Compared to our parents or grandparents, we’re living in a different world. Some law school grads—especially after the 2008 financial crisis—had trouble finding steady employment, which led to stress in paying off their law school loans. Simply executing a Google search for “law school loan horror stories” may make you think twice before attending law school.
Therefore, it is critical to review the costs of law school before attending. The investment will cost hundreds of thousands of dollars, so you want to ensure that you are choosing the best school for you—in terms of academics, location, and cost.
An easy way to compare the cost of a particular law school is to use free tools provided by AdmissionsDean or Law School Transparency. These tools will provide you a basic estimate of your costs and they make it easy to take a comparative view when contemplating multiple law schools.
Having said this, every law school provides an estimate of a budget of tuition and fees, along with estimates for things like living expenses and books. They use these budgets for financial aid (as we will discuss below), but they provide a good estimate of your total costs for attending the current year of law school. Note that this estimate is only for the upcoming or current academic year. Your 2L and 3L costs, in all likelihood, will be slightly higher.
As just one example, Yale Law School (ranked as the number one law school in the U.S. by U.S. News & World Report) released its 2018-2019 basic budget here. Tuition is $62,017, the university administrative & activities fee is $2,250, room, board & personal expenses is $17,595, books are $1,100 and university hospitalization coverage is $2,402, leading to a grand total of $85,364. Multiply that out by three years and you are looking at a total price of (at least) $256,092.
While this may be on the higher side compared to other law schools, you will have to do the math for each school that you are thinking of attending.
The bottom line: no matter where you attend, law school is an expensive endeavor.
Clearly, law school isn’t cheap. So how do you go about paying for three years of long, hard work?
There are three major ways to go about this. While they aren’t exclusive, it’s critical to understand these three methods so that you can make the best financial decisions before attending law school.
A. Scholarships and Grants
Like college, scholarships and grants can help you fund your law school education. These financial awards can come from the law schools themselves or may come from private organizations that fund scholarship opportunities. Also similar to college, an applicant’s scholarship and/or grants may cover all or some of the cost of attending law school.
A merit-based scholarship or grant provided by law schools will depend on the particular law school that you attend. As for private law school scholarships, you can visit websites like AdmissionsDean to search for scholarships that may be the best for you.
We can’t include a discussion of paying for law school without a discussion of out-of-pocket payments. If you are lucky enough to pay for your own law school education (or have someone else pay for you), you will have much more flexibility in terms of your career choice. You won’t feel that subtle pressure of taking a job to pay off your loans and can, instead, choose something you are more passionate about, even if it pays less.
Of course, you may have to pay out-of-pocket to supplement any costs that loans or scholarships don’t cover. If you are able to do it, however, paying out-of-pocket for the totality of law school is a much better option than funding your experience through loans.
This is the big one.
In all likelihood, you are familiar with taking out loans to attend college. The procedure for law school is quite similar. The Law School Admission Council (“LSAC”) provides a preliminary guide to paying for law school.
We could spend another article (or series of articles) describing how to take out loans to pay for law school. That said, here are some fundamental principles to keep in mind.
First, recognize that federal loans provide more benefits and perks than private loans. Federal student loans provide more flexible repayment options and more opportunities for payment relief versus a loan provided by a private or institutional entity.
Second, any financial aid that you accept cannot exceed the cost of attendance established by the law school you attend for the academic year. This is set by your law school and will vary from school to school. Each school’s website will provide more information.
Third, mind your deadlines. If you intend to take out federal student loans, you will need to complete the Free Application for Federal Student Aid (FAFSA) beginning October 1 of the year before you attend law school. Regardless of whether you are seeking federal student loans, you will need to carefully read the information provided by your school’s financial aid office to ensure that you are submitting all required paperwork on time.
If you’d like to do some introductory research on student loans, you can find more information in LSAC’s Financial Aid Guide or on Sallie Mae’s website.
Ultimately, many law school graduates take on their first jobs with significant law school debt. If you are the type of person that enjoys digging into the numbers, Law School Transparency published a detailed report on law school debt for class of 2017 graduates.
First, the basics: a little more than three-quarters of class of 2017 law school graduates borrowed at least some money to attend law school. While the average amount of cash borrowed by graduates who borrowed decreased by 3.5 percent as compared to 2016, the average amount borrowed was $115,854. On average, those grads of private law schools borrowed more than grads of public law schools—although both public and private class of 2017 grads borrowed less than class of 2016 grads.
Along with an understanding of the macro landscape of law school loans, it’s critical to look at the indebtedness numbers of schools that you are targeting. U.S. News & World Report has a useful table on this subject. For each school, the table shows the percent of grads with debt and, for those 2016 grads who incurred law school debt, the average indebtedness. For instance, the Thomas Jefferson School of Law in San Diego, California has the highest level of average indebtedness of 2016 grads who incurred law school debt ($198,962) and one of the highest levels for percentage of grads with debt (91 percent).
Law school is expensive—regardless of where you attend. That said, it is important to consider these indebtedness numbers for your targeted schools along with employment outcomes for those graduates. The American Bar Association provides reports of employment outcomes for each law school (which you can find here). The worst case scenario is attending a law school with extremely high levels of indebtedness and low employment levels. It will ultimately cause you economic pain for years—perhaps even decades—into the future.
IV. First Jobs and Salaries
So considering the debt that you will (likely) have to take on, the natural question is how you will actually pay off your law school loans.
Quite obviously, you will be paying off your law school loans through your wages from your first job. As a brief aside, that is why jobs at “Big Law” firms are so desirable. Big Law positions pay the highest salaries to law school graduates, so the general consensus is that Big Law associates will use that salary to pay off their law school loans before moving on to a position that better suits their interests.
Ultimately, your first job out of law school doesn’t necessarily define the arc of your legal career. That said, it can go a long way toward putting a large dent in your loans outstanding. Along with this, where you work is a large determinant of how much you will be paid. Bigger markets like New York City or Los Angeles pay more than smaller markets.
A caveat to this entire discussion is that salary, quite obviously, is not the only factor that you should account for when thinking of your first job after graduation. You will want to find a position that speaks to your interests, challenges you intellectually, and that contains intelligent, hard-working colleagues. Pursuing a job simply for the money is not an effective strategy in the long run. Therefore, working in the legal field (especially in your dream office) before law school presents a unique opportunity to see the work that attorneys actually do. It may reaffirm—or dissuade—you from pursuing a certain career path in the legal field.
With that said, here is a list of common first jobs out of law school and how much law school graduates are paid.
A. Big Law
Referenced above, so-called “Big Law” firms are some of the largest firms in the world. They typically represent corporations and wealthy individuals in litigation, transactional, or tax matters. Further, Big Law firms are known for high compensation, high stress, and long hours. To get a sampling of Big Law firms, you can view the 100 most prestigious Big Law firms in America by clicking here.
Big Law associates are compensated extremely well. Many Big Law firms have started offering starting salaries of $190,000 for first-year associates. This number does not include discretionary bonuses that are given to associates each year, which can be a prorated amount of $10,000 to $15,000 for first-year associates.
It is useful to look at median salaries for graduating law students who enter Big Law. The National Association for Law Placement (“NALP”) provides a consolidated summary of full-time long-term salaries of law school graduates from the class of 2017. For law firms with 501 or more attorneys (Big Law firms), the median full-time long-term salary is $180,000, with a mean salary of $171,628.
As stated above, working at a Big Law firm provides the quickest opportunity to pay off your law school debt. Actually obtaining a Big Law job, however, is another story, as many law students are striving for the few positions available.
B. Mid Law and Small Law
Big Law firms aren’t the only game in town. Law school graduates can pursue positions at smaller commercial law firms. These law firms can range from a boutique firm specializing in criminal defense or a firm that specializes in entertainment law.
These firms often offer more hands-on work than at a Big Law firm and may take on similar clients to Big Law firms. They often offer a more positive work environment and more work-life balance. That said, these jobs are as difficult (or even more difficult) to obtain than Big Law positions. Contrary to Big Law, smaller firms don’t recruit on campus, so law students have to hustle to obtain these jobs.
Also, a more relaxed working environment and more work-life balance come at a cost, namely your salary. The NALP data for the class of 2017 shows the smallest law firms to firms with 251 to 500 attorneys containing a median salary of $58,000 to $180,000. Some boutiques may pay even higher than the traditional Big Law first-year salary of $180,000, but this depends on the specific firm.
C. Solo Practitioner
Law school grads who want to take full ownership over their careers may opt to “hang a shingle,” meaning that they start their own legal practice. These solo practitioners can specialize in any area of law, like family law, employment law, or criminal defense. Becoming a solo practitioner isn’t for everyone and there can be immense challenges to starting your own firm. That said, if you are able to overcome the challenges, your professional income is theoretically unlimited.
Not many law graduates start their careers as solo practitioners. The NALP data shows that only 408 out of 33,966 class of 2017 grads (approximately 1.2 percent) chose this path. Unfortunately, NALP does not provide the median salary of solo practitioners.
D. Judicial Clerkships
A good number of law students choose to clerk with a judge immediately after graduation. Clerkships are great opportunities to work closely with judges in courts ranging from a small court in your state to the U.S. Supreme Court. As a clerk, you work with your judge and other clerks to research case law and write briefs and opinions on matters that are before your judge.
As far as salary, however, clerkships aren’t at the top. The median clerkship salary is $56,748. That said, keep in mind that law students aren’t pursuing clerkships for the money. The ultimate intention is to gain legal writing and research experience by working closely with a judge. The monetary rewards emerge later, whether that is through a large clerkship bonus from your new law firm or by becoming a talented litigator who eventually becomes a Big Law partner.
Government legal jobs can range from an assistant U.S. Attorney or local prosecutor to an attorney working for a certain committee in the U.S. House of Representatives or U.S. Senate.
NALP data for the class of 2017 shows that government salaries have a median salary of $60,000. Most government attorneys don’t go into this line of work for the salary. Rather, they become government attorneys for the overall mission and for giving back to their country. Government attorneys also have the opportunity to pay off some of their loans through the Public Service Loan Forgiveness Program, which we will explain in the next section.
F. Public Interest / Nonprofit
Public interest and non-profit attorneys represent organizations or groups of individuals that advocate for some cause. Some simple examples include attorneys for Legal Information for Families Today, a New York City-based nonprofit that provides legal information and advice to litigants in family court, public interest law firms whose primary mission is to assist underrepresented people or causes, or attorneys for human rights organizations like Amnesty International or Human Rights Watch.
The median salary for public interest and non-profit legal positions for law school grads is $50,000. Like government positions, however, these attorneys aren’t taking these jobs for the money. They are pursuing a higher mission. Like government attorneys, public interest and non-profit attorneys may be eligible for the Public Service Loan Forgiveness Program.
The NALP data provides a category of “business” positions that law school graduates obtain. Business is an extremely broad category and can include a variety of positions. Some of those positions can include consulting, investment banking, working as an in-house attorney for a corporation, or working for a family or small business. Business includes both legal and non-legal positions. NALP states that “business” includes “most employers that are not law firms, schools, or government organizations, as well as most instances of being self-employed (other than having set up your own solo law practice), including contract work for multiple firms.”
The median salary for business positions, according to NALP, is $75,000. Compared to the median Big Law salary, however, the variance is quite large. Your particular salary for a business position will depend on the actual position itself, the market, and where the business is located.
Education includes teaching positions at any level, from elementary schools to higher education. These positions may either be in the public or private sector and include teaching, non-teaching, or administrative positions. It is not a popular career choice for law school grads. According to the NALP data, 486 law school grads out of 33,966 (approximately 1.4 percent) became educators.
The median salary for first-year educators is $50,000. As with government and public interest positions, educators aren’t prioritizing salary when making their career position.
These are the most common first-year positions for law school grads. The opportunity to pursue a given career path depends on many factors, including your law school, your 1L grades, your interviewing skills, and your network. As with everything, you must consider employment outcomes when making your law school decision. If you wish to become a Big Law attorney, for instance, you will want to attend a “Top 14” law school in or near a large city. If you want to become a local prosecutor in your hometown, however, it may not be the best decision to attend the most prestigious (and expensive) law school in the country.
Understanding the different types of positions and salaries that graduates can obtain after law school, we now proceed to discuss how law school grads actually pay off their debt.
Your debt repayment will depend on your income and the type of loans that are outstanding. For instance, if you have taken out federal student loans, there will likely be a six month grace period immediately after graduation, meaning that you won’t need to start making payments until the seventh month after graduation. That said, interest will start accruing as soon as the loan is disbursed. If you take out federal loans, you will follow a payment plan. The standard repayment plan is a 10-year repayment plan, but you will want to find the best plan for you.
If you are having trouble paying off your loans, there are several things you can do to stay on track, including changing your payment due date, changing your repayment plan to an income-driven repayment plan, or consolidating your loans. If none of these solutions work, you could be eligible to postpone payments through a deferment or forbearance, but this will depend on your individual circumstances. Just keep in mind that seeking extensions or deferments may provide some relief in the short-term, but in the long run, you will be making more interest payments to your lender.
For private loans, your particular terms will vary depending on your loan agreement. You will need to contact your lender and read the fine print to understand your obligations.
A. Options for Certain Attorneys
As stated above, certain attorneys have an easier time paying off their law school loans as compared to others. The question of debt is why many graduating lawyers seek out Big Law jobs, pay off their loans, and then move on to a position that speaks to them. Those that are seeking out lower salaried jobs—particularly those in government or public interest positions—there are certain available programs that can make life easier. While this is not an exclusive list, some of the most notable programs are below.
1. Public Service Loan Forgiveness Program
Certain attorneys may be eligible for the Public Service Loan Forgiveness (“PSLF”) Program. The PSLF Program forgives the remaining balance on your federal direct loans if you make “120 qualifying monthly payments under a qualifying repayment plan while working full-time for a qualifying employer.”
There are several follow-up questions to that definition, including what constitutes a qualifying monthly payment, qualifying repayment plan, and qualifying employer.
Luckily, the federal student aid website provides some clarification. A qualifying monthly payment is a payment made (1) after October 1, 2007; (2) under a qualifying repayment plan; (3) for the full amount due as shown on your bill; (4) no later than 15 days after your due date; and (5) while you are employed full-time by a qualifying employer. Further, the 120 qualifying monthly repayments do not need to be consecutive.
Qualifying repayment plans include all income-driven repayment plans for your federal student loans. That said, while the 10-year Standard Repayment Plan is a qualifying repayment plan for the PSLF, you still cannot receive the PSLF unless you enter an income-driven repayment plan, as you will have no remaining balance to forgive after you make 120 qualifying monthly payments. For more details, you can click here.
Finally, a qualifying employer includes government organizations at any level, nonprofits that are tax-exempt under 501(c)(3) of the IRS Code, and other types of nonprofits if their primary purpose is to provide certain types of qualifying public services. Employers that do not count for the PSLF program include labor unions, partisan political organizations, for-profit organizations (including for-profit government contractors) and nonprofits whose primary purpose is not to provide certain types of qualifying public services.
If you are interested in public interest or a career in government, you will absolutely want to inquire on whether you are eligible for the PSLF program.
Loan Repayment Assistance Programs (“LRAPS”) also offer loan forgiveness to law school grads who select careers in public service. Often, you must work in a public-interest role for ten years, along with having loans that are being actively repaid and in good standing. Like the PSLF program, LRAPS only forgive federal loans.
LRAPS aren’t available to everyone, however. Over 100 law schools offer LRAPS, but you will need to check if your law school offers this opportunity. You can click here to find a list of law schools that have LRAPS (as of January 1, 2017). You can also find more information by visiting the website of the LRAP Association.
Law school is expensive. There is no way around it. Before attending law school, you should think about how you are going to pay back your law school loans—should you have any.
It may be a boring exercise. It may even be nerve-wracking. However, putting in the hard work now will save you from headaches down the road.
Some helpful questions to consider include the following:
● What are the estimated costs of attendance for every school that I’m targeting?
● Realistically, how am I going to pay for law school? Is it mostly loans? Almost entirely loans? Or a good amount of out-of-pocket cash?
● What is the average indebtedness of graduates of your targeted law schools? Along with that, how successful are those graduates in finding the job that you would like after graduation?
● Are you comfortable with the financial consequences of choosing your number one career choice, even though you may not necessarily like the job or that it may decades to pay off your loans?
● If you are seeking a career in government or public interest work, will your job be covered by loan forgiveness programs like the PSLF or LRAPS?
Answering these questions will go a long way to helping you avoid mistakes and making the best financial decisions for y