Careers
Lawyer with $150K in Student Loans Asks Suze Orman for Advice
Posted Sep 22, 2008, 08:56 am CST
By Debra Cassens Weiss
A lawyer saddled with $150,000 in student debt has written to financial guru Suze Orman for advice.
The anonymous writer tells of a “dire” financial situation caused by the pursuit of a law degree and a graduate degree in public policy. He or she has $150,000 in debt at 4 percent interest and only $8,000 in savings.
“Now I have to work at a corporate law firm to pay off the debt!” the writer says in a letter posted on the New York Times Freakonomics blog. “Am I doomed to a life of puritanical delayed gratification where I can’t think about buying a car or home for another 20 years? How much should I save, as opposed to using that money to pay off school debts?"
Orman responds that the 4 percent interest rate is a “pretty nice deal” and the lawyer shouldn’t rush to pay it all off, as long as the interest rate is fixed. She adds that the writer will probably be able to make a “serious dent” in the loans within about five years and will be able to pursue other financial goals at that time, whether it’s buying a home or putting money in stocks.
Orman also offers a haiku that sums up her best financial advice.
Can you afford it?
Unpaid credit card balance?
One word, friend: denied!
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Comments
Posted by CIS - 2 months, 1 week, 2 days, 3 hours, 8 minutes ago
At least it sounds like this attorney has an opportunity at a “corporate law firm.“ There are many attorneys with $100k+ in loans that will not have a chance to earn a yearly salary that is anywhere near their student loan debt…
Posted by DEM - 2 months, 1 week, 1 day, 23 hours, 53 minutes ago
What a sense of entitlement this gentleman exudes. Did it not occur to him when he was planning to attend law school to pay attention to tuition and living expenses of each school? as well as his graduate degree? Did it not occur to him to attend a lesser expensive school, to work part time during his school years, to budget and make financial plans??! I put myself through law school by choosing a B quality school (at that time, it rates significantly higher now) that was far less expensive then some of the ludicrously expensive schools I was academically eligible to attend, worked part time during the school years and summers, and paid off my loans on a gradual payment program spreading out the payments over 15 years. I looked at costs before I applied because I knew I was likely to go into some form of public service. I have had a very happy life and career, purchased and sold several houses, and never felt crushed by student loans. Of course, I maintained excellent credit, and always bought houses at about half of the amount of what mortgage lenders and realtors told me that my family and I were qualified to buy. Or perhaps such ideas are heresy to young lawyers today. I was admitted to the bar 25 years ago.
Posted by EAW - 2 months, 1 week, 22 hours, 14 minutes ago
You make it sound easy. Certainly 25 years ago law school didn’t cost what it does today (over $1000 per credit hour at the cheapest of schools). I worked full time while going to law school and tried to cover whatever I could and I still ended up with large loans between law school and undergrad despite watching expenses. I’m not lucky enough to have a low fixed rate on my loans either. I don’t have to worry about buying a house for what a mortgage lender would qualify me at, it’s very clear my budget has no extra room to buy a house or any other major purchases. Salaries for most new lawyers are down, many I know didn’t even get jobs, and debts are higher than ever. My father didn’t have the same problems when he graduated and was supporting a wife and children 30 years ago, but times have changed significantly. Comparing something you went through 25 years ago to today is just apples to oranges. Don’t act so smug when you have no real understanding of what this person is going through.
Posted by Isaac Laquedem - 2 months, 1 week, 14 hours, 32 minutes ago
To be fair to DEM, 25 years ago lawyers didn’t make what they make today, either. Put everything into relation first. I graduated from an obscure law school 20 years ago with student loans equal to about half the total tuition cost. My first job (at a small firm in a secondary or tertiary market that paid below local scale) had an annual salary equal to twice my loans, or about equal to the total tuitiion cost (excluding room, board, and books) for all of law school.
Tuition at Harvard Law School (rather more expensive than where I went to) will be $41,500 next year, so on the same scale, someone would graduate with about $63,000 in loans and hope for a job that pays about $125,000. Tuition at the place I went to will be $30,000, so on the same scale, someone would graduate with about $45,000 in debt and hope for a job that pays $90,000. It’s a lot easier for the Harvard graduate to find a $125,000 job than for the new graduates of my alma mater to find a $90,000 job,
None of this was any great secret when the attorney in question started law school, and with a master’s degree already, the attorney should have been able to predict almost to the penny how much debt s/he would have on graduation. It sounds to me as if the attorney simply decided to buy more education than s/he could afford, which isn’t any different, really, than someone who buys more house or car than s/he can afford.