Student Debt Impacts Well-Being And Life Decisions Of Young Lawyers

ABA & AccessLex, Student Debt, COVID-19 Relief, and Loan Forgiveness: Perspectives from Today’s Young Lawyers — Selected Findings from the 2024 American Bar Association Young Lawyers Division Student Loan Survey:

Executive Summary
Over the last few years, the American Bar Association Young Lawyers Division (ABA YLD) has used data from its members to sound the alarm on student loan debt trends and the impact of student loan debt on early career attorneys who are under the age of 36 or were first admitted to practice within the last 10 years. The 2020 and 2021 Student Debt Surveys elucidated the ways in which education debt tangibly burdens relatively new J.D. recipients —most of whom are in the process of building their careers and lives. Both surveys’ results indicated that those with the highest debt balances are more often to report delaying or forgoing significant life events (e.g., marriage, homebuying, and having children). Further, the 2021 Report demonstrated that the impacts of debt are not felt equally among all young lawyers; lawyers of color are disproportionately likely to have borrowed for their education, carry high debt balances, and see their debt balances grow after graduation.

The 2024 survey results reaffirm the above findings while offering 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. The survey results also illustrate notable differences in borrowing and debt effects by respondent characteristics, including first-generation college status. In summary, the findings indicate:

• Just over a quarter (27%) of respondents have a current student loan balance that is higher now than when they graduated. Of those, 71% indicate their balance has grown because they are in an income-driven repayment plan and their monthly payments do not cover the principal.
• While 70% of respondents who borrowed report they were aware of their student balance each year they were enrolled in law school, only 42% report having an awareness 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 at 33% each compared to 45% of continuing generation respondents and 44% of racially represented respondents.
• At the time they enrolled in law school, many young lawyers did not anticipate how student loans would affect them after graduation. Of those who borrowed, only 25% agreed they clearly understood how their student loans would impact their careers, and only 28% clearly understood how their student loans would impact their personal lives.
• Most young lawyers (75%) who borrowed report their debt altered the career plans they had when they entered law school, and 76% report their debt caused them to delay or forgo life plans, such as marriage and children. Over half indicate their debt has prevented them from reaching savings, investment, and retirement goals.
• Carrying student loan debt also causes stress and anxiety for most young lawyers who borrowed (68%), and 67% of all respondents, including those without debt, report feeling stressed about their finances. However, respondents with higher amounts of debt are more likely to report financial stress compared to those with little to no debt.
• Although 60% of respondents are satisfied with the ease of making mandatory monthly payments to loan servicers, many report dissatisfaction with call hold/wait times and the ease of applying for the Public Service Loan Forgiveness program with their servicers.
• Among respondents who borrowed, 86% report 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 would use the money gained to grow their savings, and 44% would contribute it to retirement accounts.
• Many respondents (54%) report 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.
• 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.

These results serve a dual purpose of both highlighting the challenges of student loan debt for young attorneys and pointing the way to potential interventions and policy solutions that could serve to relieve financial stress not only for young lawyers but also for the millions of Americans shouldering the weight of education debt. The full report provides a robust overview of the findings summarized above and offers recommendations for how we can better support early career professionals who uphold the rule of law in our society.

• ABA Journal, Stressed and Depressed, Only 34% of Young Lawyers With Highest Student Debt Say JD Was Worth Cost, New ABA Survey Says
• AccessLex Press Release, New Study Reveals Effects of Law Student Debt, Offers Recommendations
• Diverse: Issues In Higher Education, Survey Shows Impacts of Law Student Debt
• Reuters, Financial Stress and Anxiety Plagues Two-Thirds of Young Lawyers, ABA Survey Finds