By Jason Boleman
BridgeTower Media Newswires
After graduating from the George Mason University Antonin Scalia Law School in Virginia, Ann Kossachev found herself facing a problem that is not uncommon among recent law school graduates: six-figure student loan debt.
“It can feel overwhelming, and especially as you’re just starting out your legal career is difficult to manage financially,” Kossachev, now director of regulatory affairs at the National Association of Federally-Insured Credit Unions, said.
As the cost of tuition at America’s colleges and universities has risen over the years, the amount of student debt held by the country’s college graduates continues to rise.
According to U.S. News & World Report data, the average college graduate from the class of 2020 borrowed $29,927, roughly $5,000 more than graduates from 2010.
Federal Reserve estimates from the second quarter of 2021 place the total amount of national student loan debt at over $1.7 trillion, the highest that mark has ever been. However, those estimates are for traditional four-year courses of study. For law school graduates, the debt totals are even higher.
With that in mind, the American Bar Association Young Lawyers Division released its 2021 student debt survey last month. The survey, which was administered in the spring of 2021, targeted members age 36 or younger who had graduated law school in the last 10 years. Over 1,300 young lawyers from throughout the country responded to the survey, which aimed to “understand the impact of student loan debt on the personal and professional lives of relatively new lawyers.”
ABA survey results
Roughly 90 percent of respondents took out student loans to finance their legal education or prior college education, with the average borrower owing $130,000 in cumulative loans at graduation. Additionally, 30 percent of respondents reported borrowing for bar exam preparation, adding an average of $8,785 in debt at the time of graduation.
“The ABA and the Young Lawyers Division have recognized, for the last few years especially, that the toll of student debt has been absolutely skyrocketing and taking a tremendous impact on legal graduates,” Chris Jennison, former speaker of the ABA Young Lawyers Division, said.
Jennison, who currently serves as an attorney-advisor for the Federal Aviation Administration, also participated in a panel discussion on the survey when the results were released last month.
Jennison noted that one finding from the survey is a “wide, wide discrepancy between the debt load and the borrowing amount from our white graduates versus people of color.” The survey found that graduates identifying as Black were far more likely to report having more student debt than when they graduated than any other racial group surveyed. In total, 26.9 percent of all respondents reported having more debt now than they did on graduation day, while 15 percent reported having the same balance.
According to the ABA survey, student debt has altered the paths of some of the survey respondents. A majority reported salary impacting their job selection more than anticipated, while some respondents reported taking jobs in public service to qualify for public service loan forgiveness.
“We sometimes work with third-year students or recent graduates who intended to do public interest or government work when they decided to go to law school, but feel compelled to go into private practice to repay their student loans,” Tanya Lundberg, assistant dean of Career Services and Outreach at the University of Detroit Mercy School of Law, said.
Due to law school debt, some attorneys also reported delaying or deciding not to pursue major life milestones — 51.8 percent of borrowers said they postponed or decided not to buy a home due to debt, while 39 percent of borrowers delayed having children due to their student loans. The greater the overall debt balance held by borrowers, the more likely they are to delay major life milestones, including marriage and car and home ownership.
“I think we are going to continue to see that student debt is driving people to make decisions that are either delaying milestones or are deciding for them what jobs they can do,” Jennison said.
Debt-related lifestyle adjustments can begin before students even leaves law school. Lundberg noted that they “often make tough choices to reduce their debt load.”
“Some students live with their parents and commute to school, sometimes an hour or more, to save money on rent,” Lundberg said. “Some extend their programs or delay graduation to balance school and work or to stay in a job that gives tuition reimbursement.”
The survey also found a substantial correlation between debt load and overall stress. While 49.1 percent of graduates with no debt balance reported high or overwhelming stress, 82.5 percent of graduates with more than $200,000 of student debt reported the same. Overall, nearly two-thirds of respondents said their student debt balance has made them feel anxious or stressed in the last month.
Solutions
In conjunction with the survey’s release, the ABA hosted a “Student Debt Week of Action” in September. During the week, the ABA encouraged those in the legal community to write to their elected officials and engage members of Congress on the issue and conducted online programming to educate others on student debt.
Jennison said the ABA has a policy and advocacy arm and government affairs office that allows it to advocate in particular areas. Recently, Jennison said the ABA Young Lawyers Division has called for “wholesale reform” on how the legal profession deals with debt.
Jennison added that the ABA now supports forgiveness of student debt, although the association did not put a dollar amount on it. During the 2020 presidential campaign, President Joe Biden promised to cancel $10,000 in student debt per borrower, although some members of Congress have advocated for higher amounts.
Last month, the U.S. Department of Education announced changes to the Public Service Loan Forgiveness Program, which wipes out federal student loan debt for borrowers employed in public service. The executive action broadened what payments count towards PSLF, with the Department of Education estimating over 22,000 borrowers will receive “immediate student loan forgiveness” due to the changes.
Jennison said that “the most likely route that we could see in Congress is some measure of bankruptcy reform.” Sponsored by Sen. Richard Durbin (D-IL) and Sen. John Cornyn (R-TX), the Fresh Start Through Bankruptcy Act was introduced in August and would more easily permit student loan discharges under certain conditions under an amended Bankruptcy Code.
“It doesn’t make a whole lot of sense to go through the life-changing process of bankruptcy proceedings and still be saddled by debt because half of your debt load was student debt,” Jennison said.
In Michigan, Lundberg said Detroit Mercy Law has endowed scholarships to help students. Additionally, the school’s financial aid office promotes external scholarship opportunities for students from organizations like the Women Lawyers Association of Michigan Foundation and emphasizes using a “thrifty budget” model for law school financing.
“There has definitely been an increased focus on law school debt in recent years,” Lundberg said.
She noted that bar associations, foundations and some law firms have created scholarships and made efforts to address the issue of student debt.
Whether through public service loan forgiveness, scholarships or other means, Lundberg noted that a wide array of options are needed to support law students and young attorneys.
“It’s important to keep in mind the different types of support prospective and current students, as well as recent graduates, need to enter and remain in our profession,” she said.
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