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Wednesday, October 8, 2008

Debt-laden student escapes job market by going to law school

The Wall Street Journal has an interesting article today about parents having to "bailout" loan-laden students having trouble finding well-paying jobs in today's abysmal economy. I found the following excerpt particularly relevant to our readership:

Some parents are taking a deep breath and upping the ante. A Pennsylvania mother says that after her 23-year-old daughter took on $20,000 in loans to help finance a $160,000 undergraduate degree, the best job she could get last year paid less than $40,000, failing to cover rent, expenses and loan payments. In hopes of helping her gain entry to a higher-paying career, her parents picked up her loan payments, paid off $2,000 in credit-card debt and persuaded her to move back home, where she's preparing to apply for law school. The mother asked that her name not be used to avoid embarrassing her daughter.

As many of you know and have pointed out on this blog, competition for legal jobs is fierce, with many younger lawyers having trouble finding the kind of jobs that pay enough to allow them to service their ever increasing student debt loads. Hopefully it will work out for this young woman, but it's not always the best plan to treat the law as a safe haven in an economic storm.


Anonymous said...

This is going to be a huge issue, because all those people at Lehman and other I-Banks who are out of work are going to be applying to B-Schools and law schools, and I suspect the job market will not be better in 2-3 years.

Traditionally attorney salaries at big firms in Minneapolis had a trickle down effect. Investment banks raised salaries and took Ivy League graduates, then Wall Street law firms raised salaries, then Chicago and SF firms raised salaries, then cities like Minneapolis. The one exception to this traditional structure was when the dot-com boom put those employers at the top of the heap. That lead to a big jump in salaries in 1999, perhaps the biggest. Big firms in the Twin Cities all moved from around $70k per year to $90k per year for first-years.

The problem here (which is well-known) is that there are too many law schools and so they flood the market with graduates which depress salaries for the vast majority of lawyers. Of course, arguably they also reduce the cost of legal services to the public. At least that's the rationalization the law schools use.

From a public policy perspective, I don't understand why there are not 50% less law schools and 50% more medical and nursing schools. Well, I do actually understand - law schools are cash cows whereas medical schools lose money.

It is too bad that our public leaders do not recognize this. Expanding education for Americans to go into healthcare is a great thing given the demographics of our country and the fact that nearly all healthcare jobs cannot be outsourced offshore. Also increasing supply of labor will surely help control costs. Most of us know very smart upstanding people who wanted to go to medical school but didn't have the grades but then attended law school. Rarely, if ever, do you find the reverse.

Anonymous said...

Insightful Post. I always wanted to be a doctor. I went to law school because it is much easier to get into, at least in the sense that all you need is a bachelor's degree. Medical school requires a hard science background and my school did not offer any. Believe it or not.

Who Am Us Anyway? said...

"Debt-laden student escapes ..."

A great, Onion-quality headline, that.

Anonymous said...

The era of the single degree is over. A bachelor's usually isn't enough these days.

Anonymous said...

Is a bachelor's degree not enough or too much? If I had to do it all over again, I'd opt to enter a skilled trade right out of high school - my friends that did that now much MUCH more disposable income than I do.