One Law School Reveals The Scary Reality Of Paying Back Massive Debt

If you're applying for law school, it shouldn't come as a shock to you that you might end up poor after paying for your degree.

Tuition at private law schools has climbed to $40,000 a year (not counting living expenses), and it's getting harder and harder to find a well-paying lawyer job these days.

But one law school is taking great pains to let prospective and current students know exactly how poor they could be if they pursue their attorney dreams, the National Law Journal's Karen Sloan reports.

The University of Michigan's Law School's "Debt Wizard" program lays out 11,000 different financial scenarios you could find yourself in after law school.

Prospective or current students plug in the type of work they're going to pursue – from academia to public interest to business to private practice – and where they'll live.

Then the tool tells them exactly how much of their income will pay for loans and housing, according to Sloan.

The tool underscores the reality that students who take on a lot of debt and get relatively low-paying jobs won't have much money left over after they pay for their loans or housing, Sloan writes.

"This might be a wake up call in terms of, 'Gee, if I'm going to do this job, I might not be going out to expensive restaurants every night," the school's dean Evan Caminker told Sloan.

But law school grads who take public service or government jobs might not be able to make ends meet at all if they're trying to pay off their loans at a reasonable pace.

Legal industry group NALP found in October that salaries for those jobs had hardly grown at all since 2004. Public defenders typically start out making around $50,000 a year, while lawyers for nonprofits can make as little as $45,000.

Say, you have $150,000 in law school debt, which is feasible given tuition levels these days.

If you went to work as a nonprofit lawyer in New York City, law school loans and housing would add up to more than your income – even if you had a 25-year repayment plan for your loans, according to the "debt wizard."

If you're making a little bit more money – $80,000 – you'd still be spending about 80 percent of your New York City income on loans and housing with a 25-year repayment plan.

To be sure, there are "income-based" repayment plans that let law grads spend even more time paying off their loans. But those plans mean you'll essentially be paying off your debt forever, and the government will be subsidizing that choice.

In the meantime, you could spend a very long time trying to find a job as a lawyer, or never find one at all. A Wall Street Journal analysis from over the summer found that just 50 percent of 2011 law school grads found work as a lawyer within nine months of graduating.

In light of this grim news, the debt wizard could have the effect of deterring students from getting a JD at all. In an era where there's arguably a glut of lawyers, that might not be such a bad thing.