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Where things stand

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Call me Mr. LawSchoolDebt. I graduated from law school in 2011. I went to a law school that ranks pretty highly (usually in the 15 to 20-ish range, so not a vaunted T14 member but not too shabby by any means). Prior to attending, I had heard about some poor law school outcomes but I thought they were limited to graduates of third tier and lower law schools. I got average grades and ended up in the middle of the class, which translates to being barred from working in BigLaw firms and prestigious government agencies that pay well. My law school debt when I graduated was approximately $190,000.

The published starting salaries for my law school were substantial and strong six-figure incomes, so I reasoned that taking on six figures in debt was not crazy and I could pay it off within a 3-5 year period of time. Wrong. I graduated without a job and had to spend quite a while finding one. I worked for a year at a law firm that paid peanuts. My law school debt meanwhile ballooned to more than $200,000. I eventually found a job that pays a little more than $40,000. It’s not perfect, but it has benefits and I feel that it adds more value to my future than doing temporary document review gigs.

I’ve been through the Kübler-Ross model, more popularly known as the five stages of grief: denial, anger, bargaining, depression, and acceptance.

  • Denial: at first I pretended that Income-Based Repayment (IBR) was going to save me and that I’d eventually find a high-salary job with my oh-so-prestigious law degree. As the months turned into years, I’ve accepted that I most likely will never land a high-paying law job and I’d be better off paying off the debt as soon as possible. Under the IBR plan, you make small payments based on your income and your law school debt is “forgiven” after 25 years. But there must be a catch, right? Correctamundo. The amount of debt that’s forgiven is treated as taxable income. With some of my loans at 8%+ interest rates, it’s entirely possible that my debt could explode to $400k+ in 25 years if I just made the minimum payments under the IBR plan. So in 25 years, I could face a HUGE bankruptcy-inducing tax bill when I’m in my 50s and past my prime earning years. Needless to say, this would be a catastrophe. I’ve since stopped living in denial that IBR isn’t a good plan for my future.
  • Anger: I will admit that I was very angry for a time – angry at the law school for sending me all those seductive marketing materials, angry at my law professors for not giving me the A grades I thought I deserved, angry at other law students for “taking” the jobs I thought I wanted, angry at the ABA for failing to regulate the legal industry and legal education, angry for feeling tricked and having my finances destroyed, etc. I was definitely angry for a while. I still am slightly angry, but I’m more angry at myself for letting my life get off the rails and being as naive as I was in my early 20s.
  • Bargaining: I thought if I went to a ton of networking events, CLEs, MeetUps, and emailed lots of people, I’d be able to rise like the phoenix from my grave of law school debt. Nope. The debt just continued to grow and my efforts at career networking produced rejection after rejection.
  • Depression: I’m not proud to admit that I’ve suffered some severe depression after law school. I’ve had to move back with my parents. I hate complaining but my salary isn’t paying the bills. I drive a 17-year-old car. I don’t have money to partake in social activities, take trips, or pursue my interests. If it even needs to be said, this translates to zero dating life. I’ve realized I’ll be broke for a very, very long time. I was also depressed that I would never be able to find a wife or start a family due to my financial and career condition. All of this caused some pretty severe depression and during the depths of my depression, I often had thoughts about self-harm. When you’re turning the corner on 30 and you have no savings, your career is going nowhere, you have HUGE student debt, you have no dating life, you live like a hermit with your parents, and you spend your time fruitlessly searching for better job options, it’s not good for the psyche.
  • Acceptance: I’ve come to accept that I signed up for the debt. No one forced me to get a law degree. It’s my responsibility to pay back the money I borrowed. I also started focusing on exercising, nutrition, and making time to socialize with friends and family, which was good for my mental health. Reading more books and engaging in cheap or free activities has also been good for my outlook. I’ve accepted that this law school debt is the challenge life has handed me and I think I’m up for the task. I’ve also begun building other skills that may provide me the opportunity to change careers into an industry with more jobs and better salaries.

So enough Tony Robbins psychobabble. Here’s the damage I’m looking at as of today:

Principal Accrued Interest Interest Rate Total
$22,159.66 $11.93 6.55% $22,171.59
$35,583.53 $3,887.10 7.65% $39,470.63
$23,437.53 $1,065.11 6.55% $24,502.64
$6,621.76 $4.49 8.25% $6,626.25
$44,515.47 $3,224.48 8.00% $47,739.95
$24,371.95 $3,224.48 6.30% $27,596.43
TOTAL $168,107.48

$168,107.48

That’s the number standing between me and some semblance of freedom. It’s a lot of money. I’m throwing most of my paycheck at the debt and working side jobs to throw even more money at it. It’s going to take more than a minor miracle to pay these loans off in the near future.

This blog is going to detail my progress paying off my law school debt and hopefully it can serve as a resource for others with similar debt troubles. I’ll share any tips I have for paying off debt and hope to commiserate with others working hard to pay off their student loans. There is strength in numbers.

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8 responses »

  1. It may not be possible with your income (without a cosigner anyway*) but if you haven’t already you should look into if any of your loans can be refinanced. If you’re paying on IBR it might not be a possibility for all of your loans, but you might be able to swing refinancing one or two of the smaller ones, into a private loan with a better interest. I was able to move my loans from 6.625% to 4.74% (slightly higher for a 20 year term), and your rates are far worse.

    Best of luck from a fellow 2011 grad. I may never make the $160,000 I was all-but-promised when I entered law school, but after two and a half years I did find permanent employment that allows me to pay all my bills.

    * I wouldn’t normally agree with obligating a cosigner, but if you use one, please ensure that you have term life insurance for any loans that would not be discharged on your death. Many loans allow for cosigner to be released after three years of payments.

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    • I’ve spent some time perusing the Sofi website and thought about refinancing. I’m going to look into it some more because I agree, my interest rates are usurious.

      Ah yes, the $160k salary. Ha! If I only knew then what I know now… In my experience, law is feast or famine. You’re either making boatloads or you’re barely surviving. Obviously, I’m in the latter camp. The only way I’ve been able to aggressively pay down my loans is through living at home, having no social life, driving a paleolithic-era vehicle, packing lunches, etc.

      Thanks for the comment. I’ve added your blog to my blogroll in a show of 2011 solidarity. What a brutal, brutal year to graduate law school.

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  2. I also graduated in 2011. Good luck to us all on tackling the loans!

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  3. I’m not a law school grad but a teacher who likes to peruse finance blogs (no debt now, but there were some scary times!). I plan to visit your blog often. You are a very good writer with a sense of humor and real honesty about your situation. I loved reading about your five stages of grief. BTW, I found you through Six Figures Under. Keep looking toward the future. It seems that someone with your obvious intelligence will land something better someday. Good luck!

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  4. fnsfridaynightshenanigans

    I too am ℅ 2011 and I once read an article that said 2011 law school grads would forever be at the bottom of the market. I’m pretty sure it was the most depressing thing I had ever heard, apparently there was something worse than graduating college in 2008. I basically just read through you blog and kept repeating the word yes. Man do I hear and agree with you. It took two years after law school before I found permanent full time work and was able to actually pay my bills. However, I’m on IBR and as such the bills keep getting bigger, but until I get rid of my other debt, I’m relying on the flexibility of the IBR plan in case anything happens. Good luck and thank you for including me in you Blog roll. 🙂

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  5. Did you hear about the woman in California who took the bar exam 14 times, and finally passed? She has massive debt, not just from law school, but from taking the bar exam so many times (each time you take the bar, it costs several thousand dollars). I don’t even want to think about her mind boggling amount of debt. But she said she is happy because she can say she is a lawyer now. I actually feel sorry for her. Our society needs to learn that status seeking can mess up their lives.

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    • I had not heard of this person, but that sounds like an awfully high number of times to take the bar exam. I can’t begrudge anyone’s happiness, but I don’t think I would continue to pursue something like that. I agree that our society would benefit if we held those who create real artistic, economic, and scientific value. If you’ve never read him, I recommend checking out Alain de Botton, who has some interesting thoughts on these issues.

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