Law Schools

What I Wish I Knew About Student Loans As A First-Year Attorney

You probably don't need to dedicate your entire life to debt repayment. You can afford to 'chill out' about your student loans.

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I can’t believe I have already been an attorney for about five years! Time really flies when you’re having “fun,” and it is crazy to think that I have been practicing law for so long.  When I first started my career, I had many fears about student loans, and I also misunderstood the impact that student loans could have on my life.  I never thought that I would be debt free so early in my career, and I also did not totally grasp the reality of living with student loans when I was a first-year associate.  All told, there are a number of things about student loans I wish I knew when I was a first-year attorney that I came to understand from living with student debt.

One thing I wish I knew about student loans as a first-year associate was that repaying student loans should not necessarily take priority over saving for retirement.  One of the first firms for which I worked right after graduating from law school matched employee contributions to 401(k) accounts.  This meant that if I saved money in such a retirement account, I would be receiving “free money” from my employer.  Many of the people I worked with took advantage of this employer match, and my coworkers tried to convince me numerous times to participate in this program as well.

I did not take advantage of this employer match, and I did not begin saving for retirement until years after I started paying off my student loans.  I decided to devote all of my resources to paying down my debt, and any money I saved for retirement could not be dedicated to paying off my student loans.  However, the money I saved for retirement would have likely increased in value at a rate higher than the interest rate on my student loans.  Also, due to the effect of capitalizing interest, if I had started saving for retirement years earlier, I would have had a huge impact on my retirement savings.  I recommend that all first-year associates seriously consider contributing to retirement accounts, even if you have massive amounts of student debt. Take it from me, I wish I began saving for retirement sooner!

I also wish I realized earlier in my career that you will likely have the most difficulty paying off your student loans right after graduating from law school than at any other point in your life.  This is because most student loans have a fixed monthly payment amount that does not increase throughout the life of the debt.  However, people typically receive pay raises throughout their careers, so it is usually much easier to pay off student loans later in one’s career than it is at the beginning.  I never truly grasped this concept right after I graduated from law school, and it would have been reassuring to understand as a first-year associate that paying off student loans gets easier over time.

I also wish I networked more as a first-year associate and cultivated contacts that could lead to potential business.  As I have previously mentioned on this website and on my own blog, it is possible for young attorneys to generate money from originating business, and any additional cash can be devoted to student debt.  However, in order to generate business, you need to make contacts as early in your career as possible.  In addition, you need to keep in touch with people you went to law school with or other individuals who might refer you work so that they will remember you if they have business to refer.  If you let these contacts go stale, it will be very hard to generate business from these individuals in the future.

If I could go back a few years, and redo parts of my career, I would have networked earlier in my professional life.  I would have joined more bar associations and became a member of as many committees of these bar associations as possible, since friends have told me that this can lead to potential business.  In addition, I would have also attended more alumni events, since these outings are a great way to make meaningful contacts.  As my own student debt saga shows, you can help pay down your student loans through origination bonuses, and you should take steps early in your career that will help you generate business.

I also wish I knew as a first-year associate that I did not need to stress out so much about student loans.  Right after graduating from a law school, I was not the most pleasant person to be around, since I viewed student loans as a financial emergency that needed to be contained at all costs.  I obsessed over my student loans constantly, saved money in almost laughable ways, and stressed out about my debt to an unbelievable degree.  I was particularly paranoid about my debt while working in Biglaw, since I thought that I would never be able to quickly pay off my student loans if I worked in another part of the legal profession.

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However, anyone can make an impact on their student debt by working side-hustles, so there is no reason to stress out about your job.  Also, student debt repayment is a marathon and not a sprint, and any saving you do will likely only account for a small amount of the money you devote to student loans.  In the end, I wish I “chilled out” more about my student loans as a first-year attorney, as there are much greater things in life worth stressing out about!

In the end, I am no sage, and since I am only five years removed from law school, I’m still relatively early in my career.  However, there are some things about student loans I wish I knew as a first-year associate.  Hopefully, my advice will help new attorneys lay the foundation for student loan success in their own lives.

Jordan Rothman is the founder of Student Debt Diaries, a personal finance website discussing how he paid off all $197,890.20 of his college and law school student loans over 46 months of his late 20s. You can reach him at Jordan@studentdebtdiaries.com.

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