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September 06, 2011


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John William Nelson

Fascinating stories and statistics. The major factor the recent, vocal minority of dissatisfied law students complain about isn't directly accounted for—the percentage of graduates who get jobs. Then again, part of the problem I've seen are graduates who turn down the $45k-$65k a year jobs because (1) they expected to make more and (2) they don't think they can manage loans off of such a salary. This shows a surprising ignorance in student loan repayment management, and this story addresses new tools like IBR in reducing the hit student loan repayment takes out of a paycheck. (It also misses that IBR repayment is over 25 years and, after those 25 years, any unpaid balance is forgiven, albeit taxed as income.)

I am wondering how schools could provide more support to students, alumni, and recent grads when it came to making repayment choices. (I.E., having someone help run the numbers for them; explaining the benefits/disadvantages in federal consolidation; what it might mean to pay over 10 years, 25 years, 30 years, income contingent, or IBR; how to fill out the IBR paperwork; how to fill out deferments; etc.) This might be a service that could engender good will towards a school with their alums who might otherwise feel underpaid or underemployed.

Gary Rosin

Standard 510 requires law schools to provide debt counseling to law students, both when they take out student loans, and "prior to graduation." At a minimum, I would think that that would include a general session for upcoming graduates that explains payment alternatives (with examples), and individual meetings, when requested.

As to salaries and statistics, the ABA has taken some steps to improve transparency, including information that otherwise might only have been available through purchase of NALP's Jobs & JDs reports. The information required could be better, and the ABA could make information, including comparative information, available more quickly. But "that's another story" (Robert E. Howard).

John William Nelson

Schools do provide some help prior to graduation, but ongoing support in managing student loans post-graduation might be a nice feature as well. What surprises me are the number of graduates I meet who are trying to pay back their loans on the 10 year plan. Admirable, certainly, but also a lot more difficult.

But it's not just lack of knowledge that leads to this, I've found. It's also an unwillingness to go down the rabbit hole that is student loan repayment and try to make a sense of it all.

Further, it could be nice to have an advocate and an expert help explain some of the more unique loan features, such as forgiveness. When does forgiveness for public service work? How does it work? Is there a way to verify which jobs meet the requirements? How does the paperwork get filled out for forgiveness?

Debt counseling schools do provide, in my experience, is limited. Don't take out a lot. Borrowing enough for that Starbucks coffee now means you'll be paying back enough for an XBox or more later. Student loans can't get discharged in bankruptcy. All the old standards, but not much specific to a students situation.

A real advisor, who is an expert in this, and who takes time with an individual student or alumni, might be a valuable asset to a school. Then again, they'd probably have to higher someone more than the $30k a year staffers I've seen doing the counseling in the past.

Just some thoughts. I do think the studies are fascinating, though. I've always suspected similar results. Nice to see some numbers behind it.

Brian Tamanaha


The problem with this study is that it did not discount for reporting rates. Georgia is ranked #2 on the list, but only 54% of the class reported salary information. The reported median private of $130,000--which National Jurist based its ranking on--reflects only 31% of the class.

Or consider Catholic, ranked #21 by NJ, with a reported median private salary of $160,000. This number reflects the income of 28% of the class.

Now compare the above two with Columbia, ranked #53 on the National Jurist list. The reported median of $160,000 reflects the earnings of 82% of the class.

The National Jurist study is deeply flawed, unfortunately. Any student who relies on it will be badly misled.

The "good news about debt repayment options" is also misleading because it only provides half the story. It's true that students can replay the loan over 25 years--but the article fails to mention that, as a consequence, a student with $120,000 debt (one third of students today), will pay back $300,000, and will be making these payments until age 55-60 (along with mortgage, etc.)

The article touts "Income Based Repayment" as "the best for more than half of law students." But this advice is highly problematic. Students qualify if they meet "partial financial hardship" standards. The reduced monthly payments (based on a percentage of their income) will not cover the interest, so the loan amount will continue to grow. If the graduate's income increases to the point that he or she no longer qualifies as suffering from financial hardship, the loan (now much bigger) must be paid. If the student remains in hardship (qualifying for IBR all the way), the remaining balance will be forgiven after 25 years, but think about what this says about the legal career of the student. (The forgiveness after 10 years for public service jobs, on the other hand, is a good deal.)

The National Jurist should have done a better job with its report.



My law school never asked me anything about employment status. $160,000 is a "typical" big firm salary for a first year. Big firms tend to pursue students in the top 10%-25%. Given that nobody bothered to ask about my employment status after graduation, I tend to believe that only a certain portion of graduates are sampled, which is fine - as long as it's representative of the whole. But based on this report, the sample shows a really high percentage of big firm salaries. Makes me wonder who is being sampled.

16%-18% of the population earning big firm salary does not sound accurate to me, in light of the small percentage of the class that would be hired by a big firm, bolstered by the fact that there has been a general hiring freeze from big law firms. I think we can do better than this sample!

John William Nelson


I agree that it is flawed because it is based on varying degrees of reporting by each school. Nevertheless, I do think it illustrates that the jobs that are out there do leave those in them better off.

What it does not address is whether there are enough jobs for everyone out there. That's a whole other matter.

As for IBR, I think you miss a few key points on the IBR. Yes, if you pay back at a 25 to 30 year rate, you will pay more. And if you initially go on IBR and then get a job that disqualifies you for it, then your payments will increase and you'll owe more on your loan.

On the other hand, folks who never intend to move beyond the middling tier of 40k-60k a year jobs may not be affected by this. Workers eligible for forgiveness for public service will receive a great boon—complete repayment after 10 years of public service work. Those who stay private, but with low enough debt to income ratios to qualify for IBR, will have their loans forgiven after 25 years.

So while IBR is not always the best choice, it offers substantially increased flexibility for many law students. This is especially the case in the early years of a career. One might start off with a lower salary but then make more, and IBR payments enable those graduates to make rent and eat food sufficient to survive the lean early years.

What I think would help law students, as I proposed above, was more support in understanding how these choices affect your loans. When do you qualify for public service forgiveness? When do you move out of IBR qualification, and what will that do to your payments? Someone with the expertise to guide graduates on these decisions could be a beneficial member of law school staff. (Plus, it might be a service that reminds law grads about the value of their school, keep them more in contact with the school, and lead to more donations down the line.)

John William Nelson

Also, to follow up on IBR, there is an analysis and explanation of IBR at that oultines how IBR is calculated:

To be clear, there is no initial IBR qualification. Everyone is technically qualified for IBR. However, one is only required to pay back the lesser of the two: Monthly amounts under the 10-year plan, or the amounts calculated under IBR.

So if you no longer are paying IBR amounts, you are paying the 10-year amounts. Theoretically you should be able to do so.

The "partial financial hardship" is merely the fact that the monthly amount you would be required to pay on your IBR-eligible loans in a 10-year (standard) repayment plan is higher than the monthly amount you're required to pay under IBR.

Gary Rosin


One of the ways that the National Jurist controlled for reporting rate was to exclude schools with less than a 40% reporting rate.

Brian & CMAEsq,

The reported salaries are clearly biased to the up side, if only because people with high salaries are more likely to report. The second curve in NALP's "The NALP Salary Curve Morphs with the Class of 2010" (link above) shows an adjusted distribution of salaries that "includes" unreported salaries.

That said, even with the up-side bias, a substantial number of schools have median reported salaries in the lower peak of the individual salaries distribution.

Brian Tamanaha


You are right that they left out schools that did not make the cut off. Catholic had a 50% response rate so it made the cut. But a $160,000 median salary based upon 82% of the class (Columbia) is very different from a $160,000 median based upon 28% of the class (Catholic), yet the study treats them exactly the same way (without disclosing the disparity).


You say: "I do think it illustrates that the jobs that are out there do leave those in them better off."

I don't think anyone would challenge this point--every school has at least a few students (top 5-10 percent) for whom law school pays off handsomely, and at schools like Columbia almost everyone benefits.

My problem with the article--and with us using it as a legitimate source of information--is that it makes broad claims like "recent law graduates have more disposable income than they did 10 years ago--this despite higher student loan debt and a worsened job market." This is simply not true for many law graduates.

Reading something like that would naturally lead a prospective student to think that one could make a lot of money by going to law school--especially to places like Georgia (#2) and Catholic (21#). But what the article omits entirely is that about half of the graduates at both of those schools did not report their salary.

Furthermore, at Catholic, which claims an 88% employed rate (9 months after graduation), only 67% of the jobs required a JD, and 11% of those jobs were part-time positions. (Georgia does much better, with 90%+ in full time lawyer jobs). If we looked at the entire class, the picture is far more dismal than the advertised $160,000 median the study uses.

All of this information can be found on Law School Transparency. (I'm not picking on Catholic and Georgia--there are many other schools in this situation, but they were high in the ranking so I use them as examples for why it is misleading.) National Jurist made no mention of it.

So yes, the winners at every law school are doing well. The problem with the study is that it counted ONLY the winners. When you add in the ones who did not get lawyer jobs, or got part time legal temp positions, the picture is radically different.

On IBR, I agree with you that it helps students who are in a terrible position, and in that sense it is a good thing. My objection is to their suggestion that it is a GOOD option that people thinking about going to law school can count on to ease the debt burden. They suggested that fully one half of law students should use it. That alone tells us how bad the situation is, because it suggests that at today's prices, 1/2 of law students can expect to secure jobs that qualifies them for "partial financial hardship." (And let's leave aside the implications for society of a system that will produce billions of dollars of losses in loan forgiveness.)

This is not a good situation, and the NJ report did not help by glossing over these essential points.


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