Harvard Law School has the lowest debt-to-earnings ratio of all U.S. law schools, according to a new study by The HEA Group and Student Defense.
Four years after graduation, Harvard Law graduates had a median annual salary of $233,589 and a median debt of $93,235, for a debt-to-income ratio of 39.9%.
The HEA Group is a consulting agency that focuses on higher education. It pulled data from U.S. Department of Education records to assess which graduates are most able to pay down federal student loans.
The study looked at 2014 and 2015 graduates from 187 law schools. It included some schools that have since closed, such as Whittier Law School, which had a 285.6% debt-to-income ratio. The study also included some schools not accredited by the American Bar Association.
After Harvard, the nextbest-performing law school was Antonin Scalia Law School at George Mason University in Arlington, Virginia. Four years after graduation, the median salary of its graduates was $109,265. That’s far below Harvard, but George Mason grads’ median debt four years after graduation was only $65,077, leaving them with a debt-to- earnings ratio of 59.6%.
Graduates of Columbia University in New York have the highest median salary at $280,926. But their median debt was $198,924, resulting in a 70.8% debt-to-earnings ratio.
Thomas Jefferson School of Law in San Diego registered the highest median debt at $229,699. Graduates of that school, which is no longer accredited by the ABA, had a median income of $80,754 for a ratio of 284.4%.
University of Nebraska College of Law had the lowest median debt at $54,456. Its median salary was $73,448 for a 74.1% ratio.
Derek Brainard, director of financial education at AccessLex Center for Education and Financial Capability, explained some of the financial challenges law students face. He noted that more than 33% of them grapple with debts of more than $130,000.
“The sheer weight of this growing obligation can seem abstract for some and overwhelming for many others,” Brainard said, adding that inflation further exacerbates the challenge, affecting living costs and borrowing decisions.
This level of debt, while considerable, is seen by some experts as manageable when compared to the graduates’ potential earnings. A general rule of thumb is that total student loans should not exceed the graduate’s expected starting salary. But fewer than 30% of law schools meet this rule.
Harvard Law School reports the lowest debt among the nation’s most elite law schools. This could be attributed to the fact that a large proportion of Harvard students — approximately 57% according to the Law School Admission Council — pay full tuition. This is the highest percentage among Ivy League law schools.
When it comes to choosing a law school, experts warn that graduate salary figures alone might be misleading.
“For example, a $100,000 salary in Indianapolis, a city with a lower cost of living, might afford a more comfortable lifestyle than a $200,000 salary in New York City,” said Nikia Gray, executive director of the National Association for Law Placement (NALP).
Cost of living data shows that a $100,000 salary in Indianapolis would equate to a $267,429 salary in New York City.
Law schools with the highest graduate salaries tend to have the largest percentage of graduates working at big law firms, which pay the most. Law schools with a large percentage of graduates working in public interest or government report lower average salaries.
Gray recommends studying each potential school’s graduate employment profile. This includes understanding the proportion of graduates who enter various sectors, such as private practice, government, public interest and business. A school with a high percentage of graduates working in public interest law, for example, may have lower graduate salary figures but could provide a richer experience for students interested in such work.
She also advises students to consider how well their career goals align with a school’s profile. For example, a student passionate about environmental law might find the most rewarding opportunities at a school that is known for its strong environmental law program, even if that school doesn’t have the highest graduate salary statistics.
Gray said it is important to understand total debt versus the expected salary in one’s chosen specialty. Resources such as NALP’s annual salary studies or ABA data can provide insights into expected salaries based on region, job type and law firm size, resulting in better informed decision-making.
Gray said high levels of debt may be more manageable for students planning to work in big law firms, but be careful.
Students often change their career paths while in law school, and high debt could limit your options.
According to results of the 2021 American Bar Association Young Lawyers Division Student Loan Survey, one in three respondents with student loan debt — compared with one in five without student loan debt — took a job less focused on public service than they had planned to prior to law school.
Brainard said students should try to mitigate debt by seeking scholarships.
“Setting yourself up for the best possible merit scholarship offer upon admission to a law school by maximizing your undergrad GPA and LSAT/GRE scores is an important priority,” he said. “Make sure to meet institutional deadlines for scholarship consideration at the very least, but apply as early as possible.”
If you do have to borrow money, Brainard recommends federal loans over private loans. Federal direct student loans come with several repayment and forgiveness programs, such as the Public Service Loan Forgiveness Program, which can be crucial for graduates pursuing careers in public service or in nonprofit sectors.
Moreover, he advised that students explore Loan Repayment Assistance Programs (LRAPs) offered by law schools. These programs can help alleviate the burden of student loans. While they vary in terms of eligibility and benefits, most provide payments to graduates so long as they work in public interest.
Brainard said it is important to look at return on investment when making financial decisions about education and future careers. He recommends using student loan calculators and researching existing salary data to estimate projected borrowing versus potential starting salaries.
The U.S. Department of Education has also set new requirements for all graduate schools to disclose more financial information. This is meant to help benefit potential students by giving them access to data on costs, borrowing and earning potential.
Law schools must start reporting figures including average amount borrowed, total cost of attendance, and average earnings for graduates. This information will be found in a single location online facilitated by the Department of Education.
Programs offered by law schools that report high debt levels and lower graduate earnings over a two-year period will be required to disclose this to students so that the risk is clearly understood. The Department of Education will begin data collection in July 2024. Schools and programs with numbers that fall within the disclosure threshold will need to start disclosing to students in 2026.
Previous debt-to-income ratios show that the schools with the highest ratios include Cooley Law School, Atlanta’s John Marshall Law School and Appalachian School of Law.
AccessLex Institute provides several resources to assist with financial planning, including Ask Edna! and MAX Pre-Law. They offer aspiring law students a variety of checklists, guides, online lessons, webinars and one-on-one financial coaching with accredited financial counselors.
These resources are designed to help students make informed decisions about choosing the best law schools for them, applying and financing their legal educations.
Prospective law students should be proactive in seeking resources and advice. As Brainard puts it: “When in doubt, reach out.” Consulting with pre-law advisers and financial experts can help future law students navigate the complex financial choices of law school education.
Check out the digital edition of this article showing the chart with law schools, salary, debt and debt-to-income ratio.
