Law School Loan Debt: Declaration of Dependence

Kyle Fry and Amanda Ruff
Law school debt negatively impacts young lawyers’ everyday lives and their future.

Law school debt negatively impacts young lawyers’ everyday lives and their future.

Hispanolistic via iStock

The 2021 ABA YLD Law School Student Loan Debt Survey Report examines the issues at the heart of the student loan crisis and offers recommendations. Read the report.

For the second consecutive year, the American Bar Association Young Lawyers Division surveyed its members about the cost and associated outcomes of pursuing a legal education. 

The Student Loan Survey Results Are Unmistakable

The results are clear: law school debt negatively impacts young lawyers’ everyday lives and their future. Overall, 85 percent believe that their student debt has negatively impacted their financial well-being. More than two-thirds of respondents attribute emotional or mental health issues to these obligations. And 90 percent have adjusted traditional American milestones due to financial, emotional, and mental health struggles.

Here Are Some of the Low-Lights

Student loan debt is directly attributable to emotional and mental health issues.

  • Anxiety and stress (65%)
  • Regret and guilt (53%)
  • Depression and hopelessness (44%)
  • Inadequacy (42%)
  • Embarrassment and shame (41%)

Student loan debt causes financial uncertainty.

  • 44% do not have a three-month emergency fund
  • 21% cannot cover a $1,000 emergency expense
  • 62% cannot save for retirement like they want to
  • 25% cannot save for retirement at all
  • 20% require a co-signer to qualify for a loan or rent an apartment
  • 25% have noticed a negative effect on their credit score

Student loan debt delays (perhaps indefinitely) life milestones.

  • Buying a house (52%)
  • Having children (39%)
  • Buying a car (31%)
  • Getting married (27%)

These results reiterate the many costs of becoming a legal professional. These costs will continue to be a long-term problem for many young lawyers as well. A startling proportion of young lawyers either owe the same amount or more now than when they graduated from law school (42 percent) because their payments have not covered loan interest. This debt influences job selection, practice area, and even whether they choose to continue to practice law.

Loan Debt Causes Detrimental Effects on Well-Being

Without surprise, the more a student borrowed to attend law school, the more likely they were to indicate a negative impact on emotional and financial well-being as a lawyer. This effect is even more pronounced among lawyers of color, who also borrow more for law school.

Young Lawyers Have a Surprising Lack of Knowledge about the Profession

What was a surprise—at least to the young attorneys surveyed—is what lawyers do, how much they make, and how debt negatively impacts your personal and professional well-being. In general, young attorneys felt ill-informed on life as a lawyer at the time they entered law school:

  • 43% did not understand the nature of the work they would do as an attorney
  • 48% did not understand how much money attorneys make
  • 51% did not understand the cost or debt of obtaining a law degree
  • 53% did not understand the legal job market
  • 58% did not realize the impact law school debt would have on their personal lives
  • 58% did not realize the impact law school debt would have on their professional careers

We have yet to see a full generational employment cycle of lawyers graduating with significant debt. The fallout of this cycle is unknown, but the warning sirens are loud, present, and clear.

By the nature of the practice, today’s young lawyers will bear the torch for the future of the practice of law as they transition to firm leaders, judges, and institutional thought leaders. Without addressing these issues, those most likely to be these leaders will not pursue this path. Already, young attorneys are choosing to leave the law, seeking higher-paying jobs over public service work, and taking practice risks to get out of debt sooner.

Loan Debt Will Have Detrimental Effects on the Practice of Law

En masse, young attorneys are confronted with stories and narratives that there is a shortcoming of the legal profession to meet society’s needs. Without a pipeline that can afford to join, remain, and flourish in law, lawyers’ ability to meet those societal needs is in question. Will young people become lawyers? Will young lawyers continue to practice? Will they provide pro bono services when they need a second job to repay their debt, build their emergency funds, or save for retirement? The answer to these and similar questions is unknown but deserves our attention and action.

What Does This Mean for the Future of the Profession?

Surveys, and their results, merely measure what was, not what can be. Too often, the discussion of debt centers on individuals. However, results of this survey, as well as last year’s survey, underscore how important a more proactive approach will be—one that focuses on how we attract people to our profession and whether our profession can even attract ethical and competent people at all who can be happy and healthy as lawyers. This requires transparent entry to the legal profession, starting with knowledge of our profession and pathways to practice, as well as more affordable law school. Improving upon the cost of legal education will ensure longevity, dedication, and the well-being of the legal profession and of our professionals.

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Kyle Fry

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Kyle Fry is an attorney in Iowa.

Amanda Ruff

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Amanda Ruff is a licensed attorney in Iowa, and she currently works for a multinational financial services company analyzing privacy and data protection-related issues. She holds her CIPP/US and CIPM designations and is designated as a Fellow of Information Privacy (FIP) by the International Association of Privacy Professionals.