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YLD takes a hard look at law school debt

Senior Editor News in Photos

Division wants greater law school financing transparency

The 2018 Young Lawyers Division Earnings Survey showed, among other things, that 75 percent of recent graduate respondents have outstanding student loans — with a median debt level of $150,000.

Christian George“The student debt numbers are eye-opening, especially when compared to median total income reported in the survey,” said YLD President Christian George. “When you have student debt it’s crippling, and it certainly effects a lawyer’s wellbeing, as well as their ability to competently practice law.”

YLD President-elect Designate Adam White, who worked on the project, was shocked that the debt level was so high.

“That would just be eye-popping if every student was coming out law school with that type of debt,” he said. “But that’s carrying a substantial amount of debt for a long time.”

Young lawyers in Florida are defined as those 35 and under or who have been practicing for five years or less.

Public perception of the legal profession is often clouded by the six-figure salaries awarded to recent graduates of the nation’s top-tier schools. But the YLD survey — emailed to a random sample of 3,754 in-state young lawyers with a 13 percent response rate — showed most law school graduates face a different reality; a median income of $75,000.

While many would consider that respectable, a companion survey by the Iowa State Bar Association YLD concluded that it poses a problem for anyone who went deeply into debt to finance a law degree.

The Iowa Bar YLD survey found that a recent law school graduate with a typical six-figure loan would have to earn between $112,000 and $168,000 to maintain the 10 percent to 15 percent income-to-debt ratio recommended by most financial advisors.

According to the Iowa Bar YLD survey, the first monthly payment on a typical, 10-year, $125,000 law school loan is $1,400.

“With the median income compared to the median student debt, people are going to have to give up other things, like buying a house, buying a car,” George said. “I personally graduated with a ton of student debt because I wasn’t aware of what I was getting myself into, to be honest.”

Other research shows that Florida is not unique, and debt is taking a toll.

A February Gallop survey of 4,000 American adults who earned a post-graduate degree between 2000 and 2015 revealed that just 23 percent of law school graduates felt their education was worth the cost. The same survey showed that 58 percent of medical school grads, who pay significantly more for their education, considered it worth the cost.

Gallop pollsters blamed a weak job market for recent law school graduates, and George agrees.

“I’m not sure if the legal industry has ever recovered from the Great Recession, as far as hiring out of law school,” George said. “At least, finding the kind of jobs that can pay off this kind of debt is very, very hard.”

Adam WhiteA Florida Bar YLD report, “Increasing Law School Transparency: Tackling the Mountain of Debt faced by Young Lawyers,” showed that, when adjusted for inflation, private law school tuition was 1.46 times higher in 2015 than it was in 2000. Public school tuition for in-state students was 2.38 times more.

The survey results are prompting The Florida Bar YLD, the Iowa Bar YLD, and the ABA Task Force on the Financing of Legal Education to call for “changes to the disclosures made to law students and prospective law students, and for increased reporting of data by law schools to the ABA concerning financial aid.”

The report calls for modifying ABA Standards 507, 508, and 509 to provide for “mandatory and meaningful financial aid counseling for law students prior to entering law school, during law school, and after graduation.”

“We need to get to these law student applicants before they’re considering law school and definitely before they’re applying,” George said. “Ideally, I’d like to see a truth-in-lending disclosure alongside of an application to law school, and I’d like to see a financial counselor on every campus.”

The report notes that the current ABA 509 Standard, last updated in 2012, requires law schools to digitally post such things as admissions data, tuition and fees, living costs, financial aid, conditional scholarships, class sizes for first-year and upper-class courses, employment outcomes, bar passage data, and a host of other categories that even includes the law school’s number of professional librarians.

But the young lawyers groups want Standard 509 to also require law schools to report the percentage of students who take out student loans, the median and mean amount of debt that students incur, and the median length of time it takes graduates to pay off their student loans.

The groups also want law schools to be required to post information contained in the National Association of Law Placements Report, that are based on annual surveys of graduating classes and include salary and employment data.

The NALP data is more detailed than the standard employment data the ABA currently requires law schools to post, according to The Florida Bar YLD report. Many law schools post NALP results, but on a voluntary basis, according to the report.

White, a 2010 graduate of Florida Coastal School of Law, recalls receiving a bare minimum of financial aid counseling.

“People don’t know things like that,” he said. “I remember getting my financial education, as far as student loans through law school, from a computer program that I clicked through.”

White said a 75 percent scholarship in his final two years of law school allowed him to graduate with just $75,000 in student loan debt, and after working on the survey, he said he feels fortunate.

Better financial reporting will allow prospective students to review all their options, including choosing a lower-cost school or delaying law school to build up savings, White said.

“It’s not about not going to law school, it’s more about educating them to make the best choice,” he said.


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