Guest Poster Steve V. writes for WealthSharp.com, an investment and personal finance site dedicated to helping readers obtain true wealth.
When you were a promising young high school or college student, you probably heard countless times that you should become a doctor or a lawyer. It was most likely a well-intentioned remark from a teacher or relative, meant to motivate you to pursue the highest levels of education reserved only for the brightest academic minds with strong work ethics. There was nothing wrong with not being accepted into the best law schools at the time, until countless other less accredited schools started sprouting up everywhere as the competition for a JD grew more intense. Instead of narrowing down the list of law school hopefuls that probably didn’t have the chops to make it as real lawyers, the powers that be instead chose to open up tier 2 and tier 3 law schools to accommodate this new generation of students who didn’t make the cut for top programs. The result today is that there are thousands of law school graduates from these less credible tier 3 schools competing for $40,000 a year contract jobs to repay hundred thousand dollar loans. So now the question looms large: are tier 3 law schools a wise investment?
The Odds of Success are Against You
In “Law School Debt By the Numbers,” a video about law school by Bloomberg, we learn that the average debt load for a graduate of the California Western School of Law was $153,000. That’s well north of a 6-figure debt for a law school that isn’t exactly Harvard or Yale. And it’s downright startling that many schools are allowing students to take out loans that they have no hope of repaying. A recent controversy came about when law schools were discovered publishing graduate employment statistics in the 90% range when many JD’s were working in professions that didn’t require a degree at all. Some were working as teachers while others even resorted to working at local coffee shops for some spending money. Even worse, some law grads weren’t hired for jobs outside the law field because they were deemed to be overqualified. The law profession in many regards has become a make or break type of career path, and a large portion of the students accepted to tier 3 schools shouldn’t have ever attended because their odds of success in the profession are so low.
In “From J.D. to Food Stamps: The Personal Cost of Going to Law School,” Elie Mystal explores the life of a particular law school grad who now has an insane debt load and has resorted to going on welfare and collective food stamps to survive. Here’s an excerpt:
Before I went to law school, I was full of potential. Now, I can’t even get paid a living wage. I have more debt than I’ll ever be able to pay off and Northeastern simply counts the dollars rolling in while relying on federal loan forgiveness programs to deal with the graduates. Northeastern, and schools like it, have absolutely no incentive to prepare its students for a career. Its a cash cow for those professors who thought they would like to work 5 hours a week for their six figure salaries and provide the university at large with a prestigious addition.
I’m so —— I don’t even want to get out of bed. I hate my life. I can’t change any of it. I’m stuck. Its not all Northeastern’s fault. Its probably mostly my fault. But Northeastern said the job prospects were in the 90%s. Not true. Never was.
The average debt burden for a recent law graduate is $100,433 according to a report by a US News & World Report survey. While the amount seems impossibly high, many hopeful students are still determined to stay the course and follow through with law school regardless of how high the odds are stacked against them. When asked why, many tier 3 law grads believe they will be the exception to the rule and are blinded by stories of making partner, corner offices and lavish lunches. The reality is many will go on to work in semi-abandoned offices for $40,000 a year doing outsourced contract reviews for companies they’ve never heard of.
What Ado About Nothing
Succeeding in the law profession these days takes a large amount of preparation and skill, not to mention money. The hard truth is if you’re considering law school and know that your grades or test scores will land you in a tier 2 or 3 school at best, think long and hard before pursuing the JD. Or just make up your mind and don’t go. If you were meant to be in the law field, odds are you’d be at the one of the top tier 1 law schools where your prospects for landing a job in this tough economy are decent.
CBSNews writer Lynn O’Shaughnessy said it best in her article questioning the value of a law school degree:
Unfortunately, too many young college graduates turn to law school as a default career move. They don’t know what else to do — especially in a weak economy when jobs are scarce.
Law school is no longer the route to a steady, well-paying job. According to a report by the National Association for Legal Career Professionals, only 50.9% of 2010 law school graduates who found jobs were employed at law firms. What’s more, today the leading source of law firm jobs comes not from the big firms with fat salaries, but mom-and-pop law firms.
Many people are going to law schools for the wrong reasons, and a tier 3 school is a strong indication of this in my mind. Sure, there will always be a select few who will be wildly successful in the profession despite having attended a less credible tier 3 school, but those exceptions are few and far between. Think of your school’s rank as a strong indicator of how well you’re likely to do in the field. In any career you pick, you’re going to have to work your way up in order to branch out and establish yourself later. It’s going to be much more difficult to do this when you have a six-figure debt load hanging on your neck. The law profession is becoming notoriously hard for graduates to get their foot in the door. Everyone is competing for those coveted internships and clerkships, so unless you have the connections, that’s another huge obstacle that’s going to keep you in the warehouse cubicle rather than the corner office. As far as investments go, tier 3 law degrees seem to have a lousy return.
It’s not just law grads who are feeling the burn of the economy and increased competition. Tier 3 MBA programs are popping up all over the place, including online. I have a hard time believing one can receive a quality MBA education online once a week for a year, but many of these “degree mills” are pumping out diplomas and charging a premium for it despite not helping graduates land high-paying jobs. If you’re having a hard time breaking into a tier 1 law program, it’s time to rethink your dreams or study harder and give it another go. Anything else will most likely result in failure and a huge debt burden on your head.
For those who are still motivated to push forward despite the horror stories from recent law school grads, here’s a transparency index that will at least give you some understanding on how much information (about graduate employment rates, etc) each institution is hiding. The more they hide, the worse the job prospects likely are for law school grads.