Law School For Rich Kids

I’ve been crunching some debt numbers for the most recent law school grads, and have found some really interesting stuff. These data become all the more interesting when we consider the drastic changes to law school debt financing coming down the pike because of Trump’s bill (Annual federal loan borrowing is going to be restricted to $50K per year, with a lifetime limit of $200K for all federal educational loans, graduate and undergradute).

(1) The percentage of law school graduates who are borrowing from the federal government to finance their attendance has been declining quite sharply over the past dozen years. In 2012 that figure was 84%. I estimate that for the class of 2025 it was around 65%. This 100% a product of the fact that law school is increasingly becoming a way station for rich kids on the road to wherever.

(2) This effect is especially pronounced, not surprisingly, at the most elite schools. At one particular Elite Law School ™, I estimate that the mean and median amount borrowed for all educational expenses, including undergraduate loans, for pretty much exactly one half of the 2024 graduating class was . . . zero. For the OTHER half of the graduating class — the half of the class that had to borrow to attend this law school — the mean educational debt at graduating was approximately . . . $250,000. This debt had interest rates that are generating nearly $2,000 per month in interest alone.

This same basic pattern can now be found all over legal academia, as illustrated by another law school that I will not name, but which is located roughly 25 miles northwest of Denver, Colorado. At this school, one half of the graduating class had a mean total educational debt at graduation of about $10,000, and median debt of zero. The other half of the class had a mean educational debt of about $150,000.

Basically, law school students have over the past 15 years or so divided into two roughly similar-sized groups: Rich Kids, who have essentially no debt at graduation, and Everybody Else, who graduate with a mortgage for a regular house in Flyover, and a condo in the Latte Sipping Regions.

It’s a fascinating microcosm of higher ed in general, and indeed the economy as a whole.