Law school offers $163 K in debt to graduate

Law school offers $163 K in debt to graduate

Law school was once considered a surefire ticket to a comfortable life. Years of tuition increases have made it a fast way to get buried in debt.

Recent graduates of the University of Miami School of LawMiami School of Law borrowing in federal loans borrowed a median of $163,000. If two years later, half were earning $19,000 or less. That's the biggest gap between debt and earnings among the top 100 law schools as calculated by U.S. News World Report, a Wall Street Journal analysis of federal data found.

Graduates from a host of other good law schools regularly leave with six-figure student loans, fail to find high paying jobs as lawyers, according to the Journal's analysis of the latest federal data on earnings, for students who graduated in 2015 and 2016.

When Miami students asked for financial assistance, some graduates told the Journal that school officials sometimes offered this solution: Take more loans.

I had nothing life experience, work experience, anything like that before I signed on this quarter million loan, said Dylan Boigris, who began his career making about $45,000 as a public defender. I thought that I would come out with more money than I made.

A law professor at the university, Anthony Alfieri, said law schools foster this kind of cruel optimism in students, letting them think six-figure salaries are attainable, when in reality those high-paying jobs are reserved for students at only top-ranked law schools.

Law schools encourage a kind of magical thinking to keep the lights on, he said.

The University of Miami's Jacqueline Menendez, a university of Miami spokeswoman, said in a written statement: Reducing student debt is of primary importance at each of the university's schools and colleges, including Miami Law. The school declined to comment on specific students' experiences.

The value of a law degree has diminished from nonelite schools. In the past 20 years, Salaries haven't kept pace with inflation. Meanwhile tuition fees have increased. A three year program of juris doctorate, including living expenses, now can cost more than $250,000 at private schools.

Graduates who finished law school in 2019 earned a median $72,500 the following year, according to the National Association for Law Placement. That is about the same as graduates who earned school a decade earlier after graduating soon after.

In recent years, different private schools have been saddling graduated students with upward of $100,000 in debt despite their limited earning prospects, in fields such as film and theater, the Journal has reported. The data suggest that undergraduate debt is emerging as a new trouble spot in the student debt crisis. The law number in particular demonstrate how the problem extends even to professions reputed to be more lucrative.

Only a dozen of the nation's law schools leave students earning annual salaries two years after graduation that exceed their debts, according to the Education Department data covering roughly 200 programs. There are Harvard University, the University of Pennsylvania and Stanford University among them.

Even at some of the most prestigious law schools — those in U.S. News Top 30 — students borrow far more than they will earn soon after graduation, including at George Washington University and Emory University. At the competitive but still underrated American University, graduates borrowed a median of $175,000, nearly triple their median earnings after two years.

George Washington's dean said that many of the college graduates enter government and private - interest jobs, which pay less than public firms. Emory University declined to comment.

The University of Miami in Coral Gables, Fla. is among the richest private universities in the United States with a $1 billion endowment. It is a not-for-profit institution, meaning it pays no federal taxes.

Its law school has consistently ranked in the top 100 law schools in the U.S. News rankings, peaking at 60th in 2016 in 2016. Its website boasts its low faculty and high student-to-facult ratio.

Many private students of Miami Law said in interviews that they assumed attending a recognized private school would give them an edge in the job market.

Laura Cordell, a 2019 graduate, said she chose Miami for the prestige, particularly within Florida. You go to any courthouse in Miami and the judge went to UM, the judge is a teacher at UM, there's some sort of connection to UM, she said.

When I was looking at law schools, I wasn't looking at price as much as what would be good for my career, said Ms. Cordell, 30 years old, who turned down another school that offered her a large scholarship. I didn't have an understanding of the gravity of the amount borrowed.

Ms. Cordell owes $334,000 in federal loans for her time at Miami. She now earns an base salary of $80,000 with a bonus of approximately $12,000 working for a firm that makes insurance information. Because the debt burden is so high, she told Ms. Chandle that she can't afford more than the minimum in an income-driven plan which sets her monthly payments according to her income.

Over the past decade, Miami has increased law school tuition and fees by 43%, to $57,000 in the coming year, according to the American Bar Association data. What's more than double the rate of inflation?

Law schools can charge higher amounts knowing that students can tap the U.S. government's Grad Plus loan program, which permits borrowing up to the cost of tuition, fees and living expenses. It is also the fastest growing federal student loan program for students. If graduates' loans are never repaid, taxpayers will be on the hook.

Patricia White, who served as Miami Law's dean from 2009 to 2019 and is currently a professor there, said tuition at Miami Law and other law schools got raised year after year so that the schools could operate, and typically came with government loans.

The tuition number would come out, he said. The students would go to the government. They'd say what they needed and Suddenly they'd borrow $70,000, $75,000 a year.

Ms. White said Miami raised tuition to cover the school's higher expenses, including salaries and financial contributions the law school was expected to make to the broader university. This year the University of Miami asked Ms. White's successor to step down from the position of dean, citing in a public statement the need for new leadership amid its current fundraising campaign.

Between 1985 and 2019, the average annual tuition at private law schools nearly tripled to $49,000, adjusted for inflation, according to data from nonprofit advocacy group Law School Transparency, which has pushed law schools to provide more detailed information on job prospects.

Law school attendance plummeted after the recession as law firms reduced young lawyers and entry level job openings. Though enrollment began rebounding in 2018, fewer students are choosing law school than a decade ago, according to the American Bar Association data.

Law school deans say that costs have increased as schools create more hands-on clinics to better prepare students to practice law and devote more money to scholarships to attract top students, which improves their rankings.

Ms. White said Miami urged students to borrow less for living expenses but that students tend to be unsophisticated borrowers, with many taking the maximum every year out. They don't know how to manipulate money in large numbers, she said. And so, borrowing got out of control over a relatively small period of time.

The starting lawyer salaries generally fall into two clusters: $45,000 to $75,000 for small-firm lawyers and around $190,000 for public service and large firm jobs, according to data from the National Association for Law Placement.

More experienced associates at small firms can earn upward of $250,000 — much more than their peers in large firms or in the public sector. The American Bar Association, however, more than half of entry level jobs at high-paying firms have gone to graduates of top-20 schools, according to an analysis of the data from Law School Transparency.

There are only a handful of schools that can offer guarantee that if you're in your class and graduated you can get into a high-paying job, said William Bratton, a University of Miami Senior Lecturer.

Far more lawyers graduate from Miami Law School to smaller firms than big ones, National Association for Law Placement data show. According to the group, Miami graduates in 2019 earned a median of $70,000. That is higher than the Ed Dept.'s figure from tax records, which is for 2015 and 2016 graduates and reflects only loans to borrowers.

Paying off student loans over 10 years, once considered standard, is difficult for many law-school graduates with six-figure debt. Two in three recent graduates had suspended or not repaid a dime of their principal balance within two years or had repaid payments altogether, the Journal's analysis shows. If the graduates don't pay down interest — often topping 7% in recent years - their balances will grow, not shrink.

Just 15% of recent graduates had begun repaying their student loans after two years — the lowest rate among law schools at elite private research universities, defined by categories the education department uses.

At only 14 law schools with published repayment data were the majority of graduates repaying the principal within two years. That is partly because many law student graduates enroll in income-driven repayment plans. In those that can fully reconcile loan payments with the previous year's salary, which may not reflect a full year of work.

Kyle McEntee, who co-founded Law School Transparency, said that many people borrow too much because they want to attend schools which are prestigious, and they think any debt taken out for higher education is worthwhile. But that's just not true, he said.

The University of Miami advertises the law school as an academically renowned experience in a tropical paradise setting, including proximity to 20 beaches. Ms. James declined to comment.

Mr. Alfieri, the Miami-Lorean Law professor, said that marketing efforts don't fully inform students about how realistic their prospects are for joining a large firm. Branding and marketing campaigns would self-sabotage if they provided that kind of granular information, said Mr. Alfieri, who has participated in publicity campaigns at the university

Ms. Menendez, the spokeswoman, said the school has graduated some of the most successful attorneys in Florida and around the country. Miami includes data on graduate salaries and job prospects on its website.

Mr. Boigris, the 2016 Miami graduate, said he didn't receive counseling about what borrowing roughly $240,000 would mean for his financial future. He now owes nearly $300,000, including interest and undergraduate debt.

You tell them, I need assistance, and they are like, 'OK, here's a loan, said Mr. Boigris, who is 30. It was just an endless supply of cash.

In February, he was surprised to learn that he and his wife could not get approved to borrow as much as they wanted to buy a home. If Mr. Boigris was making $120,000 after moving to private sector, the lender told him that his debt load was too high.

Ms. Menendez advised admitted Miami students receive information on fees and loan options and admissions officers provide one-on-one counseling to address financial questions. The dean of students advises current students on financial planning resources, she said. In recent years, Miami has hosted programs for student loans and financial literacy.

Miami has made progress in debating debt, the school said. In 2017 and 2018 federal debt for lawyers decreased 6% from two years earlier to $154,000, according to the median data show.

About 57% of Miami students that enrolled in the 2019-20 school year received some form of scholarship, according to documents filed with American Bar Association, with 16% receiving scholarships worth full tuition or more. That money doesn't always go to the students with the most financial needs.

Before she started at Miami in 2016, she and her mother visited the law school to discuss their concerns about affordability. The student immigrated as a child from Colombia and grew up in a low-income family. She needed to buy books totaling about $1,000, she said, but her student loan money wasn't yet available.

A school official recalled Ms. Rodriguez, now 27, stated there were no need-based scholarships available for her and suggested that she consider going with a credit card to buy the books, recalled Ms. Rodriguez.

Ms. Rodriguez said she didn't blame the school for the time when loans were processed. She found a bookstore that gave her the books up front after she promised to make good when her loans came through.

She had a great educational experience at Miami, she said, although she now owes $350,000 in loans for her law and bachelor's degrees. She works as a federal employee, is certified with an income-based repayment plan and expects to have her loans wiped out by a public service loan forgiveness program after paying for a decade.

Zigan Danklou, a 2018 Miami Law graduate, estimated that about two dozen students met with Ms. White during his final year to voice financial concerns and ideas. The students hadn't paid their loan money as quickly as they had expected and were struggling, he said.

She wanted to encourage us to hang in there, that when you graduate, things will get better because we are going to be lawyers and we are going to make a decent living, recalled Mr. Danklou, now 38 years old, an immigrant from West Africa in Togo and a Navy veteran. She didn't make it sound like it was guaranteed, but she did give us hope.

Dr. Danklou said the dean was very nice and gave the students pizza. But apart from that, I do not recall any aid being offered, he said.

Ms. White said she often held meetings with students and served them pizza, but that gathering didn't get the chance. She said she never would have told students they can expect to earn high salaries after school, and that she often advised them to limit how much student debt they took on.

He said he asked a friend to buy his books and promised to repay him when the loans came through. His landlord was understanding that he would be late on his rent, he said, and he borrowed $20 from friends here and there for food.

Even with a partial scholarship, Mr. Danklou borrowed $138,000. He struggled to find permanent jobs after his graduation.

After a brief stint working for the Federal Government, he has begun to practice as a solo practitioner in Jacksonville. He currently has zero income, but hopes to earn money from cases taken on a contingency basis. His student loan balance, with interest, has risen to $155,000.