Featured Job Survey: Got (Huge) Debt?
We received 3,846 responses to this month's ATL / Lateral Link survey on your student loans, mortgages, and credit card debt, and one thing's pretty clear: an awful lot of you owe an awful lot of money.
Roughly 40% of respondents owed at least $100,000 in outstanding student loans. Broken down by class, here's what your student loan debt looks like:
Survey Results: Student Loan Debt By Law School Class
| Before 2000 |
2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | Still in school |
|
| None. | 62% | 46% | 32% | 24% | 16% | 15% | 10% | 13% | 8% | 11% |
| Less than $10,000 | 2% | 2% | 2% | 2% | 1% | 1% | 2% | 1% | 1% | 1% |
| $10,000 to $19,999 | 3% | 7% | 5% | 3% | 2% | 1% | 1% | 1% | 1% | 2% |
| $20,000 to $29,999 | 5% | 4% | 7% | 6% | 3% | 3% | 3% | 2% | 2% | 2% |
| $30,000 to $39,999 | 6% | 7% | 6% | 8% | 5% | 5% | 4% | 2% | 2% | 3% |
| $40,000 to $49,999 | 7% | 5% | 6% | 6% | 8% | 4% | 5% | 4% | 3% | 3% |
| $50,000 to $59,999 | 6% | 5% | 6% | 15% | 15% | 15% | 10% | 7% | 6% | 6% |
| $60,000 to $69,999 | 1% | 5% | 7% | 5% | 9% | 7% | 7% | 7% | 5% | 5% |
| $70,000 to $79,999 | 1% | - | 10% | 10% | 7% | 7% | 5% | 8% | 6% | 6% |
| $80,000 to $89,999 | 4% | 4% | 5% | 3% | 8% | 5% | 6% | 7% | 5% | 6% |
| $90,000 to $99,999 | 1% | 7% | 5% | 6% | 7% | 5% | 5% | 5% | 5% | 6% |
| $100,000 or more | 5% | 10% | 12% | 12% | 18% | 35% | 43% | 44% | 54% | 51% |
Even as the amount of student loan debt begins to subside for members of the Classes of 2004 and 2003, mortgage debt starts to creep up:
Survey Results: Mortgage Debt By Law School Class
| Before 2000 | 2000 | 2001 | 2002 | 2003 | 2004 | 2005 | 2006 | 2007 | Still in school | |
| None. | 20% | 29% | 26% | 33% | 36% | 42% | 62% | 72% | 81% | 87% |
| Less than $50,000 | 2% | 1% | - | - | - | - | 1% | 1% | 1% | 1% |
| $50,000 to $99,999 | 1% | - | - | 1% | 1% | 2% | 1% | 1% | 2% | 1% |
| $100,000 to $149,999 | 4% | 1% | 2% | 3% | 2% | 3% | 1% | 2% | 3% | 3% |
| $150,000 to $199,999 | 8% | 8% | 4% | 5% | 3% | 5% | 2% | 3% | 3% | 3% |
| $200,000 to $249,999 | 8% | 10% | 9% | 3% | 6% | 5% | 4% | 4% | 2% | 2% |
| $250,000 to $299,999 | 10% | 9% | 6% | 5% | 9% | 7% | 5% | 4% | 3% | 3% |
| $300,000 to $349,999 | 11% | 9% | 10% | 9% | 7% | 8% | 6% | 4% | 3% | 2% |
| $350,000 to $399,999 | 4% | 1% | 7% | 8% | 8% | 8% | 5% | 4% | 2% | 1% |
| $400,000 to $449,999 | 6% | 8% | 3% | 5% | 7% | 4% | 4% | 3% | 2% | 1% |
| $450,000 to $499,999 | 6% | 4% | 11% | 8% | 5% | 6% | 4% | 2% | 1% | 1% |
| $500,000 or more | 26% | 25% | 25% | 25% | 20% | 16% | 12% | 6% | 4% | 2% |
Credit card debt, in comparison, is relatively tame. Sixty-four percent of respondents had no credit card debt, and 21% had less than $10,000 in credit card debt. About two percent held $40,000 or more.
But how much does all this debt affect your career choices? Find out, after the jump.
Well, let's put it this way. Yesterday, the ABA Journal asked "Why Associates Leave is Clear, But What Would Lure Them to Stay?" Based on this month's ATL / Lateral Link survey, the answer is simple: raise the cost of law school (not that we'd recommend that).
* Only 13.6% of respondents said that their debt did not affect their decision to work at, or stay at, a law firm. This number was much lower for respondents with at least $50,000 in outstanding student loans.
* Another ten percent said that their debt affected their career choice "very little."
* Twenty-four percent of respondents said that their debt affected their decision to join or stay at their firm about as much as other factors.
* But more than half said that their debt affected their choice either "very much" (34.6%) or "more than any other factor" (17.7%).
As you might expect, the higher the respondent's student loan debt, the greater the reported impact on his or her choice to join a firm or stay there:
Survey Results: How Much Does Your Debt Affect Your Decision To Join, Or Stay At, Your Firm
(By Student Loan Debt)
| Not at all. | Very little. | About as much as other factors. | Very much. | More than any other factor. | |
| None. | 50% | 13% | 20% | 13% | 4% |
| Less than $10,000 | 22% | 29% | 27% | 16% | 7% |
| $10,000 to $19,999 | 22% | 27% | 22% | 24% | 4% |
| $20,000 to $29,999 | 17% | 23% | 26% | 28% | 5% |
| $30,000 to $39,999 | 17% | 13% | 41% | 24% | 6% |
| $40,000 to $49,999 | 13% | 18% | 32% | 26% | 11% |
| $50,000 to $59,999 | 8% | 17% | 30% | 35% | 10% |
| $60,000 to $69,999 | 8% | 10% | 33% | 39% | 9% |
| $70,000 to $79,999 | 5% | 10% | 30% | 36% | 18% |
| $80,000 to $89,999 | 6% | 10% | 23% | 41% | 20% |
| $90,000 to $99,999 | 5% | 10% | 25% | 45% | 16% |
| $100,000 or more | 4% | 5% | 19% | 43% | 29% |
(64) Comments
firsties again, woo hoo!
Who says law students are risk averse? Why anyone would borrow 100K+ to go to law school vs. 100k+ to go business school is beyond me. At least with an MBA you are pretty certain to land a job in the high 80's. If you don't strike the jackpot with biglaw coming out of law school, you are screwed. Talk about taking a huge risk!
"At least with an MBA you are pretty certain to land a job in the high 80's."
This is nonsense.
1:46,
Your mom is nonsense...IN BED!!!
Sincerely yours,
1:39
1:46,
Your mom is nonsense...IN BED!!!
Sincerely yours,
1:39
Obama recently was up in arms about a student who was going to owe $30,000 in student loans and she was going to teach and get paid about $27,000/year. How is this any different than someone that owes $170,000 in student loan debt and making $160,000? Neither person is all that screwed, but $27K as a teacher is about as low as you can get paid with a real job out of college while it is rare that someone out of law school is getting the 160 or even 145K. It's much more likely a law school graduate is getting paid in the 50s, 60s, or 70s. These are the people that are screwed.
i have 100k+ in loans, going to biglaw, and still scared
So how do law schools cook their numbers to show statistics like "average debt for graduates: $72,000?"
The same way they cook their employment numbers and US News Rankings.
Law schools cook their employment numbers? Shocked, yes, shocked I am to hear such startling allegations!
With debt liabilities like this, how the hell can clients complain when billing rates go up for new associates? At some point, probably in the near future, law school admissions are going to start dropping off either because 1. it will become more difficult to get loans when lenders figure out that law graduates can no longer make repayments, or 2. prospective law students become more accurate in their cost-benefit analyses.
Why wouldn't tuition continue to rise when law students are taught to choose prestige at any cost? When I chose between law schools with half-scholarship and no scholarship, I felt it was important to make the choice with no weight on the money at all. After all, it's about the school and the rest of my life, right? But having independently chosen the school with half-ride scholarship (and the same job prospects), I can now say it means A LOT to have 50K lower debt than I otherwise would have. I'm a lot happier in my job not feeling forced to be there, for one thing. A lot of us know applicants making similar choices. Perhaps we could pass this along.
That upper right corner of 4% that has no debt and yet it was the most important factor proves... that 4% of people don't understand survey questions?
it is a risk averse move to go to a top law school. Where else can you take on 100k in debt (or less) and get 160k coming out. Lower down the law school rankings it becomes more risky, but for top students, it is not too bad.
Tuition has gone up because it's been easier for students (usually naive idiots) to get loans. When you increase the pool of money on the buy side, of course the prices will go up.
If the government increases the Stafford Loan limit to $200k/year, guess whether tuition will immediately go up or down. In the 1960s when loans were minimal, tuition was minimal because otherwise few could afford to go to that school.
The solution is to clamp down on student loans with merit-based testing. Reduce aid so that tuition will come down. Sure, a few low-merit students won't go to college, but the rest won't suffer a lifetime of debt.
Amen, 2:15.
1:52(2), Obama can't knock law schools because he's complicit in the law school thing as a "professor of law" at U of Illinois-Chicago. But those poor teachers, on the other hand . . .
Stupidity does not necessarily equate to risk aversion.
How is it that only 50% of the people with no debt say that debt doesn't influence their decision to work at a firm? How can the remaining 50% be influenced by debt THEY DON'T HAVE??
That's as crazy as talking to an imaginary person.
Really, what's $80k in student loan debt when you're also taking out a $350k mortgage and starting out in the low six figures?
I heard Obama is behind the Sonnenschein associate layoffs, and that he opposes insurance coverage for IVF treatments!
Also, Lat -- unrelated -- every time I try to put up an avatar I get an error message. Something is wrong with your website.
I have almost $200,000 in student loan debt combined and I have both a JD and MBA. All I can say is that I still have nightmares about this stuff, and I was lucky enough to have landed at a firm that isn't "Biglaw" but pays "Biglaw dollars". Add on a monthly mortgage and car payment within the next 5 years and I'm screwed.
I went to a top-ten law school where there were plenty of biglaw jobs available to those who wanted them. I remember the law school president publishing an article during my 2L year in the alumni news about how, depite not needing to because of the size of the school's endowment, the law school had chosen to charge student's "market" tuition rates. The "market" tuition rate was, as he went on to explain, a function of both what other comparable schools were charging then AND THE AVERAGE SALARY FOR JUNIOR ASSOCIATES AT BIG LAW FIRMS.
How's that for circular logic - big law firms pay more in part because their associates demand raises to finance their student loan debt incurred to pay tuition that goes up because law firms are raising salaries?!?!?!?
I'm two years out and I still laugh at the poor sad aluni fundraisers who call me for money. No way are they getting one penny until my student loans are paid off.
I left law school over 200k in debt, between my master's degree, college, and a third-tier law school. The fact I wasn't more scared in school still amazes me. But I landed in big law and 2 years later I'm down to half the debt I had. 2 more years and I'll be set. Don't up your lifestyle, keep a roommate, throw your whole bonus at your private loans. That's the difference between 30k in debt and a 30k job. We can choose not to live in Manhattan or eat out at Daniel.
@1:39 -- The answer is: math.
Any thoughts on some of the loan consolidation places out there?
2:21/2:12 -- People could be influenced by debt without actually having any present debt. For example, I've paid off my law school loans, so have no debt, but am now helping to pay for my spouse's tuition. If I were to quit my job, we'd have to take out loans. Therefore, my lack of debt is influencing me to stay at my biglaw job, because I'd like to it that way.
2:26 - was it UVA?
Sorry, that should have been -- "because I'd like to keep it that way."
--2:34
I didn't take the survey but could have been one of the people with no debt for which my (previous) debt was a huge factor in taking a law firm job. I left law school with more than $100k in debt from law school and undergrad combined. Having spent all my post-law school years at a law firm has enabled me to now be debt-free.
I think it would have been interesting to break it down by higher amounts. I'm curious as to how many people are like me and still have over 120k in debt. I think I've barely touched the principal on my high-interest private loan. Sallie Mae has more than doubled the interest rate I agreed to in law school.
@ 2:23 PM --- the difference is that the loans are paid off over a 10 year period, where the mortgage is likely over a 30 year period.
Yeah whoever designed the survey categories is worthless. More than half the younger people with >$100,000 in debt is not enlightening.
I might as well as design a survey for lawyer salaries:
0-$20k
$20k-$40k
$40k-$60k
Over $60k
How much would it suck to wake up 30 years from now and still be paying for law school? I'll tell you in thirty years....
RE: Comments about "no debt, high influence" voters.
It seems like simple logic [and so I guess I could be missing something], but it seems like these voters could be saying that not having debt allowed them to choose the firm at which they work, even if it may not pay full NYC market rates.
RE: Comments about "no debt, high influence" voters.
Or even more simply, they are people with no STUDENT debt but a big house. You might be tempted to stay in biglaw with a 7 figure mortgage to pay each month.
Cheers to 2:55, this survey needs to be redone.
2:12/2:21
There are types of debt other than student loan debt. Perhaps 50% of those with no student loan debt are motivated to remain at big firms because of mortgage debt, car payments, or rent-to-own furniture.
rent to own furniture? you can get a whole house full of furniture for around $100 at IKEA!
Is there a troll from one of those sleazebag student loan companies on this site?
Is there a troll from one of those sleazebag student loan companies on this site?
Is there a troll from one of those sleazebag student loan companies on this site?
Those making biglaw salaries that doesn't pay off all student loans in three years are making a decision to live beyond their means.
You have no excuse but your own spending habits.
The survey asked how much "debt" influenced the decision to stay at the firm. That would include credit card debt, a mortgage, or a spouse's debt. So the people who answered that their nonexistent debt influences their decision to remain at their firms are either poor readers or irrational.
Deciding to stay in a job to stay *out* of debt is not the same as deciding to stay in a job to pay off existing debt. All that amounts to is "I'm in it for the money," which describes 99.9999999999999999% if not 100% of firm attorneys. If you wanted to stay out of debt you could just as easily alter your lifestyle to accommodate a lower salary.
Law students can still be risk averse notwithstanding the low percentage of them who land BigLaw jobs, because you have to consider the alternative: not going to grad school.
What can anyone do anymore with a BA/BS, even from a top school? Not much- consult, maybe. But consultants all go to B-school or law school in after a few years.
That's why I went to law school, anyway- I wasn't prepared to have to claw my way to the top in business or some other trade with a starting salary of - who know- $50k?
Nah, better to spend three years becoming more valuable/ going into debt, the next 5-10 paying it off WHILE living well, and then starting to make the real money.
look at the last table:
how do 4% of people who say 'none' to debt still say that debt is 'more than any other factor' their decision to go to a firm?
4:26 -- I disagree. If I'm working so my spouse doesn't have to take out student loans, that is not the same thing as being in it for the money. We don't own a home, we live in a small 1 bedroom/1 bath apartment, I own very few clothes, take the bus to work, etc. And I have no desire to stick it out at biglaw to raise my standard of living -- it's just not worth it. However, I will stay as long as I need to so as to not go into debt due to my spouse's tuition costs.
That said, I do agree that mortgage debt, car payments, etc. fall into a different category from student debt. In those cases, the person is making a lifestyle choice, whereas it could be said that student debts and tuition costs are an investment in future occupational opportunities. (One also could argue that going to a state school is a viable alternative to high debt but I think most of us at least can see the argument that a top 5 school opens up opportunities and is therefore not as completely vain a choice as a million dollar mortgage).
4:46, that's not exactly what I said. I simply pointed out that "debt," as it was used in the survey, was not limited to student loan debt.
Also, mortgages are just as valid an investment as tuition -- shelter is generally considered a basic necessity for human flourishing -- and in many cases, moreso. If you have a house, you have a place to live. If you have a degree, you don't necessarily have a better job.
Bear in mind, too, that higher education is also a lifestyle choice. It can be a good one in many cases, but it's still a lifestyle choice. The difference between you and someone who is working for a firm because of debt is that you *do* have the option of walking away without Sallie Mae chasing you down. Someone who is $100,000+ in debt does not have that option. Yes, it would suck for your spouse to have to drop out of school. But you wouldn't face ruined credit if s/he did. The fact remains that you have more options than does someone saddled with loads of debt.
Are you really screwed if you make $50 to $60,000 and have over $100,000 in debt?
Here is how I pay more than $1300 a month in loans and live:
Income
$60,000 ($780 after taxes, includes pre-tax subway pass, and health insurance)
Expenses
$713.00 national Education student loans
$614.00 Access Group Student loans
$550.00 rent (2 roomies)
$200.00 car
$150.00 car insurance
$50.00 credit card
$90.00 cell phone
$86.00 heat/cable/electric
$100 IRA
$100 Savings
_________________
-$2602
$3380
-$2602
-----------
$778 discretionary spending
Many posters live in major cities where it isn't realistic to live off 50-60k. I don't know any safe neighborhood in my city where I'd pay less than $800-900 a month plus utilities, with roommates, unless it's a college frat house.
2:12, it could be that they are influenced by the lack of their debt to join a firm that they would not have otherwise joined if they had debt (i.e., a firm that pays less than market). Perhaps they were just interpreting the question the best they knew how given that it was written so poorly.
Can anybody recommend a "get out of debt" consultant online or in Los Angeles?
I have 160k in debt right now, but I don't know whether it's best to pay loans off as quickly as possible, stretch it out as long as possible and invest my extra money, ditch biglaw and get a "do gooder" job so my school's loan forgiveness plan will help me out, pay off some loans quickly and stretch others out....there are too many options! And I went to law school because I don't like/do numbers.
Anybody have any suggestions?
4:19:
Biglaw associates that haven't paid off their loans in their third year aren't necessarily living beyond their means. They could (1) have clerked at low government salary for 1-2 of those years; (2) have debt from undergrad; (3) live in a high cost of living area; (4) have a family to support; and/or (5) work for a firm that doesn't give out NYC bonuses.
Signed,
3rd Year With Lots of Debt
6:16, two-three years ago first-year associates in New York made $125k a year. After taxes, that is around $60k. To suggest that people in New York cannot live on $60k a year is to say that associates there three years ago were living in poverty. That is obviously not true.
You live a pampered lifestyle that is out of touch with the reality of America. Don't try to pretend otherwise.
6.16pm, I live in a major northeastern city. I live in a safe area about 20 mins subway ride to downtown. I have 2 roomies in a triple decker house on a quiet residential street. It can be done. Sure you will not be living on central park west or beacon hill but u can do it.
If I worked at Biglaw I could absolutely destroy my loans in 2 years flat. It would be a piece of cake.
6:05...don't you need to EAT?
It seems like a breakdown of the $100,000+ category would be helpful since that can cover an awful lot of ground. The high option you should have offered should have been at least $150,000.
10:02...6:05 eats all right. Didn't you notice the $50 credit card bill? 6:05 buys food on the credit card, which is now close to being maxed out, and pays the $50 minimum each month.
Food spending is discretionary. Grow your own grits.
Ah yes...sorry what I meant was the $778 a month pays for groceries, dry cleaning, laundry, etc.....living expenses. So u r correct it is not discretionary! The $50 is a min payment on a credit card balance that is locked in at 2.5% interest. I do not run up any credit cards at all.
Obviously this means I do not go out to clubs and bars and drop $100 on a bar tab, or buy expensive clothes and I do watch my money. However as time goes by it will get easier.
"6:16, two-three years ago first-year associates in New York made $125k a year. After taxes, that is around $60k. To suggest that people in New York cannot live on $60k a year is to say that associates there three years ago were living in poverty. That is obviously not true.
You live a pampered lifestyle that is out of touch with the reality of America. Don't try to pretend otherwise. "
Wasn't 6:16 referring to a salary of $60,000 pre-taxes? It doesn't make sense to compare $125,000 after taxes to $60,000 pre-taxes.
"6:16, two-three years ago first-year associates in New York made $125k a year. After taxes, that is around $60k. To suggest that people in New York cannot live on $60k a year is to say that associates there three years ago were living in poverty. That is obviously not true.
You live a pampered lifestyle that is out of touch with the reality of America. Don't try to pretend otherwise. "
8:28, you COMPLETELY missed the point. Of course one can live off of a SALARY of 125k. We were talking about a SALARY of 50-60k. Hope your reading skills are better when you're working.
we should have free education paid for by the state through taxation - its the only way to have a somewhat level playing field. Its also a lot cheaper - no interest etc.
Having people spend their lives paying student debt is very harmful for our economy.
For all of the people whining about being in debt from law school on this page - you have no one to blame but yourself. Before beginning law school, maybe you didn't realistically assess your ability to land and maintain a high-paying job upon graduation. Maybe you were already in so much debt from undergrad and a superfluous graduate program or two that taking on more debt was a bad idea. Think of this as a life lesson - financial planning and foresight is key.