Why are people so scared of debt at top law schools?

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neeks8282

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Why are people so scared of debt at top law schools?

Postby neeks8282 » Mon Sep 10, 2018 12:08 am

Please don't flame me if I'm wrong, because I very well could be. I understand that. But, this is what I understand from what I've been reading about.

Let's say you pay sticker at a T14, you have about $200,000 in debt. If you find a biglaw job paying $180,000 before bonuses, great. You can make a substantial dent into your debt before being kicked out which everyone is convinced will happen, and I have no reason to doubt them. But, if you are frugal, you can make a substantial dent in your loans to make them manageable no matter what you do after biglaw (assuming around 3 years or more in biglaw).

If you don't find a biglaw job out of a t14, you can take advantage of the LRAP which are very good at many of these schools, keeping the cost per month of paying off debt at a manageable level until they are forgiven after whatever amount of years the LRAP requires (max 10? someone correct me if I'm wrong). Now I suppose the issue is, is it hard to find a public interest job? From what I'm thinking, it would seem very reasonable to assume a graduate of a T14 school could find a public interest job.

So, in the end, is the debt really that horrible?

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Re: Why are people so scared of debt at top law schools?

Postby Calbears123 » Mon Sep 10, 2018 1:23 am

After tax, rent, student loans, state tax, social security, retirement, food, loan interest, work transportation...$180,000 gets pretty small.

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Re: Why are people so scared of debt at top law schools?

Postby nixy » Mon Sep 10, 2018 6:38 am

If you find out that you really really hate your big law job, which people notoriously do, yeah, the debt is pretty terrible.

Plus for many people (not all, but many), you can avoid the problem in the first place by taking a scholarship.

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Re: Why are people so scared of debt at top law schools?

Postby Pneumonia » Mon Sep 10, 2018 9:27 am

Sticker is much closer to 300k. At some schools it's more.

The economy is currently humming just fine, and you're right to assume that right now most T14 grads are able to graduate into jobs that are financially unobjectionable. But for current 1Ls graduation is three years away. For current applicants it's four. And for a lot of those currently considering the LSAT, five. Your debt stays the same even if the economy significantly contracts.

For biglaw, others are right that it is hard to be frugal. Assuming NYC, but to a certain extent elsewhere, you won't have enough time to to a lot of the things that frugal people do. But even if you're super disciplined, it can be tough. There is also the very real possibility that you will hate your job. Doing a 9-5 that you hate is one thing. But hating biglaw is miserable, in part, because it's pretty much the only thing you do all day. And you don't have any choice but to keep doing it.

For PI, LRAPs within the T14 actually vary pretty widely. It's easy to get hosed on technicalities in the federal debt-forgiveness programs, and there is no guarantee that they'll be around forever. For some programs there is also the tax-bomb issue. Lastly, PI jobs in major cities are fairly competitive to get. So yeah, you can get one if your financial debt depends on it. But these jobs tend to be just as competitive as any others in NY, SF, LA, Boston, etc.

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Re: Why are people so scared of debt at top law schools?

Postby Npret » Mon Sep 10, 2018 11:07 am

neeks8282 wrote:Please don't flame me if I'm wrong, because I very well could be. I understand that. But, this is what I understand from what I've been reading about.

Let's say you pay sticker at a T14, you have about $200,000 in debt. If you find a biglaw job paying $180,000 before bonuses, great. You can make a substantial dent into your debt before being kicked out which everyone is convinced will happen, and I have no reason to doubt them. But, if you are frugal, you can make a substantial dent in your loans to make them manageable no matter what you do after biglaw (assuming around 3 years or more in biglaw).

If you don't find a biglaw job out of a t14, you can take advantage of the LRAP which are very good at many of these schools, keeping the cost per month of paying off debt at a manageable level until they are forgiven after whatever amount of years the LRAP requires (max 10? someone correct me if I'm wrong). Now I suppose the issue is, is it hard to find a public interest job? From what I'm thinking, it would seem very reasonable to assume a graduate of a T14 school could find a public interest job.

So, in the end, is the debt really that horrible?

Yes. Are you really asking why people worry about taking on hundreds of thousands of non dischargable debt for an intangible resource?

You’re assuming the ability to repay that debt comes in tandem with an admission to a certain few law school. It doesn’t. Getting and keeping a job (biglaw, small law, IP, even government) isn’t guaranteed to anyone.

Also, your debt estimate seems low.

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Re: Why are people so scared of debt at top law schools?

Postby totesTheGoat » Mon Sep 10, 2018 11:17 am

Because sometimes life doesn't go as planned, and being leveraged to the tune of a quarter million dollars when life goes sideways is a recipe for disaster. Take off your best-case scenario blinders and start looking at all the ways your life could end up somewhere except in your dream situation. Then ask yourself whether a $2500/month debt payment helps or hurts that situation. (No matter whether you can defer that payment for a few months or not, it's still looming over you).

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Re: Why are people so scared of debt at top law schools?

Postby albanach » Mon Sep 10, 2018 11:26 am

LRAP at other than the very top schools might be contingent on PSLF still being available. Or may be predicated on a very low household income which could be problematic if you want to marry/have a family.

It's also likely to require that you keep the loans as federal loans with a relatively high interest rate. Now imagine you do five qualifying years in public service but you're offered a decent private gig paying $140k. Your $300k in student loan debt is now $400k which will take a long time to repay, even with that larger salary.

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Re: Why are people so scared of debt at top law schools?

Postby QContinuum » Mon Sep 10, 2018 2:26 pm

neeks8282 wrote:If you don't find a biglaw job out of a t14, you can take advantage of the LRAP which are very good at many of these schools, keeping the cost per month of paying off debt at a manageable level until they are forgiven after whatever amount of years the LRAP requires (max 10? someone correct me if I'm wrong). Now I suppose the issue is, is it hard to find a public interest job? From what I'm thinking, it would seem very reasonable to assume a graduate of a T14 school could find a public interest job.

So, in the end, is the debt really that horrible?


LRAPs often come with strict qualifying conditions (locking you into not just PI in general but specific employers/jobs); lock you into PI for a decade (if you leave prior to your loans being forgiven, you may actually owe more than when you graduated!); effectively prevent you from getting married to a working partner (otherwise their income gets calculated in to how much you must repay); and, if not combined with PSLF, result in a huge tax liability when the loans are finally forgiven.

LRAPs are not fun by any stretch. They're an invaluable resource for PI-minded folks, but should not be thought of as a "get-out-of-jail-free" safety net, especially when folks considering top law schools generally have other options for making a good living without the downside risk of being locked in to a low-paying career for (at least) 10 years.

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Re: Why are people so scared of debt at top law schools?

Postby TrustMeImALawStudent » Mon Sep 10, 2018 7:09 pm

I'm at a T14 and my debt will be $200K by the time I pay it off (I have several scholarships, but the interest really adds up) and even though I have not yet graduated, I am thinking about this issue now, so I'll tell you that $200K in debt is scary in this day and age for most people. Middle class jobs are shrinking away, so if you opt out of big law (or out of law completely, which many people end up doing) after working in big law for several years, your next job options don't just pay less---they pay a lot less, which makes paying back those loans with growing interest very difficult.

I've met many attorneys who went to my school (and other T14s) who can't deal with big law's inhumane work hours, and jump ship after 2-3 years and take a PI job. In my city, the standard pay for PI for grads of my school is around $65K, which means these attorneys end up living with many other roommates and living on a tight budget, which doesn't feel right, as an adult, to live like a college student or someone in their early 20's, especially after you've had a substantial paycheck for several years. You can get on the loan forgiveness track if you jump ship from big law soon enough after graduation, but you're still tied to your legal job (even if you decide you hate being an attorney) because you need that loan forgiveness, and the debt hanging over your head feels suffocating.

Also: "it would seem very reasonable to assume a graduate of a T14 school could find a public interest job" -- this isn't necessarily true. The legal job market is tight and PI jobs are not plentiful. The PI students at my T14 have job hunts that are filled with uncertainty, even beyond graduation.

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Re: Why are people so scared of debt at top law schools?

Postby Wild Card » Sun Dec 23, 2018 6:11 pm

LST says sticker at Columbia is $340,000.

First-year biglaw is $205,000. Less taxes, rent, health, and retirement brings that down to $80,000. Less discretionary spending brings it down to $70,000. Let's say you throw all $70,000 at that $340,000. Many biglaw firms have started firing associates after only 1 year and 6 months. So you've brought that debt down to $240,000. How are you going to pay the rest of it off working as a contract attorney for $60,000 per year?

BigFed and even BigState, don't even think about landing.

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Re: Why are people so scared of debt at top law schools?

Postby Npret » Sun Dec 23, 2018 10:35 pm

Here is why I’m opposed to massive debt-
1. It’s sometimes unnecessary and can be avoided by retaking.

2. 0Ls are naive and put blinders on as to the amount ofthe debt and how they will repay. You can sign up for massive debt just online, very quickly. If you were borrowing that debt to buy a house, for example, you would have to think carefully about it and the bank will not give it to you unless they think you can repay it. The federal government doesn’t care.

3. You have no tangible asset at the end. You can’t borrow against your degree. You can’t sell or trade it. It has no intrinsic value.

4. The debt is non dischargeable in bankruptcy. Not only do you have a valueless asset, you are stuck paying for it outside of a complete disabling injury or illness.

5. Law school tuition is outrageously and criminally high for the cost of teaching and the result. It’s not like medical school that need expensive labs, etc. The overprice of the tuition makes going deeply into debt to obtain it even more ridiculous.

6. People borrow based on the fantasy of how law will be lucrative. I’m going to keep telling you - going into law because you think you will be rich is an unsupported idea. People assume they will get biglaw just because they have a T13 acceptance and their future is guaranteed. We know that is not true. Going to law on the individual level is a crapshoot.

There are no long term studies as to what lawyers are earning 5, 10, 20 years out. No data to support the fantasy of wealth.

7. Lots of 0Ls have no idea what the practice of law entails. Many of them have never even had a real job. Unlike medical schools requiring volunteer work, law schools don’t require undergrad experience and exposure to law. People go deeply into debt and end up hating their job or at least regretting their choice. But they are trapped in a career they don’t want because of debt and not wanting to admit they made a bad choice.


I’m sure there are more but that’s what I have now.

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Re: Why are people so scared of debt at top law schools?

Postby Npret » Sun Dec 23, 2018 11:10 pm

8. Massive debt can drastically impact mental health. There have been posts here over the years of people being depressed or even suicidal because of unemployment and debt. Even people who have jobs can be negatively affected by owing so much money.
While people have different levels of stress and there are at least PAYE programs now, debt can take a toll on mental health.

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Re: Why are people so scared of debt at top law schools?

Postby cavalier1138 » Mon Dec 24, 2018 8:56 am

Npret wrote:There are no long term studies as to what lawyers are earning 5, 10, 20 years out. No data to support the fantasy of wealth.


Well, there is the "After the JD" set of studies, but it's a really flawed metric. It gives what appears to be an accurate picture of what attorneys are earning years out from graduation. But it doesn't account for people who burn out or leave legal practice, and most importantly for T3/T4 schools, it didn't survey anyone who never entered practice to begin with.

That said, the study does support the idea that graduates of top schools earn see median earnings of around $200k. That doesn't make the idea of sticker debt very appetizing; the survey respondents would just have finished paying that off on a 10-year plan when the last data points were collected.

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Re: Why are people so scared of debt at top law schools?

Postby Npret » Mon Dec 24, 2018 9:23 am

cavalier1138 wrote:
Npret wrote:There are no long term studies as to what lawyers are earning 5, 10, 20 years out. No data to support the fantasy of wealth.


Well, there is the "After the JD" set of studies, but it's a really flawed metric. It gives what appears to be an accurate picture of what attorneys are earning years out from graduation. But it doesn't account for people who burn out or leave legal practice, and most importantly for T3/T4 schools, it didn't survey anyone who never entered practice to begin with.

That said, the study does support the idea that graduates of top schools earn see median earnings of around $200k. That doesn't make the idea of sticker debt very appetizing; the survey respondents would just have finished paying that off on a 10-year plan when the last data points were collected.

If that’s what I think it is, it’s unveified self reported data? Or have I missed something?

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Re: Why are people so scared of debt at top law schools?

Postby cavalier1138 » Mon Dec 24, 2018 12:05 pm

Npret wrote:
cavalier1138 wrote:
Npret wrote:There are no long term studies as to what lawyers are earning 5, 10, 20 years out. No data to support the fantasy of wealth.


Well, there is the "After the JD" set of studies, but it's a really flawed metric. It gives what appears to be an accurate picture of what attorneys are earning years out from graduation. But it doesn't account for people who burn out or leave legal practice, and most importantly for T3/T4 schools, it didn't survey anyone who never entered practice to begin with.

That said, the study does support the idea that graduates of top schools earn see median earnings of around $200k. That doesn't make the idea of sticker debt very appetizing; the survey respondents would just have finished paying that off on a 10-year plan when the last data points were collected.

If that’s what I think it is, it’s unveified self reported data? Or have I missed something?


I believe it's self-reported, but I doubt the people involved in the survey are padding their incomes. The methodology isn't great, but the numbers aren't crazy for practicing attorneys. People who leave biglaw aren't ending up at Starbucks.

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Re: Why are people so scared of debt at top law schools?

Postby Npret » Mon Dec 24, 2018 1:43 pm

cavalier1138 wrote:
Npret wrote:
cavalier1138 wrote:
Npret wrote:There are no long term studies as to what lawyers are earning 5, 10, 20 years out. No data to support the fantasy of wealth.


Well, there is the "After the JD" set of studies, but it's a really flawed metric. It gives what appears to be an accurate picture of what attorneys are earning years out from graduation. But it doesn't account for people who burn out or leave legal practice, and most importantly for T3/T4 schools, it didn't survey anyone who never entered practice to begin with.

That said, the study does support the idea that graduates of top schools earn see median earnings of around $200k. That doesn't make the idea of sticker debt very appetizing; the survey respondents would just have finished paying that off on a 10-year plan when the last data points were collected.

If that’s what I think it is, it’s unveified self reported data? Or have I missed something?


I believe it's self-reported, but I doubt the people involved in the survey are padding their incomes. The methodology isn't great, but the numbers aren't crazy for practicing attorneys. People who leave biglaw aren't ending up at Starbucks.

I know a fair number who left law altogether and are doing something else or staying at home with kids.

Do you have a link to the study? I haven’t seen it for a while.

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Re: Why are people so scared of debt at top law schools?

Postby nixy » Mon Dec 24, 2018 1:52 pm

People who left law don’t show up in that study, right? It’s just people who actually stay in law?

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Re: Why are people so scared of debt at top law schools?

Postby cavalier1138 » Mon Dec 24, 2018 2:22 pm

nixy wrote:People who left law don’t show up in that study, right? It’s just people who actually stay in law?


Right. So your point about a lot of 0Ls (especially K-JDs) not knowing what they want to do is important.

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Re: Why are people so scared of debt at top law schools?

Postby QContinuum » Mon Dec 24, 2018 2:50 pm

Npret wrote:8. Massive debt can drastically impact mental health. There have been posts here over the years of people being depressed or even suicidal because of unemployment and debt. Even people who have jobs can be negatively affected by owing so much money.
While people have different levels of stress and there are at least PAYE programs now, debt can take a toll on mental health.

9. 0Ls frequently overestimate their intended law school's placement power. I've lost count of how many 0Ls come here planning to take out massive loans to attend a (non-T20) T1/T2 law school with the goal of working in BigLaw or BigFed. When they're told their chances of success are slim, they respond that they will hustle and thus everything will work out. They accept that there are "bad" law schools, but they rationalize that their intended school isn't a T3/T4, so they conclude they will be fine. They refuse to acknowledge the cliff in placement power between the T13 and the T20, and the T20 and the rest of the T1 (with a few exceptions). It's frustrating and disheartening to see 0Ls, over and over again, racing to throw themselves off the cliff even after they've been warned, very starkly, of the danger.

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Re: Why are people so scared of debt at top law schools?

Postby Bingo_Bongo » Mon Dec 24, 2018 5:25 pm

QContinuum wrote:
Npret wrote:8. Massive debt can drastically impact mental health. There have been posts here over the years of people being depressed or even suicidal because of unemployment and debt. Even people who have jobs can be negatively affected by owing so much money.
While people have different levels of stress and there are at least PAYE programs now, debt can take a toll on mental health.

9. 0Ls frequently overestimate their intended law school's placement power. I've lost count of how many 0Ls come here planning to take out massive loans to attend a (non-T20) T1/T2 law school with the goal of working in BigLaw or BigFed. When they're told their chances of success are slim, they respond that they will hustle and thus everything will work out. They accept that there are "bad" law schools, but they rationalize that their intended school isn't a T3/T4, so they conclude they will be fine. They refuse to acknowledge the cliff in placement power between the T13 and the T20, and the T20 and the rest of the T1 (with a few exceptions). It's frustrating and disheartening to see 0Ls, over and over again, racing to throw themselves off the cliff even after they've been warned, very starkly, of the danger.


My law school choice came down between a full scholly at a T3, a 50% scholly at a T2, and sticker at a lower ranked T1. I chose the full scholly at the T3, and it was one of the best long-term decisions I think I've made my whole life. I came out of the experience debt-free, still managed to land a job, and don't have a bunch of debt hanging over my head preventing me from jumping around to different jobs (which I've done).

OP - undischargable debt should be a lot scarier to you than it is. Racking up $200k + worth of debt under the assumption that you'll be able to work a biglaw job for several years and pay it off is almost laughably flawed. First off, even at a top school biglaw is not guaranteed. There are stories on this forum you can read from really good students at T13 schools still striking out at OCI. If you were hinging you entire financial future on landing one of these jobs, the start of your 2L year would be very depressing if you didn't land anything.

Second, assuming you are able to land a biglaw job, it's still going to take you years to pay off that debt. As other posters have pointed out, there's a really good chance you're not going to make it years in big law (between being fired or quitting once you realize just how miserable it is). Even if you do stay, you pretty much become a slave wearing the golden handcuffs as they call it. Even though your life is miserable, you can't leave because you need the big salary to make your $2,500+ a month loan payments.

The one girl I graduated with who went to a big law firm no longer does it. She was also on a full scholly, so she had no debt going into it, but she told me her plan was to accumulate and save big chunks of her paycheck, then retire from big law after 3-5 years and do something fun with a huge nest of money she could invest/use to support her smaller salary.

According to her, she's blown through all that money she planned to hoard from her biglaw paychecks (when you live in an inflated downtown area, eat out for every meal because you don't have time to meal prep, hire a laundry service because you don't have time to do your laundry, and compete to have nicer things than your biglaw coworkers, your expenses tend to inflate more than you anticipated). She now works a (non-law) job making less money than I do. She sold a few years of her life and literally got nothing in return other than permanent bags under her eyes and greying hair in her mid-30s. If she was still stuck paying off a huge debt, her experience would suck even more.

So, let that be a cautionary tale.

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Re: Why are people so scared of debt at top law schools?

Postby QContinuum » Mon Dec 24, 2018 9:12 pm

Not to be an ass but, while I agree with Bingo_Bongo's takeaway that undischargeable debt should be scary, I don't want any reader of this thread to think attending a T3 on a full scholly is always TCR. Attending a T3 on a full scholly can certainly make sense for applicants with certain goals, but it shouldn't be considered the best option for everyone. In many cases, retaking for a higher LSAT will make much more sense than attending a T3.



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