Go to law school...save money?

Discuss various money matters here. Loans (federal and private), scholarships, lottery winnings, or other school finance related information and queries.
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TR Fan
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Go to law school...save money?

Postby TR Fan » Sun Feb 27, 2011 3:37 am

Hi all. As counterintuitive as this may sound, I think I've discovered that gong to law school will actually save me money. Any help folks could offer in assessing the wisdom (or lack thereof) of this plan would be most appreciated.

By way of background: In a few months I will be completing graduate school, gaining an MA in Int'l Rel/Econ as well as $100K in debt. If l wasn't interested in law school, I'd probably join the Foreign Service or PMF, starting salary probably around $55K (I’m not currently working). Under IBR, I'd be paying roughly $400-500 per month towards loans (payments rising commensurate with salary), and after 10 years of public service the federal government will forgive my remaining debt. Not bad.

Meanwhile, I have been accepted to the part-time program at GULC with its generous LRAP program for folks like myself interested in the public sector (specifically, looking for work abroad with DOJ, State, and/or USAID). Four years of GULC PT will run me over $200K, leaving me with a total debt burden north of $350K. Yikes.

However, regardless of the additional debt I'd take on, IBR would keep my payments relatively low. Critically, the addition of LRAP from GULC would mean that my monthly student loan payments for the first decade of my career would be zero (or close to it). And after those ten years are up, the near half-million in loan principle+interest that would have quietly accumulated would be wiped clean, leaving me debt free and with enough experience to move up to GS-13/15 territory or transfer to private sector, earning 6-figures.

Is this insane? Could taking on $200K in debt actually cost me less in the long run?

Renzo
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Re: Go to law school...save money?

Postby Renzo » Sun Feb 27, 2011 3:42 am

TR Fan wrote:Hi all. As counterintuitive as this may sound, I think I've discovered that gong to law school will actually save me money. Any help folks could offer in assessing the wisdom (or lack thereof) of this plan would be most appreciated.

By way of background: In a few months I will be completing graduate school, gaining an MA in Int'l Rel/Econ as well as $100K in debt. If l wasn't interested in law school, I'd probably join the Foreign Service or PMF, starting salary probably around $55K (I’m not currently working). Under IBR, I'd be paying roughly $400-500 per month towards loans (payments rising commensurate with salary), and after 10 years of public service the federal government will forgive my remaining debt. Not bad.

Meanwhile, I have been accepted to the part-time program at GULC with its generous LRAP program for folks like myself interested in the public sector (specifically, looking for work abroad with DOJ, State, and/or USAID). Four years of GULC PT will run me over $200K, leaving me with a total debt burden north of $350K. Yikes.

However, regardless of the additional debt I'd take on, IBR would keep my payments relatively low. Critically, the addition of LRAP from GULC would mean that my monthly student loan payments for the first decade of my career would be zero (or close to it). And after those ten years are up, the near half-million in loan principle+interest that would have quietly accumulated would be wiped clean, leaving me debt free and with enough experience to move up to GS-13/15 territory or transfer to private sector, earning 6-figures.

Is this insane? Could taking on $200K in debt actually cost me less in the long run?

Not insane at all. The only hitch in your plans that I foresee are: 1) I don't know about GULC specifically, but most LRAPs won't cover you about about 70k a year, and it only takes a couple years for a government attorney to get above that cap (if they don't start out above it). This will also hurt your IBR calculation 2) If you're thinking, "no problem, I'll take a non-legal job that pays less" you might be in trouble. Most LRAP programs only cover legal work.

Aggiegrad2011
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Re: Go to law school...save money?

Postby Aggiegrad2011 » Sun Feb 27, 2011 3:44 am

This sounds like a really bad idea.

Relying on IBR sounds like a horrible idea. 10+ years is a really long time, and one regime change in our gov't and IBR could be axed. Then where would you be?

I dunno. TLS is likely to roast you though.

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TR Fan
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Re: Go to law school...save money?

Postby TR Fan » Sun Feb 27, 2011 3:48 am

Good point on the cap; GULC has a soft cap of $75K, pro-rated above that amount. Even if I do go above, GULC's LRAP assistance would still be useful.

As a point of comparison, I've also been admitted to Cornell, where the LRAP does not have a salary cap (though I haven't yet run the numbers to compare it to GULC in the long run).

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fatduck
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Re: Go to law school...save money?

Postby fatduck » Sun Feb 27, 2011 3:50 am

enjoy paying taxes on that loan forgiveness

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Re: Go to law school...save money?

Postby TR Fan » Sun Feb 27, 2011 3:58 am

fatduck wrote:enjoy paying taxes on that loan forgiveness


My understanding is that debt forgiven through Public Service Loan Forgiveness is not taxable. What is currently taxable is any debt forgiven after being on IBR for 25 years (i.e., those who weren't in public service for the requisite 120 months).

Source: http://www.ibrinfo.org/faq.vp.html#_Will_forgiven_loan

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fatduck
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Re: Go to law school...save money?

Postby fatduck » Sun Feb 27, 2011 3:59 am

TR Fan wrote:
fatduck wrote:enjoy paying taxes on that loan forgiveness


My understanding is that debt forgiven through Public Service Loan Forgiveness is not taxable. What is currently taxable is any debt forgiven after being on IBR for 25 years (i.e., those who weren't in public service for the requisite 120 months).

Source: http://www.ibrinfo.org/faq.vp.html#_Will_forgiven_loan

never mind, you are correct.

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Re: Go to law school...save money?

Postby TR Fan » Sun Feb 27, 2011 4:05 am

Aggiegrad2011 wrote:This sounds like a really bad idea.

Relying on IBR sounds like a horrible idea. 10+ years is a really long time, and one regime change in our gov't and IBR could be axed. Then where would you be?

I dunno. TLS is likely to roast you though.


That's certainly a valid concern. For what it's worth, financial aid staff I've spoken with are not inclined to think that this will be rolled back anytime soon (having only been in place for about two years, it will be awhile before any debts are forgiven). Even if it is eliminated, those cuts would presumably more likely apply to future would-be participants, not those who have already "come of age" in the system.

But you're right. Nothing is assured, particularly given the current budget climate.

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TR Fan
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Re: Go to law school...save money?

Postby TR Fan » Sun Feb 27, 2011 4:06 am

fatduck wrote:
TR Fan wrote:
fatduck wrote:enjoy paying taxes on that loan forgiveness


My understanding is that debt forgiven through Public Service Loan Forgiveness is not taxable. What is currently taxable is any debt forgiven after being on IBR for 25 years (i.e., those who weren't in public service for the requisite 120 months).

Source: http://www.ibrinfo.org/faq.vp.html#_Will_forgiven_loan

never mind, you are correct.


Even a broken clock... :wink:

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PDaddy
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Re: Go to law school...save money?

Postby PDaddy » Sun Feb 27, 2011 5:04 am

I tried to talk a friend of mine from Penn into following a similar plan. She was young, having graduated law school at 22. I told her to go the public service route and do BigLaw once in her 30's. She did not follow my advice. Her first year at a top NY BigLaw firm, she was paid $80K not to work...did some doc review and research under a junior partner, though.

She transitioned into full-time associate work the over the past year and a half and is probably going to leave the firm in a year or so because she's burned out.

I warned her that a lot of BigLaw careers last only 3-5 years anyways. You need a backup plan. Did you know they fire people in large groups?

FiveSermon
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Re: Go to law school...save money?

Postby FiveSermon » Sun Feb 27, 2011 5:09 am

PDaddy wrote:I tried to talk a friend of mine from Penn into following a similar plan. She was young, having graduated law school at 22. I told her to go the public service route and do BigLaw once in her 30's. She did not follow my advice. Her first year at a top NY BigLaw firm, she was paid $80K not to work...did some doc review and research under a junior partner, though.

She transitioned into full-time associate work the over the past year and a half and is probably going to leave the firm in a year or so because she's burned out.

I warned her that a lot of BigLaw careers last only 3-5 years anyways. You need a backup plan. Did you know they fire people in large groups?


I thought attrition rate in biglaw was mainly due to people burning out and leaving not due to firing? ITE anyways since most of the layoffs came in the few years following the crash.

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Re: Go to law school...save money?

Postby Hey-O » Sun Feb 27, 2011 5:46 am

I'm very interested in this as well as it will probably be how I pay back my loans.

porgie
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Re: Go to law school...save money?

Postby porgie » Sun Feb 27, 2011 7:14 am

I guess this is what's wrong w/ our education system. We have systems set up in place that make it cheaper for an individual to get a degree he doesn't really need that costs society a couple hundred grand.

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Re: Go to law school...save money?

Postby Hey-O » Sun Feb 27, 2011 7:33 am

porgie wrote:I guess this is what's wrong w/ our education system. We have systems set up in place that make it cheaper for an individual to get a degree he doesn't really need that costs society a couple hundred grand.


It's better than Europe. They have a system and actively encourages people to take as long as possible getting a degree and goof off in the mean time.

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Re: Go to law school...save money?

Postby rose711 » Sun Feb 27, 2011 9:03 am

Do you actually have a job offer from the foreign service now? Will you be doing that and going to law school part time? If you don't have a job offer, how sure are you that you can find one? Have there been cutbacks or hiring freezes in this area? How does the job situation look for the future?

I would like to see you consider that worst case scenario under these plans, and see if you feel like you could deal with the risks. (Is there a way you can end up with all this debt and not qualify for IBR or LRAP?)

I just have no idea what the employment situation for foreign service is right now.

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Re: Go to law school...save money?

Postby TR Fan » Sun Feb 27, 2011 11:21 am

PDaddy wrote:I tried to talk a friend of mine from Penn into following a similar plan. She was young, having graduated law school at 22. I told her to go the public service route and do BigLaw once in her 30's. She did not follow my advice. Her first year at a top NY BigLaw firm, she was paid $80K not to work...did some doc review and research under a junior partner, though.

She transitioned into full-time associate work the over the past year and a half and is probably going to leave the firm in a year or so because she's burned out.

I warned her that a lot of BigLaw careers last only 3-5 years anyways. You need a backup plan. Did you know they fire people in large groups?


Thanks, though I'm preparing for work in PI with no intent for BigLaw (at least not for the first decade+ of my career).

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Re: Go to law school...save money?

Postby TR Fan » Sun Feb 27, 2011 11:42 am

porgie wrote:I guess this is what's wrong w/ our education system. We have systems set up in place that make it cheaper for an individual to get a degree he doesn't really need that costs society a couple hundred grand.


Well that's certainly one way to look at it. Not to devolve into a debate about the intent and utility of IBR, loan forgiveness, and LRAP programs like GULC's writ large, but the flip side of being forgiven of so much debt by society is that my work would be in sectors that serve society, not only for the first decade of my career but beyond. Unlike the European model, I'm presuming, should I fail to live up to my end of the bargain I'm back on the hook.

Additionally, how do you qualify "a degree he doesn't really need"? I could pursue another career without the JD, sure, but so could most of us here. The kind of agencies I would like to make my career in favor applicants with JD/MA backgrounds, my lifelong earning potential is higher with the JD than without, and there's the not unimportant consideration that this a field that I'm passionate about and wish to pursue.

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fatduck
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Re: Go to law school...save money?

Postby fatduck » Sun Feb 27, 2011 2:28 pm

if you have a legitimate interest in doing legal public interest work then i say go for it

rose711
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Re: Go to law school...save money?

Postby rose711 » Sun Feb 27, 2011 2:33 pm

I am genuinely interested in knowing if the type of jobs you will pursue have been hit by hiring freezes or cutbacks? I haven't seen this question asked before and I don't know the answer.

porgie
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Re: Go to law school...save money?

Postby porgie » Sun Feb 27, 2011 5:17 pm

TR Fan wrote:
porgie wrote:I guess this is what's wrong w/ our education system. We have systems set up in place that make it cheaper for an individual to get a degree he doesn't really need that costs society a couple hundred grand.


Well that's certainly one way to look at it. Not to devolve into a debate about the intent and utility of IBR, loan forgiveness, and LRAP programs like GULC's writ large, but the flip side of being forgiven of so much debt by society is that my work would be in sectors that serve society, not only for the first decade of my career but beyond. Unlike the European model, I'm presuming, should I fail to live up to my end of the bargain I'm back on the hook.

Additionally, how do you qualify "a degree he doesn't really need"? I could pursue another career without the JD, sure, but so could most of us here. The kind of agencies I would like to make my career in favor applicants with JD/MA backgrounds, my lifelong earning potential is higher with the JD than without, and there's the not unimportant consideration that this a field that I'm passionate about and wish to pursue.


Maybe you should've said that you felt passionate about it before. You made it sound like the only consideration was the money issue. Also, I'm kind of at a loss as to why you needed both the MA and the JD. The way you're phrasing it, it sounds like the MA would allow you to get into one line of public work, and the JD will allow you to get into a different line of public work. So if you pursue the JD, then did you really need the MA in the first place? It seems like you went and got a masters degree that will be useless if you pursue the JD, trying to buy time to figure out what you wanted to do, and now you're expecting society to pick up the tab for that degree.

It's disheartening to realize there's a system in place that allows people to pursue education they might not even need, and then pay it off through IBR with taxpayers left holding the bag. If I go and get 5 different MA degrees in different fields that might make me competitive for 5 different types of public service jobs, it seems kinda shitty that society should have to pay for the four degrees I didn't need that made me competitive for the four jobs I didn't ever take. It seems like the fair thing to do would be to allow me to use IBR for the education I was required to get for my job, and not the unrelated degrees.

I personally think you shoudl be on the hook for the 100K you acquired before law school if you wind up getting the JD and getting a legal job. Not everyone should be on the hook for your private decisions regarding education merely b/c you happen to take a public service job in the future.
Last edited by porgie on Sun Feb 27, 2011 5:21 pm, edited 1 time in total.

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Re: Go to law school...save money?

Postby dr123 » Sun Feb 27, 2011 5:19 pm

You have graduate degree already and youre unemployed? get a job ya bum

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TR Fan
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Re: Go to law school...save money?

Postby TR Fan » Sun Feb 27, 2011 6:32 pm

rose711 wrote:I am genuinely interested in knowing if the type of jobs you will pursue have been hit by hiring freezes or cutbacks? I haven't seen this question asked before and I don't know the answer.


On the one hand, U.S. government foreign policy/development programs are certainly at risk of being cut in the face of budget crises (although State/USAID did manage a meager budget increase in the White House's FY2012 budget).

That being said, within the U.S. foreign policy establishment civilian-led reconstruction and stabilization efforts (including many led by DOJ) have been growing rapidly, becoming an increasingly important pillar within the community. Speaking from personal experience having worked for/with some of these agencies, I'm fairly confident (though not naively so) that positions will be available

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Re: Go to law school...save money?

Postby TR Fan » Sun Feb 27, 2011 6:48 pm

porgie wrote:Maybe you should've said that you felt passionate about it before. You made it sound like the only consideration was the money issue. Also, I'm kind of at a loss as to why you needed both the MA and the JD. The way you're phrasing it, it sounds like the MA would allow you to get into one line of public work, and the JD will allow you to get into a different line of public work. So if you pursue the JD, then did you really need the MA in the first place? It seems like you went and got a masters degree that will be useless if you pursue the JD, trying to buy time to figure out what you wanted to do, and now you're expecting society to pick up the tab for that degree.

It's disheartening to realize there's a system in place that allows people to pursue education they might not even need, and then pay it off through IBR with taxpayers left holding the bag. If I go and get 5 different MA degrees in different fields that might make me competitive for 5 different types of public service jobs, it seems kinda shitty that society should have to pay for the four degrees I didn't need that made me competitive for the four jobs I didn't ever take. It seems like the fair thing to do would be to allow me to use IBR for the education I was required to get for my job, and not the unrelated degrees.

I personally think you shoudl be on the hook for the 100K you acquired before law school if you wind up getting the JD and getting a legal job. Not everyone should be on the hook for your private decisions regarding education merely b/c you happen to take a public service job in the future.


Pardon, I should have made it clear earlier that it was not my goal to go into PI merely for the money (bet that's a sentence not often uttered on TLS). :wink:

Regarding the decision to go to law school, this had been my intent even before pursuing the MA. In fact I initially applied to 4yr joint JD/MA programs, however for a variety of reasons this didn't work out. I later took up the offer of a well-regarded MA program in DC, which in addition to being an amazing and invaluable experience in it's own right also was critical, I'm confident, to my being accepted to T14 schools.

I agree that having two unrelated degrees that would make me eligible for two separate PI career tracks might be a waste, both of public money and my own time. However, for the kinds of careers I'm interested in (e.g., State Dept. Legal Advisor, DOJ:OPDAT, Civilian Response Corps, etc.) having the two degrees will make me a much stronger applicant and more successful public service employee.
Last edited by TR Fan on Sun Feb 27, 2011 11:52 pm, edited 1 time in total.

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Re: Go to law school...save money?

Postby TR Fan » Sun Feb 27, 2011 6:52 pm

dr123 wrote:You have graduate degree already and youre unemployed? get a job ya bum


Don't have the degree yet.

Unmentioned so far as to keep my initial question more straightforward, if I do GULC PT I would be working during the days, most likely with State or USAID (hopefully DOJ after 1L). My earnings over the course of the four years, along with those of my (soon to be) spouse, would of course go towards law school. The total debt burden of $350K mentioned earlier is therefore a worse-case possibility.

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MTal
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Re: Go to law school...save money?

Postby MTal » Sun Feb 27, 2011 7:08 pm

http://www.collegehumor.com/video:1944515

"It's not unemployment if you pay tuition!"




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