Forbes magazine recently ran an article asserting that American law students are “victims of an unfolding education hoax on the middle class”–the myth that college and advanced degrees translate to a life of economic privilege.
The average law grad has $100,000 in student debt, according to the magazine. An UCLA law professor says the problem can be worst for African-American students, who are lured into law school to improve diversity rankings without being told that less than half will pass the bar. Schools also “goose employment statistics by temporarily hiring new grads and spotlighting kids who land top-paying jobs, while glossing over far-lower average incomes,” the story says.
Private loans are typically a greater burden than those funded by the government, many private lenders charge 10 percent loan origination fees and 18 percent variable interest rates that start to accrue as soon as the loan is funded. And student loans cannot be discharged in bankruptcy.
Many educators tout the statistic that college graduates will earn $1 million more than high school grads. The magazine examines the claim and says the statistic doesn’t account for some facts. But the Forbes story challenges this claim. First, the higher salary figure may reflect the fact that college graduates are smarter and work harder–characteristics that could boost salaries for such people even if they don’t attend college. Second, the cost of a college degree has risen at twice the rate of inflation, coming to nearly $100,000 for a private school. Third, college students give up about $125,000 in pay for the four years they are in school. The story cites a College Board study that found one in four college grads earns considerably less than the top quartile of high school grads.
Registrations for the law school admissions test are flat or below the norm for this year, highly unusual for the depressed economic environment. Historically, when times are tough more people look to graduate school as a means to better their opportunities. But the salary numbers can still be alluring. According to the National Association for Law Placement (NALP), 2008 Associate Salary Survey shows that the median salary for a fifth year associate ranges from $99,000 to $183,000 depending on firm size. Even the civil legal aid lawyers, the lowest paid positions in the profession, have a median entry-level salary for a legal services attorney of $40,000; at 11-15 years of experience, the median is $60,000.