By Mat Wadsworth
I will be graduating with about $65,000 in student loan debt next year. Disturbingly, this is not even close to the average amount of debt that ASU law students graduate with.
The ASU law school estimates that the average ASU law student graduated with almost $90,000 in student loan debt last year. US News lists almost 90 law schools where the average graduating student last year had more than $100,000 in debt. Students with truly staggering debt loads are frighteningly common.
Law schools around the country have been criticized recently for fudging their numbers to entice new students. Congress is investigating questionable reporting practices sanctioned by the ABA such as only counting graduates that self-report and counting graduates as employed no matter where they are working. Flipping burgers part-time qualifies as employed for some law schools. Many more offer one-year fellowships or similar programs after graduation so that graduates will be employed 9 months after graduation when the surveys are taken. Some schools have been caught outright fabricating numbers to improve their statistics.
There can be little doubt that law schools use numbers to paint the state of legal education in the best light possible. Yet, even those self-reported numbers paint a pretty bleak picture.
This is not an article about the plight of the poor law student. The internet is full of websites, blogs, and articles dedicated to criticizing “the law school scam.” This is an article about the massive societal cost involved with making law school so insanely expensive.
I went into this with my eyes open. I know the debt load that I am taking on, and I know the risks that I face. I do not ask for any sympathy for myself, nor for any of my fellow law students. I chose to take on this amount of debt because I am confident that I will put my law degree to good use. I will at least eventually be successful, and so will the vast majority of my colleagues. Tough economy or not, I know I am surrounded by smart, proactive people who will do well regardless of the initial debt burden we are being saddled with.
But, the obvious cost to society is that attending school is becoming prohibitively expensive for many people, and it will become prohibitive for many more if the cost keeps going up even as the economy continues to slide deeper into depression. The less obvious, more treacherous cost is that massive student debt loads are eventually going to drive up the already astronomical cost of legal services. We are entering an era where large segments of society will be unable to afford access to the legal system, and most new lawyers will be helpless to do anything about that, because the student loan bills have to be paid.
An appellate court judge in Arizona recently stated during a class presentation that he could not afford to access the litigation system today. He was promoting the importance of alternative dispute resolution techniques because that is all that most people can afford today given the exorbitant cost of the legal system. There is something viscerally unjust about a split system of justice, in which the poor and middle classes have access to one system, but only the rich can afford to have their case heard by a real judge and jury.
It is easy to understand why law students build up so much debt. Tuition is through the roof; law students are discouraged from working; and paying summer jobs are only slightly less common than penguins in Arizona.
Tuition for law school at ASU is about $25,000 per year for in-state students, and almost $40,000 per year for out-of-state students. Tuition went up several thousand dollars this year and is expected to go up a similar amount next year, so incoming students need to plan for a rapidly moving tuition target. Once cost-of-living and almost $200 per-class-books are factored in, ASU’s self-reported numbers estimate that in-state students need about $45,000 per year and out-of-state students need almost $60,000 per year. Assuming that these costs are stable, that means a three year law school education costs in-state students about $135,000 and out-of-state students almost $180,000.
To some, an obvious answer is to get a job or go to school part-time. That is difficult when ASU, like many other law schools, does not allow first-year law students to work and actively discourages second and third year law students from working. Adding to the problem, ASU does not have an evening program, and applicants are discouraged from the flexible scheduling program, which costs more than attending law school full time. Of course, Arizonans who want to attend law school part-time may attend Phoenix School of Law, the only other law school in Phoenix, but the tuition costs are so much higher there that any increased ability to work is not likely to lower the debt load at graduation.
Law school policies are not the only source of blame for the minimal number of law students capable of working. Paying legal jobs are few and far between, and working for $8 an hour at Starbucks is unlikely to make a significant dent in the tuition bill. Also, it must be noted that law school is challenging. I took more than the maximum number of classes almost every semester as an undergrad, and I worked close to full-time. I am used to hard work, and I had no problem doing well at a job while attending school as an undergrad. There is no way I could do that as a law student, regardless of student policies, because law school is so much more time consuming.
A simple loan calculator helps put some of the loan numbers into perspective for graduating students. Most student loans are direct subsidized and unsubsidized loans at 6.55% interest. Many students also have private and Graduate PLUS loans at higher interest rates, but for simplicity, 6.55% will be used here. I will be graduating with about $65,000 in student loan debt. That means I will need to pay almost $740 per month to pay off my loans in 10 years. Finanaid.org estimates that I will need a job with an annual salary of almost $90,000 per year to handle that large a loan payment. ASU self-reports that the average 2010 graduate left law school with almost $90,000 in student loan debt. That means a $1,025 monthly loan payment. Finanaid.org estimates that the average ASU law grad will need to make more than $120,000 per year to handle those loan payments.
Of course, it could be worse. At over $145,000, California Western School of Law has the highest average student loan debt, according to US News. That works out to a monthly payment of $1,650, with an estimated annual salary of almost $200,000 needed to afford the loan payments.
Graduating law students used to shoot for big firm jobs with extravagant starting salaries so that they could afford to live an equally extravagant lifestyle. Today, those six figure salaries do not look extravagant; they look necessary to make loan payments.
There are some volunteer and public interest programs available that will forgive all or part of student loan debt. However, those programs are competitive, they require a large time commitment—in some cases 10 years—and they may limit options for private employment after the student’s commitment is completed. Graduates who forgo the opportunity to work for a private employer and to build a book of clients may be able to have some of their loans forgiven by the federal government, but there are large costs to their long-term employability.
Public-interest and pro bono jobs are necessary to ensure that all members of society have access to the legal system, but it is becoming increasingly difficult for graduating law students to afford to go into public interest work. Not because graduating law students necessarily have some expectation of a big firm lawyer’s lifestyle, but because creditors have to be paid. Legal fees across the board are going to rise because of it.
Many states recommend, but do not require, that lawyers do pro bono work. However, as the economy crashed, pro bono hours have crashed along with it. Lawyers have bills to pay, so they are able to dedicate less and less time to the needy. Meanwhile, the number of people who need access to low income services has risen, with no one to fill the gap.
Finally, exorbitant student loans can almost never be discharged in bankruptcy. Law school tuition and costs continue to rise, year after year. Students are discouraged from working or going to school part-time to facilitate working. Student loans are seemingly unlimited during school. Then, students graduate with unreal amounts of debt and the payments to go with it. That debt must be paid off and cannot be discharged. Pro bono work goes down and legal fees go up—not to pay for greedy lawyers, but to pay off the creditors.
My fellow law graduates and I will do fine, regardless of our debt load. We got into law school for a reason, and we will be successful regardless of the cost. However, the cost of legal services will continue to rise, and segments of society will be excluded both from law school and from access to the legal system as a result of the rising costs of a legal education. That is the true law school scam.