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Debt calculators tell me that if I refinance the term to 30 years, my payment will be over $ 900/mo. Practicing attorneys, would you suggest I do this, or should I chose a more affordable school. Keep in mind, the average starting salary for this school of choice is $ 130k/yr, but on the east coast.

1 Thought on Law School: I’m considering taking a total of $150K worth of student loans.?
  1. Reply
    July 6, 2011 at 3:01 am


    The general rule of thumb is that a student should not borrow more than his/her first year’s salary. A slightly more accurate estimate is that a monthly student loan obligation should never represent more than about 15% of income.

    From that perspective, you’re close to “reasonable”, but a little bit over.

    A few cautions, though:

    The legal profession is hardly immune from the larger economic environment. Visiting here: , you’ll find a list of layoffs at the Largest 200 law firms in the US.

    You’ll see headlines like:

    “Baker & McKenzie announces associate layoffs in New York”

    “Firms continue to scale back attorneys and staff”

    “Chicago’s Bell Boyd & Lloyd Lays Off 10 Associates”

    “Boston Based Brown Rudnick Lays Off 20 Lawyers”

    Only the large firms pay the kind of salaries that would enable you to bank on a $ 130,000 offer, and those are amongst the firms that have been hardest hit.

    I’d strongly recommend that you read this article, published today: “Five Sobering Future Trends Could Impact Younger Lawyers”, and this one: “The Coming Law Firm Hiring Crisis”.

    Listen – my point is not to dissuade you from following your dream to study law, but you’d be short-sighted to ignore the ongoing shifts in the legal profession. It may be feasible to borrow $ 150,000 to attend your dream school IF it leads to one of the $ 130,000 jobs that you are counting on. If it doesn’t, well – you’re going to find yourself in a big, big hole.

    The other thing I wanted to mention – it’s also not a given that you’ll be able to consolidate or refinance your loans over 30 years. Consolidation loans have been even harder hit than education loans in general – I can count the number of lenders making student consolidation loans on about one hand, at the moment.

    This is a very risky time to be committing to an expensive law school, and you’ll have to weigh your options carefully. If the economy picks up, and law firms immediately return to their once profligate ways, you could hit the jackpot with your big name degree. If the economy continues to slump, and/or if the firms spend a few more years simply retrenching, that $ 150,000 in debt is going to be a tremendous albatross around your neck, especially if you’re not able to extend the repayment period on those loans.

    Good luck to you – I’m sorry I couldn’t give you a definitive answer.

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