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 FastWeb.com and FinAid.org, “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?