As product liability lawyers, we here at Abnormal Use acknowledge the existence of inherently dangerous products or items that, at the very least, can do cause serious damage if not handled properly or operated the proper fashion. Accordingly, we often analyze whether there should be warnings on a product, and if so, what they should say and how they should say it. As a society, we don’t always remove such products from the market, but we have decided that we want to make certain that consumers realize what they can do to protect themselves when using such products. Certainly, there is nothing controversial about those sentiments.
The same might be said for law schools. Most of us have been out of law school for some time now, and as such, we may have forgotten the price we paid to practice in our current profession (at least in those brief moments when we can forget those monthly student loan statements). As this Associated Press article indicates, tuition at top private law schools can top $30,000 per year. Very few students can afford that princely sum. Furthermore, many students feel compelled to attend the best law school which will admit them, and thus, they may be less likely to be awarded scholarships from that institution. So, these newly minted law students turn to lending institutions for financial assistance. As set forth in this article, the average educational debt for a student graduating from a private law school is $106,000, and $70,000 for those students who attended a public law school, an increase of 50 percent between 2001 and 2010. The ABA Journal further reported that, according to U.S. News & World Report, in 2010, 85 percent of law school graduates from accredited schools carried an average debt load of $98,500.
Now, that wouldn’t be such an obstacle if new lawyers could practice for a few years and repay those loans with great ease and little fanfare. But we all know that’s not the case, especially these days.
Problem #1: Getting hired. During these troubled/troubling times, there are fewer jobs for graduates of any educational institution, much less law school. For some time now, we’ve read about law firms instituting hiring freezes, relying on lateral hires rather than gambling on recent graduates, or even laying off lawyers and other support staff. We don’t need to spend more time on this cheery subject.
Problem #2: Earning enough money to repay one’s loans in a reasonable amount of time. That’s the real trick, isn’t it? As law students, few of us suspected that we’d be able to wear this t-shirt immediately upon graduation:
On the flip side, as noble and idealized as it may sound, we didn’t want to live like we have been paid in vegetables, like Atticus Finch in To Kill a Mockingbird. According to the National Association for Law Placement, the median starting salary in 2010 for law school grduates was $63,000, as reported by the ABA Journal here. That amount simply isn’t enough to confront the average student loan debt.
Jim Chen, dean of the University of Louisville Louis D. Brandeis School of Law, recently crunched the numbers and published an article entitled “A Degree of Practical Wisdom: The Ratio of Educational Debt to Income as a Basic Measurement of Law School Graduate’s Economic Viability.” A good summary of Chen’s article can be found at the Wall Street Journal’s Law Blog here.
Chen’s conclusion? In order to attain a “good” level of financial viability (defined as being able to take on more debt and be “very financially secure”), a law school graduate must earn six times the amount of annual tuition he or she paid for school. So the average private school grad (where the bill usually starts around $30,000 per year) must earn $180,000 per year salary to have a “good” level of financial viability.
We’d like to point out one thing in particular about the WSJ Law Blog article. It states the median salary for lawyers was $113,000 in 2010. This accounts, however, for all lawyers, no matter how long they have been practicing; it also tracks lawyer salaries, not law grad salaries. For that, we would refer you back to Problem #1 – getting that law job in the first place. It’s also a bit deceiving in that most of the lawyers who are paying this student debt are new lawyers, who would be earning the lowest figures of that median scale. We think the more accurate figure, therefore, is the $63,000 figure.
So, if we were to design a warning for a legal education, what would it say? One option:
WARNING: You may not be able to pay these loans back during your lifetime.
We would argue, however, that this warning might not be adequate. Instead, consider this stronger, more accurate warning:
WARNING: Go to law school, and you may wind up bankrupt and still liable for the student loan debt.
The data supports the warning, unfortunately. Reuters reports that according to Access Group, a bigwig in the law school loan debt industry, “law-school loan debts started rising in 2008 and peaked toward the end of 2010, when students were defaulting at twice the expected rate.” Indeed, Reuters recounts the story of one law grad who filed for Chapter 7 bankruptcy protection even before she graduated but is still stuck with the law school bill. Under federal law, student loan debt is only discharged if the repayment would cause the debtor “undue hardship,” which, as the article points out, is extremely hard to meet. In fact, the only account we found where law loan debt was discharged in bankruptcy was here, and involved a student who had failed the bar exam three times and a retiring judge who openly defied the District Court that remanded his decision.
A warning (of sorts) is in the works. As reported here and here by the Wall Street Journal Law Blog, the American Bar Association is making changes to the way it collects job data from law schools, as well as the way in which law schools report job statistics, with the goal of increasing “clarity, accuracy, and accountability.” No longer will law schools be able to count baristas at Starbucks as one of their “employed grads” within nine months of graduation; schools must disclose whether their graduates found jobs in the legal field. The ABA also wants to create some consequences for inaccurate reporting, such as its recent public censure of Villanova University School of Law in August of this year for reporting inflated and inaccurate GPA’s and LSAT scores. Perhaps the new requirements will stem the tide of lawsuits by grads and students against their lawsuits for misleading them about job placement numbers, as reported here.
Or maybe not. After all, law schools allegedly train us to be lawyers. What better on-the-job training, so to speak, than suing the institution that taught you everything you know about the law?