MrKappus wrote:I don't get it. I'm a 2L. I'm not choosing anything right now. My expected value idea is reasonably straightforward. Assume bimodal salary distribution: 50% get biglaw ($160k), 40% get shit law ($40k), and 10% are unemployed ($0). EV(salary) = $96k. EV(debt) is (1)($200k). If a prospective UMich grad has prospects worth more than the PV($96k/year [w/ raises] x 30 years) - present value of 30 year loan repayment schedule for $200k, then he/she should take it. But UMich does appear to be worth sticker. Your unfunny snark's unneeded.
It is not inherently "worth sticker." Only when you factor in things like opportunity costs and risk tolerance can you decide whether an investment is worthwhile.
For fun, I ran the numbers on 96k over 30 yrs with a compounding 3% annual raise, alongside 25 year repayment of 200k at 7.8% weighted average, using a 5% discount rate. With these numbers, you break even taking a 68k job with the same growth rate instead of going to law school. With 2% compounding raises and a 7% discount rate, the breaking point is 64.5k.
Of course, this leaves out many many things, most significantly risk. Many would say that the swing between 160k, 40k, and 0 borders on the absurd as far as major life decisions go. But different people will have different risk tolerances, of course.
A final consideration I'll raise is the value of your free time. What is the opportunity cost of choosing to work 60-70 hour weeks for life as a lawyer instead of 40 or 50 doing something else? Different people will answer this very differently, of course.
So, this is why I made fun of your proclamation that ZOMG TOP TEN DUDE OMFG ALWAYS WORTH STICKER DUH TOP TEN TOP TEN!!!!11