Can we talk about T-14 at sticker? Forum

[californiauser]

Alright, I know this thread pops up multiple times during every year's admission cycle, but I'm starting a new one - ignore it if you feel it's overdone.

I regularly see people posting that T-14 is worth sticker and that T-6 is certainly worth it. Are people seriously paying $250k+ for these schools or are people having parents help them with the sticker cost? I've tried to run the numbers and it's literally insane to pay back $250K, even with big law. As someone who considered ED'ing to a T-14, I'm curious to see how people justify paying sticker for the 2013-2014 cycle.

For reference:
Harvard: Non-Discounted Cost: $277,772
Columbia: Non-Discounted Cost: $288,597
Penn: Non-Discounted Cost: $267,383
Northwestern: Non-Discounted Cost: $291,900
Cornell: Non-Discounted Cost: $271,785

[chem]

Alright, I know this thread pops up multiple times during every year's admission cycle, but I'm starting a new one - ignore it if you feel it's overdone.

I regularly see people posting that T-14 is worth sticker and that T-6 is certainly worth it. Are people seriously paying $250k+ for these schools or are people having parents help them with the sticker cost? I've tried to run the numbers and it's literally insane to pay back $250K, even with big law. As someone who considered ED'ing to a T-14, I'm curious to see how people justify paying sticker for the 2013-2014 cycle.

For reference:
Harvard: Non-Discounted Cost: $277,772
Columbia: Non-Discounted Cost: $288,597
Penn: Non-Discounted Cost: $267,383
Northwestern: Non-Discounted Cost: $291,900
Cornell: Non-Discounted Cost: $271,785

If you came to the conclusion that biglaw doesnt make sticker worth it, then the way you ran your numbers are seriously flawed.

Just going to throw these terms out there, and you can see if it changes your conclusions
PAYE
lifetime earnings
limited opportunities for college graduates
lockstep raises and bonuses
tax deductions
Regulus's biglaw attrition data

Taking it all together, if you get biglaw, even paying sticker is the best return you can get at this age for most people

[californiauser]

Alright, I know this thread pops up multiple times during every year's admission cycle, but I'm starting a new one - ignore it if you feel it's overdone.

I regularly see people posting that T-14 is worth sticker and that T-6 is certainly worth it. Are people seriously paying $250k+ for these schools or are people having parents help them with the sticker cost? I've tried to run the numbers and it's literally insane to pay back $250K, even with big law. As someone who considered ED'ing to a T-14, I'm curious to see how people justify paying sticker for the 2013-2014 cycle.

For reference:
Harvard: Non-Discounted Cost: $277,772
Columbia: Non-Discounted Cost: $288,597
Penn: Non-Discounted Cost: $267,383
Northwestern: Non-Discounted Cost: $291,900
Cornell: Non-Discounted Cost: $271,785

If you came to the conclusion that biglaw doesnt make sticker worth it, then the way you ran your numbers are seriously flawed.

Just going to throw these terms out there, and you can see if it changes your conclusions
PAYE
lifetime earnings
limited opportunities for college graduates
lockstep raises and bonuses
tax deductions
Regulus's biglaw attrition data

Taking it all together, if you get biglaw, even paying sticker is the best return you can get at this age for most people

I'm familiar with all of these terms. Can you link to Regulus's big law attrition data? I'm under the impression that the typical big law tenure is 3-5 years, hardly enough time to pay off 300k.

PAYE is good in theory, but until the tax bomb is fixed, it's hardly a no brainer from a finanical standpoint.

[cotiger]

If you came to the conclusion that biglaw doesnt make sticker worth it, then the way you ran your numbers are seriously flawed.

Just going to throw these terms out there, and you can see if it changes your conclusions
PAYE
lifetime earnings
limited opportunities for college graduates
lockstep raises and bonuses
tax deductions
Regulus's biglaw attrition data

Taking it all together, if you get biglaw, even paying sticker is the best return you can get at this age for most people

I dunno.. at $290k debt at graduation that's $42k/year for 10 years. I know someone who just got BigLaw in NYC who said that after taxes her $160k became more like $80k. So after debt and taxes you're left with ~38k for living in Manhattan. That's not a lot. Certainly not a lot in exchange for working BigLaw hours.

And this doesn't even take into consideration the sizable attrition factor.

[chem]

If you came to the conclusion that biglaw doesnt make sticker worth it, then the way you ran your numbers are seriously flawed.

Just going to throw these terms out there, and you can see if it changes your conclusions
PAYE
lifetime earnings
limited opportunities for college graduates
lockstep raises and bonuses
tax deductions
Regulus's biglaw attrition data

Taking it all together, if you get biglaw, even paying sticker is the best return you can get at this age for most people

I dunno.. at $290k debt at graduation that's $42k/year for 10 years. I know someone who just got BigLaw in NYC who said that after taxes her $160k became more like $80k. So after debt and taxes you're left with ~38k for living in Manhattan. That's not a lot. Certainly not a lot in exchange for working BigLaw hours.

And this doesn't even take into consideration the sizable attrition factor.

There are numerous numerous TLS posts on this. But a quick search yielded

It really isn't if you can do math. Weighted for risk, law school (a T14) pays for itself in just a few years of big law, and everything after that you're coming out ahead.

lol I would love to see your "math" for this

So let's start with this data: http://www.law.northwestern.edu/career/statistics/

52% in $160k jobs or federal clerkships. Payoff, $450k after-tax including shitty bonus after four years.
7% in $140-160k jobs (probably $145k). Payoff (assuming typical $145k scale and secondary-market tax rate), $400k after-tax.
9% in $100k-$140k jobs. Payoff (assuming $120k average), $320k after-tax.
4% in permanent PI. Payoff (amortizing loan forgiveness and assuming $50k/year salary), $220k after-tax.
28% in other things. Let's assume doc review at $45k/year for simplicity. $130k after-tax.

Weighted average of the above is $336k return over four years.

Now, assume our baseline job is $45k/year, or about $32k/year take-home, or $130k over four years. You're up roughly $200k over what you'd have in the base line, or basically even accounting for loans ($230k full freight - $30k SA take-home thanks to ridic favorable tax situation).

Future classes will have higher tuition, but also higher employment than C/2011.

Don't want to look up Regulus's data, because im just posting to procrastinate. Attrition was on average 5 years, and most lateraled to a position that was comparable to big law

[twenty]

Higher tuition -> fewer people applying -> getting into a better school
Better school + fewer overall graduates -> More job opportunities

So basically, you're paying more for a better chance of having a "good" outcome.

[staedtler12]

I did a search and found this post:

Well, I finally got my hands on The NALP Foundation’s “2012 Update on Associate Attrition for Calendar Year 2011,” and I even made some kick-ass Google spreadsheets from the data, but I was denied access to share them by NALP. So… I am going to have to simply state points that I thought were interesting here. Before that, however, I would highly recommend that anyone who is considering going to law school read their report as it is literally a goldmine of information; it shows what percentage of associates (broken down into categories of new-hires, lateral hires, male, female, minority, etc.) leave what size firms and after how many years, as well as why they leave and where they end up going.

Synopsis:
Biglaw firms lost roughly 69% of their entry-level associates within the first 5 years, but only a quarter within the first 3 years. Apparently only about a quarter of the associate departures were desired by the law firms, whereas roughly half of the departures were unwanted (the remaining attrition was viewed neutrally). As for where the entry-level associates ended up after leaving their firms, slightly less than half moved to associate positions at other legal firms, and one-fifth of them moved in house with corporate counsels. Unfortunately, there is no way to tell how many of these associates that lateraled into other law firms went to a smaller firm (biglaw to midlaw, midlaw to shitlaw, etc.). Additionally, only 2% of departing associates went to judicial clerkships, and NALP doesn’t break this down into “type” of clerkship, so there is no way to tell how many of these were AIII clerkships, although we know it is a max of 2%. In conclusion, it looks like roughly 31% of entry-level associates are still with their firms after 5 years when it comes to the largest firms (501+ attorneys); this number is slightly higher for other large firms (101-250 attorneys). Of the 69% that leave, approximately 73% end up in decent legal employment such as law firm associate, law firm partner, judicial clerk, other governmental legal job, and corporate in-house counsel. Accordingly, 31% + 50% (73% of 69%) = 81% of entry-level associates are still in some sort of (presumably) decent legal position at the end of year 5.

[cotiger]

So let's start with this data: http://www.law.northwestern.edu/career/statistics/

52% in $160k jobs or federal clerkships. Payoff, $450k after-tax including shitty bonus after four years.
7% in $140-160k jobs (probably $145k). Payoff (assuming typical $145k scale and secondary-market tax rate), $400k after-tax.
9% in $100k-$140k jobs. Payoff (assuming $120k average), $320k after-tax.
4% in permanent PI. Payoff (amortizing loan forgiveness and assuming $50k/year salary), $220k after-tax.
28% in other things. Let's assume doc review at $45k/year for simplicity. $130k after-tax.

Weighted average of the above is $336k return over four years.

Now, assume our baseline job is $45k/year, or about $32k/year take-home, or $130k over four years. You're up roughly $200k over what you'd have in the base line, or basically even accounting for loans ($230k full freight - $30k SA take-home thanks to ridic favorable tax situation).

Future classes will have higher tuition, but also higher employment than C/2011.

Don't want to look up Regulus's data, because im just posting to procrastinate. Attrition was on average 5 years, and most lateraled to a position that was comparable to big law

Wait a sec. First of all, the after-tax money at BigLaw seems quite off-base if what my friend was telling me is accurate. Also, the debt figure is low. The HLS website estimates 15-20k take home from SA. Applying that to tuition, the estimated debt owed at graduation is still approximately 270k. Also, he's not taking into consideration the money that would have been made over those three years had you not been in school.

BUT, even if we use those after-tax numbers, the 230k debt figure, AND ignore the additional money from 3 years working the $45k job, the return he calculates over 4 years is 336-230= $106k from law school vs $130 from the $45k job.

[californiauser]

So let's start with this data: http://www.law.northwestern.edu/career/statistics/

52% in $160k jobs or federal clerkships. Payoff, $450k after-tax including shitty bonus after four years.
7% in $140-160k jobs (probably $145k). Payoff (assuming typical $145k scale and secondary-market tax rate), $400k after-tax.
9% in $100k-$140k jobs. Payoff (assuming $120k average), $320k after-tax.
4% in permanent PI. Payoff (amortizing loan forgiveness and assuming $50k/year salary), $220k after-tax.
28% in other things. Let's assume doc review at $45k/year for simplicity. $130k after-tax.

Weighted average of the above is $336k return over four years.

Now, assume our baseline job is $45k/year, or about $32k/year take-home, or $130k over four years. You're up roughly $200k over what you'd have in the base line, or basically even accounting for loans ($230k full freight - $30k SA take-home thanks to ridic favorable tax situation).

Future classes will have higher tuition, but also higher employment than C/2011.

Don't want to look up Regulus's data, because im just posting to procrastinate. Attrition was on average 5 years, and most lateraled to a position that was comparable to big law

Wait a sec. First of all, the after-tax money at BigLaw seems quite off-base if what my friend was telling me is accurate. Also, the debt figure is low. The HLS website estimates 15-20k take home from SA. Applying that to tuition, the estimated debt owed at graduation is still approximately 270k. Also, he's not taking into consideration the money that would have been made over those three years had you not been in school.

BUT, even if we use those after-tax numbers, the 230k debt figure, AND ignore the additional money from 3 years working the $45k job, the return he calculates over 4 years is 336-230= $106k from law school vs $130 from the $45k job.

Godo post. I was going to wait until after work to break down the many things wrong with his/her calculations, but you pretty much nailed it. He/she doesn't seem to account for interest accrual either.


I'd also like people to share how they plan on living/having a life in NYC on 38-45k as a professional.

[DrStudMuffin]

I dunno.. at $290k debt at graduation that's $42k/year for 10 years. I know someone who just got BigLaw in NYC who said that after taxes her $160k became more like $80k. So after debt and taxes you're left with ~38k for living in Manhattan. That's not a lot. Certainly not a lot in exchange for working BigLaw hours.

And this doesn't even take into consideration the sizable attrition factor.

Some guy posted this in another thread. No idea if it's correct, but take home is definitely higher than 80k.

Salary: 160,000
Bonus: 10,000
Total Gross Income: $170,000

Taxes
New York City Income Tax (does not apply to NJ residents):
For married, filing jointly, excluding spouse's income: 5989.40
For single: 6083.60
New York State Income Tax:
For married, filing jointly, excluding spouse's income: 10,148.36
For single: 10,526.97
Federal Income Tax
For married, filing jointly, excluding spouse's income, living in NJ: 27,586
For married, filing jointly, excluding spouse's income, living in NYC: 24584.50
For single, living in NJ: 34,101.94
For single, living in NYC: 30,694.90
Other federal taxes:
Social Security tax: 7049.40
Medicare tax: 2465

After tax income
Married, filing jointly, excluding spouse's income, living in NJ: $122,751.24
Married, filing jointly, excluding spouse's income, living in NYC: $120,128.14
Single, living in NJ: $115,856.69
Single, living in NYC: $113,180.13


Notes
This obviously shouldn't be taken as legit tax advice
Income taxes could be even lower if you tax deductions for, e.g., health expenses, business expenses, mortgage interest, etc. But after state and city taxes, most folks will be approaching the limits for the Alternative Minimum Tax.
Married individuals obviously need to recalculate with their spouse's income for this to be of much use.
This includes a $10,000 year-end bonus, so this gives an annual comp estimate but not a paycheck calculator.
This doesn't include any credits, though I don't believe any would typically apply, except the education credits in your stub year.

[jbagelboy]

If you came to the conclusion that biglaw doesnt make sticker worth it, then the way you ran your numbers are seriously flawed.

Just going to throw these terms out there, and you can see if it changes your conclusions
PAYE
lifetime earnings
limited opportunities for college graduates
lockstep raises and bonuses
tax deductions
Regulus's biglaw attrition data

Taking it all together, if you get biglaw, even paying sticker is the best return you can get at this age for most people

I dunno.. at $290k debt at graduation that's $42k/year for 10 years. I know someone who just got BigLaw in NYC who said that after taxes her $160k became more like $80k. So after debt and taxes you're left with ~38k for living in Manhattan. That's not a lot. Certainly not a lot in exchange for working BigLaw hours.

And this doesn't even take into consideration the sizable attrition factor.

your friend is exaggerating.

[cotiger]

Some guy posted this in another thread. No idea if it's correct, but take home is definitely higher than 80k.

Salary: 160,000
Bonus: 10,000
Total Gross Income: $170,000


After tax income
Married, filing jointly, excluding spouse's income, living in NJ: $122,751.24
Married, filing jointly, excluding spouse's income, living in NYC: $120,128.14
Single, living in NJ: $115,856.69
Single, living in NYC: $113,180.13

Interesting. This seems to be the after-tax info rayiner was using. I really have no idea one way or the other.

I want to re-iterate, though, that even if this is the correct tax info, rayiner's calculations that chem was citing still show the $45k job as being more financially rewarding than T14 sticker after 4 years.

[cotiger]

your friend is exaggerating.

She did tell me this right after the bar exam, so she hadn't actually worked there yet. Plus, she said that there were other tax things that she would eventually get back.

Anyway, I do trust WhirledWorld's calculation of $110k post-tax, but again I don't think it changes the argument against sticker.

[timbs4339]

Ultimately, this is something that is highly person-specific, but here's some info that might be of interest.

IME, estimates of post-tax income in NYC for a first-year are between 96-106K, not counting bonus.

Most associates I know paying 200K+ are throwing more like 60K per year at the loans. The problem is that the age you'll be coming out of law school (26-28) is the age when many people are thinking about starting a family- so they want to get the debt paid down ASAP. Add to that the uncertainty people feel nowadays, where many of the mid-tier NYC firms might go belly up.

Of course it is possible to live on 40K post-tax/loans in NYC. You eat a lot of Seamless and take car service when you can. You get roommates, live in a shitty walkup, live in the outer boroughs (Brooklyn is getting tapped out, so Queens will be next) or split the cost of an apartment with an S/O. And there's the occasional person who can live in the $1000 a month four-bedroom sixth floor walkup and eat ramen noodles well into (his) twenties. But someone with no debt or 75K debt is going to have a MUCH better lifestyle than someone paying off 270K.

The other thing to consider, of course, is what your other opportunities are. Although very few BA holders get jobs paying 80K or whatever right out of school, I'm sure that of those jobs, most students who have the smarts and background to get into a T14 can snag one of them.

[smaug_]

I never really understand threads like these.

(1) Whether a school at sticker is worth it or not depends on what your other options are and what you want to do. If you want to be a lawyer, you're going to have to go to law school. If you don't want to be a lawyer, you shouldn't go to law school, even if you get a scholarship to a great school.

(2)

(a) I don't really get the "45k job puts you in a better place four years after graduation" argument. The interesting question is the one you can't really answer: where are you going to be in ten years/twenty years/when you retire. I have a feeling that most people in law school expect to be in a better situation when they retire than they would have otherwise been in had they not gone to law school.

(b) Moreover, you run into problems in saying that BIGLAW is SO SO MUCH WORSE than the 45k job when you're working the 45k job for a longer period of time. I don't expect biglaw to be fun, but law school is actually pretty enjoyable most of the time. I fully realize that my fun now comes at the expense of harder work later, but I'm OK with that.

(3) If you're doing this (just) for the money, it'll probably be hell anyway. There are assuredly many many ways to make good money that involve less suffering than being a lawyer. If there isn't some intrinsic value in becoming a lawyer/doing that work, what's the point of going through the effort?

[midwest17]

If you came to the conclusion that biglaw doesnt make sticker worth it, then the way you ran your numbers are seriously flawed.

Just going to throw these terms out there, and you can see if it changes your conclusions
PAYE
lifetime earnings
limited opportunities for college graduates
lockstep raises and bonuses
tax deductions
Regulus's biglaw attrition data

Taking it all together, if you get biglaw, even paying sticker is the best return you can get at this age for most people

I dunno.. at $290k debt at graduation that's $42k/year for 10 years. I know someone who just got BigLaw in NYC who said that after taxes her $160k became more like $80k. So after debt and taxes you're left with ~38k for living in Manhattan. That's not a lot. Certainly not a lot in exchange for working BigLaw hours.

And this doesn't even take into consideration the sizable attrition factor.

This would come out to 50% combined average tax rates. Marginal federal tax rates at $160,000 are 28% (http://www.forbes.com/sites/moneybuilde ... nal-rates/). NYC income tax maxes out at 3.6% (http://taxes.about.com/od/statetaxes/a/ ... me-Tax.htm). NY state income tax marginal rates are 6.65% in that range (http://www.tax.ny.gov/pdf/current_forms ... hedule.pdf).

tl;dr there's no way that $160k comes out to $80k post-tax.

[californiauser]

I never really understand threads like these.

(1) Whether a school at sticker is worth it or not depends on what your other options are and what you want to do. If you want to be a lawyer, you're going to have to go to law school. If you don't want to be a lawyer, you shouldn't go to law school, even if you get a scholarship to a great school.

You're moving goalposts. This argument obviously assumes you want to be a lawyer. At what debt-point is it not worth it 200k? 300k? 400k? 500k?

[smaug_]

I never really understand threads like these.

(1) Whether a school at sticker is worth it or not depends on what your other options are and what you want to do. If you want to be a lawyer, you're going to have to go to law school. If you don't want to be a lawyer, you shouldn't go to law school, even if you get a scholarship to a great school.

You're moving goalposts. This argument obviously assumes you want to be a lawyer. At what debt-point is it not worth it 200k? 300k? 400k? 500k?

If you want to be a lawyer, how much are you willing to pay in tuition to do so? Sticker at a T14 seems reasonable if you care more about being a lawyer than making a lot of money. That's the point.

When people make these threads, it's either because:

(1) they're bored and feel like trolling (poorly) for a bit

(2) they're trying to justify going to crappy school with scholarship as opposed to a T14 or

(3) they care more about making money than being a lawyer and are just now realizing that biglaw isn't a path to financial success.

So, which of those concerns do you empathize with best?

[t-14orbust]

So...what is a path to financial success for someone with a TTTUG Humanities degree with little/no debt that makes 30-45k?

[californiauser]

I never really understand threads like these.

(1) Whether a school at sticker is worth it or not depends on what your other options are and what you want to do. If you want to be a lawyer, you're going to have to go to law school. If you don't want to be a lawyer, you shouldn't go to law school, even if you get a scholarship to a great school.

You're moving goalposts. This argument obviously assumes you want to be a lawyer. At what debt-point is it not worth it 200k? 300k? 400k? 500k?

If you want to be a lawyer, how much are you willing to pay in tuition to do so? Sticker at a T14 seems reasonable if you care more about being a lawyer than making a lot of money. That's the point.

When people make these threads, it's either because:

(1) they're bored and feel like trolling (poorly) for a bit

(2) they're trying to justify going to crappy school with scholarship as opposed to a T14 or

(3) they care more about making money than being a lawyer and are just now realizing that biglaw isn't a path to financial success.

So, which of those concerns do you empathize with best?

IAre you paying sticker at a T-14? If so, please share your insights

[smaug_]

IAre you paying sticker at a T-14? If so, please share your insights

I am not. The reason I think this is a bit of a joke is that unless you're talking about something like a full ride scholarship, very few students at T-14s are going to have a different calculus. You might shave a few years off of your repayment, but the reasons why law school would be a bad idea stay the same.

If you think law school is a horrible idea for someone with sticker level debt, it's probably a bad idea for anyone who doesn't have a full-ride.

So...what is a path to financial success for someone with a TTTUG Humanities degree with little/no debt that makes 30-45k?

I don't think there is one. Striverism is a flame.

[t-14orbust]

So...what is a path to financial success for someone with a TTTUG Humanities degree with little/no debt that makes 30-45k?

I don't think there is one. Striverism is a flame.

lawl skewl it is...

I do think I'll be paying much less than sticker though, so I guess it's alright

[jbagelboy]

On some level the sticker debate is arbitrary from an ex poste perspective. The general wisdom is that going to Harvard or Stanford is worth the $280K in debt, but Duke or Cornell is definitely not. Most of the graduates at any of the four schools will work at large firms after they graduate where they will make the same salary and have the same exit opportunities (give or take some unquantifiable delta in vault) -- whats the difference then? There's obviously more to it than the raw cash or the decision would never make sense. Theres a prestige factor, sure, but other considerations implicit and explicit as well.

Its also a bit of a straw man that we use on these forums with little real world correlation. We talked all the time about sticker last year on TLS, but I have only met one student out of hundreds who is actually loaning sticker here at CLS and that individual has extraneous circumstances.

[DrStudMuffin]

IAre you paying sticker at a T-14? If so, please share your insights

I am not. The reason I think this is a bit of a joke is that unless you're talking about something like a full ride scholarship, very few students at T-14s are going to have a different calculus. You might shave a few years off of your repayment, but the reasons why law school would be a bad idea stay the same.

If you think law school is a horrible idea for someone with sticker level debt, it's probably a bad idea for anyone who doesn't have a full-ride.

So...what is a path to financial success for someone with a TTTUG Humanities degree with little/no debt that makes 30-45k?

I don't think there is one. Striverism is a flame.

What? The rest of this debate aside, there's a colossal difference between 80k and 280k.

Even for those who "want to be a lawyer" as you say, working biglaw hours while putting 60% of your post-tax income to service your debt (which you'll have to do for a while) sucks, and it makes starting a family or buying a house borderline impossible.

[smaug_]

What? The rest of this debate aside, there's a colossal difference between 80k and 280k.

Even for those who "want to be a lawyer" as you say, working biglaw hours while putting 60% of your post-tax income to service your debt (which you'll have to do for a while) sucks, and it makes starting a family or buying a house borderline impossible.

I agree that there's a huge difference between a full ride/full tuition scholarship and sticker.

There's not a huge difference between sticker-level-debt and the kinds of scholarships that most people will be getting from these schools. Even a 75k scholarship leaves you with a substantial debt-load. That's my point.

It's the same reason that the HYS or don't go threads are pretty worthless. HYS still leaves you with a healthy amount to pay back. If your argument is that it doesn't make sense to go to law school from a financial point of view, that's probably true for most students of Harvard as well as for most students at Georgetown.

So, re: OP, if someone really truly had that line of thinking it would end up being something more like Ruby/Hamilton/RTK/Darrow/NU ED or bust.

And really, if you have the credentials for those, they should be your target.