Fight The Hypo

I wanted to offer a corollary to The Sherpa’s post about the “worth” of a law school education. To frame the debate, let my first offer a little background.

I went to graduate school at the University of Chicago immediately after I got out of college. Since I went to an undergraduate institution that did not have a stellar reputation in the Social Sciences and my academic record wasn’t off the charts, I paid my own freight for the degree. The program – a one year masters – was marketed as being a way to burnish your CV, and get into a doctoral program. Assuming you decided academia wasn’t for you, the claim was that you would be able to parlay the degree into a far more substantive job that would offset the cost. Incidentally, the total cost of this enterprise, counting tuition, fees, books, moving expenses, and credit card debt was probably on the order of $60,000.

This degree did not work for me as advertised. The only job interview that I was able to lock down specifically because of it was with a very large, national consulting firm, and they offered me the princely sum of $27,000, which even 7 years ago, wasn’t great. In my 22 year mind, it was flat out an insult, and I went off on the estranged career path that led me to where I am now. I feel a great deal of attachment to Kirstin Wolf in this regard, since I think enticing people into paying for graduate school by leveraging their dreams of being professors is a bit of chicanery worthy of P.T. Barnum.

Needless to say, this was all fresh in mind when thinking about the law school process, and the debt burden that goes along with it. So here’s my math. Please feel free to check it and let me know if I screwed up. Let’s assume that law school costs $100 grand. I work for a company that has a great educational assistance program, offering up to $8,500 per academic year.

Assuming I’m able to take full advantage of that, I can knock $34,000 off my total bill, bringing it down to $66,000. I occasionally work side, consulting jobs, and if I pull in an extra $5,000 each summer, I’m able to knock another $20,000 off the total, meaning that I walk with a total debt of $46,000.

If you figure that the average interest rate on student loans is about 6%, and I pay it back over the standard, 10 year repayment schedule, my monthly payment should be about $686. [46,000 * 1.06^10/120= 686].

And while that sounds like a lot, particularly since I have passing flirtations with public interest and government law, at a 28% tax bracket, it means that I’ve got to increase my marginal income by about $828 a month or $9,936 a year. Anything over that is gravy. In my case, I could not envision a way that I could grow my salary at a comparable rate staying at my current company, making the investment worthwhile.

So the real question you have to ask yourself is not “is law school worth it?” but is law school worth it for you? This calculation has to include an analysis of what you want (or are willing to do) when you get out of school, and what you’re making now. It also has to include an analysis of the intangible benefits of the process, job satisfaction, etc. I do think that a real danger awaits people who imagine that law school is a ticket to being able to drive a new Bentley off a cliff just because. In our economy, no one pulls down serious coin without responsibility. Before considering law school, it is imperative to do the kind of financial analysis I did to see how the investment will work for you.