Monday, May 7, 2012

A follow-up post to the one earlier in the evening

A follow-up post to the one earlier in the evening about the cost of law school.  I actually took pen to paper and accessed my personal account ledger to figure out, to the cent, how much I'll have paid toward my law school students loans from the first payment to the last*.

Drum roll...

My $42,000 juris doctor student loan is going to end up costing me $84,249.69.  Yep, almost double.  Ouch.  The five years I didn't pay a dime toward them while they were on forbearance from May 1998 until February 2004 sure came back to haunt me, as those loans' interest rates really did their trick.  Oh well, live and learn.  It would be easy to get angry about the costs of higher education and the cost of my loan in particular, but I did sign on the dotted line and I have no one to blame but myself for going five years without making a payment.  At least my initial loans were reasonable enough to enable me to pay them off in less than ten years (of the first payment).  That, and I was able to enter the legal profession during a period of economic growth and be fully entrenched in the legal community, with experience and connections, by the time the economy went into the toilet in 2008, so I never had to sweat being unemployed.  People nowadays will have neither and come out of law school with a much more onerous student-loan repayment future.  A bleak future, to say the least, if those loans are piggybacking them from now until the End Times.

Oh, one more thing to consider when I talk about the "cost" of my law degree.  Its what the scam-bloggers (AKA those folks who blog about the law school "scam") refer to as "opportunity cost."  Essentially, the missed salary I should compute from 1995 to 1998, when I was in school, not earning a living.  I really have no idea what my 1995 BA in English would have been worth on the open market back then and what type of job I was even qualified for, but I think it reasonable to estimate that an average 1995 college graduate in Arkansas could command $20,000 per year starting out.  Hell, that may be too low.  But its a nice round number.  So, at the risk of throwing my "true cost" accuracy out the window by using arbitrary numbers, let's say that I missed out on salary from June 1995 until October 1998 (when I got my first attorney job).  That's 40 months.  At $20,000 per year, that's a gross of $66,666.00.  Take 20% of the top for taxes and that leaves a post-tax net of $53,332.00.  So, yeah, I could have expected to have $53,000 in my pocket from June 1995 through October 1998.  And, mind you, I graduated college with ZERO debt.  No credit cards, nothing.

So, while it is true that my law degree likely over the long haul of my career will result in a higher earning potential, the sunk costs are staggering.  $53K in lost initial earnings and $84K in loan payments.  $137,000 total outlay for the privilege of calling myself a lawyer.  Staggering.

* Although I have not paid them off entirely, I was able to accurately determine how much my final bill will be.  You'll just have to trust me on the figures.  They should be fully paid off by this time next year :)

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