Can we talk about T-14 at sticker? Forum

[kwais]

This is my calculation, which includes an SO helping with housing.

Year
1: 96k after taxes. 48k to loans.
2: 58k to loans because of salary increase and possible bonus
3: 68k to loans
4: 78k to loans
5: Remainder of loans and Profit

Living in NY off 48k, post tax, post loan, for 5 years is not an issue for those who don't care to drop $100 at bars each Friday. Cook food, get Netflix and pay off your loans.

Then for the rest of my life I have a degree and a resume that allows me to earn more than my State U polisci degree would have by a large margin.
Is it worth it to me? Absolutely, if I can stay in Biglaw for 4-5 years. It's a big if, so we will see.

[cotiger]

(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.

I don't think that anyone was really making that argument, but rather just responding to the person who was trying to claim that even over the short term law school at sticker was a much better decision from a financial standpoint.

Agreed that the longer-term is what would matter in terms of that, anyway.

(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?

I don't think anyone is saying become a lawyer just for the money. But there are trade-offs. For instance, I've been working in ... the last few years. I love it, but I've come to realize that it's not worth it to me to be legit poor the rest of my life. Similarly, I'm looking forward to law school and think I'll enjoy being a lawyer. That being said, if I was putting in tons of work and was only making $30k/year (to pick a completely unrepresentative number), I might look for other career options.

[cotiger]

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.

This is a fair point. I, too, was thinking about the hypothetical 60-80k in loans as a counter, but that's only really possible when bringing personal/parental money, and we were talking about someone who is totally debt-financing. Even a 120k scholly leaves you like 140k in debt.

ETA: Though there's still an enormous difference between 140k and 280k

[Tiago Splitter]

I don't think that anyone was really making that argument, but rather just responding to the person who was trying to claim that even over the short term law school at sticker was a much better decision from a financial standpoint.

No one said that. Even Rayiner, who graduated a year ago and for whom sticker debt came to only 230k, said you'd break even after four years. He'd be the first to admit that the break even point continues to move further out, and it only becomes "much better" once you move out a few years from there. Not really all that short term.

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.

This is worth repeating.

[Otunga]

Say someone would be content to work in Boston and has local ties. How credited is EDing to BU (I hear it's a full ride) over going to, say, Harvard if you're indifferent to getting biglaw? Apply this to any scenario where one that's indifferent to biglaw can go (technically speaking, of course) for free to the local school or else sticker at HYS. I know there are many qualifications to be made, like if one wants prestigious clerkships or professorships but what makes more sense here? You can further complicate this by adding in some of the lower t14s where you may get some decent scholarships. Even if you want the prestigious clerkship or the professorship, is it worth taking on a mortgage?

That sticker debt number is just so so damn scary.

[jordan15]

1) If you get biglaw, you will hopefully be getting bonuses each year. You will definitely be getting a raise each year. So it's not $160k/year for 5 years, by year 5 it should be $200k+.

2) Good luck getting biglaw if you didn't get a 2L SA position. The 30K you'll earn that summer will make a dent in your debt.

3) Get a good accountant. I've been able to write off all tuition payments and some transportation, among other things, throughout UG. You shouldn't be paying 50% in taxes. That's ridiculous.

[Tiago Splitter]

Say someone would be content to work in Boston and has local ties. How credited is EDing to BU (I hear it's a full ride) over going to, say, Harvard if you're indifferent to getting biglaw? Apply this to any scenario where one that's indifferent to biglaw can go (technically speaking, of course) for free to the local school or else sticker at HYS. I know there are many qualifications to be made, like if one wants prestigious clerkships or professorships but what makes more sense here? You can further complicate this by adding in some of the lower t14s where you may get some decent scholarships. Even if you want the prestigious clerkship or the professorship, is it worth taking on a mortgage?

Basically I'm asking something that has been asked a lot here: is sticker EVER worth it?

If you have Harvard numbers you should play it straight and see where things end up. If you're "indifferent" to BigLaw you'll probably end up wanting to start in BigLaw, which means you should go T-14. If you do decide it's Boston or bust, you should still have huge scholarship options from BU or BC.

[cotiger]

I don't think that anyone was really making that argument, but rather just responding to the person who was trying to claim that even over the short term law school at sticker was a much better decision from a financial standpoint.

No one said that. Even Rayiner, who graduated a year ago and for whom sticker debt came to only 230k, said you'd break even after four years. He'd be the first to admit that the break even point continues to move further out, and it only becomes "much better" once you move out a few years from there. Not really all that short term.

Well, not said it word for word, but..

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

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

Rayiner's post was actually very helpful in arguing against this because it demonstrated a break-even point for T14 sticker of 4+ years out (without even accounting for the three lost years of income and further tuition increases).

[Otunga]

I don't think that anyone was really making that argument, but rather just responding to the person who was trying to claim that even over the short term law school at sticker was a much better decision from a financial standpoint.

No one said that. Even Rayiner, who graduated a year ago and for whom sticker debt came to only 230k, said you'd break even after four years. He'd be the first to admit that the break even point continues to move further out, and it only becomes "much better" once you move out a few years from there. Not really all that short term.

Well, not said it word for word, but..

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

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

Rayiner's post was actually very helpful in arguing against this because it demonstrated a break-even point for T14 sticker of 4+ years out (without even accounting for the three lost years of income and further tuition increases).

Isn't the general line of argument that t14 is sticker is worth it for the liberal arts grad with no good career prospects? If it is, I think that premise is an issue since for how many people can we say there are no good career prospects for them? I think if many of us liberal arts grads try hard enough (masters in computer science? become a certified teacher. etc.) we make ourselves a decent enough career without taking on a mortgage. Now, it's different if such grads really want to go to law school and think they'd like that a lot more.

[Tiago Splitter]

I don't think that anyone was really making that argument, but rather just responding to the person who was trying to claim that even over the short term law school at sticker was a much better decision from a financial standpoint.

No one said that. Even Rayiner, who graduated a year ago and for whom sticker debt came to only 230k, said you'd break even after four years. He'd be the first to admit that the break even point continues to move further out, and it only becomes "much better" once you move out a few years from there. Not really all that short term.

Well, not said it word for word, but..

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

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

Rayiner's post was actually very helpful in arguing against this because it demonstrated a break-even point for T14 sticker of 4+ years out (without even accounting for the three lost years of income and further tuition increases).

I guess we have very different views of chem's statement. My own philosophy is that even at today's enormous sticker rates you'll be much better off over the course of your lifetime if you were coming out of a job paying an average salary for a college grad like I was. If you want to nitpick Rayiner's analysis he doesn't include income foregone during law school nor count interest on the sticker debt. But I also wish there were some way to account for the fact that law school is essentially a three year vacation.

[cotiger]

1) If you get biglaw, you will hopefully be getting bonuses each year. You will definitely be getting a raise each year. So it's not $160k/year for 5 years, by year 5 it should be $200k+.

2) Good luck getting biglaw if you didn't get a 2L SA position. The 30K you'll earn that summer will make a dent in your debt.

3) Get a good accountant. I've been able to write off all tuition payments and some transportation, among other things, throughout UG. You shouldn't be paying 50% in taxes. That's ridiculous.

1. I think rayiner included salary bumps (and bonus) in his calculations. Per year over the 4 years came to $113k/year after taxes, which is more than the 96-106k post-tax that timbs reported for a 160k salary.

2. $270k sticker debt includes 20k from SA income (per HLS estimation) for a 79k/year COA with 3.5% annual increases and interest on debt.

3. 80k after taxes was second-hand information that seems to be most assuredly incorrect.

Edited to correct info

[Hutz_and_Goodman]

If anyone wants to talk about the other route (full tuition at lower school) feel free to PM me. I turned down 60k at two T14 schools in favor of a full ride + stipend at a T40. I have a friend here who did the same thing. I had a big law 1L SA in my regional market and for next summer have accepted a V25 2L SA in NYC. My friend had a 1L big law SA in this regional market and has a couple of market-paying 2L SA offers in our market (paying 100-110k). Before I made the choice to attend the school where I am, I researched the people in the past few years who had attended my school with a full tuition + stipend. I found that the majority were in big law, which gave me confidence.

I am an advocate of this other route because I think people underestimate the advantage in grades that you have as a full tuition person at a school where you are above both 75th percentiles. I also think people undervalue the impact of the debt on quality of life.

Having said that, there are some important caveats:
1) I feel hugely lucky, and I could easily have been stuck in this market (which wouldn't be bad at all, just not ideal); I got exactly 1 offer in a major market, and I took it and withdrew everywhere else.
2) If you are someone whose goal is Cravath/Wachtell/Davis Polk/etc. you have absolutely no choice but to go T14, but that may not even be enough--you may even need T6 or HYS.
3) I worked for several years before law school, so I am not 22/23 years old. I think T14 makes more financial sense the younger you are, but on the other hand the flip side is that there is more risk, because you are younger, that the law itself is a bad choice for you (you later realize you don't want to practice law, for example).
4) Obviously if you go to a lower school and get bad grades for whatever reason (ex. a family tragedy right before 1L exams) you will be massively screwed. I probably worked 60-70 hours a week last year, took all sorts of precautions to avoid getting sick, and crossed my fingers that nothing crazy would happen. Nothing did, but at a T14 there would be way less risk since even with median or slightly below median big law would still be possible.

[Tiago Splitter]

1. I think rayiner included salary bumps (and bonus) in his calculations. Per year over the 4 years came to $113k/year after taxes, which is more than the 96-106k post-tax that timbs reported for a 160k salary.

2. $270k sticker debt includes 20k after-tax SA income (per HLS estimation of 15-20k post-tax) for a 79k/year COA with 3.5% annual increases and interest on debt.

1) 113k does not properly account for raises and bonuses. I didn't realize Rayiner had undercounted. Base salary in year four is 210k with most people getting much higher bonuses than the 10k first year's received last year. You also will make 30-40k pre-tax during your stub year.

2) I don't know why you'd believe that a person making just over 30K would pay more than half of that in taxes. But assuming some of that gets spent and the rest goes into tuition payments then 20k is a reasonable number. Remember again that for Rayiner 230k was sticker debt. Dude started law school in 2009.

[cotiger]

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

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

Rayiner's post was actually very helpful in arguing against this because it demonstrated a break-even point for T14 sticker of 4+ years out (without even accounting for the three lost years of income and further tuition increases).

I guess we have very different views of chem's statement. My own philosophy is that even at today's enormous sticker rates you'll be much better off over the course of your lifetime if you were coming out of a job paying an average salary for a college grad like I was. If you want to nitpick Rayiner's analysis he doesn't include income foregone during law school nor count interest on the sticker debt. But I also wish there were some way to account for the fact that law school is essentially a three year vacation.

To account for the three-year vacation: to make it easy, how about valuing it at the same cost as your foregone income? So, say, 96k over three years? That way we don't have to worry about that foregone income. Though I have to say, I don't imagine law school is quite as enjoyable as a $96,000 vacation would be.

For sure if you get and then stick with biglaw, your career earnings and ROI skyrocket. But I read "best return you can get at this age" as implying some at least relatively near-term payback, not something that only begins to pay off starting 7+ years out.

FWIW, given the high percentage of people who decide they actually hate being a lawyer and drop out of the profession entirely, looking at what happens in that time frame isn't the craziest thing in the world to do.

[cotiger]

2) I don't know why you'd believe that a person making just over 30K would pay more than half of that in taxes. But assuming some of that gets spent and the rest goes into tuition payments then 20k is a reasonable number. Remember again that for Rayiner 230k was sticker debt. Dude started law school in 2009.

Excuse me. I meant to say that 20k was the amount contributed towards tuition.

Also, I'm not criticizing rayiner (except for not factoring in foregone salary). Just arguing against what I perceived as chem trying to say that T14 sticker had a good ROI in the nearish (7-10 year) time frame.

[jordan15]

I'd just like to clarify that if you get a SA position ($30K in a summer), are paying sticker or some sort of tuition afterward, have a decent accountant and aren't incredibly irresponsible, you should pay *no* taxes on that 30K and could possibly get money back from the government. I worked all through UG, made large cash payments directly to the school, which combined with other deductions I claimed towards work and commuting expenses, meant that I was always well below the poverty line (even when I made $30k+) and I never owed anything. Some years I even got a check from the government (which I put directly towards another tuition payment).

Since everyone seems to agree that 3L is worthless anyway, it might be a good idea to pick up a part time bartending or tutoring job and make $15-30K your last year to offset some more debt. Again, tax free.

[jselson]

What kind of idiot goes to law school and only cares about his/her ROI for the first 4-5 years?

Oh no, to be 35 with little-to-no debt and earning over six figures, how terrible! Oh no, you'll only be in the top 5-10% of individual earners in the country!

Gag me with a gavel.

[yomisterd]

What kind of idiot goes to law school and only cares about his/her ROI for the first 4-5 years?

Oh no, to be 35 with little-to-no debt and earning over six figures, how terrible! Oh no, you'll only be in the top 5-10% of individual earners in the country!

Gag me with a gavel.

I don't think it is JUST about ROI. Just like with undergrad, finances (unless you have mumsie and popsie) are an important consideration. Ignore that consideration, and you could possibly turn down great scholarship opportunities just to do a T14 (for the name).

[Tiago Splitter]

What kind of idiot goes to law school and only cares about his/her ROI for the first 4-5 years?

Oh no, to be 35 with little-to-no debt and earning over six figures, how terrible! Oh no, you'll only be in the top 5-10% of individual earners in the country!

Gag me with a gavel.

I don't think it is JUST about ROI. Just like with undergrad, finances (unless you have mumsie and popsie) are an important consideration. Ignore that consideration, and you could possibly turn down great scholarship opportunities just to do a T14 (for the name).

This isn't like undergrad. No one does a T-14 for the name.

[jordan15]

What kind of idiot goes to law school and only cares about his/her ROI for the first 4-5 years?

Oh no, to be 35 with little-to-no debt and earning over six figures, how terrible! Oh no, you'll only be in the top 5-10% of individual earners in the country!

Gag me with a gavel.

I don't think it is JUST about ROI. Just like with undergrad, finances (unless you have mumsie and popsie) are an important consideration. Ignore that consideration, and you could possibly turn down great scholarship opportunities just to do a T14 (for the name).

But life doesn't end at 35. I'm sure lots of TT and TTT grads with full scholarships are jealous 5+ yrs after graduation when their opportunities are more limited than the t14 grads who lived cheaply for a few years and already finished paying off their debt.

[jbagelboy]

What kind of idiot goes to law school and only cares about his/her ROI for the first 4-5 years?

Oh no, to be 35 with little-to-no debt and earning over six figures, how terrible! Oh no, you'll only be in the top 5-10% of individual earners in the country!

Gag me with a gavel.

I don't think it is JUST about ROI. Just like with undergrad, finances (unless you have mumsie and popsie) are an important consideration. Ignore that consideration, and you could possibly turn down great scholarship opportunities just to do a T14 (for the name).

This isn't like undergrad. No one does a T-14 for the name.

Well, some might, but there are usually other, better more salient reasons to attend a top law school that overshadow that intent (employment). Few, if any, high school seniors consider jobs when choosing colleges - I certainly didn't. Even quality of dining hall food was honestly more critical at the time. And there's such tremendous variety in colleges and no such comparable top designation like "T14" regardless

(Ironically, people DO consistently choose certain undergrads because they think it will help them get into prestigious law schools, only to find out in 3 yrs on TLS that it makes close to zero difference).

[cotiger]

What kind of idiot goes to law school and only cares about his/her ROI for the first 4-5 years?

Oh no, to be 35 with little-to-no debt and earning over six figures, how terrible! Oh no, you'll only be in the top 5-10% of individual earners in the country!

Gag me with a gavel.

You're oversimplifying.

If biglaw was guaranteed and you were guaranteed to like being a lawyer, then paying sticker would be a fantastic choice. No one questions that. Even if you quit biglaw after 4 years of paying off your debt and earning back that lost income and settled into a job that paid exactly what you would have made without law school (or did meaningful low-paying PI or whatever), it still would be 100% worth it because.. Hey! You get to be a lawyer!

I'm planning on enjoying being a lawyer. So is everyone else who goes to law school. But..

FWIW, given the high percentage of people who decide they actually hate being a lawyer and drop out of the profession entirely, looking at what happens in that [7-10 year] time frame isn't the craziest thing in the world to do.

If you realize on your first day on the job that you hate being a lawyer, you still would need to stick it out for 4+ years before you even broke even. That's not to say that this is the most important metric, or even one of the top 5 considerations, but it's certainly relevant information.

The problem with sticker debt is the incredibly large downside risk. People don't operate as purely efficient expected value calculators. A big loss has a much bigger impact on your life enjoyment than a correspondingly big gain does. So if you're one of the people who can't find a job (like ~10% of grads at really great schools like Duke, Michigan, Northwestern, and Cornell), the next 10 years of your life are likely to be pretty friggin' terrible trying to pay off $42k/year.

[Otunga]

What kind of idiot goes to law school and only cares about his/her ROI for the first 4-5 years?

Oh no, to be 35 with little-to-no debt and earning over six figures, how terrible! Oh no, you'll only be in the top 5-10% of individual earners in the country!

Gag me with a gavel.

You're oversimplifying.

If biglaw was guaranteed and you were guaranteed to like being a lawyer, then paying sticker would be a fantastic choice. No one questions that. Even if you quit biglaw after 4 years of paying off your debt and earning back that lost income and settled into a job that paid exactly what you would have made without law school (or did meaningful low-paying PI or whatever), it still would be 100% worth it because.. Hey! You get to be a lawyer!

I'm planning on enjoying being a lawyer. So is everyone else who goes to law school. But..

FWIW, given the high percentage of people who decide they actually hate being a lawyer and drop out of the profession entirely, looking at what happens in that [7-10 year] time frame isn't the craziest thing in the world to do.

If you realize on your first day on the job that you hate being a lawyer, you still would need to stick it out for 4+ years before you even broke even. That's not to say that this is the most important metric, or even one of the top 5 considerations, but it's certainly relevant information.

The problem with sticker debt is the incredibly large downside risk. People don't operate as purely efficient expected value calculators. A big loss has a much bigger impact on your life enjoyment than a correspondingly big gain does. So if you're one of the people who can't find a job (like ~10% of grads at really great schools like Duke, Michigan, Northwestern, and Cornell), the next 10 years of your life are likely to be pretty friggin' terrible trying to pay off $42k/year.

Good point here. It's brave to assume that you'll like the law enough to stay in there long enough to get even a decent return on your sticker investment.

[jselson]

What kind of idiot goes to law school and only cares about his/her ROI for the first 4-5 years?

Oh no, to be 35 with little-to-no debt and earning over six figures, how terrible! Oh no, you'll only be in the top 5-10% of individual earners in the country!

Gag me with a gavel.

You're oversimplifying.

If biglaw was guaranteed and you were guaranteed to like being a lawyer, then paying sticker would be a fantastic choice. No one questions that. Even if you quit biglaw after 4 years of paying off your debt and earning back that lost income and settled into a job that paid exactly what you would have made without law school (or did meaningful low-paying PI or whatever), it still would be 100% worth it because.. Hey! You get to be a lawyer!

I'm planning on enjoying being a lawyer. So is everyone else who goes to law school. But..

Certainly not clear from my post, but there are people in this thread claiming that sticker at HYS isn't even worth it from a ROI perspective, and those schools are in the "biglaw practically guaranteed" category, and have great LRAPs. (*Full disclosure: Attending H at sticker.*) At that point, such claims are ridiculous. And yeah, sure, maybe you won't like being a lawyer. So maybe what you should do instead of limiting your career choices and possible lifetime earnings potential by taking a full scholarship at a lower ranked school is to become a paralegal for a little while and see what's what. And you should also realize that almost any job where an individual is earning over $100,000 is going to require 60+ hrs/wk. If you think that sounds horrible, cool, but then 1) Don't go to law school, and 2) Stop dreaming of individually earning that much.

Also, for the year I was out of school and earning $65k individually and worked 60+ hrs/wk, I still felt like a king. If someone's expectation is that they're gonna live a models and bottles life, and they're disappointed, who cares? That person has idiotic goals. If instead you think having financial security, a good job, and a comfortable life are really pretty awesome in and of themselves, then no, $65k (individually! more than the PRE-TAX median HOUSEHOLD income in this country!) after taxes and paying a buncha your loans off isn't so bad. In fact, it's pretty great.

Also, folks, you're gonna have some sorta debt hanging over your head your entire life. Would you refuse to buy a house because the prospect of a mortgage is "terrifying"? Would you not have a kid because you'll lose $200k over 20 years?

[Otunga]

Would you not have a kid because you'll lose $200k over 20 years?

Mostly for other reasons but that could contribute.

And odds are you lose way more than that.

To be serious, more good points in your discussion.

Keep them coming.