In 2010 Kate Kingsley was fresh out of law school with a job as an attorney at a small law firm and six-figure student loan debt. Even with her large debt, she was making things work and became pregnant with her first child. And then she was laid off.
Recently pregnant, broke, unable to find a job, and desperate, she looked for anything that would give her guidance. She listened to “The Dave Ramsey Show” personal finance radio program and loved hearing the signature “debt-free screams.” She would dream about her life without debt — but she never tried to pay it off herself.
“Quite frankly, I just didn’t think it was possible,” she says. “Sure, I paid off debts here and there, but with absolutely no ‘gazelle intensity,’[as Dave Ramsey calls it], no determination, no drive. And no belief that I could ever free myself from $100,000+ of student loans.”
Student loans are holding lawyers back
Kingsley isn’t alone. The average law degree debt at a private university, tracked by the National Center for Education Statistics, has skyrocketed 77% in the last 20 years, from $82,000 in 1999 to currently $145,000.
And while new graduates begin law school with dreams of making six-figure salaries straight out of the gate, starting salaries in the private sector are realistically just $72,000, according to a U.S. News & World Report survey.
With their debt often double their annual salary, many lawyers are struggling to pay back student loans. They’re forced to stay at high-paying jobs even if they’re miserable and turn down jobs they’d like because they need more money.
“When I graduated from law school, I had $160,000 in student loans between law school and undergrad,” says Luis Scott, Jr., Managing Attorney at The Bader Scott Law Firm.
Scott made the minimum payment of $1,500 every month for nine years while he worked to make partner at his firm. Even with payments that high, his balance didn’t go down; it ballooned to almost $200,000 with interest.
He’s now working to pay down the balance, but he doesn’t like to think of everything he could’ve been doing with that money. “The amount I paid is equivalent to buying a used Toyota Camry every single year for nine years, which is incredibly disappointing.”
Between job changes and opening his own firm, Brady McAninch has made little progress on his debt since graduating law school in 2011.
“It is frustrating that I have been unable to make more of a dent into the amounts owed to date,” McAninch says. “I deserve some of the blame for this, without a doubt, but the debt, totaling right under $200,000, is daunting. The debt has prevented me from purchasing a home, as I fear getting into a mortgage until my debt is significantly lower.”
Six-figure debt doesn’t just hold lawyers back financially; it keeps them from living the life they want and is a mental and emotional burden. Immigration and trademarks attorney Priscilla Deniz made it out of law school with only $68,000 in student loan debt, but within a few years, interest has increased it to almost $90,000.
“This debt holds me back from purchasing a home and putting roots down somewhere, traveling, changing careers if I wish to do so, having children, etc,” Deniz says. “While the black cloud looms over, it is very hard to focus and accomplish other things in life.”
There is hope for struggling lawyers
Eventually, Kingsley found a better paying job as a litigator. She and her husband had no trouble affording their bills and lifestyle, so they felt no urgency to pay off debt. But when her husband, also an attorney, was laid off from his job several years later, they finally got serious about paying off their debt.
Three years later, the couple paid off her $105,000 student loan debt.
“When I paid off all my debt last November, I hung a sign on my law degree in my office that read, ‘Paid in Full!!!’ The sign started many conversations with colleagues who were amazed that I’d been able to dig myself out of debt and who felt that they would never be able to achieve debt freedom,” she says.
But you can dig yourself out of six-figure law school debt.
One thing that helped Kingsley pay off her debt was working overtime. “During my debt-free journey, I regularly worked overtime, billing more and more hours to earn additional income to put towards the debt,” she said. “I often set billable hour goals to reach each month, and anything above and beyond my standard pay went straight to debt.”
She also makes a zero-based budget every month and tracked “no-spend” days. She aims to not spend any money on non-essentials for 15 days a month. That means by the end of the year, she accumulates six months of no spending.
In addition to practicing law, Kingsley now helps others on the path to debt freedom through her blog, Living That Debt Free Life.
“Now that I’ve paid off the debt, I feel invincible! I feel like I can accomplish anything. I spent so many years believing the debt would never be paid off. And when you achieve something you think is impossible, you feel like there’s nothing you can’t accomplish.”