7.4 - Law School Debt

Last up, we're talking student debt and why you should fight tooth and nail to go to law school for free.

In this lesson we'll cover:

• What debt service looks like for the average full-price JD
• What debt service looks like in the T-14
• Why you should NOT accept full recourse debt

Putting Debt in Perspective

National Average

According to data from Biglaw Investor, the average annual cost to attend law school is about $55,000 / year. In many cases, it's more—sometimes as much as one and a half times that average figure.

Let's be generous and say you plan to attend a school more in line with the average, and that you're going to take on the debt to pay for it all. That's $165,000 to attend school, assuming you graduate.

Typically, federal student loans are paid back on 10-year terms unless refinanced or consolidated somehow. As of this writing, according to StudentAid.gov, the interest rates for graduate student loans are set at 7.05% (8.05% for PLUS loans).

That means your monthly debt service on that $165,000 will be $1,920 per month on average.

T-14 Debt

Now let's talk the esteemed T-14. Before anyone comes at me for having sour grapes about admissions results, I got into several of these schools and decided not to go almost entirely based around the debt implications.

Again, according to Biglaw Investor, the average price to attend a T-14 school comes out to $84,000 / year. That's $252,000 under the auspices that you graduate.

Let's run those debt service numbers for full-paying borrowers.

At 7.05%, that's over $2,930 / month. That's just debt service. No housing costs, no food, no nothing.

Full-Recourse Debt

Now, I'm not a Dave Ramsey type who will preach to you about the evils of debt in any form. I will, however, tell you that consumer debt, medical debt, and student loan debt are the devil incarnate. Avoid them as much as possible.

Having paid off an absurd amount of bad debt, please believe me when I say, you do not want this hanging over your head.

If my word's not enough, I want to introduce you to the two scariest words in the English language when put together with a hyphen: full-recourse. This means student loan debt survives bankruptcy.

It's possible your payments will end up restructured under such circumstances, but the bottom line is that Uncle Sam's gonna get his money, even if your payments become too much to bare and you file bankruptcy somewhere down the road.

Misconceptions Contributing to Student Debt

I see a few major problems creep up time and again around student debt amongst LSAT students.

They often fall into one or more of these three categories:

1. Some external figure—Mom, Dad, maybe a grandparent—is pressuring them to go to law school as soon as possible
2. They believe a legal education is bound to leave them gainfully employed
3. They think some unique circumstance(s) will set them apart from other applicants and score them admits and scholarships

External Pressure

If someone's pressuring you to go to law school right this minute, have them email me. I'd love to start a dialogue with them about why that might not be in your best interest.

Attorneys often work until they're 70+ years old. It's demanding work in terms of stress and mental strain, but it's not like you're breaking rocks at the quarry. There's no legitimate reason to rush into this career path.

Moreover, a single gap year might be the difference between you boosting your LSAT score by 10 points and attending law school for free, as opposed to rushing your applications with a suboptimal score and paying for your classmates' tuition.

Employment Trap

A JD earned does not a hired lawyer make.

Go do some research at local law firms or talk to law students about the job hunt. Or, heck, try to contact newer associates at bigger firms. They'll all tell you how challenging it is to find work that will pay your debt service. And if you're not absolutely crushing it in school, the chances are good that you won't be rolling in the dough during the early years of your career—especially if you go into government lawyering.

Truth is, we deify professional work in the U.S., so much so that thousands of applicants dig themselves into massive, full-recourse debt every single year in pursuit of some glory they don't really understand for the most part.

Before you even think about accepting that kind of debt, be sure you really understand what lawyers actually do.

You're Probably the Rule, Not the Exception

Every LSAT student—including me—receives advice at some point during their journey that makes them think, "That's not me. I'm going to rise above, crush this test, and go to a T-14 school on a full ride."

I'm not here to kick your puppy, but the chances of that are slim. You need to be the literal best of the best. Are you in the top 1% in anything you do? If so, you might actually be the exception to most law school admissions advice. If you're not, you need to get real about your expectations.

That doesn't have to be a bad thing. Lawyers from "regional" law schools go on to do massively impactful work. Don't let SUITS get you believing that it's Harvard or bust.

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And that's it! You made it. Thanks a million for reading and watching this course. Now, it's time to dig into some actual practice. Go drill some more questions and ace this thing! You got this.

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What'd you think of this lesson on debt? What would you change? What would you add? Leave me a comment below, and thanks for your feedback.