarships for law students. We dove deep into pipeline programs a while back on YouTube, so head here to learn more about them and how they can help finance law school. Applying for pipeline or fellowship programs is always a good idea. Make sure you keep an eye on your school’s financial aid page – lots of schools also have scholarship money set aside for continuing students!
Start a 529 savings account for yourself if there’s some time between now and when you’d like to go to law school. Some states will even match all or part of your initial contribution! Check with your state for the specifics as the rules are different from state to state. Now, when you get a check for your birthday or Christmas, just pop that check in there!
So, the moral of the story is this: As an adult human, and a future attorney, you should be engaging in learning and taking control of your financial landscape. Not sure where to start – lots of banks offer financial planning products and help for free. I’m also going to hype AccessLex again – once you start law school, they offer a ton of free resources for financial literacy (and offer free financial planning). Knowing your financial landscape will make it easier to make wise decisions about law school, and about life in general!
Want even more help? Contact us and we can work with you through the application and decision process for law school! Please note: we aren’t certified financial planners, but we did attend and have to pay for law school. We’ve been there.