It has been ten years since I graduated from law school and have been working in my "JD-Advantage" job. I am nothing but grateful that I managed to stay employed during the Great Recession and its on-going aftermath, to be sure, given my seemingly precarious status as an early-40s Gen-Xer with the attendant responsibilities of a mortgage and family. However, to point to law school as a ringing endorsement for my "success" is premature at best, and largely in spite of law school at the worst. Of course, by going to a quad-T law school I did myself in to some degree, but those shiny brochures and smiling ScamDeans certainly told another tale about student outcomes even then, as we all know.
If you have followed my posts, you know that I used to be an engineer prior to law school. I was school-debt-free, and making around $50k back on-or-about 1995, with reasonable yearly raises. As you will see, my law school education dumped on a lot of debt with no real uptick in my starting salary, and there is nothing to suggest that my progression in my old career would have been worse. If nothing else, I would still be education-debt-free, at a very reasonable salary, with no missed opportunity costs.
When I was hired into my JD-Advantage job, after extensive networking, researching, and informational interviews, I stared out at (wait for it) $55k. In 2005. While $55k is nothing to sneeze at given the deplorable outcomes for many JD graduates, my law degree did not catapult me forward as the ScamDeans and shiny brochures would suggest...in fact, it slammed my butt back ten years to 1995, plus debt. I thought that shiny JD was supposed to be remunerative and versatile...?
Anyway, when I graduated in 2005, my law school debt stood approximately as follows (more below the fold):
Federal: $71,000.00 at 2.65%, 30 yr. graduated
Private 1: $16,000.00 at 4.82%, 15 yr.
Private 2: $5,000.00 at 2.33%, 12 yr.
Private 3: $42,500.00 at 3.00% (approx.), 15 yr.
You will notice first-off that my rates are low, and nowhere near what a graduate in 2015 can hope to obtain. While the private loans are variable, the Great Recession did me the "favor" of bringing my loans down to the 3% range, on average, for the last seven years or so. I do expect them to bump up a bit in the near future given Janet Yellen's recent discussions. My monthly loan payments have been approximately $800/month.
As of 2015, my law school debt stands approximately at:
Private 1: $11,900.00
Private 2: $700.00
Private 3: $20,300.00
I have therefore paid down $35,700.00 on my principal balance, but when taking interest into account I have paid approximately $100,000.00. Let that sink in for a minute. Think of what you could do with an extra hundred grand saved up. Pay off a house? Add to a child's education fund? A nice car and a vacation, with lots to spare?
Nope, all gone. Debt service. My Boomer forebears paid around $5,000 for their law school education in contrast, which in 2015 dollars is around $20,000.00. And I thank the many "honest Boomers" who comment here and similar sites elsewhere who offer up this information and who advise their children to do anything but law school, as it helps paint an accurate picture compared to today. One really could pay off their law school debt in 5-10 years, decades ago. Now, due to outrageous tuition increases during that period at twice the rate of inflation (in part due to "dishonest" Boomers) I have paid off that debt and then some, thank you very much, with much more to go.
Slacker Gen-Xers, amirite? Go get a damn job, or "network", or something. Pay your bills, deadbeat.
Luckily, I received small raises along the way, just like my prior engineering job. So, on to a rough monthly budget:
Income after taxes,benefits: $5,100.00
Home/car insurance: $100.00
Public transportation costs: $175.00
Other revolving debt (thanks, law school): $500.00
Remaining per month $625.00
I won't go into my 2005-2010 budgets, as they were truly zero-sum if not negative. And I only joined the ranks of fabulous homeowners two years ago (for the school district).
So, in essence, I have been paying an additional 15% "education tax" every month on my net income, for ten years, due to the glory of law school, with miles to go before I sleep. Of course, child care, child expenses, home repairs, car maintenance, dry cleaning, clothes, etc. etc. all come out of that remaining $625.00, but hey, if you were single and lived like a spartan, maybe you could bank it all. Also, health care is another consideration, but that is too individual to try to account for. Maybe if you never get sick, you can bank that $625.00. Oh, and I drive a 14 year old car and try to keep it limping along, just like the stereotype on jdunderground.
The point being is that $625.00 net "goes fast," and not due to going on extravagant vacations or buying a new flat-screen TVs every month. Also, my spouses income ($35k gross) and school debt of her own ($60k at 7.8%) does influence this equation, but when you add up all of the plusses and minuses, it doesn't affect the outcome as much as you would think.
I say all this not to wallow in self-pity or to say that I am a suffering saint, but to try to paint a picture for all contemplating law school. ScamDeans and tenured LawProfs all say "go on IBR," (this doesn't help private loans and ignores marriage) and "the market is improving," and "now is a great time to go to law school," while easily clearing twice what it has taken me ten years to achieve in terms of real income. They don't break down the nuts and bolts while shilling for law school. They don't go into how tuition costs continue to escalate, for no reason but profit.
Granted, we could all quibble with my numbers (e.g. you could "live somewhere else" and shave $150/mo. off your mortgage [although, per Simkovic, the point of going to law school is to avoid living in toxic neighborhoods], you could "eat less" and save $100/mo., you could deduct x and y and shave $750.00 off your Gross Income calculation, etc. etc. etc.), but the take-home here is that law school debt matters, and will significantly affect you. And some troll will always say "hey, you don't need electricity" or some such nonsense. Or I could move to Nebraska, but that would involve me losing my current job and starting over, yet again.
I was "lucky" in that my interest rates are low and my starting debt was in the low $100k range...graduate debt now runs at approximately 8%, or twice that of what I am currently laboring under, with a higher starting cost to boot. And IBR is a short-term fix anyway. If one's career progresses "as it should," then you would get priced out of IBR, and then all of a sudden that success looks a lot more tarnished. If you actually care about your family, you won't try to "stay on IBR" anyway as that locks you into an income level that makes it even harder to provide for yourself and others. And of course, we have been ignoring undergraduate debt, which is not a safe assumption anymore. My equation "looks good" compared to what many, many others are facing in 2015, but again, that is not a ringing endorsement for law school.
As we have always said on OTLSS and other venues, if you have backing, get into a good school, have no debt, and come out of law school making $160k in BIGLAW, then indeed, yes, law school may be for you. Even if you only keep BIGLAW for a few years. For the remaining 90% or so without these advantages, its not a great deal.