The student debt crisis is hitting law firms where it hurts most—their bottom line and talent retention—according to a new analysis by Brian Kabateck, founding partner of Kabateck LLP, published today in Law360.
With federal student loan delinquency rates at a historic high of 31% and new Trump administration policies eliminating borrower protections, young lawyers are facing unprecedented financial stress. Today’s law school graduates emerge with debt approaching $140,000—costs that have risen dramatically even after adjusting for inflation.
This financial burden is creating a workforce crisis. The 2024 ABA Young Lawyers Division survey found that debt-laden attorneys experience anxiety and depression that directly impacts productivity, with three-quarters altering their career plans to prioritize salary over professional interests.
Kabateck argues law firm leaders should respond with concrete solutions: offering student loan repayment as an employee benefit, providing financial counseling, and creating structured assistance programs. He suggests firms consider five-year plans to pay off associates’ debt, noting that while this creates taxable income for employees, it ensures retention of valuable talent and creates more productive lawyers who can focus on career building rather than financial survival.
The investment in debt assistance isn’t just good corporate citizenship—it’s smart business strategy in an increasingly competitive legal talent market.