A Resolution for Student Debt?

student-debt.jpgDebt. It is a word that strikes fear into every law students heart, and is an ever growing issue for post-graduates. Recently, the Young Lawyer’s Division’s 111A Report reported that educational debt, which is almost exclusively incurred by young college and graduate students, has exceeded credit card debt in the United States. This is mainly because college and graduate school tuition has risen at a continuous rate throughout the past 30 years in the US.
In response to this growing issue, the American Bar Association’s Young Lawyer Division proposed two Resolutions; one, Resolution 111A is aimed at providing financial assistance for those students in extreme debt, while the other, Resolution 111B, is geared towards getting Law Schools to provide more transparent reports on job prospects and median salary figures.
As proposed, Resolution 111A seeks to extend federal student loan repayment terms and programs to those students burdened with excessive financial debt due to education. It also calls for programs that give income-based repayment options and loan forgiveness programs. Finally, it calls for a decrease or complete elimination of income levels associated with the federal income tax deduction for interest paid on student loans.
Another factor in student’s debt is their initial misconception of job prospects and beginning income upon graduation; this information is key to making the decision to initially delve into debt, as a high perceived return will encourage students to paying more initially, as they figure it can be made back relatively quickly. Unfortunately, figures published by law schools pertaining to this matter are frequently misleading. In fact, according to a National Association for Law Placement (NALP) report, 8.7 percent of the class of 2009 was unemployed (based on the 36,046 employed graduates out of 40,833 for whom employment status was known). Resolution 111B seeks to address this disconnection between perception and reality by requiring law schools to explain their numbers more clearly by stating how many of these jobs are permanent and how many are temporary (less than 1 year). In addition, the resolution calls for law schools to communicate the cost of living post graduation and while attending law school.
While both of these resolutions have been passed, debt is still a serious issue facing law students. One of the biggest costs a new lawyer faces upon beginning his or her practice is the cost of real estate. In 2010, Elaine Russell, a lawyer operating in the Buckhead section of Atlanta, created LawSpaceMatch.com to help address this issue. This free service allows firms with open office space to quickly and easily post their openings and get into contact with solo practitioners who are in need of this space. This subleasing opportunity allows newly minted lawyers to cut down on a large cost, easing their already-prominent burden of debt.
Reference Article: ABA Adresses Law Graduate’s Job, Debt Woes
See Also: Job Outsourcing: What Does it Mean for the Legal Profession?, Lawyers Sharing Space: Benefits and Responsibilities,