Breaking news: law school is expensive. Really, really expensive. Much more expensive than it used to be.
Are there still people out there who don’t know that? I mean, we’re certainly at the point where you don’t deserve sympathy if you go to law school without understanding the financial ramifications of your decision. The truth is out there, people.
The stats for prospective law students are sobering:
The large debt is what sets this recession apart from all others, said James Leipold, executive director for the National Association for Law Placement. All modern economic recessions in this country have seen an initial surge in law school applications as people decide to make themselves more employable with advanced degrees, followed by a slump in applications as the legal job market became tougher.
The wrinkle this time is the cost of law school has far outpaced the rate of inflation.
From 2001 to 2010, the average amount borrowed annually by law students for their three-year degrees increased 50 percent, according to the American Bar Association. This past academic year, law students borrowed an average of $68,827 for public educations and $106,249 for private educations.
So, I’ve been thinking about how I can make money off of this bubble bursting. Should I be shorting the banks that have made a lot of student loans? Maybe I should be buying stocks in McDonald’s, Burger King, and other companies that will benefit from very highly educated manual laborers. If you have a great bubble bursting profit idea, share it with me in the comments.
Sorry, I didn’t mean to draw attention away from the slow-moving train wreck:
Law school debt essentially means a lawyer must make $200,000 or more above what the holder of a bachelor’s degree will make over a lifetime, to have the investment break even.
Now that is an interesting number. Can you make $200,000 more overall as a lawyer than as somebody with a regular old bachelor’s degree? Can you both make $200K more and do something you enjoy doing more than what you could have done with a bachelor’s degree?
Or let’s flip it around this way: people who have college degrees, three years of extra earning potential, and make $200,000 less over the course of their lives are just as well off as many lawyers — only they don’t have to practice law for a living.
Lawyers’ debt hits all-time high [Hartford Business Journal]
Average Annual Law School Loan Jumped 50 Percent Since 2001 [ABA Journal]