How a Law School Grad Is Repaying $250,000 — Without the High-Paying Law Career

law school debt

Los Angeles native Andrew Post had every reason to think that law school, even the expensive private school that was his top pick, was a smart investment.

When he applied for schools in 2007, the economy was strong and law graduates were in high demand. But by the time he completed his degree in 2010, “The economy tanked and almost nobody was hiring,” he says.

“Almost none of my classmates got jobs at a law firm, compared to a ton that had from the graduating class a few years earlier.”

On top of that, Post faced over $200,000 in student debt. He put his loans in forbearance to study for the bar exam. Between forbearance and interest rates averaging around 8%, his student debts ballooned to about $250,000 at their peak.

Struggling with $250,000 in law school debt

Post figured the answer to his problem would be to get a high-powered, high-paying position at a firm — but it never materialized.

Instead, he contracted for a solo practitioner. The pay was low compared to his towering student debt and the high costs of Los Angeles living, and varied widely from month to month.

Trying to keep up with student loans on unstable income was a big challenge for Post.

“There were days I had to decide, ‘Am I going to buy gas or buy lunch today?’” Post says. Struggling to pay living expenses like rent, Post moved back in with parents to cope.

Switching careers from law to programming

About two years after graduating from law school, Post’s prospects hadn’t improved. He was no closer to the high-paying firm position he’d counted on to help pay off his law school debts.

During this time, Post tried to get a handle on his student loan situation. He ran the numbers on many possible solutions, from income-driven repayment to Public Service Loan Forgiveness, as he continued to search for a job.

But there were no clear answers. “Everything felt very hopeless financially,” he says.

A friend suggested he consider a career change — he had a bachelor’s in computer science that he could fall back on. And in Los Angeles, the tech sector was booming.

He decided to go for it, studying to refresh his programming skills so he was ready for interviews. After a couple months of searching, he got a programming day job with a stable, higher income.

Getting a money makeover

Shortly after, the Los Angeles Times featured Post in a money makeover series. Post got a free session with a certified financial planner as a result.

Together, they sat down and “talked over everything, all of my financial information, and came up with an actual budget and a plan,” Post says.

Under his new budget, Post lived off about 40 percent of his total $90,000 annual earnings from his day job and some legal side work. The rest went to savings or paying down debt.

To help him stick to a budget, he kept two separate accounts for his monthly expenses: One for fixed costs like rent and insurance and another for his discretionary spending.

“I decided to live very frugally and get as high a paying job as I could to pay down my debts,” he says.

Learning to live on less

Growing up in a well-off family, some of the adjustments were tough. “There’s a lot of learning that you have to do” to live off less, Post says.

For example, when he started cooking at home more instead of eating out, he realized “you have to know a lot of recipes, judge when food is fresh, shop differently.”

But Post followed through. He skipped outings with friends. He commuted two hours a day to keep his $600-a-month rent, a steal for the Los Angeles area.

The sacrifices were worth it. Post put enough toward his law school debt that by the time he’d been out of school for around four years, he’d gotten his debt down to just under $180,000.

The financial planner also helped Post prioritize his overwhelming student debt with other financial goals. He started saving for retirement through his work benefits, contributing up to the full 401k match.

He also set aside a few hundred dollars each month into an emergency fund, with the goal to save three months’ worth of expenses.

Refinancing law school debts saved $10,000 a year

Once Post finally had his finances and student debt under control, he started getting concerned about his interest. Most of his law school debt was Grad PLUS loans, with interest rates ranging from 7.7% to 8.2%.

“Over $1,000 of my monthly payments went straight to interest,” Post had calculated. “It added up to around $15,000 a year.”

Post looked into refinancing options. He found a private lender willing to offer him 2.75% interest rates, a third of what he was paying on his PLUS loans.

In all, the switch saves him about $10,000 a year in interest, extra money he’s using to pay the principal down even faster.

The refinancing loan also offered unique terms: Monthly payments would be amortized over a 30-year period. The loan only lasts ten years, however, with any remaining balance due in full when it ends.

Post kept paying extra toward his student debt, averaging around $2,500 a month. So far, Post is on track to pay it off in about 8.5 years.

If needed, however, he can make the minimum monthly payment of around $600 a month.

Facing unemployment, panic-free

It turns out Post has needed to fall back on the lower monthly payments. At the time we spoke to him, Post had just been laid off a week earlier and is currently unemployed.

While it’s not ideal, Post isn’t panicking. With the emergency fund he’s saved and the option to scale back his student loan payments, his finances are still under control.

“At first I was nervous about dipping into several years of savings,” Post says. But mostly he’s grateful that he’s still financially secure and can wait for the right offer.

“I realized that by being careful with my budget, I invested in making sure my next job is something that I’m happy doing.” Post is still benefitting from his career switch, he adds, and is confident that he’ll have plenty of new opportunities open to him.

This hard-won freedom is what Post says he is most proud of.

“I created a lifestyle where I don’t have to work to death to have enough money to both live like I’m not in debt — and to pay off debt,” he says.

“I could have stopped learning to live on a budget and just worked 50 to 60 hours a week. But now I get to work a normal work week and have time to see parents, spend time with friends.”

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