We mentioned this in yesterday’s Morning Docket, but I think it deserves a full post. For a long time, I have been questioning the value proposition of going to law school. Finally, it seems that somebody who can operate a calculator has my back.
The National Law Journal reports that Jim Chen, Dean of the Louisville School of Law, has come up with an easy-to-apply salary figure to determine whether law school was a financially sound decision on a case-by-case basis.
If you want to go to law school and one day be able to own a home, Chen argues you need to have a salary that is three times your law school’s annual tuition. You need to earn six times your annual tuition if you want to be a truly financially sound home owner if you are carrying three years of law school debt with you.
I’d like for people who constantly defend the value of law school to start pointing out the high-salaried jobs that are needed to make law school worth it….
Chen’s figures come with some caveats that supporters of law school will howl about. First, we’re talking about people who had to borrow the full freight. If you don’t have to borrow 100% of the cost of going to law school, you don’t need to make quite as much on the back end when you graduate.
Also, since Chen is looking at debt, let’s not discount the fact that people try to pay down their educational debt before they purchase a home. If you dedicate yourself to paying down your debt, maybe you can be in a position to own a home when you are 10 or 15 years out of law school, without having to have a partner’s salary.
So while I could say that if you go to Touro Law, the school that was the readers’ runaway choice for worst law school in New York, you need to earn $250,000 in salary to own a home — well, that only applies to people who are on the hook for the full $120K that it costs to go to Touro for three years who want to own a home straight out of school.
Obviously, more reasonable grads can work for years paying down debt so that one day they only need to earn $150,000 in order to own a home. Yay!
Look, defenders of the high cost of law school can massage Dean Chen’s figures in many ways. But he’s trying to get people to acknowledge a fundamental — and what should be obvious — point:
To maintain a “good” level of financial viability — meaning they could easily secure loans and would be very financially secure — graduates must earn six times their annual tuition, Chen calculates. That means graduates of $16,000-a-year schools would need to earn $96,000; graduates of $32,000 schools would need to earn $192,000; and graduates of $48,000 schools would need to earn $288,000…
According to the National Association of Law Placement, new law graduates earn, on average, $68,500. That means many would be unable to purchase a home and repay their loans, according to Chen’s analysis. Lenders generally frown on educational debt that represents more than 8 percent to 12 percent of the borrower’s monthly gross income, he wrote.
Going to law school at any cost is not a safe track to financial security in America. A career in law is not the fallback option if a more risky career doesn’t pan out — it is the risky career. That’s what your parents, the ones who pushed you to go to law school (and don’t act like I’m the only one), don’t understand. They think that lawyers are financially stable. They don’t get that you have to make a quarter of a million dollars to be “secure” if you take out a bunch of law school debt. They don’t get that law school can be financially ruinous if you are not careful.
The nice thing about Chen using home ownership as his hook for financial success is that it’s a tangible thing mommy and daddy can put their minds around. It’s a simple, all-American goal that law school puts beyond the reach of many students who attend.
It’s just one way of looking at the problem. But at least it’s looking at the problem with real-world measures of success instead of rose-colored glasses. That’s a lot better than you get from most law school deans.
Law school, a ticket to economic security? Better run the numbers [National Law Journal]