In this rendition of Testimonial Tuesday, we look at a personal experience with graduate school, specifically law school. Many people would blindly argue that a post graduate degree from a top-tier program is almost always a no-brain-er. They argue that despite the cost, the degree holder will be certain to obtain a top notch job that will enable them to tackle their student loan debt. I believe this week’s contributor would disagree with that thought process.
Don’t get caught up in the post-graduate education hype.1
It wasn’t that long ago that I was 100% completely debt free. Both my wife and I had been through college without incurring any debt. We owned both our vehicles. We lived in an apartment, so we did not have a mortgage. I was making $55,000 per year in a field with plenty of room for advancement. We had $10,000 in a bank account for a rainy day. In short, things were good from a financial standpoint.
Then I decided to go to law school.2 My primary motivation for going to law school was not money, but I did not think that going to law school was a bad decision financially. All of the law schools I looked at touted what a good investment law school was and how quickly you could pay off the, admittedly, substantial cost of their fine institutions. So I thought that going to law school was, at least, a financially responsible decision.
When I graduated in 2008, I had $150,000 in student loans, about half of which were private loans at exorbitant rates. I did not incur that much debt through frivolous spending. We lived very humbly, and my wife had a job that met most of our basic needs. The 150k is almost entirely school-related expenses and interest.
I understood when I went to law school that I would be racking up that much debt, but, because of what the admissions departments told me, I thought that I would be able to find a job that would make it fairly easy to pay off my debt in a reasonable time. The school I went to advertised an average salary after graduation of $100,000. Like most people, I considered myself better than average, so I thought I’d be able to bring in $110,000 to $120,000 per year pretty easily. So I thought, if we continued to live humbly, I could pay off my debt in 3 to 5 years. Well, that’s not what happened.
Why? There were a few key things that none of the law schools I applied to mentioned. First, while some first-year attorneys make up to $180,000, that is only in the largest markets (New York, L.A., etc.), where the cost of living negates a large portion of that impressive number. Second, the only firms that pay that kind of money demand that you work ridiculous hours. 3500 hours per year requirements are not uncommon. Third, attorneys who take those kinds of jobs develop very few marketable skills during the first five years of their practice because they are stuck at their desks doing research most days. Fourth, the vast majority of attorneys who take those kinds of jobs leave for more reasonable, and less-paying, jobs within 2 years. Last, the schools don’t tell you what kind of interest rates your loans are going to be at. In my experience, it is not uncommon to have loans up to 8%.
In other words, what the schools don’t tell you when you’re applying is, that to make a reasonable return on your investment, you have to take a job that you’re probably going to hate.
So here I am, after 3 years of grueling school, with more debt than I ever thought I would have, making not that much more than I would have had I continued in my prior career. You might be thinking, “well, you must have gone to a crappy school, or you must not have done very well.” Admittedly, I did not go to Harvard, and I did not graduate magna cum laude. But I did go to a well-respected school that has consistently ranked in the top 20 in the country (out of more than 200 law schools nationwide). And I graduated in the top 1/3 of my class with several accomplishments and honors.
What’s the lesson here, from a financial perspective? Don’t get caught up in the numbers the schools publish. Do your own research, and ask hard questions of the admissions folks to see what “lies behind” the numbers. Ask if you can contact some recent graduates that are making what the school says you can make. Call those folks, and see what they had to give up to make that kind of money. If you don’t want to work in a city like New York then contact some graduates who are working in the area you want to live in and see what kind of money they’re making. In short, don’t get caught up in the hype.1 This article is entirely one-dimensional, in that it addresses only the financial aspect of post-graduate education. Whether to pursue post-graduate education is, of course, a very complex decision that involves social, family, religious, and other considerations along with financial considerations.2 While I speak entirely from my experience in law school, I think my point applies to many types of post-graduate education. For example see, this article.