Can today’s young lawyers and law students actually afford a law degree? With law school applicant pools growing and many firms still stuck in cutback-mode, this question has become more important and timely than ever.  In the last few years, schooling has been an attractive option to many in hopes of waiting out the recession, but the reality is that less jobs are available amidst a cloud of increased competition, tuition and short-term uncertainty.

In a recent paper by University of Louisville Law Dean Jim Chen, (A Degree of Practical Wisdom: The Ratio of Educational Debt to Income as a Basic Measurement of Law School Graduate’s Economic Viability) Chen analyzed the amount of debt that a law student can afford after graduating from law school.  As noted by Karen Sloan in her recent article for, applicants often fawn at the high-paying salaries offered by top firms without considering the long-term realities of debt.

While Chen acknowledges many factors play into the decision to attend law school, his baseline for measuring financial viability is simple. He maintains that students should be able to afford a home after graduation, while also being able to pay back their debts incurred.

As noted by Sloan, in looking at debt standards set by mortgage providers, Chen concluded that “law graduates need to earn three times their law school tuition annually” to achieve “adequate” financial viability. In other words, this is what  Chen defines as the bare minimum students need to make to justify the decision to attend law school. Moreover, this assumes students are not entering school with other outstanding debt, which Chen terms as “conservative” at best.

To put this into real terms, young graduates of the most affordable schools with tuition around $17,000 per year would need to earn more than $50,000 per year, while graduates of more expensive programs at $34,000 each year would need to earn more than $100,000 annually. The highest echelon of programs would require students to earn around $150,000 per year.

In large measure, this does not line up with what graduates are earning. Sloan notes, “According to the National Association of Law Placement, new law graduates earn, on average, $68,500. That means many would be unable to purchase a home and repay their loans, according to Chen’s analysis. Lenders generally frown on educational debt that represents more than 8 percent to 12 percent of the borrower’s monthly gross income, he wrote.”

At the same time, every student’s situation is unique, and money is certainly not the only motivator or measure of success. However, with Chen’s stature as law dean for a prominent university, his findings are clearly well-intended and hard to ignore.