A new student debt study conducted by the American Bar Association Young Lawyers Division offers new insights regarding young lawyers’ experiences with the COVID-19 student loan repayment pause, their plans in the event of loan forgiveness, their satisfaction with loan servicers and their mindsets regarding work-life balance.
ABA student debt surveys in 2020 and 2021 showed that those with the highest debt balances more often reported delaying or forgoing significant life events (e.g., marriage, homebuying and having children).
The 2021 report also showed that lawyers of color are disproportionately likely to have borrowed for their education, carried high debt balances and saw their debt balances grow after graduation.
The 2024 survey results illustrated notable differences in borrowing and debt effects by respondent characteristics, including first-generation college status.
Bill Bay, president of the ABA, said the survey results show that education debt is a major deterrent to young attorneys’ progression toward career, financial and personal life goals.
Yet despite the burdens that accompany education debt, most respondents (74%) would still get a J.D. if they could go back and do it all over again.
Conducted over four weeks in April and May 2024, more than 700 young lawyers nationwide completed the survey and more than 800 provided partial responses. The data was analyzed by AccessLex Institute.
Just over a quarter (27%) of respondents said they have a current student loan balance that is higher now than when they graduated. Of those, 71% indicated their balance has grown because they are on an income-driven repayment plan and their monthly payments do not cover the principal.
While 70% of respondents who borrowed reported they were aware of their student balance each year they were enrolled in law school, only 42% said they were aware of the impact of compound interest and other fees associated with deferring loan payments. Awareness was even lower for first-generation and racially underrepresented respondents.
Most young lawyers (75%) who borrowed reported their debt altered the career plans they had when they entered law school, and 76% reported their debt caused them to delay or forgo life plans, such as marriage and children. Over half indicated their debt has prevented them from reaching savings, investment and retirement goals.
Carrying student loan debt also caused stress and anxiety for most young lawyers who borrowed (68%), and 67% of all respondents, including those without debt, reported feeling stressed about their finances.
Among respondents who borrowed, 86% reported benefiting from the COVID-19 student loan repayment pause. Of those, 76% indicated the money that would have gone to their monthly payment was instead used for essential expenses, and 54% used the money to pay down other debts.
In the event of total loan forgiveness, half of borrowers said they would use the money gained to grow their savings, and 44% said they would contribute it to retirement accounts.
More than half of respondents (54%) reported spending less time vacationing, socializing with family and friends or engaging in exercise or self-care because doing so would jeopardize their prospects for a promotion or salary increase.
“The results also give us a roadmap to potential solutions that could serve to relieve financial stress for young lawyers as well as for the millions of Americans shouldering the weight of education debt,” Bay said.
The report made the following recommendations:
Augment student loan counseling and related financial education programming within law school.
Continue educating prelaw students on the legal job market, salary expectations and the financial realities of student loan repayment.
Strengthen the Public Service Loan Forgiveness program to ensure public servants receive the forgiveness they earned in an efficient and timely manner.
Ensure that income-driven repayment plans remain available for borrowers to affordably repay their student loans.
Ease the ability to discharge student loans in bankruptcy.
Support law students and alumni in developing and prioritizing wellness.
