The debt of law school

[Whist]

Hey all. I remember there being a similar thread on the old site, and since this has been weighing on my mind as an incoming 1L, I figured I'd get the conversation going again. 

I know that how much debt one winds up with will vary, especially considering the range of tuition and living costs across Canada. I happen to have chosen one of the cheaper schools, and yet I still feel like the weight of the debt I'm staring down is terrifying. I don't know exactly how things will shake out, but it would be within reason for me to hit six figures owing by the time I'm articling. 

I've never earned more than $15-$17 dollars an hour. My parents don't even have retirement funds. It's hard to conceptualize how much money six figures is except that it's potentially crushing. How do lawyers really handle this? Am I being ridiculous, considering this education and career path was my own choice? How much of my life can I expect to be paying off loans for? 

[CleanHands]

Completely dependent upon what kind of law you want to do (and how successful you are at obtaining it and within the field where you end up).

Gotta specify things a bit more to get a decent answer.

[LMP]

Are you factoring in your summer earnings? Those will lower the debt load somewhat. 

And even assuming you do owe six figures upon graduation (a figure that seems high) frugal living afterwards can help pay it down quickly. 

Let's say you earn about $65k a year after articling (which I feel is a fair estimate) and after tax you get to keep about 49k. 

Let us further assume you put about 30k towards living expenses (again, this is certainly on the high side!). 

That leaves almost 20k to be put towards debt every year. So even if your debt was as high as 100k you could quickly beat it down. And this isn't accounting for any increases in income that may come in the following years. 

I will add that these are just estimates, but all we can do at this point is estimate. And I think it is fair to say that the average individual will be fine. 

Though I should note this is based on my life and work experience, none of which has been related to the legal industry or post law school life.

Edited July 1, 2021 by LMP

[Whist]

27 minutes ago, CleanHands said:

Completely dependent upon what kind of law you want to do (and how successful you are at obtaining it and within the field where you end up).

Gotta specify things a bit more to get a decent answer.

I'm open to going other directions, but I'm probably going to pursue labour/employment law. I'd be fine representing on a union or management level, or on an individual client level. (As I gather, those differences in themselves may change earning potential, but I don't know enough yet to determine which I'd prefer.)

[Whist]

31 minutes ago, LMP said:

Are you factoring in your summer earnings? Those will lower the debt load somewhat. 

And even assuming you do owe six figures upon graduation (a figure that seems high) frugal living afterwards can help pay it down quickly. 

Let's say you earn about $65k a year after articling (which I feel is a fair estimate) and after tax you get to keep about 49k. 

Let us further assume you put about 30k towards living expenses (again, this is certainly on the high side!). 

That leaves almost 20k to be put towards debt every year. So even if your debt was as high as 100k you could quickly beat it down. And this isn't accounting for any increases in income that may come in the following years. 

I will add that these are just estimates, but all we can do at this point is estimate. And I think it is fair to say that the average individual will be fine. 

Though I should note this is based on my life and work experience, none of which has been related to the legal industry or post law school life.

The JD itself won't cost me $100k, but I have debt from undergrad for roughly $37k, and no savings. So the total may be around that right after I graduate.

[Mountebank]

Having over $100k owing after all is said and done is a reasonable assumption, given that you're more than a third of the way there already.

It's a lot of debt, but most lawyers also make a lot of money so you'll probably be fine. Let your fear of the debt inform your decision-making for the next few years.

I had something like $114k owing between LOC and Canada Student Loans when I graduated. I'm in my 4th year of call and have about $61k of that original debt remaining, while being the sole breadwinner for a family of 5 (full disclosure, that's about $33k paid off completely and $20k converted into low-interest mortgage debt). Many other lawyers of my vintage have more income and fewer obligations and so should be able to pay more off sooner. But this is just to say that you'll be fine as long as you take your finances seriously.

[Whist]

4 hours ago, Mountebank said:

Having over $100k owing after all is said and done is a reasonable assumption, given that you're more than a third of the way there already.

It's a lot of debt, but most lawyers also make a lot of money so you'll probably be fine. Let your fear of the debt inform your decision-making for the next few years.

I had something like $114k owing between LOC and Canada Student Loans when I graduated. I'm in my 4th year of call and have about $61k of that original debt remaining, while being the sole breadwinner for a family of 5 (full disclosure, that's about $33k paid off completely and $20k converted into low-interest mortgage debt). Many other lawyers of my vintage have more income and fewer obligations and so should be able to pay more off sooner. But this is just to say that you'll be fine as long as you take your finances seriously.

I appreciate the response. And congrats on the debt you've paid off so far! That's reassuring. Tangentially, I always thought you were a 10+ year call or something... 

What field of law are you in, if you don't mind disclosing?

[Mountebank]

19 hours ago, Liavas said:

I appreciate the response. And congrats on the debt you've paid off so far! That's reassuring. Tangentially, I always thought you were a 10+ year call or something... 

What field of law are you in, if you don't mind disclosing?

That's probably because I have no compunction speaking with authority on matters about which I know nothing.

I'm a solicitor, primarily Wills & Estates.

[Avatar Aang]

I have never met a labour lawyer say they would work for the other side. Most labour lawyers I know were also actively involved with unions and collective bargaining even before going to law school. 

You would probably make 70-100k starting out, so the debt is manageable. Debt is inevitable for white-collar professions unless you come from a privileged background. 

The length of time it takes to pay off your debt depends on how you prioritize it. Some people actively put most of their pay cheque towards it every month and others only the minimum amount.

Do you have a good career to fall back on or an undergraduate degree with decent job prospects? If you've never earned anything more than 15-17/hour, then that tells me that you don't have a lot of options, and law will at least get you into a higher income bracket. 

[Whist]

1 hour ago, Avatar Aang said:

I have never met a labour lawyer say they would work for the other side. Most labour lawyers I know were also actively involved with unions and collective bargaining even before going to law school. 

You would probably make 70-100k starting out, so the debt is manageable. Debt is inevitable for white-collar professions unless you come from a privileged background. 

The length of time it takes to pay off your debt depends on how you prioritize it. Some people actively put most of their pay cheque towards it every month and others only the minimum amount.

Do you have a good career to fall back on or an undergraduate degree with decent job prospects? If you've never earned anything more than 15-17/hour, then that tells me that you don't have a lot of options, and law will at least get you into a higher income bracket. 

Thanks for the response. I would prefer union side, but given that I don't have prior involvement with them, I wouldn't know if that makes it a harder goal for me. 

I don't have a career to fall back on. I worked full-time for a few years between secondary school and university, but not in positions with many growth opportunities. My degree is in social sciences, so... a toss-up in terms of prospects. I probably would've pursued a professional Master's had I not wanted law school. 

[TheCryptozoologist]

I did a line of credit and saddled with debt but don' feel bad about it. You should consider that funds paid today amoritize in the future because of inflation. example is $100K to pay for education today, will end up just costing the equivalent of $50k in a few years. 

if you've been following all the news around central banks, that initial cost will be even lower in a few years since the money supply is at an all time high and inflation probably exceeds the APR of most existing loans. the end result is the cost of an education today won't be that much more significant, compared to everything else in the future.

our generation has unique challenges but the benefits of a legal education IMO outweigh costs. 

[chaboywb]

2 hours ago, TheCryptozoologist said:

I did a line of credit and saddled with debt but don' feel bad about it. You should consider that funds paid today amoritize in the future because of inflation. example is $100K to pay for education today, will end up just costing the equivalent of $50k in a few years. 

if you've been following all the news around central banks, that initial cost will be even lower in a few years since the money supply is at an all time high and inflation probably exceeds the APR of most existing loans. the end result is the cost of an education today won't be that much more significant, compared to everything else in the future.

our generation has unique challenges but the benefits of a legal education IMO outweigh costs. 

Yes, I'm looking forward to paying off my debt with one of these in a few years. I'll even let them keep the change.

[TheCryptozoologist]

1 hour ago, chaboywb said:

Yes, I'm looking forward to paying off my debt with one of these in a few years. I'll even let them keep the change.

 

lol you'll enjoy this video/youtuber. everything's a bit yikes right now but such is life.

 

[Apple]

I have a few things to say about debt and law school. 
 

First, many if not most students come out of law school with substantial debt. It is not uncommon and it is certainly doable to pay it down. This will require sacrifice and giving up things you otherwise may want to do, but it is doable. 
 

Second, your debt load can be seriously mitigated with wise financial planning. Cut coasts wherever you can, eliminate the unnecessary luxuries if there are any, and live as though you are in debt. Do you need an expensive phone plan? Probably not so cut it down where you can. There are so many cost savings available to many people but requires analyzing what you’re actually spending. I strongly recommend making a budget. This forces you to look where your money is going. Your debt load can also be reduced by working. I worked a part time job throughout law school and then also worked during the summers. It’s all manageable while still performing well academically. This will enable you to reduce a lot of debt. Thousands of dollars in fact. 
 

Law school is expensive but if you’re capable of sacrificing a lot you can seriously reduce your debt load. Sacrifice is hard and not all people even have more to sacrifice. But look to see where you can. 
 

Finally, if you’re going to go into debt you need to accept that. The anxiety and worry over money cannot be a dominate force in your life once you’ve committed. It will eat your away. Therefore, consider the cost and then establish yourself firmly in whatever decision you make. This will be important for your mental health while in law school and in practice. 
 

It is totally possible to leave law school debt free. There’s a lot of people that claim these sorts of people have mommy and daddy pay for everything but I honestly find this form of thinking stupid, often wrong and a justification for some sort of complaint such people have against the world. I paid for my own educational expenses and living expenses and have zero debt. I had the encouragement from my family throughout it all and for that I consider myself blessed. I also do not begrudge those who had things paid for by their family. Heck, I worked as hard as I did so that if I ever have children of my own I’ll be able to bless them! But, you can get out with little to no debt if you line your ducks up in a row. 

Edited July 16, 2021 by Apple

[aceattorney]

On 7/16/2021 at 2:25 PM, Apple said:

It is totally possible to leave law school debt free.

How? You went to Osgoode, which is like what $26k in tuition. Plus you lived in one of the most expensive cities in Canada. How the heck did you pull this off without the financial help of family?

[Avatar Aang]

16 minutes ago, aceattorney said:

How? You went to Osgoode, which is like what $26k in tuition. Plus you lived in one of the most expensive cities in Canada. How the heck did you pull this off without the financial help of family?

LOL. I know people who received 25k in bursaries and still did not graduate debt-free from Osgoode. Unless the OP was an older student that had money saved up, this is just not possible. 

[Apple]

14 hours ago, aceattorney said:

How? You went to Osgoode, which is like what $26k in tuition. Plus you lived in one of the most expensive cities in Canada. How the heck did you pull this off without the financial help of family?

I worked 26 hours a week during school which effectively paid my tuition bill every year. I then obtained 1L and 2L employment which increased my earnings greatly. I continued to work a part time job on weekends while working in the summer positions. What? No holidays and no breaks? Yes…because a little pain for much gain now was worth the bargain. Now my earnings go straight to me, not interest. 
 

Housing can be expensive in Toronto but there are ways to reduce how much you spend. Again, if you’re willing to make sacrifices. You can find housing for $12,000 a year. Osgoode bursaries combined with OSAP bursaries effectively covered my housing and living expenses. 
 

I received a few scholarships and then worked a job at a university every so often which provided additional money as needed. I ate modestly, didn’t go out to eat/out at all really. I didn’t buy text books but instead used the free ones available at the Osgoode library.

 

14 hours ago, Avatar Aang said:

LOL. I know people who received 25k in bursaries and still did not graduate debt-free from Osgoode. Unless the OP was an older student that had money saved up, this is just not possible. 

It is possible. I am not an older student. Went right into Osgoode after undergrad. I did of course have a modest amount saved up prior to Osgoode since I worked in undergrad and received substantial scholarships throughout my undergrad and thus had no debt from there either. I don’t know why you think I didn’t have savings from undergrad or why others can’t. 

[SlytherinLLP]

4 hours ago, Apple said:

I worked 26 hours a week during school which effectively paid my tuition bill every year. I then obtained 1L and 2L employment which increased my earnings greatly. I continued to work a part time job on weekends while working in the summer positions. What? No holidays and no breaks? Yes…because a little pain for much gain now was worth the bargain. Now my earnings go straight to me, not interest. 
 

Housing can be expensive in Toronto but there are ways to reduce how much you spend. Again, if you’re willing to make sacrifices. You can find housing for $12,000 a year. Osgoode bursaries combined with OSAP bursaries effectively covered my housing and living expenses. 
 

I received a few scholarships and then worked a job at a university every so often which provided additional money as needed. I ate modestly, didn’t go out to eat/out at all really. I didn’t buy text books but instead used the free ones available at the Osgoode library.

 

It is possible. I am not an older student. Went right into Osgoode after undergrad. I did of course have a modest amount saved up prior to Osgoode since I worked in undergrad and received substantial scholarships throughout my undergrad and thus had no debt from there either. I don’t know why you think I didn’t have savings from undergrad or why others can’t. 

I will add that you don't have to hustle this hard (though it's impressive and good on you) to graduate with less than 100k. I have colleagues that worked 20+ hours/week throughout the year. After 1L, I don't think I spent more than 30ish hours studying per course (and that's overestimating it probably). So there's a lot of potential to make use of spare time to make some money. 

My debt is not even close to 100k. I find that is an irresponsible amount of debt.

What with working the summer of 1L and 2L and bursaries, I was able to cut into my debt substantially. I budgeted responsibly and monitored expenses but I wasn't frugal by any means. Went on vacation twice. Ate out at least once a week. 

[KOMODO]

>> Inserting the caution we used to include on the old site from time to time - just because you can minimize debt to near-zero, doesn't mean that you HAVE to or always should. Totally up to each individual to make their own choices and prioritize what they feel is most important. Sometimes this gets lost in the back and forth about whether or not you CAN graduate with minimal debt - even if you can, you may decide that working 20-30 hours a week during law school isn't worth it, because it's possible that spending that time studying will pay you more in the long run. Debt can be a problem and you should think about it carefully, but it's also not always evil, it's a tool.

[BlockedQuebecois]

22 minutes ago, KOMODO said:

because it's possible that spending that time studying will pay you more in the long run

Or, you know, having a life will make you happier in the long run. 

Edited July 20, 2021 by BlockedQuebecois

[Apple]

45 minutes ago, SlytherinLLP said:

I will add that you don't have to hustle this hard (though it's impressive and good on you) to graduate with less than 100k. I have colleagues that worked 20+ hours/week throughout the year. After 1L, I don't think I spent more than 30ish hours studying per course (and that's overestimating it probably). So there's a lot of potential to make use of spare time to make some money. 

My debt is not even close to 100k. I find that is an irresponsible amount of debt.

What with working the summer of 1L and 2L and bursaries, I was able to cut into my debt substantially. I budgeted responsibly and monitored expenses but I wasn't frugal by any means. Went on vacation twice. Ate out at least once a week. 

This is really valuable post for OP. What I did was a personal choice and it’s not always the best for everyone nor is it necessary by any means.  
 

My original post wasn’t a campaign to be debt free. I just wanted to highlight some tips to OP about how manageable law school costs can be/what worked for me. 
 

Budget, determine what your tolerable debt load will be and then enjoy your time at law school! 

[KOMODO]

6 minutes ago, BlockedQuebecois said:

Or, you know, having a life will make you happier in the long run. 

Haha right, that's true too! I must be having a rough couple weeks, totally forgot about maximizing happiness....already hit target this month though 🥲

Do what BQ says

[Apple]

33 minutes ago, KOMODO said:

>> Inserting the caution we used to include on the old site from time to time - just because you can minimize debt to near-zero, doesn't mean that you HAVE to or always should. Totally up to each individual to make their own choices and prioritize what they feel is most important. Sometimes this gets lost in the back and forth about whether or not you CAN graduate with minimal debt - even if you can, you may decide that working 20-30 hours a week during law school isn't worth it, because it's possible that spending that time studying will pay you more in the long run. Debt can be a problem and you should think about it carefully, but it's also not always evil, it's a tool.

This clearly goes without saying haha. But I get why you provide it. OP was asking about managing law school debt and I assume at the very least they want to reduce it to some extend.  Given they already have about 30k in debt I think they likely should minimize debt! 
 

But of course, to each their own! I was fortunate enough that my work didn’t impact my academic performance but recognize that’s not the same for us all!