Inflation is an inescapable evil; every time you go to the grocery store, browse home listings, shop for a new car, or even just pump gas, we are reminded of how the dollar does not go as far as it did just a few years ago. I started law school in 2021. Since then, tuition has been increased twice and the value of a dollar has decreased by about 15%. Now, with every little thing coming at a higher cost, it is a daunting time to graduate.
Following graduation, law students are expected to take approximately 10 weeks to study for the bar exam -- full-time. Working is discouraged during this time to ensure you dedicate all of your available time to passing the bar exam. How should students pay their bills during that time? Financial aid is unavailable since students have graduated, working is highly discouraged, and families that have the means to support their law students may be drained from paying costly tuition for three years. Some rely on the income of their spouse, and some move back in with their parents.
Thankfully, banks have found a way to profit off this system and offer their assistance. Many private student loan providers offer Bar Prep Loans. These loans are private student loans which law graduates may take out to pay for their living expenses, bar exam fees, and study materials. Like other loans, students may opt for a variable or fixed interest rate and the rates are dependent on the student's credit. Students are encouraged to find an income-earning credit-worthy cosigner to increase their likelihood of being approved for the requested amount. Sallie Mae is currently offering fixed interest rates of 7.01% — 15.26% and variable interest rates of 8.13% — 17.72%.
Saddled with debt from undergraduate and law school, and now a bar prep loan, newly minted attorneys venture into the workforce with salaries similar to what they were in 2021. At a 15% inflation disadvantage, with record high student loan interest rates (for both public and private loans), the comfortable financial position many of us pursued a legal career for is seeming more like a Craigslist couch than the West Elm sofa that was advertised.
On the bright side, the Federal government has put out new ways to save on student loan payments (i.e. the SAVE plan), attorneys experience generally stable employment and job security, and salaries typically rise annually.
This is the law school industrial complex at work. It can be just as oppressive as the military industrial complex President Eisenhower warned Americans about as he was about to finish his second term in office.
ReplyDeleteThey have something you want desperately, which depending on what phase you are in, is either admission to law school, a degree once you are enrolled, or passing the Bar once you graduate. And they control the market for these desperately needed services. So it is no surprise that whether or not they are technically non-profit, they intend to profit from your needs.
The lack of competition and lack of accountability by the providers of these services is a fundamental problem that needs to be addressed. If you don't get into law school (or the law school you want to get into), if you don't graduate, if you don't pass the Bar, if you don't get a law job, they still get their money. So why should they change? Change must be forced on them from the outside.