Calculating the Annual Salary You Need to Pay Your Law School Debt - SBM Blog

Calculating the Annual Salary You Need to Pay Your Law School Debt - SBM Blog



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09/01/2011

Calculating the Annual Salary You Need to Pay Your Law School Debt



Let's assume a newly minted graduate wishes to pay that $120,000 off in the standard 10 year term, and let's assume a consolidated loan rate of 7.25 percent (combining Stafford and GradPlus loans). The loan payment due each month will be $1,408. The student loan site I used to make this calculation, FinAid, advises: "It is estimated that you will need an annual salary of at least $169,057.20 to be able to afford to repay this loan....If you use 15% of your gross monthly income to repay the loan, you will need an annual salary of only $112,704.80, but you may experience some financial difficulty. This corresponds to a debt-to-income ratio of 1.1."



Here's the USN&WR listing of average law school debt for 2010 grads. (Of Michigan law schools, only Wayne State comes in at under $100K.) Tamanaha recommends taking a look at the list and contemplating "how many law graduates can expect to earn enough to pay off their debt within 10 years, or even 30 years. Keep in mind that, according to NALP, only 64 percent of the class of 2010 secured full time lawyer jobs, with a median salary of $63,000."



Posted by SBM Blog at 01:33 AM in Economics of Legal Practice |"