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Latest law graduate debt figures

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US News has published the debt figures for the law school graduating classes of 2012. A few notes:

(1) These figures are mislabeled “average indebtedness of 2012 graduates who incurred debt.” That’s incorrect. These figures represent the mean amount of federal educational loans taken out over the course of law school by graduates who incurred debt. The distinction is significant, because the reported figures don’t include interest accrued during school. How significant? The #1 school on the list, Thomas Jefferson, reported 98% of its graduates taking out a mean of $168,800 in federal loans. A student who borrows that amount will have $201,000 in federal loan debt at repayment, six months after graduation. So you can tack about 17% onto these figures to get a true sense of what people owe on their law school loans when they get their bar results. (Note too that these figures don’t include undergraduate debt).

(2) The increase in indebtedness over the past few years is startling, though not surprising, given the very rapid run-up in tuition. Compare these figures to the class of 2008:

Total number of schools where the mean total of law school loans taken out was at least $100,000:

2008: 47 of 191 reporting schools

2012: 123 of 193 reporting schools

The mean total of law school loans taken out at the median school increased by 33% between 2008 and 2012, from $84.5K to $112.6K.

In 2008 there were 15 schools at which the mean total of loans taken out was less than $50,000 (this is the figure that Brian Tamanaha gives as a reasonable amount of money for most law students to borrow under current circumstances; Tamanaha’s thoughts on the new debt figures are here). In 2012 there are two, one of which (UC-Irvine) charged no tuition to members of the class of 2012, but is now charging nearly $50,000 per year to its new admits. The other school is Southern, which almost certainly misreported its data.

The UC-Irvine data are interesting, because they indicate how high the direct costs of going to law school are in an expensive urban area even if law school is “free.” UC-I gave full three-year tuition scholarships to everyone in its initial entering class, yet those students who borrowed any money still finished with around $58,000 in debt (including interest) by the time they graduated.

(3) There are some very striking differences in how fast indebtedness has risen at different schools. For example, mean debt at Columbia has risen “only” 13%, while at TJSL it has gone up by astonishing 60% in just four years. It’s also notable that fully one in five Columbia graduates incur no law school debt at all, even though only a handful of Columbia graduates get large discounts on tuition, and the non-discounted cost of attending the school is now nearly $250,000. This suggests that the relatively modest increase in mean debt loads among Columbia graduates is to some extent a reflection of the mean SES of the student body at Ivy League schools.

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  • But what does Brian Leiter think?

    • IM

      three times and he will jump out of the mirror

  • I’m very glad that my online MA cost me around 10k, and it’s all paid for. I suppose I can understand the acceptance of taking on debt for an increase in future earnings, but holy hell that’s a lot of money!

    • Humanities Grad

      Yes, it is. And the trouble is, for too many of these folks, the “increase in future earnings” that they’re anticipation (and for which they’re taking on all that debt) is never going to materialize.

      • daveNYC

        And the trouble is, for too many of these folks, the “increase in future earnings” that they’re anticipation (and for which they’re taking on all that debt) is never going to materialize.

        Fixed to reflect the current economic climate.

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  • Andy

    http://www.lsac.org/lsacresources/data/lsats-administered.asp

    LSATs administered crashed again – down 13% Y-O-Y for the lowest total cycle volume since 2000-2001.

  • Randy

    Last week, I attended a talk by the Dean of the NYU School of Law and he was asked about law school debt. His perspective was interesting, if NYU-specific. He pointed out that NYU graduates basically fall into two categories – people who take big firm jobs, who can pay the debt on their own, and people who don’t, who are eligible for NYU’s loan repayment program (that is, NYU paying the loans) – and his view was that with the repayment program in place, both categories of students were fine. He also said, fairly pointedly (in part because there were prospective students in the room, I’m sure) that there were only a few schools where this was true.

    He really was talking about how NYU gives students options that other top 10 schools don’t provide, but the point becomes even more significant as to schools that don’t compete with NYU. It’s one thing if you go to, oh, Columbia or Chicago and you don’t have the choice of taking a government job or a public interest job because you need to take a firm job to pay your debt. It’s something else entirely if you’re going to leave law school with $200K in debt and only 10% of your class gets jobs that pay enough to cover that debt and rent and food and clothes. That’s a really crummy proposition.

    • mpowell

      Yes, the bottom 100 law schools need to go out of business so that the remaining bottom 90 have a reasonable proposition to offer students. The top 10 law schools will be fine either way.

      • Pooh

        Even the bottom 7 of the top 10 seem to have a sliding scale of “okayness”.

      • NewishLawyer

        My law school was in Tier 2 when I applied in 2008. It was Tier 2 when I graduated in 2011.

        Now it is 144 and firmly Tier 3 according to US News and World Report.

        I did not attend law school with idiots. We were hard-working people. The first time bar passage rate was solid.

        Overall I don’t know how my class is doing. Among my circle I know: two people with big firm jobs, a few people working for their parents, a bunch of people with jobs at small to medium sized firms, one person in-house, a few people like me are direct hires but in contract positions, some through temp agencies, and others who hung up their own shingle, some ADAs and PDs in rural counties, etc, and a few people working non-law jobs. This accounts for the 30-40 or so people I knew fairly well in law school.

        It is very easy to say that most law schools should shut down, much harder logistically and feasibly do it.

        it is easy and probably a decent idea to tell people to think of things other than law school. Much harder to come up for solutions to those who went to law school and worked hard and passed the bar during the crisis. Writing of us as being a lost generation feels cruel.

    • no

      i still call BS even on NYU. what about those students who don’t get law jobs at ever all even after long periods in deferment doing internships and such-i don’t think they get the loan assistance the Dean is talking about.

      I also doubt small firm attorneys and solo’s get the assistance he is talking about.

      • Anonymous

        I’m not going to claim to know all the details, but the program as described by the dean was based entirely on income, not on where you worked. And, of course, it’s a lot easier to get a job if you go to NYU than to all but about 2 or 3 other law schools. (Whatever you think about law school employment statistics in general, NYU’s are quite good – you can see them at http://www.law.nyu.edu/careerservices/employmentstatistics/index.htm.)

  • wowzer

    This is really pretty terrible.

    Law faculty seem inadequately concerned. Perhaps PAYE will mean that future students have debt caps and the law school music can continue (and perhaps drown out the cries of the hundreds of thousands being crushed by nondischargeable debt).

    The current costly system subsidizes a glut with strong negative consequences to the profession and life-altering consequences to individual debtors.

    These stats should make any teacher with a conscience weep.

  • Holy shit, has Paul commented on his school hiring the very stupid Steven Hayward of Power Line in an explicitly affirmative-action for conservatives move?

  • Steve

    Please bring back ITLSS

  • Sooner

    It is pretty annoying how these statistics continue to underestimate just how much debt the average law student is in. I don’t think potential applicants look at those lists to figure out how much the particular law school added to the matriculant’s debt. They look at it to figure out how much debt your average student is when they graduate from that institution. While it may make the law school look less attractive based on actions it has no controls over, an applicant needs to know those figures are understated by probably something close to 50% when you add in undergrad, capitalized interest, and avg. private loan balance (which includes the near mandatory loan for the Bar and Bar review course time period).
    The figures as listed are alarming enough on their own, but it should be the point of these types of lists to give a reader insight in to what position they are likely to find themselves in.
    But whatareyagonnado, you know?

  • SEK

    The UC-Irvine data are interesting, because they indicate how high the direct costs of going to law school are in an expensive urban area even if law school is “free.” UC-I gave full three-year tuition scholarships to everyone in its initial entering class, yet those students who borrowed any money still finished with around $58,000 in debt (including interest) by the time they graduated.

    That does mean that they were living on about $19,000 in Irvine, which — as someone who spent nearly a decade doing the same — is actually quite good. Also, the law school folks did receive campus housing, if I’m remembering right. Point being, that’s the kind of debt that anyone getting a “free” education at UCI acquires.

  • thepoors

    The first page of schools listed in the link consists almost entirely of schools that are either ranked in the top 20 or the bottom 20. It’s criminal that the some of the most expensive schools in the country can charge that much money. Thomas Jefferson, Cal Western, Phoenix, NYLS — these schools probably shouldn’t even exist, and they take up 4 out of the top 5 slots.

  • thepoors

    “It’s criminal that the some of the most expensive schools in the country can charge that much money.”

    That should be some of the ‘worst’ schools in the country.

  • thepoors

    Skimming further down the list, Alabama continues to impress. A well-ranked, reasonably priced public school that places well in its local market. What happened to all of these type of schools?

  • Guest

    The top schools in big cities may have more students who can pay a chunk of their tuition than lower ranked law schools or schools in smaller cities. The top law schools take many students from top undergraduate schools with high starting salaries. The average starting salary of a Yale BA was over $59,000 in 2009. Someone who lives at home and works a couple of years after going to a top college can save $60,000 to $90,000 if they are really thrifty.
    There are also high paying jobs in the City. Being a waiter or waitress in an expensive restaurant can pay quite well for example. There are probably a lot of law students in the City with working spouses or living with parents who pay for the student’s food and rent, so you are talking little expense above the tuition for some students. A summer job at a big firm, mostly available only at the top law schools, can pay a big chunk of third year tuition while that waiter/ waitress job in the summer after first year and during second and third year will pay a portion of the third year tuition. With good planning and a good living situation, it is possible to make it through law school while minimizing debt.
    Of course, New York City is home to some of the richest families in the world, so some students just can go through school with no debt. Others may take out private debt (not counted in the totals, are they?) or their parents may second mortgage a home or borrow against securities or retirement accounts to help the student pay interest a lower rates than the government offers for student loans. Some students even have a small nest egg of securities where it is possible to get a loan today at about 2% interest, a rate which would be tied to LIBOR over the life of the loan.
    It is not surprising that many people are able to somewhat control their debt at Columbia.
    It is also not surprising that at lower ranked schools students incur more debt. These schools draw from lower ranked colleges where students have lower starting salaries after college and many work in retail.

  • A bit surprising to see US News not factor in something like interest…
    Interest on hundreds of thousands of dollars is definitely no trivial matter. Many of them will pay thousands in interest every year

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