While attorneys working in
public interest jobs nearly always earn less than those working in the
private sector, public interest attorneys are much more likely to be
satisfied with their work. With some careful planning, attorneys
can live well on a public interest
salary.
Sections:
Can I Afford to Practice Public Interest Law? The Problem The Solution Jump to page: 42 43 44 Back to Table of Contents |
Can I Afford to Practice Public Interest Law? While many people survive quite well on public interest salaries, it is a personal matter for each one to decide whether it is worth it and how to make it work. For more about making the personal decision about whether it is worth it for you, see Question 9 in “Myths (and Facts)” part of Section 1 of this handbook. The following section is a very practical consideration of the economic realities of public interest law and of ways to afford a public interest career. In addition to the suggestions listed below, keep in mind that the cost of living varies by geographic location: the same salary that would leave you homeless in one city might allow you a very comfortable life in another. Online cost-of-living calculators can be a useful preliminary tool for assessing geographic areas. The rest of this section was adapted from “Can You Afford a Career in Public Interest Law? Financial Realities and Success Strategies,” a presentation given by Jeffrey E. Hanson, Ph.D (Director of Borrower Education Services for Access Group, Inc.) at the Equal Justice Works Conference in October 2005 in Washington, D.C. The investment you are making in your education is an important and valuable personal investment of both time and money. You will use many of your own financial resources, and those of others, to pay for your legal education. You may use savings and other assets, gifts from family and others, in-school earnings, and more. However, you will likely pay for most of your legal education by taking out student loans. When you take out a student loan, the financial resource you are spending is your own future income! Because your legal education will increase your earning potential, it is a good use of your future income. But because you do not yet know what your future income will be, it is very difficult to decide how much you can afford to borrow. The answer to this difficult question is budget planning. Budget planning The purpose of budget planning is to figure out how far your future income will go. It helps you to determine how much you can borrow in student loans. To do budget planning, you must estimate your post-school budget. Some things to estimate include how much student loan debt you will have to repay, how much you will earn once you graduate, how much money you will need to cover your living expenses, and how much you will need for the future (e.g. retirement). 41
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| The
Problem How much will you borrow? Students at public law schools in 2004 borrowed an average of $48,910. Students at private law schools borrowed, on average, $76,563. Because the tuition is low at BYU, it is possible that your own amount of debt will be much lower. But tuition is only part of your in-school expenditures. Many BYU law students have spouses, families, or other financial responsibilities that may increase their debt even above the national average. Also, many students have taken out loans during their undergraduate studies that increase the total amount of their debt. The estimates below are meant to be illustrative; use them as a starting point to do your own calculations based on your own financial circumstances. If you borrow $80,000 during law school, you will also owe approximately $11,900 in capitalized interest and fees, which results in an estimated total debt at repayment of $91,900. That total amount will require an estimated $1,010 per month loan payment.1 How much do public interest attorneys earn?2 Public interest median salaries All full-time public interest jobs $38,000 Legal services $37,000 Public defenders $39,750 Policy / advocacy $37,500 Government median salaries All full-time government jobs $45,000 Federal government $50,000 State government $40,000 Local government $45,000 Median salaries for other public sector jobs Federal judicial clerkships $49,850 State judicial clerkships $40,000 Local judicial clerkships $35,000 Academic positions $40,000 |
How much can you really
afford
to borrow? As discussed above, the median annual salary for a public interest lawyer is about $37,500. That annual salary would yield a gross monthly salary of $3,125, or approximately $2,083 after taxes and other payroll deductions. With an average monthly loan payment of $943, only $1,140 of that money will become your monthly disposable income (and even less if you have credit card debt). Is that enough disposable income to live on each month once you graduate? How much monthly disposable income will you need? Even if you spend only $600 a month on rent or a mortgage, $400 on food, $500 on transportation (car payment, gas, repairs, etc.), and $313 (10% of your gross) on retirement, you will be spending $1,813 a month. And that amount does not include such things as clothing, entertainment, health club memberships, and other important things. You should expect to spend even more each month if you are, or plan to be, supporting a spouse and children. Even if we do the math using that unrealistically low amount of monthly expenditures, $1,813, you will be $673 in the hole each month if your disposable monthly income is $1,140. Savings will not even be on the horizon, because you will be losing money each month. The Solution Being a wise borrower The good news is that these deficits can be avoided, through both in-school and post-school strategies. In-school strategies While still in school, you can borrow less by revising your in school budget (live more cheaply, increase resources by working during school, apply for grants and scholarships) and by using cash instead of credit cards. You can also make the effort to develop good financial habits. Work to improve your credit score both during and after law school. You can find out your credit score by getting a free copy of your credit report at www.AnnualCreditReport.com (available to each person once every twelve months). You can also get a credit report online from one of the three national credit reporting agencies (usually for a fee).3 You can maximize your credit score by (1) paying all bills on time and not procrastinating your payments; (2) keeping revolving debt as low as possible and paying off any existing credit card debt as soon as possible; (3) avoiding closing your oldest credit card account, because older accounts score more favorably; and (4) minimizing opening new revolving accounts. |
| Use your credit
cards wisely by
remembering the ABCs of credit cards: A credit card is helpful for emergencies, but those emergencies rarely happen at the mall. Buying on sale is still spending, not saving. Credit card debt is not an investment; instead it reduces your ability to invest. Do not use your credit cards for cash advances. Post-school strategies After graduating from school, you can continue to improve your financial prognosis. Your options include revising your post-school budget plan by planning to live more cheaply, considering an alternative repayment plan, and consolidating your federal student loans. You can also continue using cash instead of credit cards, revise your future lifestyle expectations, and tap into LRAPs (Loan Repayment Assistance Programs – see the information about LRAPs in the “Opportunities After Graduation” section of this handbook). It is also very important to manage your loan responsibly. Be sure to meet all of your borrower responsibilities and to understand your loan terms and conditions. Do not ignore mail from your loan holder or servicer! Promptly report any relevant changes to your holder or servicer, and request deferments or forbearance as needed. Keep accurate, well-organized records. Perhaps most important, be sure to repay all that you owe. Consider consolidating all or some of your eligible federal loans. There is no minimum amount for consolidation, no fees, and up to a 30-year repayment period. Consolidated loans also have a fixed interest rate that is the weighted average of the interest rates of the consolidated loans, rounded up to the next 1/8%.4 The interest rate of a consolidation loan cannot exceed 8.25%. Consolidation reduces your monthly loan payment (and increases your monthly cash flow), increases convenience (single-statement billing), renews your deferments or makes you eligible for new deferments, and allows you to take advantage of the fixed interest rate structure. How exactly can I live more cheaply? Both during and after law school, there are a number of things you can do to reduce your expenses and to live below your means. You can live with a roommate or roommates, you can bring your own lunch to school, and you can eat at inexpensive places when eating out. You can limit yourself to just one phone (instead of both a home phone and a cell phone) and you can buy an answering machine instead of paying each month for call waiting or other special phone services. You can find fun things to do that cost nothing, and you can even reduce the amount you spend on entertainment that costs money (for example, by going to matinees or renting videos, or by sharing videos with friends). You can spend less money on your clothes by shopping at discount stores, you can clip and use coupons, and you can use public transport or carpool instead of buying a new car. Beware of buying for convenience instead of for need, and avoid impulse buying by using the twenty-four hour rule (you cannot actually buy anything until at least twenty-four hours after you decide you want it). |
Three examples help to
demonstrate how much of a difference these
apparently small sacrifices can make. First, if you save just
$300 by having a roommate, you are saving $3,600 a year or $10,800
during law school. If you use student loan money to pay your
rent, that $10,800 in savings becomes $12,696 in savings when you
figure in interest, or $156 less that you have to pay each month for
your loan payment after law school. $156 a month is a very
substantial amount of savings on a public interest budget. Second, if you spend just an extra $3 dollars a day to eat out or buy soft drinks and snacks, you will be spending $15 a week, $780 a year, and $2,340 during law school. If that money came out of your student loans, you will owe an extra $2,751 (after including interest), or $34 a month. By disciplining yourself to reduce snacks and how often you eat out during the three years of law school, you provide yourself with an extra $34 a month for many years after law school. Third, if you use a credit card with a 15% APR and a minimum payment of 2% of the balance, and run up only $5000 in credit card debt during law school, it will take you 385 months (over 32 years) to pay off your credit card if you can only pay the minimum balance. During those years, you will have paid $7,790 in interest alone. These figures assume that you stop using credit cards entirely as soon as you have $5000 in debt; it will take even longer if you continue to use credit cards. By avoiding credit card debt, you save a lot of money that can be better spent on post-school needs. Eliminating the deficit Above, we discovered a likely $673 monthly deficit between income and expenses for the average law graduate. If you reduce your monthly loan payment by $100 by living with a roommate while in law school, another $100 by avoiding credit card debt, and $300 by consolidating your federal loans, your deficit will only be $173. If you defer buying a car, the additional approximate $300 in monthly saving will turn your remaining deficit into a $127 surplus. From there, you can do other things like reducing the amount you save for retirement and other money-saving methods to make your post-school budget even healthier. |
| How to
afford the
career you want There are two things you will need to do to be able to afford a career in public interest law: 1. Spend your future income carefully 2. Develop a strategy for success Strategies for success • Build your own budget → make it a budget you can afford • Save on spending → shop with a list and buy only what is on your list → be thrifty by looking for discounts • Borrow only the minimum needed to achieve your goals • Manage your loans responsibly • Develop and maintain good credit Can you afford a career in public interest law? Whether you will make it work depends on you. The above section was adapted from a presentation by Access Group, Inc. Access Group is a non-profit organization dedicated to providing affordable education funding to students. To learn more about Access Group, Inc., go to www.accessgroup.org or call 1-800-282-1550. |