Challenging TLS common wisdom to "wait a cycle" for more aid

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theramblingfool
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Challenging TLS common wisdom to "wait a cycle" for more aid

Postby theramblingfool » Tue Jan 14, 2014 12:03 pm

I get it. Attending law school is expensive. Incredibly expensive. But if you're facing the decision of matriculating or waiting another cycle for a better LSAT and more aid at a T14 school (especially the top half of T14), I don't see how this is a no-brainer.

If your plan is to just go into biglaw post-grad, it looks like $160k is a reasonable income to expect. After taxes, that's probably arond $120k. Currently, I am a software engineer, and after taxes I make around $40k. That's a fair income to use for this comparison.

So if I decide to wait a cycle to apply, that is one less year, potentially, for me to work in biglaw, so -$120k. One additional year at my current job would be +$40k. So the difference in aid offered after waiting would have to be around $80k just to break even.

Help me out. Is my logic flawed here?

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PepperJack
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Re: Challenging TLS common wisdom to "wait a cycle" for more aid

Postby PepperJack » Tue Jan 14, 2014 12:07 pm

theramblingfool wrote:I get it. Attending law school is expensive. Incredibly expensive. But if you're facing the decision of matriculating or waiting another cycle for a better LSAT and more aid at a T14 school (especially the top half of T14), I don't see how this is a no-brainer.

If your plan is to just go into biglaw post-grad, it looks like $160k is a reasonable income to expect. After taxes, that's probably arond $120k. Currently, I am a software engineer, and after taxes I make around $40k. That's a fair income to use for this comparison.

So if I decide to wait a cycle to apply, that is one less year, potentially, for me to work in biglaw, so -$120k. One additional year at my current job would be +$40k. So the difference in aid offered after waiting would have to be around $80k just to break even.

Help me out. Is my logic flawed here?

The exit option if big law doesn't happen. 160k isn't guaranteed, maybe half gets it, if that. If you only have 20k in debt when you strikeout in Fall of 2L then you're not sunk in the water. If you're 100k in debt, you are. Additionally, the life span of a big law attorney isn't 40 years. Those 160-220k days may be few in number so you want to make the most out of them.

Statistically, if you go early and crack the top 20% then your logic is right. If you're median or worse (about 75% of the class) then it's wrong.

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midwest17
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Re: Challenging TLS common wisdom to "wait a cycle" for more aid

Postby midwest17 » Tue Jan 14, 2014 12:08 pm

Also factor in interest.

And unless you're going to HYS (in which case waiting wouldn't get you more aid) your expectation should not be a $160K salary. You need to adjust based on the fact that BigLaw is not a guarantee.

rad lulz
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Re: Challenging TLS common wisdom to "wait a cycle" for more aid

Postby rad lulz » Tue Jan 14, 2014 12:13 pm

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Otunga
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Re: Challenging TLS common wisdom to "wait a cycle" for more aid

Postby Otunga » Tue Jan 14, 2014 12:17 pm

PepperJack wrote:
theramblingfool wrote:I get it. Attending law school is expensive. Incredibly expensive. But if you're facing the decision of matriculating or waiting another cycle for a better LSAT and more aid at a T14 school (especially the top half of T14), I don't see how this is a no-brainer.

If your plan is to just go into biglaw post-grad, it looks like $160k is a reasonable income to expect. After taxes, that's probably arond $120k. Currently, I am a software engineer, and after taxes I make around $40k. That's a fair income to use for this comparison.

So if I decide to wait a cycle to apply, that is one less year, potentially, for me to work in biglaw, so -$120k. One additional year at my current job would be +$40k. So the difference in aid offered after waiting would have to be around $80k just to break even.

Help me out. Is my logic flawed here?

The exit option if big law doesn't happen. 160k isn't guaranteed, maybe half gets it, if that. If you only have 20k in debt when you strikeout in Fall of 2L then you're not sunk in the water. If you're 100k in debt, you are. Additionally, the life span of a big law attorney isn't 40 years. Those 160-220k days may be few in number so you want to make the most out of them.

Statistically, if you go early and crack the top 20% then your logic is right. If you're median or worse (about 75% of the class) then it's wrong.


Essentially, then, most of the mid to lower t14 students that aren't set on doing PI are taking a 50/50 chance at the salary that's going to pay off their large debts? Most aren't getting large scholarships, so even going to the mid to lower t14 on low to moderate scholarships doesn't make much sense to me either.

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midwest17
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Re: Challenging TLS common wisdom to "wait a cycle" for more aid

Postby midwest17 » Tue Jan 14, 2014 12:26 pm

Otunga wrote:
PepperJack wrote:
theramblingfool wrote:I get it. Attending law school is expensive. Incredibly expensive. But if you're facing the decision of matriculating or waiting another cycle for a better LSAT and more aid at a T14 school (especially the top half of T14), I don't see how this is a no-brainer.

If your plan is to just go into biglaw post-grad, it looks like $160k is a reasonable income to expect. After taxes, that's probably arond $120k. Currently, I am a software engineer, and after taxes I make around $40k. That's a fair income to use for this comparison.

So if I decide to wait a cycle to apply, that is one less year, potentially, for me to work in biglaw, so -$120k. One additional year at my current job would be +$40k. So the difference in aid offered after waiting would have to be around $80k just to break even.

Help me out. Is my logic flawed here?

The exit option if big law doesn't happen. 160k isn't guaranteed, maybe half gets it, if that. If you only have 20k in debt when you strikeout in Fall of 2L then you're not sunk in the water. If you're 100k in debt, you are. Additionally, the life span of a big law attorney isn't 40 years. Those 160-220k days may be few in number so you want to make the most out of them.

Statistically, if you go early and crack the top 20% then your logic is right. If you're median or worse (about 75% of the class) then it's wrong.


Essentially, then, most of the mid to lower t14 students that aren't set on doing PI are taking a 50/50 chance at the salary that's going to pay off their large debts? Most aren't getting large scholarships, so even going to the mid to lower t14 on low to moderate scholarships doesn't make much sense to me either.


Isn't it really easy to get a PSLF-eligible job? Not a *legal* PSLF/LRAP eligible job, obviously, but some sort of non-profit job shouldn't be insanely difficult. That's 10 years of living without a lot of money, but you're only paying IBR rates, so it would at least be livable.

rad lulz
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Re: Challenging TLS common wisdom to "wait a cycle" for more aid

Postby rad lulz » Tue Jan 14, 2014 12:28 pm

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Ramius
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Re: Challenging TLS common wisdom to "wait a cycle" for more aid

Postby Ramius » Tue Jan 14, 2014 12:30 pm

You need to check a lot of the LRAPs at the various schools, cause most require it to be a full time legal job. Check out twenty's guide to T14 LRAP for better explanations on this, but it's not as easy as it might seem.

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midwest17
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Re: Challenging TLS common wisdom to "wait a cycle" for more aid

Postby midwest17 » Tue Jan 14, 2014 12:34 pm

matthewsean85 wrote:You need to check a lot of the LRAPs at the various schools, cause most require it to be a full time legal job. Check out twenty's guide to T14 LRAP for better explanations on this, but it's not as easy as it might seem.


Like I said, I'm not talking about LRAP. But PSLF works for any government or tax-exempt public interest job, not just legal ones, I think.

Admittedly, I don't know how hard it would be to actually get one of those jobs. But it seems like it wouldn't be terribly difficult (at least, relative to getting any job in this economy).

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Otunga
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Re: Challenging TLS common wisdom to "wait a cycle" for more aid

Postby Otunga » Tue Jan 14, 2014 12:40 pm

midwest17 wrote:
matthewsean85 wrote:You need to check a lot of the LRAPs at the various schools, cause most require it to be a full time legal job. Check out twenty's guide to T14 LRAP for better explanations on this, but it's not as easy as it might seem.


Like I said, I'm not talking about LRAP. But PSLF works for any government or tax-exempt public interest job, not just legal ones, I think.

Admittedly, I don't know how hard it would be to actually get one of those jobs. But it seems like it wouldn't be terribly difficult (at least, relative to getting any job in this economy).


Thing is, I think you have to hold the job to secure the low rates. If you get out of work, I'm under the impression you go back to standard rates if out of PI work too long.

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Ramius
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Re: Challenging TLS common wisdom to "wait a cycle" for more aid

Postby Ramius » Tue Jan 14, 2014 12:42 pm

midwest17 wrote:
matthewsean85 wrote:You need to check a lot of the LRAPs at the various schools, cause most require it to be a full time legal job. Check out twenty's guide to T14 LRAP for better explanations on this, but it's not as easy as it might seem.


Like I said, I'm not talking about LRAP. But PSLF works for any government or tax-exempt public interest job, not just legal ones, I think.

Admittedly, I don't know how hard it would be to actually get one of those jobs. But it seems like it wouldn't be terribly difficult (at least, relative to getting any job in this economy).


I think it might partially depend on how governmental budget talks progress now and in the coming months (a long-term budget deal might help a lot, but it might not help at all), but generally speaking, most governmental agencies and programs are not bursting at the purse string with money. What that means is generally a hiring freeze across most agencies.

I don't have hard data, but having a lot of friends who work in/are trying to work for the government, getting PSLF-eligible jobs are every bit as competitive if not moreso than your typical law job.

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midwest17
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Re: Challenging TLS common wisdom to "wait a cycle" for more aid

Postby midwest17 » Tue Jan 14, 2014 12:44 pm

Otunga wrote:
midwest17 wrote:
matthewsean85 wrote:You need to check a lot of the LRAPs at the various schools, cause most require it to be a full time legal job. Check out twenty's guide to T14 LRAP for better explanations on this, but it's not as easy as it might seem.


Like I said, I'm not talking about LRAP. But PSLF works for any government or tax-exempt public interest job, not just legal ones, I think.

Admittedly, I don't know how hard it would be to actually get one of those jobs. But it seems like it wouldn't be terribly difficult (at least, relative to getting any job in this economy).


Thing is, I think you have to hold the job to secure the low rates. If you get out of work, I'm under the impression you go back to standard rates if out of PI work too long.


It's not lower rates (it's still IBR, or whatever the acronym is now), it's non-taxable forgiveness after 10 years instead of taxable forgiveness after 25 (or 20?)

My understanding is that you have to make 120 monthly payments while working in a qualifying job. So if you're out of work for three months is delays your forgiveness for three months, but you're still eligible.

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koalacity
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Re: Challenging TLS common wisdom to "wait a cycle" for more aid

Postby koalacity » Tue Jan 14, 2014 12:49 pm

midwest17 wrote:
matthewsean85 wrote:You need to check a lot of the LRAPs at the various schools, cause most require it to be a full time legal job. Check out twenty's guide to T14 LRAP for better explanations on this, but it's not as easy as it might seem.


Like I said, I'm not talking about LRAP. But PSLF works for any government or tax-exempt public interest job, not just legal ones, I think.

Admittedly, I don't know how hard it would be to actually get one of those jobs. But it seems like it wouldn't be terribly difficult (at least, relative to getting any job in this economy).

I'm quite certain you have to be full-time (30+ hours/week) to be eligible for PSLF.

Plus, relying solely on PSLF is a little risky since Congress could theoretically change it or axe it entirely whenever they feel like it. Of course, I think that's part of the reason the T14 (and some other schools) have their own LRAPs.

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Ramius
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Re: Challenging TLS common wisdom to "wait a cycle" for more aid

Postby Ramius » Tue Jan 14, 2014 12:56 pm

koalacity wrote:
midwest17 wrote:
matthewsean85 wrote:You need to check a lot of the LRAPs at the various schools, cause most require it to be a full time legal job. Check out twenty's guide to T14 LRAP for better explanations on this, but it's not as easy as it might seem.


Like I said, I'm not talking about LRAP. But PSLF works for any government or tax-exempt public interest job, not just legal ones, I think.

Admittedly, I don't know how hard it would be to actually get one of those jobs. But it seems like it wouldn't be terribly difficult (at least, relative to getting any job in this economy).

I'm quite certain you have to be full-time (30+ hours/week) to be eligible for PSLF.

Plus, relying solely on PSLF is a little risky since Congress could theoretically change it or axe it entirely whenever they feel like it. Of course, I think that's part of the reason the T14 (and some other schools) have their own LRAPs.



PSLF is probably safe, what you're thinking about going away is PAYE, which requires 20 years and could likely go kapput. PSLF serves a good purpose for professions like law and medicine and isn't nearly expensive as PAYE, which costs a small fortune because it covers all student loans.

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twenty
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Re: Challenging TLS common wisdom to "wait a cycle" for more aid

Postby twenty » Tue Jan 14, 2014 1:40 pm

**dies inside**

PSLF = applies to all full time public service jobs. After ten years, any remaining debt you have goes bye-bye. Forgiven debt is not taxable.

PAYE = applies to all jobs, period. You can get this if you're working at Starbucks. With this plan, any debt you have after 20 years is forgiven, but the forgiven amount is taxable.

PAYE + PSLF = applies to all full time public service jobs. You pay based on your salary for ten years, and then PSLF covers the rest. As midwest pointed out, you can get this very, very easily. Hell, enlisting in the Army qualifies for this, and I'm sure you can get a gig as a police officer/librarian/county-ditch-digger if you absolutely had to have PAYE + PSLF.

PAYE + PSLF + LRAP = applies to all full time public service legal jobs. As matthewsean points out, getting one of these jobs is definitely not as easy as it seems.

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Otunga
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Re: Challenging TLS common wisdom to "wait a cycle" for more aid

Postby Otunga » Tue Jan 14, 2014 1:46 pm

LOL at getting taxed like a rich guy with PAYE even if you're still working a shitty job.

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twenty
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Re: Challenging TLS common wisdom to "wait a cycle" for more aid

Postby twenty » Tue Jan 14, 2014 1:50 pm

Honest to god, I have no idea why anyone would do PAYE as a standalone. If it's going to take you twenty years to pay your loans, you need to seriously rethink your life.

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twenty
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Re: Challenging TLS common wisdom to "wait a cycle" for more aid

Postby twenty » Tue Jan 14, 2014 1:52 pm

Going back to the original OP, though: sitting the cycle out is definitely not always TCR. It's TCR for reverse splitters that have 3.7s and 162s that were PTing at 170 but choked on testing day.

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Ramius
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Re: Challenging TLS common wisdom to "wait a cycle" for more aid

Postby Ramius » Tue Jan 14, 2014 2:08 pm

twenty wrote:**dies inside**

PSLF = applies to all full time public service jobs. After ten years, any remaining debt you have goes bye-bye. Forgiven debt is not taxable.

PAYE = applies to all jobs, period. You can get this if you're working at Starbucks. With this plan, any debt you have after 20 years is forgiven, but the forgiven amount is taxable.

PAYE + PSLF = applies to all full time public service jobs. You pay based on your salary for ten years, and then PSLF covers the rest. As midwest pointed out, you can get this very, very easily. Hell, enlisting in the Army qualifies for this, and I'm sure you can get a gig as a police officer/librarian/county-ditch-digger if you absolutely had to have PAYE + PSLF.

PAYE + PSLF + LRAP = applies to all full time public service legal jobs. As matthewsean points out, getting one of these jobs is definitely not as easy as it seems.


Thanks for the clarification twenty. I knew I was by no means an expert about PSLF/LRAP, but it just seemed cavalier to say those jobs were easy to get. Then again, I was thinking about more prestigious stuff, not your average ditch digger.

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Cicero76
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Re: Challenging TLS common wisdom to "wait a cycle" for more aid

Postby Cicero76 » Tue Jan 14, 2014 7:03 pm

Where does $160k turn into $120k after taxes? Texas?

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koalacity
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Re: Challenging TLS common wisdom to "wait a cycle" for more aid

Postby koalacity » Tue Jan 14, 2014 7:15 pm

Cicero76 wrote:Where does $160k turn into $120k after taxes? Texas?

No income tax in Texas because, well, it's Texas.




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