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Debt Wizard

Our Debt Wizard is a calculator that allows law school applicants to begin developing a sense of how location, housing costs, career type, level of law school federal loan debt, and level of income interact in monthly budgets during the initial period following graduation, and serves as a simple means to explore one's ability to service prospective law school debt with various repayment options in multiple locales. It is a robust tool to generate a wide variety of estimates; it is an educational and informational tool to prepare you for a conversation (or two) with a financial aid counselor to determine your exact eligibility and repayment situation.

The basic model has just a few variables: type of post-grad employment (five possible choices); geographic market (14 choices); and law school debt level (nine choices). Choose one of each variable to produce a chart that displays a rich array of data illustrating 12 possible levels of annual salary (based on national NALP (The Association for Legal Career Professionals) data; detailed information about Michigan Law-specific outcomes and salaries is available on our Career Planning site), resulting in six approaches to loan repayment and management.

If you are interested in an in-depth exploration of the thinking that went into creating the original Debt Wizard model, please see this article. Sarah C. Zearfoss, Joseph D. Pollak, & Lorraine Lamey, A Magic Mirror for Student Loans, 3 J. of L. (2 J. Legal Metrics) 237 (2013).

When you move your cursor over each of the bar graphs in the chart, a rollover box will appear showing a monthly breakdown of net income and the estimated amount necessary to manage law school debt plus housing; the percentage of monthly net (post-tax) income that the debt plus housing amount represents; and the remaining monthly income available.

The major update for this third edition of Debt Wizard is accommodating and simplifying the multiple federal interest rate options and repayment outcomes currently available to law students. The charts, in response to changes in federal loan policy, display a total of six repayment options based on capitalized loans with 10-year, 25-year, and 15% & 10% IBR & LRAP repayment models. We have calculated the capitalization of interest during law school of the six most common federal arrangements and found quite modest differences; we chose one representative and conservative financial calculation. (For purposes of this web tool, we use the IBR term throughout, though Pay As You Earn is a qualifying repayment for Michigan Law Income-Based Debt Management Program.) The Debt Calculator has a default setting that provides rollover boxes for the 10-year, 25-year, and 10% IBR & LRAP repayment models; and, there is a second toggle button that provides rollover boxes for the 10-year, 25-year, and 15% IBR & LRAP repayment models.

The results are neither prediction nor promise (particularly with regard to the likelihood of obtaining any given job, which will vary widely among law schools and between individuals), but rather our effort to clearly represent tens of thousands of possible repayment paths as part of your exploration of law school and career choices.

Financial assessment and planning are complex undertakings, and we recommend you treat this tool as a launching point for understanding the ramifications of law school debt and a legal career path; talking to a law school financial aid advisor about the specifics of your situation is the responsible next step. The human judgment of an experienced financial aid advisor is going to give you the best understanding of your eligibility for the many programs available and the resulting repayment amounts specific to your individual situation.

Debt Wizard Calculator