In its November 2007 issue, the National Jurist asks what we can do to stem the debt crisis among recent law school graduates. Private schools now have an average debt rate of about $83,000 (for those students who graduated in 2006*). As the debt of law school graduates increases, NJ states, “The issue is compounded by excess borrowing, lifestyle choices and high consumer debt.” NJ goes on to mention law schools that are alleviating the problem by teaching their students about basic finance. This is where reality takes a back seat to hand-wringing about those spoiled Gen-Y kids.
NJ gives lip service to the rising cost of tuition:
“Higher education has also become more expensive. That public law school that cost $2,006 in 1985 now has a tab of $13,145, the American Bar Association said. A non-resident who paid $4,724 in 1985 now owes $22,987. Private law students have gone from bills of about $7,526 to a whopping $28,900, the ABA found.”
A whopping $28,900 for private law school tuition? Where is this school, and can this blogger get a refund? Actually, she’s nerd enough to do out some of the math. Of the top 25 law schools, excluding Emory, whose website is experiencing problems today, the average tuition for private schools is $39,709; the average tuition for public schools (excluding UT, whose tuition structure is based on credits and not on semesters) is $27,895 for in-state students and $36,000 for out-of-state students. (Data are here.)
Folks, that is just tuition. That doesn’t include fees (schools may differ), books, living expenses, transportation, and loan fees. The total price tag, per year, at top-25 private schools averages $60,000; in-state public, $43,000, and out-of-state public, $51,000. Multiply by three. Add interest. Present six-figure bill at graduation, to be paid off in ten years. Private-school tuition alone, with 8.5% interest (Graduate PLUS loan rate), paid off over 10 years, will cost a student $1,475 per month. Add in loans for room, board, books, and fees, assume no consumer debt (credit card, car) and a new graduate will pay $2,200/month in student loans.
That has nothing to do with poor money management, living high (the average living loan is $13,850/year**, which is only slightly above the federal poverty level), or any choice save the one to go to law school and take out six-figure loans for tuition alone. The idea that $1,400/month of loan debt from tuition can be attributed to “lavish lifestyles” is patronising. To answer the rhetorical question posed in the title: 37,800 caramel macchiatos (private), 23,900 peppermint mochas (in-state public), and 34,400 grande toasted marshmallows (out-of-state public)***. The Starbuck’s bill isn’t really the problem.
*Those students started in 2003 and have approximately $15,000 less debt than those who started in 2008.