Too much credit in the markets fuels bubbles. The most notorious example in recent memory is the subprime mortgage crisis that caused the Great Recession in 2008. Some people say we are currently in a sovereign debt bubble that is causing a bubble in all asset classes. The jury is still out on that one.

Since the early 1990’s, there has been a credit fueled bubble in law school tuition. Here is a site that analyzes the law school tuition bubble.

Law school tuition has continued to rise since 2008 despite the value of a law degree falling substantially. Why do law schools keep raising tuition? Because they can.

Many students use loans to fund law school. Rare is the young adult who can appreciate the life choking impact of years of huge student loan payments when it is explained four years before payments begin. Almost without exception, they assume it will all work out.

And in a way, it will all work out. Just probably not how they are thinking.

Here is my recent conversation with a law school applicant:

Him:  Do you think I should go to law school?

Me:    Only if you will not have to take out loans to pay for it.

Him:  But if I don’t take out loans, how can I go to law school?

Me:    I’m sorry, I have to get back to my letter bitching about someone’s discovery responses.

Maybe you can win a circular argument. I can’t.

As long as the loans can’t be discharged in bankruptcy, law schools will continue to raise tuition while admitting more students than the job market can absorb.

And prospective students who can’t identify a better option than three years of law school and ‘it will all work out’ will continue to take the loans and go to over-priced law school.

BTW, you know what I NEVER hear? I never hear anyone say I wish I had gone to law school. Just like I never hear a lawyer who leaves private practice for in-house, government or another profession say they wish they had stayed in private practice. My point related to this post is: are you sure you want to go to law school?

  • Macy Hanson

    I financed an Ole Miss law degree and paid it off, in full, within five years of graduation. But I had no furniture, I lived in what would have made Section 8 housing look posh, and my work-life balance was non-existent. I love litigating; I could not imagine doing anything else, but, my goodness, this is a tough and stressful profession with tremendous financial uncertainty.

    I’d keep writing but I’ve got to get back to a letter bitching about discovery responses (they all stonewall).

    My biggest stress is financing litigation as the defense lawyers drag out the cases for years on end.

  • Anderson

    Gave my kid the same advice: don’t pay anyone to go to law school. They give you a tuition scholarship, then okay, fine.

  • Mediumlaw attorney

    Compounding the problems post-graduation: starting attorney wages are relatively stagnant. Young associates complain about paying off loans, older partners do not understand because law school was tremendously cheaper for them (even considering inflation), and the market was far stronger. In other words, wages have at best increased to match inflation, but the loan debt (and payments) have clearly grown far larger. Even an inflation-adjusted starting salary puts a new attorney at a disadvantage as compared to when the partners started practicing. It seems the result is either (1) a reduced living standard for young attorneys or (2) paying the loans off over a longer period of time (25 years vs 10).