Break-even starting salary for a law school graduate Forum

[legalese_retard]

Not sure if this was posted yet, but there is a posting on ATL about what the dean at Northwestern thinks the break-even point for starting salaries should be. I wish he specified how much the student loans should be for this number.

"Van Zandt and some of his Northwestern colleagues did a study to determine the added value of a J.D. degree. They concluded that the break-even starting salary for a law school graduate is $65,000. Put another way, going to a law school with a median salary upon graduation that’s below $65,000 is not a wise investment. "

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[rayiner]

Sounds like a bit of a low-ball at NU (where it seems like a lot of people made that coming in), but it might be right for your average law school graduate. If you figure that your typical liberal arts major makes about $35k out of school, and that on a 30-year loan the monthly payment amounts to $25k/year pre-tax, then you break even around $60-$65k.

Of course, I'm not sure if $35k is really a representative number for the alternative career opportunities available to top law school matriculants.

[yeff]

Sounds like a bit of a low-ball at NU (where it seems like a lot of people made that coming in), but it might be right for your average law school graduate. If you figure that your typical liberal arts major makes about $35k out of school, and that on a 30-year loan the monthly payment amounts to $25k/year pre-tax, then you break even around $60-$65k.

Of course, I'm not sure if $35k is really a representative number for the alternative career opportunities available to top law school matriculants.

I'm no math major, but isn't a 30 year loan at $25k a year around $320000 if you assume 6.8% interest?

That's some serious COL.

[rayiner]

Sounds like a bit of a low-ball at NU (where it seems like a lot of people made that coming in), but it might be right for your average law school graduate. If you figure that your typical liberal arts major makes about $35k out of school, and that on a 30-year loan the monthly payment amounts to $25k/year pre-tax, then you break even around $60-$65k.

Of course, I'm not sure if $35k is really a representative number for the alternative career opportunities available to top law school matriculants.

I'm no math major, but isn't a 30 year loan at $25k a year around $320000 if you assume 6.8% interest?

That's some serious COL.

Yeah, but the bulk of your loans are at 8%. And it's actually like $540,000 on a loan with $200,000 of principal. Which is a lot of money to be fair, but the lifetime earnings difference between your typical college graduate and even a non-biglaw JD is more than that.

Of course, $65k is just the break-even point. You are giving up three years of your life to pursue the degree, and you're probably worknig a lot more hours, so you'd probably want to do a lot more than break even...

[hsprophet]

There are too many personal factors to determine a blanket break-even point.

What if you get scholarships?
What would be the expected pay if a person didn't go to law school? A corporate executive? Flipping burgers?
What are the terms of the loans a person gets?

To determine break-even you have to have something to compare it against. What does it mean to break-even? You could afford payments on a $100K loan even if you make $40K a year. You'd be living in a shack, but isn't that breaking even?

[Marisa5252]

Sounds like a bit of a low-ball at NU (where it seems like a lot of people made that coming in), but it might be right for your average law school graduate. If you figure that your typical liberal arts major makes about $35k out of school, and that on a 30-year loan the monthly payment amounts to $25k/year pre-tax, then you break even around $60-$65k.

Of course, I'm not sure if $35k is really a representative number for the alternative career opportunities available to top law school matriculants.

I'm no math major, but isn't a 30 year loan at $25k a year around $320000 if you assume 6.8% interest?

That's some serious COL.

Yeah, but the bulk of your loans are at 8%. And it's actually like $540,000 on a loan with $200,000 of principal. Which is a lot of money to be fair, but the lifetime earnings difference between your typical college graduate and even a non-biglaw JD is more than that.

Of course, $65k is just the break-even point. You are giving up three years of your life to pursue the degree, and you're probably worknig a lot more hours, so you'd probably want to do a lot more than break even...

Probably a lot of people aren't "breaking even." It seems like the consensus is that when you graduate you either do well enough at a good enough school to get into biglaw where you're probably making $100k+ or you don't, and you're making $45-$55k. I'm not sure there are a lot of jobs between those ranges and since the median is BELOW the breaking even point most people are losing on their "investment" and some people are winning out

There are too many personal factors to determine a blanket break-even point.

What if you get scholarships?
What would be the expected pay if a person didn't go to law school? A corporate executive? Flipping burgers?
What are the terms of the loans a person gets?

To determine break-even you have to have something to compare it against. What does it mean to break-even? You could afford payments on a $100K loan even if you make $40K a year. You'd be living in a shack, but isn't that breaking even?

It's not breaking even if you didn't live in a shack before school and now you do.