Survey reveals effects of law student debt, recommends solutions

A new student debt study conducted by the ABA Young Lawyers Division offers new insights regarding young lawyers’ experiences with the COVID-19 student loan repayment pause, their plans in the event of loan forgiveness, their satisfaction with loan servicers and their mindsets regarding work-life balance.

While ABA student debt surveys in 2020 and 2021 showed that young lawyers with the highest debt balances more often reported delaying or forgoing significant life events, (e.g., marriage, homebuying and having children), the latest survey results illustrate notable differences in borrowing and debt effects by respondent characteristics, including first-generation college status. The findings include:

• Just over a quarter (27%) of respondents have a current student loan balance that is higher now than when they graduated. Of those, 71% indicate their balance has grown because they are on an income-driven repayment plan and their monthly payments do not cover the principal.
• While 70% of respondents who borrowed report they were aware of their student balance each year they were enrolled in law school, only 42% report having an awareness of the impact of compound interest and other fees associated with deferring loan payments. Awareness was even lower for first-generation and racially underrepresented respondents.
• Most young lawyers (75%) who borrowed report their debt altered the career plans they had when they entered law school, and 76% report their debt caused them to delay or forgo life plans, such as marriage and children.
• Carrying student loan debt causes stress and anxiety for most young lawyers who borrowed (68%), and 67% of all respondents, including those without debt, report feeling stressed about their finances.
• Among respondents who borrowed, 86% report benefiting from the COVID-19 student loan repayment pause. Of those, 76% indicated the money that would have gone to their monthly payment was instead used for essential expenses, and 54% used the money to pay down other debts.