The Debt Calculation

Here’s a recommendation that appeared in a recent New York Times article about the burden of student loans. According to Mark Kantrowitz, publisher of and, “Do not borrow more than your expected starting salary for your entire undergraduate education.” I don’t know the rule of thumb for graduate students, but I imagine it’s something similar. (If anyone does know the recommendation, please comment and pass it along.)

The upshot is that individuals who are deciding where to go to law school should pay very close attention to the amount of debt associated with each of their options. Moreover, as these individuals assess their likely total debt, they should be pessimistic about their future earning potential. The average first year salaries reported by law schools are a snapshot of what graduates were earning before the current crisis, not what graduates are earning now. And many experts are predicting that the current crisis will change the law firm model in ways that may profoundly affect compensation.

Put differently, if you are entering a 1L class in the Fall of 2009, graduation is only 37 months away. How much debt do you think you can manage just three years from now?

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6 Responses

  1. Ted Sampsell-Jones says:

    Plus, the average salaries reported are probably inflated because recent grads with low salaries are less likely to answer that question on the survey, so they aren’t counted.

  2. Jack S. says:

    Seems to me this should profoundly the way law schools are financing their own programs. How many potential law students can attend law school without taking on significant loans?

    if they cannot, and make this analysis before applying, then the lower “ranked” law schools will most certainly pay dearly.

  3. Sarah Waldeck says:


    Not necessarily. Some lower-ranked schools offer very generous scholarships to students with stellar credentials. For some students, the anaylsis will be whether they should pay full tuition at a higher-ranked school, or attend the lower-ranked school that is offering them a full ride.

  4. dmv says:

    I guess this kind of thing may be helpful for 0Ls. But for those of us who have taken on the debt for even 1 year of law school (and I have taken on more than that, as I’m not a 1L), this kind of post just annoys me. Why? Because it’s basically telling most of us that we’re screwed. Even after 1 year of law school, the debt burden is large enough that it would probably be worse to leave law school than to finish it (even though the latter requires shouldering more debt).

    Of course, I wouldn’t have left, anyway. But then, I’m interested in public interest stuff, so I never envisioned rolling in money. But it does get so tiresome hearing about how screwed we are.

  5. Sarah Waldeck says:

    I’m glad that DMV mentioned public interest work, as there are some very generous federal loan forgiveness programs for lawyers who choose public service (which is defined very broadly). I don’t know the details of the programs, but a law school financial aid office certainly would. Such programs should be factored into a prospective student’s debt calculation.

  6. Jack S. says:


    No doubt that these generous programs exist but on the whole I don’t see how a lower ranked school could sustain itself. Notwithstanding the stellar students who are willing to take a better financial package for a “lesser” school, this “lesser” school still relies on the more mediocre students to keep the revenue stream up. If all of the mediocre students started asking themselves what their prospects are based on their undergrad grades and earning potential should they find themselves in the bottom 50% upon graduation, they will abandon and the bottom will start to fall out.

    Of course I’m not taking into account those who don’t excel, but don’t care because they are independently wealthy thanks to their parents or themselves.