Stephen Simpson / Getty Images This article covers average law school debt, how debt can differ between schools, and how much you might expect to make as a lawyer after graduation. We’ll also consider other factors to help you evaluate if law school is worth the debt you’d take on—along with strategies for paying it off.
Average Law School Debt
The average debt for law school graduates is a whopping $164,742, with graduate school loans responsible for the majority of that debt, according to a 2020 survey by the American Bar Association (ABA). According to the same survey, 95% of graduates took out loans for law school. In other words, the vast majority of law school graduates have law school debt. The highest rates of student loan debt were found among Black and Hispanic (or Latinx) graduates. In fact, one-third of people of color reported carrying more than $200,000 at graduation. In contrast, only one-fourth of White people reported a similar debt load. One takeaway Is that law school is expensive and most students don’t graduate without substantial debt. However, debt levels can vary significantly, depending, in part, on where you go to law school. The following data from the U.S. Department of Education illustrates how much school choice can influence the amount of debt you graduate with:
Average Earnings After Law School
Law school typically takes three years to complete. After law school, you take the bar exam in the state where you wish to work, then move into a job, which will largely dictate your ability to pay back the student debt you’ve incurred. According to the U.S. Bureau of Labor Statistics (BLS), in May 2020, a lawyer’s annual mean wage, or average wage, across industries was estimated to be $148,910. The highest paid lawyers work in “specialized design services,” making an average wage of $233,400 annually. Lawyers working in “computer and peripheral equipment manufacturing” came in second, making $221,000 per year. The lowest-paid lawyers were employed in “community food and housing, and emergency and other relief services” and made $89,660 per year. Other generally low-paying lawyer jobs were in state and local government.
Earnings and Career Path
Considering the wide variation in pay for lawyers and the expense of law school, it’s not surprising some law graduates make tough choices to better shoulder their debts. In fact, one in three law school graduates say they chose a different career path within the legal field because of their debt amounts, according to the ABA survey. Many turned to higher-paid jobs in private practice and corporate counsel instead of doing what they really wanted. Others took positions allowing them to benefit from Public Service Loan Forgiveness.
Is Law School Worthwhile?
Statistics show that earnings can be high for lawyers, along with student loan debt. So is law school really worthwhile? According to the 2018 Gallup poll, only about 23% of law school grads felt that graduate school was worth the cost. This is in stark contrast to the 58% of medical school graduates who felt that graduate school was worth the price. If you’re considering whether to pursue a law or a medical degree, consider this: According to the same Gallup poll, a mere 20% of law school grads felt that law school prepared them for the post-graduate-school life—compared to 50% of grads with a medical degree. That’s a notable difference and could make your choice of school crucial. To better evaluate whether a law degree is worth pursuing and the merits of specific schools, consider the following.
Percentage of Grads Passing the Bar
Considering that the bar exam is your literal gateway into the law profession, it’s well worth examining your potential law school’s bar pass rate. At some schools, 98% or more of graduates taking the bar pass it. At other schools, less than half pass the bar. PublicLegal has a complete list of schools and pass rates based on 2019 data. You can ask prospective schools about the pass rate, as well. The cost of attendance is important, but taking on more debt could be worthwhile if you’re choosing between a school with a high bar pass rate and one with a relatively low one.
Employment Success After Graduation
Ask prospective schools to provide you with employment statistics for that school’s graduates, such as those currently employed versus seeking work, employer types, job location, job terms, law firm size, and salaries in different job types. You might be able to determine the likelihood of your desired career and your potential compensation.
Financial and Other Offerings
When comparing schools or deciding whether law school is worth the debt, look at the school’s financial support and scholarships, concentrations, and alumni perspectives. One school may offer more scholarships or other financial aid, but not the concentration or certificates you’d like to study. Another school may have robust law school alumni groups, which could improve your chances of landing a post-law-school job through mentoring, networking, and other professional development.
School Costs
Consider law school costs beyond the price of tuition. For example, if you attend an in-state school, you could pay much less for tuition, but you might also have free housing available. And keep in mind that you sometimes get what you pay for. Average tuitions at top-performing law schools are much higher than the lowest-performing and mid-range schools, according to a report from Law School Transparency, a consumer advocacy and public education nonprofit focused on the legal profession. The same report points out that the lowest-performing school tuition averages are similar to mid-range schools’ averages, which means that finding a mid-range school may be your best option from a value perspective.
How to Pay Off Law School Debt
How can you budget and plan to pay off law school debt? Plenty of options exist. Here are a few to mull over.
Choose the Right Repayment Plan
After you’ve graduated, and if you have federal student loans, consider carefully which federal student loan repayment plan works best. There are various plans based on your income, including the Income-Based Repayment Plan, Pay As You Earn Repayment Plan, and Revised Pay As You Earn Repayment Plan. These plans usually consider your gross income, family size, and federal student loan balance to calculate your monthly payments.
Research Public Service Loan Forgiveness
Direct Loan borrowers may be able to qualify for loan forgiveness if employed by the government or a nonprofit organization. You’ll need to meet various requirements to earn forgiveness, including a history of 120 qualifying monthly payments on an income-driven repayment plan while working full time for a nonprofit or a federal, state, local, or tribal government.
Apply for a Loan Repayment Assistance Program (LRAPs)
These are grants and forgivable loans graduates can use to repay student debt, based on completing a required service obligation and meeting eligibility requirements. Eligibility may include factors such as your income and your participation in working in government, nonprofit, public interest, and other lower-paid fields. You could be eligible for an LRAP through federal or state governments, law schools, and state bar foundations. You can see a full list of schools offering LRAPs at the American Bar Association.
Manage Your Debt Wisely
According to the 2020 ABA survey, most law school graduates pile on more debt after graduation. The report points out that this may be due to small student loan payments or because student loans are accruing interest faster than they’re being paid down. In fact, the ABA survey found that 45.4% of those admitted to the bar before 2014 had higher debt levels than when they left school despite having worked for several years. The moral? Pay at least the interest on your loans and ideally make extra principal payments to avoid increasing the balance you owe after graduation.
Consolidate Student Loans
You can consolidate your federal Direct Loans for the ease of a single monthly payment and a fixed interest rate. However, some potentially unintended consequences can occur, such as fewer repayment options or losing recognition of payments counting toward loan forgiveness. Read the fine print and consider your options for your specific loans.
The Bottom Line
A good rule of thumb is not to borrow more than you expect to earn as a starting entry salary. As we’ve seen, there’s a wide range of salaries available to those new to the legal profession, and many of those salaries don’t come near the average law school debt of $164,742. Deciding whether law school is right for you depends on your circumstances and aspirations, and if you think you can pay off your loan amount within a reasonable timeframe while doing a job you enjoy.
