I know how concern about student debt affects life decisions. It had determined my law school choice and how I lived, which was frugally, trying to avoid any further loans. Even so, the issue of student debt was thrust at me earlier than I had expected. During my second law school year, I got a draft notice. I was able to push back the induction date until I had completed the school year. In that era of the Vietnam War, I had many concerns about going into the military. Among the minor ones was loan repayments.
The undergraduate payments would be deferred if I remained in law school, and the school told me that it would also wait to get its money back until after the army, willing to be stiffed if I became a stiff in a rice paddy. The law school, however, was not so kind and told me that once I left their institution, no matter what the reason, I would have to start paying back my debt. I was both pissed and amused. My memory is that I was to get paid $110 a month as a private, but $40 a month would have to go to the law school. As it turned out, I did not have to find out how I might fare on $70 a month. As I have related elsewhere on the blog, I eventually got a medical deferment and was not inducted. (See post of March 15, 2017, “Big Government Makes Killers” Search Results for “”Big Government”” – AJ’s Dad (ajsdad.blog))
When I finished law school, though, I went into low-paying positions—first a civil liberties fellowship and then into the public defender’s office. Nevertheless, I had to start repaying the student loans. I owed $80 a month, which might not sound like much, but it was almost 20% of my monthly take-home during the fellowship and remained a heavy burden when I joined the Legal Aid Society.
Sometimes the spouse and I discuss when it was that we first felt financially secure, and we both agree it was not until we had enough money to know we could make it to end of the month and pay the rent. We scrimped. One time, invited by some friends for dinner, we debated whether the free dinner was worth the four subway fares it would take to get there and back. Eventually, we attained what we considered financial independence, the result of a pay raise and the end of one of my loans. The college debt was less than the law school one, so we paid it off sooner. The removal of $40 from the recurring debit side of the ledger was a big event and a reason we did not have to worry about money every single moment. A few years later, the law school obligation was retired, and the disappearance of those monthly $40 payments almost made us feel we were middle class.
When I no longer had student debt, I gave the topic little thought for a long time, even when I went into law school teaching. But as my academic career continued, I began to consider the financing of higher education more. The law school in which I taught was a private, tuition-dependent institution. As the costs of the school soared, I realized that most of the students could afford it only if they took out loans. I started asking students about their debt. The figures were astounding. Fifteen years ago, it went from $90,000 to over $200,000.
I realized that I had little idea about their ability to service such loans because I knew little about the career paths of our typical graduates. Like many academics, I might hear about the outstanding successes but knew little about the average graduate.
There was little data about our grads, but there were good studies of the legal profession as a whole. The initial salaries of law school graduates did not fall into a single bell-shaped curve as it did in other professions. Instead, starting pay was grouped into two bell-shaped curves that were far apart. The modal point for one group was $160,000 and the rest of the beginning attorneys were grouped around $60,000. The high-earning graduates were corporate attorneys going into large law firms; everyone else fell into the lower bracket. The corporate jobs were overwhelmingly staffed from the elite law schools, and my school certainly did not fall into that category. Nineteen out of twenty of our grads were headed to that lower range. Of course, they could expect a higher income as they became more experienced, but the sociologists of the profession also showed that few of those in the lower bell curve would ever jump into that higher group. Starting with lower pay, our grads would forever have incomes less than those other attorneys.
I was in the teaching business for those who would not get the high-paying jobs. The corporate law firms were not going to have problems hiring smart, well-trained lawyers, but I was especially interested in a better criminal justice system, and I wanted a hand in preparing competent prosecutors and defenders where starting jobs were at best at the $60,000 point. So I compared the starting criminal justice salaries with what I earned in my first positions some thirty years before. To my surprise the money I was paid was, in inflation-adjusted dollars, more than the comparable attorneys were earning today. Starting salaries in many of the “do-good” and government legal jobs in constant dollars have been dropping. I had not found it easy to pay off my relatively modest debt. How were these graduates going to pay off so much more with less pay?
I did not have the answer, but I did have some idea as to why present student debt was so large. The costs of higher education have increased at a much greater rate than inflation. For example, in the year I graduated from college, in-state tuition at my home state’s flagship university was around $350. My first two summers after high school I worked at minimum-wage jobs that paid me $50 a week. Living at home, I could have saved enough for the tuition, and working ten hours a week during the school year could have paid for the rest of college expenses. In today’s dollars, that $350 tuition would now be about $3,000, and a minimum-wage summer job could still cover tuition. However, today the in-state tuition at the University of Wisconsin is actually about $11,000, much higher than inflation would indicate. A summer job for ten weeks at even $15 an hour will cover only about half the tuition. And the out-of-state tuition, which more closely mirrors some private schools, was about $9,000 back in my day. Now that tuition is about $39,000, and no normal student jobs are going to pay that. Thus, increased student debt.
There are now important debates about whether student debt should be forgiven. But along with those considerations, there should also be an examination of why the cost of college and graduate school has soared well beyond inflationary increases. Even if all the present student debt magically disappeared, as long as students have to pay the over-inflated costs of university systems, the student debt problem will remain.