In September, the American Bar Association’s Young Lawyers Division and AccessLex Institute released the results of a survey examining the effects of law school loans on career and life decisions of new lawyers.  

Last year, after survey results suggested that educational debt was causing young lawyers to choose jobs because of higher pay and to delay or miss out on things like getting married, having children or buying a home, the ABA began probing further. This years’ responses from more than 1,300 attorneys in their first decade of practice strongly indicate that the negative effects of student loans tend to worsen among borrowers with debt upward of $200,000 and that the impact of the debt varies by race. Black borrowers, as an example, reported higher loan balances than those of other races.

About 90% of respondents took out loans to fund their education, with average debt of $108,000 for law school. More than 40% had been unable to reduce their debt since graduation, with 27% reporting a higher loan balance than when they graduated. About 80% said their debt influenced their job or career choice. Most reported that salary factored “more heavily into their job selection than anticipated,” with almost a third stating they took jobs that were less focused on public service or doing good than they intended when they entered law school. Only 47% overall said their law school experience was worth the cost.

In those with a law school debt above $200,000, the adverse impact was notably higher. While about 67% of all respondents felt “high or overwhelming stress over finances,” nearly 83% of those owing upwards of $200,000 felt that way. As to emotional well-being, of those with more than $200,000 in loans, 68% were “embarrassed and ashamed,” about 84% were “anxious or stressed,” and almost 60% felt “depressed or hopeless” about their debt. A meager 23% of those owing $200,000 or more believed that their law school education was worth the cost. 36.4% of these respondents said they could not independently qualify for a loan, mortgage or apartment rental, and 43.5% reported their credit scores had been adversely affected.  

Considering the results, the ABA report recommends reforms of federal student loan programs in favor of more manageable repayment and the ability to discharge these loans more easily in bankruptcy. The report also recommends that students have access to improved consumer information, a fuller understanding of the legal job market and better awareness of the cost before attending law school.

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Source material: Student Debt: The Holistic Impact on today’s Young Lawyer; New Findings Published on Law School Debt; Ashamed. Stressed. Hopeless. How Debt Is Weighing on Young Lawyers