Student Loan Debt: A Crisis for Law Students, Young Lawyers and Far Too Many Underserviced Communities
It is a distinct honour for me, in my capacity as Dean of Law at Thompson Rivers University (TRU Law), to provide a contribution to the Canadian Council of Law Deans series of important issues affecting legal education and the legal profession. I have chosen to select the critical challenge for today’s law students (and recent law graduates) of the ever increasing costs of legal education in Canada. I recently was talking with a law classmate of mine (UBC ’75,) who is now a distinguished justice, about tuition fees. His recollection was that we were paying approximately $450/year to pursue our law degree and I recall that student loan and grant money was readily available. As the Table that appears below indicates, annual JD tuition in 2015-16 ranged from a ‘bargain price’ of $2,293.50 for Quebec residents attending McGill to a high of $31,740.00 at University of Toronto. Only the Universities of Victoria and Manitoba are under $10,000/year. Our alma mater of UBC is now charging approximately 25 times what we paid – although granted it was 41 years ago – and it is even still the 4th cheapest common law option in Canada!
We all know, that tuition fees are only one part of the cost of going to university. It must be remembered that students still have to buy books whose costs have skyrocketed (although more and more of us seek to avoid that through heavily using course websites and free online resources as much as possible). The expense of on campus housing, if you can find it, has also kept rising noticeably. JD students, invariably with at least a bachelor’s degree in some field, if not more, and often with several years of work experience, are not eager to move into a dorm room and share a bathroom down the hall so they want off-campus housing. Finding a decent apartment at a rent that won’t immediately put you further into debt in many of our cities can be a huge challenge. One of our 2014 grads recently told me that she left a largish firm in Vancouver to move to a smaller Interior BC city as she was paying $1400/month for 1 room and could not see how she could meet her loan obligations. Let’s not forget the need for transportation to get to work or food to eat. One of our 2016 grads told me last March that he was so desperate that he was surviving on Kraft Dinner [and he actually can cook!] as his credit cards were maxed out as well as his personal line of credit. Students also do need a break from study and some social bonding time with movies, a meal with friends, etc and this all costs money too, not to mention buying clothes.
How has Student Loan Debt Changed from the Good Old Days?
One of the biggest changes I encounter among law students today is not just the overall quantum of debt, with many law students beginning their JD already owing $20,000 or more in Canada-provincial student loans before they start borrowing more, but the range of creditors. For example, a student going to university in BC without dependent children can only receive a maximum of $320/week [with dependent children it is up to $510/week], which equates to $10,880.00 per year. While this can barely cover tuition at 3 of the 18 law schools offering common law, what about all the rest? While this loan is interest free while still in school, it is subject to what is now a very high 7% interest rate after graduation. The difficulty in meeting all expenses in BC is even harder as the provincial government appears to be the only one that doesn’t offer a grant as part of the loan package. The quantum of government loans available is so inadequate for law students that large numbers must draw on personal lines of credit and – horror of horrors – credit cards to survive.
In her paper, “Mephistopheles’ Bargain: A look at the real cost of increasing law school tuition”, Stephanie Head (TRU JD 2016) concluded that a law graduate from University of Toronto would face a law debt around $120,000.00. She further theorized that such a law graduate would have to make $162,000.00 a year in order to pay back the loan within a 10-year term at 7% interest. Based on a first year associate’s median salary of $66,000.00 a year, she concluded that paying the loan back even within 20 years is “next to impossible” and “most new lawyers now exist at a lower standard of living than they were when they were students.”
The 2016 Ontario budget has compounded the problem by eliminating the tuition tax credit that helped all young lawyers to some degree to enable repaying loan debt more quickly, although the old regime did advantage those with low or no debt.
What’s the impact of Rising Costs of Legal Education?
The CBABC presented a Report to Premier Christy Clark and 2 key Ministers in August entitled, “The Business Case for a Rural Student Lawyer Loan Forgiveness Program” that was led by then President Jennifer Chow and included consultations with students at all 3 BC law schools (with TRU JD students particularly active as they face the highest tuition) and members of the bar. The Report, which was endorsed by the CBABC Provincial Council on September 17th, calls for immediate action on 7 fronts to address the law student loan crisis. The Report stressed how these rising costs were undermining efforts to diversify the legal profession so as to better reflect underrepresented populations within Canadian society and diminished ability of students from lower income families to pursue legal education. As Sarah Rankin noted 3 years ago, “Faced with the realities of $1500 plus in monthly repayments, students are driven to the income potential of large firm, corporate work. New lawyers are increasingly unable to consider work at affordable rates, or streams of practice that directly serve middle or lower-class clients. Those clients face a justice system increasingly unaffordable and out of reach.” An added negative element from this situation is that law students are unable to consider pursuing their practice in community legal clinics, NGOs, or in smaller cities and rural areas. Ironically, it is the latter communities that are facing the same severe crisis of aging lawyers not being replaced as with medical doctors, yet governments show a far greater sensitivity to such complaints about the lack of health care than they do to the disappearance of local lawyers.
The CBABC and the Law Society of BC initiated a response to this unfolding crisis in 2009 with the launch of the REAL Program to facilitate law students pursuing summer jobs and articling placements in smaller communities, with 100 placed to date, in the hopes that this would encourage them to build a career where they had spent time. Unfortunately, this is too small an effort fully to redress the situation causing the Report to say, “If left unaddressed, the demographic realities will result in hundreds of communities and tens of thousands of BC residents without access to legal services.”
What is to Be Done?
I applaud and endorse the CBABC Report, which I encourage other provincial branches of the CBA and Law Societies to pursue. There are a number of initiatives that could help significantly to address this growing crisis. The Government of Newfoundland and Labrador has replaced its student loan program with non-repayable grants last year. New Brunswick allows students to apply for debt reduction after exceeding $32,000 in loans. Nova Scotia allows students to defer payments while articling. The Law Society of Manitoba launched its own initiative in 2010 by offering forgivable loans to cover tuition and living costs to students from remote communities who attended that province’s law school and then practiced in rural communities at a rate of 20% per year similar to some existing schemes for doctors.
I personally favour this latter approach as I believe our profession is literally in the process of disappearing from the vast majority of our country. While the profession is naturally concerned at the growth of Canadian law graduates and the explosion of NCA applicants, many of whom are Canadians who were unable to pursue a law degree here, the intense competition for articling positions and associate placements is a largely urban-suburban phenomenon. Access to justice problems and the rapid increase in self-represented litigants will only increase even more dramatically if legal services are not readily available where people live and at a cost they can afford. The presence of massive debt retarding the ability of law graduates to pursue such available opportunities in the ‘hinterlands’ of Canada because their debt outstrips their capacity to repay when earning lower salaries (even with lower costs of living) is a tragedy.
 Stephanie Head, “Mephistopheles Bargain: A look at the real cost of increasing law school tuition,” Unpublished paper, December 8 2014, presented at Society of Law Students Conference, TRU, February 5,2015, page 9.
 Sarah Rankin, “Today’s law grad: Six figures in debt and heading to Bay Street,” The Globe and Mail, April 2, 2013.
 Canadian Bar Association British Columbia Branch, “The Business Case for a Rural Student Lawyer Loan Forgiveness Program”, August 2016, page 12.