Why not pay sticker at T14 when biglaw salary could pay off loans?

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LegalBiology

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Why not pay sticker at T14 when biglaw salary could pay off loans?

Postby LegalBiology » Fri Jun 08, 2018 4:04 pm

So considering biglaw associates start out at almost 200K and make their way up to almost 300K in less than 10 years, what is 3 years of law school at full price, even if you have to take out loans for 100% of it?

I'm confused when people who are accepted to Duke or Georgetown are told not to go because they didn't get scholarships. Where do they go then? What are they suppose to do

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Re: Why not pay sticker at T14 when biglaw salary could pay off loans?

Postby nixy » Fri Jun 08, 2018 5:35 pm

1) go to a lower-ranked school with a scholarship
2) retake the LSAT and reapply for better options
3) not go to law school and find something else to do

The issue with paying sticker is that
1) you might not get biglaw
2) you might decide you want to do a different kind of law
3) you might hate biglaw so much that staying long enough to pay back ~$300,000 becomes very difficult
4) paying back $300k hurts a LOT even when you’re making $190k

Now some people think it’s still worth it. That’s fine. But the above are why people tell them not to go and what their other options are.

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Re: Why not pay sticker at T14 when biglaw salary could pay off loans?

Postby Toni V » Fri Jun 08, 2018 5:58 pm

If you’re accepted to a T14, you can pay off your loan and still live comfortably. The risk is, not securing BL $$. Even with MLaw you can pay off your loan but not live as comfortably. Short of things going terribly sideways (firm closes, recession, etc) sticker at a T14 (not ideal) is acceptable.

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Re: Why not pay sticker at T14 when biglaw salary could pay off loans?

Postby Npret » Fri Jun 08, 2018 6:47 pm

LegalBiology wrote:So considering biglaw associates start out at almost 200K and make their way up to almost 300K in less than 10 years, what is 3 years of law school at full price, even if you have to take out loans for 100% of it?

I'm confused when people who are accepted to Duke or Georgetown are told not to go because they didn't get scholarships. Where do they go then? What are they suppose to do


Law school doesn’t come with a guarantee of biglaw even from a T14.

$300,000 plus debt is a large amount of money to repay.

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Re: Why not pay sticker at T14 when biglaw salary could pay off loans?

Postby Npret » Fri Jun 08, 2018 7:45 pm

Some quick numbers from a student loan an calculator

To repay 316,000 in 10 years
Your monthly payment is $3636.54
You will pay an additional 120,384.54 in interest

I’m sure you realize that biglaw lawyers especially in nyc are paying high taxes, rounding to taxes of 40% you will bring home 114,000 or about 9,5 so more than third is debt service. Rent is another third.

The other more important point is you can’t count on lasting 10 years even if you get biglaw.

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Re: Why not pay sticker at T14 when biglaw salary could pay off loans?

Postby yyyuppp » Fri Jun 08, 2018 8:21 pm

Npret wrote:Some quick numbers from a student loan an calculator

To repay 316,000 in 10 years
Your monthly payment is $3636.54
You will pay an additional 120,384.54 in interest

I’m sure you realize that biglaw lawyers especially in nyc are paying high taxes, rounding to taxes of 40% you will bring home 114,000 or about 9,5 so more than third is debt service. Rent is another third.

The other more important point is you can’t count on lasting 10 years even if you get biglaw.


this. OP, you seem to be forgetting the 20k in compounding interest you will have to pay each year just so your debt doesn't GROW, let alone pay it down.

you might not get biglaw, you might hate and want to leave, you might get fired. with biglaw, the debt ties you to the job and significantly effects your disposable income. without it, it is going to have a serious effect in your QOL for decades. so yeah, think about the cost of attendance before committing to it.

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Re: Why not pay sticker at T14 when biglaw salary could pay off loans?

Postby Npret » Fri Jun 08, 2018 10:42 pm

Also law school transparency can tell you what percent of the class st any school paid sticker, but they can’t tell you how many people had family money paying for their degree. Don’t assume everyone is taking on close to full debt.

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Re: Why not pay sticker at T14 when biglaw salary could pay off loans?

Postby jenesaislaw » Sat Jun 09, 2018 8:46 am

Npret wrote:Also law school transparency can tell you what percent of the class st any school paid sticker, but they can’t tell you how many people had family money paying for their degree. Don’t assume everyone is taking on close to full debt.


Actually, check the policy tab on a school profile page. We have the percentage who borrowed.

You can also see all schools on our data dashboard https://data.lawschooltransparency.com/ ... pe=schools

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Re: Why not pay sticker at T14 when biglaw salary could pay off loans?

Postby Wild Card » Sat Jun 09, 2018 4:04 pm

Because many biglaw associates burn out or are pushed out after less than two years.

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Re: Why not pay sticker at T14 when biglaw salary could pay off loans?

Postby Npret » Sat Jun 09, 2018 6:21 pm

jenesaislaw wrote:
Npret wrote:Also law school transparency can tell you what percent of the class st any school paid sticker, but they can’t tell you how many people had family money paying for their degree. Don’t assume everyone is taking on close to full debt.


Actually, check the policy tab on a school profile page. We have the percentage who borrowed.

You can also see all schools on our data dashboard https://data.lawschooltransparency.com/ ... pe=schools

Thanks. I was looking at how many students paid full tuition at Duke and it’s a small number. I didn’t the debt financed part of the data.

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Re: Why not pay sticker at T14 when biglaw salary could pay off loans?

Postby Synapse2018 » Sun Jun 10, 2018 9:32 am

Because it costs 300k and no school on earth is worth a 300k investment.

If you can excel at a t14, you can be at the top of your class at a lower rank school, graduate with 0 debt, and have far less stress in your life.

300k in loans is something like 3000-4000 a month in payments for 10 years. How are you gonna manage working big law for 10 years? Isn’t the average time there just 2-3 years?

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Re: Why not pay sticker at T14 when biglaw salary could pay off loans?

Postby nealric » Mon Jun 11, 2018 3:17 pm

Synapse2018 wrote:If you can excel at a t14, you can be at the top of your class at a lower rank school, graduate with 0 debt, and have far less stress in your life.


Not really true. At the lower end school, all it takes is one flubbed test, bout of illness, or professor incompatibility to kick you out of the top of your class. Plus, the difference between a 163 and a 170 LSAT scorer really isn't that meaningful when it comes down to law school exams. Just because you had T14 offers with your 170 doesn't mean the 163 scoring T20 Admit won't be serious competition at exam time. Plus, at the very top schools, you don't even have to excel to get a job- just make it through in good standing.

To answer the OP: the reason not to pay sticker is that being under non-dischargeable debt can be pretty soul crushing. It means your options are to either grind it out in a high-paying job you may hate, or be indebted for effectively all your working life. You may not even have the option of staying in biglaw for more than a very short period of time. When I was a summer associate, I was office mates with someone who didn't even make it a year. That person wasn't stupid or lazy- just in the wrong place at the wrong time.

On the other hand, I also disagree with people who say one should "never" pay sticker. It's possible to make an informed choice that paying sticker is worth the risk, but I think you really need to know yourself and what you are getting yourself into.

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Re: Why not pay sticker at T14 when biglaw salary could pay off loans?

Postby Synapse2018 » Tue Jun 12, 2018 11:18 am

nealric wrote:
Synapse2018 wrote:If you can excel at a t14, you can be at the top of your class at a lower rank school, graduate with 0 debt, and have far less stress in your life.


Not really true. At the lower end school, all it takes is one flubbed test, bout of illness, or professor incompatibility to kick you out of the top of your class. Plus, the difference between a 163 and a 170 LSAT scorer really isn't that meaningful when it comes down to law school exams. Just because you had T14 offers with your 170 doesn't mean the 163 scoring T20 Admit won't be serious competition at exam time. Plus, at the very top schools, you don't even have to excel to get a job- just make it through in good standing.

To answer the OP: the reason not to pay sticker is that being under non-dischargeable debt can be pretty soul crushing. It means your options are to either grind it out in a high-paying job you may hate, or be indebted for effectively all your working life. You may not even have the option of staying in biglaw for more than a very short period of time. When I was a summer associate, I was office mates with someone who didn't even make it a year. That person wasn't stupid or lazy- just in the wrong place at the wrong time.

On the other hand, I also disagree with people who say one should "never" pay sticker. It's possible to make an informed choice that paying sticker is worth the risk, but I think you really need to know yourself and what you are getting yourself into.


The problem is paying sticker price with loans is not an informed decision. It’s a poor financial decision. Statistically speaking, you stand almost zero chance To be working in Big law for 10 years straight to pay back $3500 a month every month for a decade. If you do end up leaving big law, You stand almost no chance of paying back those loans. you stand almost no chance of paying back those loans. What you are suggesting to the OP, is to play Russian roulette. Making a debt payment that high is a very Serious gamble and If even one small thing doesn’t go according to plan, you’re done financially for the rest of your life vest. If even one small thing doesn’t go according to plan, you’re done financially for the rest of your life.

in undergrad, I saw many people fall for the same trick. They borrow tons of money to go to a top names school because the major had a high average starting salary. A few years later they learned that the laws of supply and demand for labor work the same way as they do for goods and services. There is no profession on earth that’s worth borrowing 200 or $300,000 to break into. That’s the same logic behind buying a home because it’ll increase in value despite not being able to make the mortgage payments.

Getting into that much debt handicaps your ability to open your own practice or even to live a lower middle-class lifestyle. If you end up in big law for three years, that leaves seven years of practically starving yourself to pay back the 3500 a month if you can even afford to make those payments.Odds are you will default. Factor in rent, car payment, car insurance, gas, electric, food, and you’re looking at $6000 a month and expenses. That’s 72,000 a year after taxes which leaves very little left over even if your base salary is 150,000 after big law. Make only 100,000? Now you’re in a very serious a deficit That leads you to drastically reduce your lifestyle back to living like a college student. With that type of debt, you can forget about starting a family and being able to afford things like childcare. These are all very serious concerns that one Should not overlook because of prestige or something stupid like that.

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Re: Why not pay sticker at T14 when biglaw salary could pay off loans?

Postby nixy » Tue Jun 12, 2018 11:32 am

No one has to default, what with income-based plans out there.

Debt still sucks, but I don’t think the concern about defaulting is realistic.

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Re: Why not pay sticker at T14 when biglaw salary could pay off loans?

Postby hoos89 » Tue Jun 12, 2018 11:42 am

nixy wrote:No one has to default, what with income-based plans out there.

Debt still sucks, but I don’t think the concern about defaulting is realistic.


It is if you refi to try to avoid paying almost $2k/mo in interest.

LegalBiology wrote:So considering biglaw associates start out at almost 200K and make their way up to almost 300K in less than 10 years, what is 3 years of law school at full price, even if you have to take out loans for 100% of it?

I'm confused when people who are accepted to Duke or Georgetown are told not to go because they didn't get scholarships. Where do they go then? What are they suppose to do


Imagine spending 3 years and law school and then probably another ~4-5 years in big law just to get back to $0 net worth. And that's assuming that you get the job in the first place (which is by no means guaranteed) and are able to keep it for that long (which again...not a guarantee).

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Re: Why not pay sticker at T14 when biglaw salary could pay off loans?

Postby nealric » Tue Jun 12, 2018 1:34 pm

Synapse2018 wrote:
nealric wrote:
Synapse2018 wrote:If you can excel at a t14, you can be at the top of your class at a lower rank school, graduate with 0 debt, and have far less stress in your life.


Not really true. At the lower end school, all it takes is one flubbed test, bout of illness, or professor incompatibility to kick you out of the top of your class. Plus, the difference between a 163 and a 170 LSAT scorer really isn't that meaningful when it comes down to law school exams. Just because you had T14 offers with your 170 doesn't mean the 163 scoring T20 Admit won't be serious competition at exam time. Plus, at the very top schools, you don't even have to excel to get a job- just make it through in good standing.

To answer the OP: the reason not to pay sticker is that being under non-dischargeable debt can be pretty soul crushing. It means your options are to either grind it out in a high-paying job you may hate, or be indebted for effectively all your working life. You may not even have the option of staying in biglaw for more than a very short period of time. When I was a summer associate, I was office mates with someone who didn't even make it a year. That person wasn't stupid or lazy- just in the wrong place at the wrong time.

On the other hand, I also disagree with people who say one should "never" pay sticker. It's possible to make an informed choice that paying sticker is worth the risk, but I think you really need to know yourself and what you are getting yourself into.


The problem is paying sticker price with loans is not an informed decision. It’s a poor financial decision. Statistically speaking, you stand almost zero chance To be working in Big law for 10 years straight to pay back $3500 a month every month for a decade. If you do end up leaving big law, You stand almost no chance of paying back those loans. you stand almost no chance of paying back those loans. What you are suggesting to the OP, is to play Russian roulette. Making a debt payment that high is a very Serious gamble and If even one small thing doesn’t go according to plan, you’re done financially for the rest of your life vest. If even one small thing doesn’t go according to plan, you’re done financially for the rest of your life.

in undergrad, I saw many people fall for the same trick. They borrow tons of money to go to a top names school because the major had a high average starting salary. A few years later they learned that the laws of supply and demand for labor work the same way as they do for goods and services. There is no profession on earth that’s worth borrowing 200 or $300,000 to break into. That’s the same logic behind buying a home because it’ll increase in value despite not being able to make the mortgage payments.

Getting into that much debt handicaps your ability to open your own practice or even to live a lower middle-class lifestyle. If you end up in big law for three years, that leaves seven years of practically starving yourself to pay back the 3500 a month if you can even afford to make those payments.Odds are you will default. Factor in rent, car payment, car insurance, gas, electric, food, and you’re looking at $6000 a month and expenses. That’s 72,000 a year after taxes which leaves very little left over even if your base salary is 150,000 after big law. Make only 100,000? Now you’re in a very serious a deficit That leads you to drastically reduce your lifestyle back to living like a college student. With that type of debt, you can forget about starting a family and being able to afford things like childcare. These are all very serious concerns that one Should not overlook because of prestige or something stupid like that.


Keep in mind that I am not a 0L pontificating here. I'm getting close to 10 years out of law school. Taking on full debt can be an informed decision, even if it is not necessarily so. You need to be comfortable with working long hours for a significant portion of your career (be it in biglaw or not), and you have to be driven to a higher-end career over a more middle-end one even if it means some unpleasantness. Some people know going in whether this is for them, and some don't. Additionally, the very top schools still have LRAP programs over and above those provided by the government. If you want to do public interest and go to Yale, the debt is really more theoretical than real, as it's almost certain the Yale degree can lead you to a job that will qualify for their generous loan forgiveness.

I also have to laugh at your proposed budget. I never spent anything like that living in NYC on a biglaw salary. I didn't have a car, I rode my bike to work (subways on rainy days), and lived in a very modest apartment in a less-hip neighborhood. No, I wasn't looking to start a family, but most 25 year old professionals aren't unless they are part of a religious community that prioritizes early childbearing (and those folks tend to have heavy community support). You live like a student for three years in law school, and it won't kill you to live for another three years in the same manner while you attack those loans. With biglaw work hours, it's not like you are going to have time to enjoy a fancy apartment. By the time you are a fourth year in NYC, your salary is getting close to $300k all-in. Live modestly, and a 3rd year biglaw associate can kill $100k in loans in a year.

Just because you leave biglaw doesn't mean you fall to the left side of the bimodal salary distribution. When I left biglaw, my all-in compensation package actually increased even though my base salary fell. I actually started really gaining traction on paying off my loans (which are now paid off) AFTER I left biglaw. Now that my net worth is many multiples of what I borrowed, that debt looks insignificant in the rear-view mirror.

None of that means that borrowing full freight can't be a poor decision. You are absolutely correct that debt can trap you, and I certainly felt like I had handcuffs on when I was still in debt. It's especially poor if you go to a school that does not provide highly paid opportunities as a matter of course. Nobody is proposing that attending NYLS at sticker is wise.

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Re: Why not pay sticker at T14 when biglaw salary could pay off loans?

Postby albanach » Tue Jun 12, 2018 2:07 pm

hoos89 wrote:
nixy wrote:No one has to default, what with income-based plans out there.

Debt still sucks, but I don’t think the concern about defaulting is realistic.


It is if you refi to try to avoid paying almost $2k/mo in interest.


Anyone qualified as a lawyer and refinancing should surely be pricing in the cost of losing access to IBR, PSLF, etc when deciding if that's worth a 4% interest rate drop.

Have people been getting substantially more than a 4% drop in their APR? That would be $12k/year on $300k of debt, or $1k/month not $2k. And that's only in the first year. Over the course of a 5 or 10 year repayment, I think it'll typically work out to less than $600 saved a month.

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Re: Why not pay sticker at T14 when biglaw salary could pay off loans?

Postby hoos89 » Tue Jun 12, 2018 2:11 pm

albanach wrote:
hoos89 wrote:
nixy wrote:No one has to default, what with income-based plans out there.

Debt still sucks, but I don’t think the concern about defaulting is realistic.


It is if you refi to try to avoid paying almost $2k/mo in interest.


Anyone qualified as a lawyer and refinancing should surely be pricing in the cost of losing access to IBR, PSLF, etc when deciding if that's worth a 4% interest rate drop.

Have people been getting substantially more than a 4% drop in their APR? That would be $12k/year on $300k of debt, or $1k/month not $2k. And that's only in the first year. Over the course of a 5 or 10 year repayment, I think it'll typically work out to less than $600 saved a month.


I meant that you would be paying less than $2k/mo in interest, not that you would be saving $2k/mo. In any case my point is that default is still a thing that can happen because people can and do refi.

I was able to refi at 3.25%, FWIW. Not sure if it's possible to go lower (and it might not even be possible to get that low anymore now that rates are rising).

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Re: Why not pay sticker at T14 when biglaw salary could pay off loans?

Postby historyminor » Tue Jun 12, 2018 2:26 pm

The real issue here isn't the biglaw salary, it's whether the individual student is a good match for that kind of job in the first place. There are some personalities that fit very well into biglaw, and for those people, this is a good investment with reasonable odds of success. I've seen other people not tend to do as well - typically people who have kind of eccentric interests and hobbies, who are very academia-oriented, or who struggle a little in social situations. These people may be super smart and easily succeed at the law school admissions game, but they just aren't going to fit into the culture of biglaw, and may struggle to break in in the first place.I think you've got to be really honest with yourself about whether you fall into these categories before you take on the loans.

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Re: Why not pay sticker at T14 when biglaw salary could pay off loans?

Postby longlivewho » Tue Jun 12, 2018 7:20 pm

historyminor wrote:The real issue here isn't the biglaw salary, it's whether the individual student is a good match for that kind of job in the first place. There are some personalities that fit very well into biglaw, and for those people, this is a good investment with reasonable odds of success. I've seen other people not tend to do as well - typically people who have kind of eccentric interests and hobbies, who are very academia-oriented, or who struggle a little in social situations. These people may be super smart and easily succeed at the law school admissions game, but they just aren't going to fit into the culture of biglaw, and may struggle to break in in the first place.I think you've got to be really honest with yourself about whether you fall into these categories before you take on the loans.


This can't be repeated enough...

The practice of law and actual law school is a completely different world. All the political correctness bull shit in law school completely goes out the door in big law world. Big law is an ole boy club.

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Re: Why not pay sticker at T14 when biglaw salary could pay off loans?

Postby Synapse2018 » Wed Jun 13, 2018 9:33 am

nealric wrote:
Synapse2018 wrote:
nealric wrote:
Synapse2018 wrote:If you can excel at a t14, you can be at the top of your class at a lower rank school, graduate with 0 debt, and have far less stress in your life.


Not really true. At the lower end school, all it takes is one flubbed test, bout of illness, or professor incompatibility to kick you out of the top of your class. Plus, the difference between a 163 and a 170 LSAT scorer really isn't that meaningful when it comes down to law school exams. Just because you had T14 offers with your 170 doesn't mean the 163 scoring T20 Admit won't be serious competition at exam time. Plus, at the very top schools, you don't even have to excel to get a job- just make it through in good standing.

To answer the OP: the reason not to pay sticker is that being under non-dischargeable debt can be pretty soul crushing. It means your options are to either grind it out in a high-paying job you may hate, or be indebted for effectively all your working life. You may not even have the option of staying in biglaw for more than a very short period of time. When I was a summer associate, I was office mates with someone who didn't even make it a year. That person wasn't stupid or lazy- just in the wrong place at the wrong time.

On the other hand, I also disagree with people who say one should "never" pay sticker. It's possible to make an informed choice that paying sticker is worth the risk, but I think you really need to know yourself and what you are getting yourself into.


The problem is paying sticker price with loans is not an informed decision. It’s a poor financial decision. Statistically speaking, you stand almost zero chance To be working in Big law for 10 years straight to pay back $3500 a month every month for a decade. If you do end up leaving big law, You stand almost no chance of paying back those loans. you stand almost no chance of paying back those loans. What you are suggesting to the OP, is to play Russian roulette. Making a debt payment that high is a very Serious gamble and If even one small thing doesn’t go according to plan, you’re done financially for the rest of your life vest. If even one small thing doesn’t go according to plan, you’re done financially for the rest of your life.

in undergrad, I saw many people fall for the same trick. They borrow tons of money to go to a top names school because the major had a high average starting salary. A few years later they learned that the laws of supply and demand for labor work the same way as they do for goods and services. There is no profession on earth that’s worth borrowing 200 or $300,000 to break into. That’s the same logic behind buying a home because it’ll increase in value despite not being able to make the mortgage payments.

Getting into that much debt handicaps your ability to open your own practice or even to live a lower middle-class lifestyle. If you end up in big law for three years, that leaves seven years of practically starving yourself to pay back the 3500 a month if you can even afford to make those payments.Odds are you will default. Factor in rent, car payment, car insurance, gas, electric, food, and you’re looking at $6000 a month and expenses. That’s 72,000 a year after taxes which leaves very little left over even if your base salary is 150,000 after big law. Make only 100,000? Now you’re in a very serious a deficit That leads you to drastically reduce your lifestyle back to living like a college student. With that type of debt, you can forget about starting a family and being able to afford things like childcare. These are all very serious concerns that one Should not overlook because of prestige or something stupid like that.


Keep in mind that I am not a 0L pontificating here. I'm getting close to 10 years out of law school. Taking on full debt can be an informed decision, even if it is not necessarily so. You need to be comfortable with working long hours for a significant portion of your career (be it in biglaw or not), and you have to be driven to a higher-end career over a more middle-end one even if it means some unpleasantness. Some people know going in whether this is for them, and some don't. Additionally, the very top schools still have LRAP programs over and above those provided by the government. If you want to do public interest and go to Yale, the debt is really more theoretical than real, as it's almost certain the Yale degree can lead you to a job that will qualify for their generous loan forgiveness.

I also have to laugh at your proposed budget. I never spent anything like that living in NYC on a biglaw salary. I didn't have a car, I rode my bike to work (subways on rainy days), and lived in a very modest apartment in a less-hip neighborhood. No, I wasn't looking to start a family, but most 25 year old professionals aren't unless they are part of a religious community that prioritizes early childbearing (and those folks tend to have heavy community support). You live like a student for three years in law school, and it won't kill you to live for another three years in the same manner while you attack those loans. With biglaw work hours, it's not like you are going to have time to enjoy a fancy apartment. By the time you are a fourth year in NYC, your salary is getting close to $300k all-in. Live modestly, and a 3rd year biglaw associate can kill $100k in loans in a year.

Just because you leave biglaw doesn't mean you fall to the left side of the bimodal salary distribution. When I left biglaw, my all-in compensation package actually increased even though my base salary fell. I actually started really gaining traction on paying off my loans (which are now paid off) AFTER I left biglaw. Now that my net worth is many multiples of what I borrowed, that debt looks insignificant in the rear-view mirror.

None of that means that borrowing full freight can't be a poor decision. You are absolutely correct that debt can trap you, and I certainly felt like I had handcuffs on when I was still in debt. It's especially poor if you go to a school that does not provide highly paid opportunities as a matter of course. Nobody is proposing that attending NYLS at sticker is wise.


OK so what percentage of people who borrowed 300 K to go to NYU or similar rank school are making as much as you claim you are? 50%? 25%? At what point do statistics catch-up and your odds are reduced Of paying that back? Because almost all of the people I spoke to that graduated from NYU said not to pay for sticker on loans because it will be impossible to pay back even if you land a job in big law. I’ve even spoken to Harvard alumni who have the same opinion. You’re making a very significant 10 year financial commitment when the average Big law employee is there only three years and most do not make more when they leave. The vast majority make less.

So, your advice to the OP is to gamble that that he’ll be one of the few statistical outliers Because that’s what you are if your story is true. It’s not the case for most people.

So many at my undergrad took 100,000+ in loans thinking they would land that investment banking gig and pay it back in three years. Of those, Not many are looking back at the decision as a wise one. Many did get the job but did not like the lifestyle or hated the grunt work and left.

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Re: Why not pay sticker at T14 when biglaw salary could pay off loans?

Postby nealric » Wed Jun 13, 2018 9:44 am

Synapse2018 wrote:
nealric wrote:
Synapse2018 wrote:
nealric wrote:
Synapse2018 wrote:If you can excel at a t14, you can be at the top of your class at a lower rank school, graduate with 0 debt, and have far less stress in your life.


Not really true. At the lower end school, all it takes is one flubbed test, bout of illness, or professor incompatibility to kick you out of the top of your class. Plus, the difference between a 163 and a 170 LSAT scorer really isn't that meaningful when it comes down to law school exams. Just because you had T14 offers with your 170 doesn't mean the 163 scoring T20 Admit won't be serious competition at exam time. Plus, at the very top schools, you don't even have to excel to get a job- just make it through in good standing.

To answer the OP: the reason not to pay sticker is that being under non-dischargeable debt can be pretty soul crushing. It means your options are to either grind it out in a high-paying job you may hate, or be indebted for effectively all your working life. You may not even have the option of staying in biglaw for more than a very short period of time. When I was a summer associate, I was office mates with someone who didn't even make it a year. That person wasn't stupid or lazy- just in the wrong place at the wrong time.

On the other hand, I also disagree with people who say one should "never" pay sticker. It's possible to make an informed choice that paying sticker is worth the risk, but I think you really need to know yourself and what you are getting yourself into.


The problem is paying sticker price with loans is not an informed decision. It’s a poor financial decision. Statistically speaking, you stand almost zero chance To be working in Big law for 10 years straight to pay back $3500 a month every month for a decade. If you do end up leaving big law, You stand almost no chance of paying back those loans. you stand almost no chance of paying back those loans. What you are suggesting to the OP, is to play Russian roulette. Making a debt payment that high is a very Serious gamble and If even one small thing doesn’t go according to plan, you’re done financially for the rest of your life vest. If even one small thing doesn’t go according to plan, you’re done financially for the rest of your life.

in undergrad, I saw many people fall for the same trick. They borrow tons of money to go to a top names school because the major had a high average starting salary. A few years later they learned that the laws of supply and demand for labor work the same way as they do for goods and services. There is no profession on earth that’s worth borrowing 200 or $300,000 to break into. That’s the same logic behind buying a home because it’ll increase in value despite not being able to make the mortgage payments.

Getting into that much debt handicaps your ability to open your own practice or even to live a lower middle-class lifestyle. If you end up in big law for three years, that leaves seven years of practically starving yourself to pay back the 3500 a month if you can even afford to make those payments.Odds are you will default. Factor in rent, car payment, car insurance, gas, electric, food, and you’re looking at $6000 a month and expenses. That’s 72,000 a year after taxes which leaves very little left over even if your base salary is 150,000 after big law. Make only 100,000? Now you’re in a very serious a deficit That leads you to drastically reduce your lifestyle back to living like a college student. With that type of debt, you can forget about starting a family and being able to afford things like childcare. These are all very serious concerns that one Should not overlook because of prestige or something stupid like that.


Keep in mind that I am not a 0L pontificating here. I'm getting close to 10 years out of law school. Taking on full debt can be an informed decision, even if it is not necessarily so. You need to be comfortable with working long hours for a significant portion of your career (be it in biglaw or not), and you have to be driven to a higher-end career over a more middle-end one even if it means some unpleasantness. Some people know going in whether this is for them, and some don't. Additionally, the very top schools still have LRAP programs over and above those provided by the government. If you want to do public interest and go to Yale, the debt is really more theoretical than real, as it's almost certain the Yale degree can lead you to a job that will qualify for their generous loan forgiveness.

I also have to laugh at your proposed budget. I never spent anything like that living in NYC on a biglaw salary. I didn't have a car, I rode my bike to work (subways on rainy days), and lived in a very modest apartment in a less-hip neighborhood. No, I wasn't looking to start a family, but most 25 year old professionals aren't unless they are part of a religious community that prioritizes early childbearing (and those folks tend to have heavy community support). You live like a student for three years in law school, and it won't kill you to live for another three years in the same manner while you attack those loans. With biglaw work hours, it's not like you are going to have time to enjoy a fancy apartment. By the time you are a fourth year in NYC, your salary is getting close to $300k all-in. Live modestly, and a 3rd year biglaw associate can kill $100k in loans in a year.

Just because you leave biglaw doesn't mean you fall to the left side of the bimodal salary distribution. When I left biglaw, my all-in compensation package actually increased even though my base salary fell. I actually started really gaining traction on paying off my loans (which are now paid off) AFTER I left biglaw. Now that my net worth is many multiples of what I borrowed, that debt looks insignificant in the rear-view mirror.

None of that means that borrowing full freight can't be a poor decision. You are absolutely correct that debt can trap you, and I certainly felt like I had handcuffs on when I was still in debt. It's especially poor if you go to a school that does not provide highly paid opportunities as a matter of course. Nobody is proposing that attending NYLS at sticker is wise.


OK so what percentage of people who borrowed 300 K to go to NYU or similar rank school are making as much as you claim you are? 50%? 25%? At what point do statistics catch-up and your odds are reduced Of paying that back? Because almost all of the people I spoke to that graduated from NYU said not to pay for sticker on loans because it will be impossible to pay back even if you land a job in big law. I’ve even spoken to Harvard alumni who have the same opinion. You’re making a very significant 10 year financial commitment when the average Big law employee is there only three years and most do not make more when they leave. The vast majority make less.

So, your advice to the OP is to gamble that that he’ll be one of the few statistical outliers Because that’s what you are if your story is true. It’s not the case for most people.


I don't think I made any claims about my income, so I'm not sure how I can answer what percentage are making as much. Frankly, there isn't much good data on what lawyers make 10 years out of school from any specific institution. I strongly suspect it is highly location dependent. That being said, my personal observation is that most people from T14 institutions I went to school or worked with are making at least healthy salaries (100k+), unless they are doing public interest (and most of those are on some sort of loan forgiveness program). The average big law employee is at a given firm for 3 years, but that doesn't necessarily mean they are gone from biglaw forever. My starting biglaw class had almost all left my firm by year 5 or so, but a healthy percentage were still in biglaw at other firms.

As for whether other alums of top schools would advise to take out full-sticker debt... it's sort of hard to argue against hearsay regarding alums of unknown vintage and backgrounds. I do think that a lot of lawyers are pessimistic by nature (it's sort of bred into us), and that often comes out in the way we give advice.

I'm not giving any advice to the OP, other than to say that there are SOME situations where paying sticker can be personally worth it. That's almost certainly a small minority of prospective students, but the number is not zero. Everyone has their own risk tolerance. Law school used to be for the risk adverse. Now, in many cases, going to law school is a gambler's game.

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Re: Why not pay sticker at T14 when biglaw salary could pay off loans?

Postby dropout » Wed Jun 13, 2018 12:38 pm

hoos89 wrote:
nixy wrote:No one has to default, what with income-based plans out there.

Debt still sucks, but I don’t think the concern about defaulting is realistic.


It is if you refi to try to avoid paying almost $2k/mo in interest.

LegalBiology wrote:So considering biglaw associates start out at almost 200K and make their way up to almost 300K in less than 10 years, what is 3 years of law school at full price, even if you have to take out loans for 100% of it?

I'm confused when people who are accepted to Duke or Georgetown are told not to go because they didn't get scholarships. Where do they go then? What are they suppose to do


Imagine spending 3 years and law school and then probably another ~4-5 years in big law just to get back to $0 net worth. And that's assuming that you get the job in the first place (which is by no means guaranteed) and are able to keep it for that long (which again...not a guarantee).


I think that 4-5 years to recoup the costs of an investment is reasonable. If i was offered a financial investment with a 20% annual return I would jump at that opportunity. I think t14 is a viable option, 75% of the class will get biglaw or clerk. Those numbers arent that bad. Then consider the prestigue and status that comes with the investment as a park. I also agree with the mentioned ibr perspective. If you miss biglaw you will likely not have to pay your entire debt.

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Re: Why not pay sticker at T14 when biglaw salary could pay off loans?

Postby Npret » Wed Jun 13, 2018 1:52 pm

dropout wrote:
hoos89 wrote:
nixy wrote:No one has to default, what with income-based plans out there.

Debt still sucks, but I don’t think the concern about defaulting is realistic.


It is if you refi to try to avoid paying almost $2k/mo in interest.

LegalBiology wrote:So considering biglaw associates start out at almost 200K and make their way up to almost 300K in less than 10 years, what is 3 years of law school at full price, even if you have to take out loans for 100% of it?

I'm confused when people who are accepted to Duke or Georgetown are told not to go because they didn't get scholarships. Where do they go then? What are they suppose to do


Imagine spending 3 years and law school and then probably another ~4-5 years in big law just to get back to $0 net worth. And that's assuming that you get the job in the first place (which is by no means guaranteed) and are able to keep it for that long (which again...not a guarantee).


I think that 4-5 years to recoup the costs of an investment is reasonable. If i was offered a financial investment with a 20% annual return I would jump at that opportunity. I think t14 is a viable option, 75% of the class will get biglaw or clerk. Those numbers arent that bad. Then consider the prestigue and status that comes with the investment as a park. I also agree with the mentioned ibr perspective. If you miss biglaw you will likely not have to pay your entire debt.


How are you repaying 300,000 plus in debt plus interest back in 4 years? Can you break that down?

I realize that people will see the salary and take the debt anyway. It’s almost like trying to explain to people that taking the Hamilton is smart. I would never take on that much debt. I would never have taken on $200,000 either back in the day when that was the shocking maximum of debt for law school.

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Re: Why not pay sticker at T14 when biglaw salary could pay off loans?

Postby dropout » Wed Jun 13, 2018 2:14 pm

Npret wrote:
How are you repaying 300,000 plus in debt plus interest back in 4 years? Can you break that down?

I realize that people will see the salary and take the debt anyway. It’s almost like trying to explain to people that taking the Hamilton is smart. I would never take on that much debt. I would never have taken on $200,000 either back in the day when that was the shocking maximum of debt for law school.


I am sorry for the mistake in the time period needed to repay, i was using someone elses statistic in this thread. Really, this should be looked at the perspective of marginal benefits. The difference in the amount you can earn with or without a jd and the probable income from a t14 versus a t1. I believe that the increase in earnings from a t14 versus a bs/ba is likely to be greater than 50k conservatively speaking. That would give you a return of just over 15%, not bad. Alternatively, the average t1 grad will not see much of an income boost from law school versus their bs/ba if the degree is in a demanded field. If you want to tweak my numbers feel free, these are very rough estimates, but i do believe that the average t14 grad may earn as much as 100k more annually than if they entered the field with just a bs/ba.



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