Bar News - November 18, 2015
New Lawyers Column: The Price to Practice: Student Loan Debt and the New Generation of Lawyers
By: Jenna M. Bergeron
Recently, I conducted an informal survey of new lawyers in New Hampshire regarding the impact student loan debt has had on their lives. Nearly 100 new lawyers – both new to the practice of law and new to the state – responded, and the response was overwhelming.
Nearly 60 percent of respondents owe more than $100,000; 90 percent owe at least $25,000. More than 82 percent of respondents reported that student loan debt has affected their future decision-making. Nearly 45 percent anticipate that they will be over age 50 by the time they pay off their loans, and many feel that they will never pay off the debt, but will eventually seek loan forgiveness, either through public service work, or through 20-25 years of income-based repayment with a taxable consequence at the time of forgiveness. More than 43 percent have requested deferments, and nearly 28 percent have been denied credit, loans, and/or mortgages due to outstanding loan balances.
For most of us graduating and beginning to practice law in the wake of an economic downturn, student debt consumes us. We are entering a workforce with fewer jobs, lower salaries, and less opportunities for advancement as firms cut back spending, and we bring with us immense debt. For many, starting salaries barely match the cost of one year of law school, and yet we must find a way to repay this debt we incurred pursuing an education we so desperately wanted.
This month, many May law school graduates will have their first payments due on their federal student loans after the six month grace period. Some may not have jobs, some may not have passed the bar, and some may not yet have received results for other state bar exams. Unless they request relief from their loan providers, these recent graduates will be expected to make their payments.
Long before law school, the prospect of student loan debt had already begun to impact my decisions. I knew I wanted to attend law school before I began my undergraduate education and planned accordingly. I chose not to attend some of the more prestigious and expensive schools to which I had been accepted, and opted instead for a school which provided scholarships, was closer to home, and would allow me to work while earning my degree. In choosing a law school, I again selected a school that would allow me to limit the amount I needed to borrow. Even though I felt I had prepared for this debt, I was not prepared for how much it would continue to guide my decision-making long after leaving law school. Like many others, I have made repayment a priority, and have delayed major life decisions in order to do so.
I distinctly remember the day the gravity of this debt became a reality for me. Surprisingly, it was not when I began payments, but during a job interview. My interviewer, a partner of a Boston-area firm, began by telling me he would never pay a new associate a salary of more than $30,000 to $35,000 “because there’s a million of them just like you. They all just graduated, they have loans, and they’ll take it.” He was not wrong. In fact, he was quite right, but that did not make his words any easier to swallow. I had already started making loan payments by this point and found myself running numbers through my head, trying to determine whether I would be able to continue my payments and survive on this salary. It was a reality check.
Many of those who responded to my survey noted that student debt has dramatically limited their ability to plan for their future and greatly impacts their lives. Many reported delaying having children, purchasing a home or vehicle, planning for retirement, and pursuing further education. Several indicated that they live paycheck to paycheck, and must carefully budget in order to afford necessary expenses, including housing and groceries. Some have chosen to seek employment outside of the legal field in order to afford their loan payments, and others, presently employed in legal positions, noted that they were considering leaving the legal profession for higher paying alternatives, to pay off student debt. Some even said they have chosen not to marry their long-time partners in order to avoid inclusion of their incomes in income-based repayment. Respondents noted feeling that they were financially worse off than those who did not to attend law school, and several described the debt as crippling, causing them severe financial and emotional stress, and changing the way they view the value of education for their children.
Some have suggested that students need better debt counseling before incurring debt, others feel that tuition rates must drop in order to keep in pace with the economy, and some believe that student loans must become more easily dischargeable in bankruptcy. While the future of, and solution to, this dilemma remains unclear, one thing is certain: the price to practice is high and it’s costing us much more than money.
Jenna M. Bergeron is an associate at Brennan Lenehan in Manchester, NH. She joined the NH Bar in 2012 and is a member of the NH Bar Association’s New Lawyers Committee.