According to a survey of almost 1,000 recent legal graduates, the average amount of debt they had accumulated, incorporating any loans taken out to cover costs such as sitting the bar exam, was $160,000.
According to the National Center for Education Statistics' most recent data, the average amount of student loan debt for law school in 2015-16 was $145,500. This figure takes into account both undergraduate debt and loans for law school. However, a July 2020 report from the American Bar Association revealed that the median law school debt of the nearly 1,000 surveyed new lawyers was $160,000. This sum includes undergraduate debt and any additional loans taken out to cover expenses such as the bar exam loan.
Is taking out loans to finance a law degree a wise decision?
The large financial strain of the average law school debt of $145,500 is a weighty load to bear. Nevertheless, it could be worth the trouble if you acquire the salary and job you want after law school. Jeffrey Hanson, a financial aid consultant at the Law School Admission Council, claims you shouldn't necessarily pick the law school with the best scholarship. Instead, search for the one with the highest chance to realize your desired career. He stated that not all schools offer the same chance for that. It might signify that you must assume six digits of debt to attend a high-ranking law school. Hanson alludes to this as your "education mortgage," and you must be aware that this investment will have an effect on you in the long run. The ABA report discovered that many new lawyers are disgruntled with their debt. Over 40% of those surveyed said they owe more money at present than when they graduated from school and are putting off major life decisions, like getting married or having children, because of their debt.
A tool to determine the amount of money one needs to pay for law school tuition fees.
How much would the typical law school debt total? If you had a balance of $145,500, you'd be required to reimburse $198,700 over the standard ten-year period, with current interest rates taken into account. The typical law school loan payment for this amount of debt would be $1,656 a month. Estimate the potential costs with the law school loan payment calculator. You can get a fast estimate of how much you would need to repay for your law school loans, including any undergraduate loans. Loan amount: $145,500; Annual interest rate: 6.55%; Loan term (years): 10; Monthly interest rate: Monthly payment: $1,656; Interest paid: $53,200; Review our top picks for the best law school loans and see if refinancing is the right option for you. Manage your money wisely, including banking, credit score, checking, savings, prepaid debt cards, money transfer, CDs, credit cards, rewards credit cards, cashback credit cards, balance transfer credit cards, airline credit cards, low interest and no fee credit cards, financial planning, paying off debt, college savings, making money, financial news, insurance, life insurance, medicare, renters insurance, pet insurance, investing, retirement planning, Roth IRA, estate planning, brokers, 401k, auto loans, student loans, mortgages, mortgage rates, and home ownership.
Making payments on legal education debt
It is necessary to consider your job and your salary when deciding how to pay off your law school loans. If you are earning a modest amount, you may benefit from income-driven repayment or a loan forgiveness program especially designed for legal professionals. On the other hand, those who are making a high income may want to pay off their loans as quickly as possible to reduce interest costs, which could mean refinancing or sticking with the standard plan. Refinancing your federal loans will take away the option of using income-driven repayment, but if you are sure you won't need it, it could still be a money-saving option.
The amount of money that is typically borrowed for student loans differs depending on the type of loan.
The average amount of debt that a person holds depends on the level of education they have attained. With a bachelor's degree, the average amount of debt is $28,950. For those looking to attend graduate school, the typical loan debt is $71,000 with a Parent PLUS loan at $28,778. Law school debt is especially high, hovering around $145,500 and an MBA student debt is about $66,300. Medical school debt is even higher at $201,490, followed by dental school at $292,169 and pharmacy school at $179,514. Nursing school student debt can vary depending on the degree chosen. An Associate Degree Nursing (ADN) has an average debt of $19,928, a Bachelor of Science in Nursing (BSN) is $47,321, and a Master of Science in Nursing (MSN) is $23,711. Veterinary school is a bit lower with a debt of $183,302. A quick estimate of what someone may owe after attending law school can be calculated using the loan amount, annual interest rate, and term. For example, a loan of $145,500 with a 6.55% interest rate over 10 years will require a monthly payment of $1,633.94 and a total interest paid of $69,381.29. For those already in debt, it may be wise to look into refinancing.