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Does Fed. Loan Forgiveness Make 'Too Much Debt' a Non-Issue?

By William Peacock, Esq. on June 23, 2014 | Last updated on March 21, 2019

Here's a stupid question: does it matter anymore how much you borrow for school?

Think about it for a second: what are your possible outcomes? You could end up in BigLaw, which means you'll have enough money to pay off your debt. Or, you could end up in public interest law, which means the government will have enough to pay off your debt after ten years.

The only scenario in which you even need to worry about that student loan balance is if you graduate and work in the small law private sector or hang a shingle.

Going solo out of school? Spend more time developing practice skills and leave the marketing work for the experts.

BigLaw Outlook

The most recent job reports from the National Association for Law Placement, while not showing significant improvement on paper, did have some positive signs if you looked hard enough. One interesting statistic was that there were more BigLaw jobs for the Class of 2013 than for the preceding few post-recession years.

Extrapolate those gains over the next few years, and factor in the ever-declining law school graduating class sizes, and you have more BigMoney, BigLaw jobs for fewer people.

Public Interest

We've talked a bit about it before, but the Pay As You Earn program is a godsend for a graduate with a moderate income, working in public interest, who is heavily indebted to the federal government. (PAYE doesn't work for private loans.)

With PAYE, you work for ten years, make income-based payments, and then leave the rest of the tab to the taxpayers.

The Questions

So, especially if you already plan on public interest work after graduating (perhaps being a public defender is your calling), does that mean your loan balance is irrelevant? Should you go to the best school that accepts you, even if the sticker price places your education in the $200,000 range?

What if you want to be a PD or a DA but can't find work thanks to government budget cuts, then what?

And do income-based repayment programs, that are heavy on forgiveness, give schools a license to exponentially inflate tuition, as they have over the last couple of decades?

Stay tuned dear readers, for more answers, and more questions.

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