‘A constant burden’: Law school debt affects well-being, life plans, access to justice

Karen Bauer, an attorney at the Legal Aid Society of Milwaukee, has heard the out-of-touch tales about new lawyer finances from outside and inside the profession. And it bothers her.

On the outside: cash gifts at her wedding a decade ago that were smaller than normal because of certain assumptions about lawyers. “What I heard from my parents is that since I was an attorney, people thought I didn’t need the money,” she says. “I made $36,000 that year—and I had $150,000 in debt at the time.”

On the inside: an older attorney who counseled would-be law students a few years ago to “take a year off and get a job” to earn all the money they’d need to pay for three years of law school. “’Are you aware that just the in-state tuition alone to attend our state law school is $20,000 a year?’’ she asked the older lawyer. His response: “’Is that so?’”

Such widespread misinformation is why Bauer has been heartened to hear greater national discussion over the last year—fueled in part by the 2020 U.S. presidential campaign—about the burdens of undergraduate and graduate student loan debt. It’s also why she jumped at the opportunity to join a task force formed last year by Wisconsin Gov. Tony Evers to explore solutions to the ballooning debt issue in the state.

At the same time, a study released just months ago by the ABA Young Lawyers Division punctuated the problem, finding a median student debt load of $160,000 for more than 1,000 recent graduates who responded to a survey. It laid bare the stories that many young, debt-ridden attorneys have swapped over the last few years: painfully frugal living; delays in starting a family, buying a home, and other milestones; mental health challenges and lost sleep; and a sense of being locked into jobs—all in order to pay down six-digit loan balances.

Although Bauer and others understand that lawyers often don’t engender much empathy from others, they hope that the spotlight on rising law school tuition and mounting loan loads—now combined with a pandemic-induced wobbly economy—will spur greater examination of how to help indebted lawyers. A failure to address the issue, many worry, risks amplifying growing concerns about negative impacts to access to justice.

‘Affecting all aspects of life’

“The number one issue is just getting people to understand what a widespread issue this is,” says ABA YLD Chair Christopher Brown, explaining the drive for the 2020 Law School Student Loan Debt Survey. “These aren’t isolated problems of a few people who made bad decisions.”

Among the findings of the survey of 1,084 recent graduates:

• More than 75 percent of respondents had at least $100,000 in student loans at graduation—and over half had more than $150,000.
• About 45 percent of lawyers who were admitted to the bar before 2014 have seen their student loan balances increase since graduation.
• Nearly half said they have either postponed or decided against having children due to debt.

As worrisome as these figures are, the written responses to open-ended questions may be equally distressing, if not more so. For example:

• I am constantly anxious knowing the weight of the debt on my shoulders.
• It is a constant burden, affecting all aspects of life.
• It's unbearable and I cannot pay enough each month to cover my loans; my balance climbs even after a month's payment.
• Massive depression.
• I gave up on life.

Debt’s effect on well-being and access to justice

Attorney Steve Rupert has not only heard the stories: He lives them. The president of the Wichita (Kan.) Bar Association Young Lawyers Section is facing down more than $150,000 in debt, six years after earning a JD from the Creighton University School of Law.

“My law school debt has affected me in almost every way imaginable, from where I’ve lived to leaving jobs I didn’t want to leave,” he says.

After holding private firm and public sector jobs, Rupert has opted to work for the Kansas Board of Indigents’ Defense Services while pursuing debt reduction under the federal Public Service Loan Forgiveness program. If Rupert maintains his public sector job—and steady loan payments—for six more years, his remaining debt will be forgiven.

It’s a similar approach that Bauer took to have her loans forgiven, but it’s not necessarily one that works for many attorneys, she readily concedes. “I went to law school to do consumer protection at Legal Aid, so I felt that I was exactly where I was supposed to be,” she says. “But to say to somebody whose dream job would be to practice personal injury law that they should come here to work in order to get rid of their student loans seems ridiculous to me. PSLF can’t be the only answer.”

Likewise, she says, the approach of finding a high-paying six-figure job out of law school to pay down debt is not a sustainable solution. Brown agrees, adding that lawyers continue to be driven toward higher-paying jobs to pay down loans—leading to shortages of lawyers in rural areas and lower-paying public sector jobs.

“You’re going to create access to justice problems,” he says. “To be a lawyer, you have to be prepared to take out six figures in debt. As a profession, we have to think about if this is a message we want to be sending out to the future lawyers of America.”

Past Virginia State Bar President Len Heath commissioned a widely read bar study in 2019 on lawyer wellness that listed large student debt as a negative contributor to attorney well-being. In fact, that study lists “educational debt” as one of eight mental and emotional factors that represent occupational risks for lawyers. Among the recommendations to mitigate this risk factor, two pertained specifically to bars: that bars consider dues models that reduce or eliminate membership fees for newer lawyers, and that firms consider encouraging newer lawyers to participate in bar activities, including by paying their dues or offering a stipend to do so. Another recommendation may pertain to bars as well as to law firms: offering financial planning services to lawyers, or access to existing services.

More recently, Heath saw the potential access to justice impacts firsthand at a meeting with rural Virginia lawyers.

“An attorney raised his hand and said, ‘Is anyone else having trouble attracting associates?’ A lot said yes,” he recalls. “The consensus was that they couldn’t attract young lawyers because the lawyers had student loans they had to feed. They couldn’t afford a long-term investment [in a lower-paying starting job]. They had to feed the beast. They could not take those opportunities.”

The outsized importance of law school rankings

Although much of the student debt conversation has focused on loan forgiveness, Brown and others say that there also needs to be more focus on the law schools themselves, from the tuition they charge to the financial aid they provide and the programs they offer.

“Why is law school so expensive, and what can we do to make it more affordable? That’s the problem moving forward,” Brown says.

St. Cloud, Minn., attorney Jonathan Wolf says his experiences with the law school process eventually led him to write Your Debt-Free JD: How to Graduate from Law School Without Incurring Student Loan Debt.  He got the idea for the book after realizing how unusual it was for him to have a debt-free law degree, while “every time you go to happy hours with other attorneys and you talk to the other associates at the firm, everyone was complaining about their student debt payments.”

A good place to start, Wolf says, is to educate undergraduates interested in law careers about U.S. News & World Report’s annual law school rankings, and to what degree this list should factor into their decision about which schools to apply to. The 10 schools with the highest tuition (all more than $66,000 annually) are all ranked in the Top 20 by the magazine.

“Law schools have made it so much more important to increase their U.S. News rankings than just about anything else. If [the rankings] went away tomorrow, I would jump for joy,” says Wolf, a 2011 graduate of the University of St. Thomas School of Law in Minneapolis. “Sometimes, [degrees from Top 20 law schools] help for the high-prestige positions, but for most of us who are going to litigate or do estate planning or do the boots-on-the-ground legal work, you’re not getting that much—and you’re giving up a lot.”

Heath recalls speaking at a lawyer wellness summit last year attended by representatives of Virginia’s eight law schools when the issue of escalating student debt came up, focusing on statistics showing that private and public law school tuition in 2017 was three to six times higher than in 1985—after adjusting for inflation.

“I might as well have been talking to the wall,” Heath says. “Not because they weren’t interested—but I’m not sure that they really know what to do.”

And with law school enrollment back on the rise, Wolf adds, there is little incentive for many schools to reduce tuition or dole out more financial aid. “Their feelings are hurt, but that’s not enough to get serious change from law schools,” he says.

More work to be done

Despite the challenges, Wolf and others believe there are opportunities for improvement. State and local bar associations—and perhaps especially metro bars—can play pivotal roles in education, advocacy and hiring, they say. It can start, Wolf says, in the networking that often occurs at the bar.

“Lawyers like to hire alums from their law schools, and if you go to a good regional law school, you probably have just as much of a hiring advantage as you do going to a T14 school,” Wolf says. “I hope students are recognizing that there are opportunities for them there that are probably better than a lot of the Harvards and Yales of the world.”

Bauer hopes that Wisconsin—followed by more states—can build off several of the recommendations from her task force: in particular, the creation of a borrower’s “Bill of Rights” and a statewide ombudsman to represent student loan recipients.

“I talk to young lawyers about repayment options, and so many of them are not aware of what their payment options even are,” Bauer says. “Creating these state-based offices will definitely help.”

Wichita’s Rupert agrees, adding that making prelaw students more aware of the pitfalls of borrowing should be a priority for bars looking to better inform prospective students.

“I wish somebody could have walked me through the economics of law school,” says Rupert, a first-generation law student. “I don’t know if I would have made the same decisions. I feel like I was just flying blind. In a perfect world, I could have made a lot better decisions.”

Ultimately, Heath says, the widespread issue of student debt will likely require greater involvement from the ABA and other organizations.

“There needs to be some calling together of the stakeholders in the profession about what to do about this problem,” he says. “The business model seems to be broken. It’s not broken for [law schools], but I think it’s broken for society and I’m afraid it’s broken for our profession. We need more reports, like ours and the ABA, to gather not just anecdotal evidence, and to get more people talking.”

To that end, Brown says, the ABA YLD is planning to introduce two measures in the ABA House of Delegates to encourage the ABA to lobby for changes in bankruptcy law that would more easily allow for student loans to be dischargeable via undue hardship—in addition to supporting any loan forgiveness programs that may emerge from Washington in the year ahead.

Those seeking a model for what bar organizations can proactively do about the debt problem might also keep an eye on the Chicago Bar Foundation, which has been working not only to support PSLF, but also to promote legislation that could bring dramatic improvements for those carrying law school debt, as well as any other student loan debt related to higher education.

The proposed Equality in Higher Education Financing and Repayment Act (EHEFRA) is “a comprehensive effort to fairly and equitably tackle the unsustainable levels of student loan debt that are exacerbating existing inequalities in education access and opportunity as well as inhibiting entrepreneurship,” according to information from the CBF. “The EHEFRA would create a more rational, fair, and accountable system, freeing many Americans from the weight of debt-based decision-making and simultaneously giving the economy a much-needed stimulus during the current financial crisis.”

In the short term, the EHEFRA focuses on providing all borrowers with a one-time opportunity to refinance both public and private student loan debt at lower and more sustainable rates, because of today’s near-zero interest rates. In the long term, this act would create one multi-tiered, income-based repayment program to provide simpler options for borrowers. It also addresses a number of other reforms to encourage employer assistance with student loan repayment, improve borrower education, and increase accountability for all parties. In a recent informational session via Zoom, CBF staff members and the team that helped draft the EHEFRA noted that this proposal differs from many others in that it covers how to support prospective students before they incur debt, rather than focusing just on the back end via loan forgiveness, and that it addresses debt from both undergraduate and graduate studies (such as law school).

Bauer says she just doesn’t want future generations of lawyers to have the somewhat paradoxical emotions she felt after her the balance of her loans were forgiven.

“It was one of the biggest moments of my career,” she says of the day her loans zeroed out. “It wasn’t me practicing law. It was me getting rid of my debt.”