USF - worth it for $120,000 in loans? Forum

[jr0008]

thanks for the advice everyone. I had a feeling job prospects were bleak for USF....guess I was just hoping someone could prove me wrong. I am also considering going to Santa Clara but I'd be paying sticker there too. On the waitlist to Hastings & Loyola and will definitely attend if admitted. This cycle has been rough. (I plan on working in the bay area after law school).

[A'nold]

I kind of like USF, TBH, but their main problem IMO is that they don't give out enough money. Back in the day I think they were more respected than McGeorge and Santa Clara and have been sliding for a few years now and they could have probably prevented this if they would have tried to lure higher numbered students to the school via large scholarships. At least they have a pretty campus in a killer location, if you are looking for a plus. Although, with that comes insane COL.

[1swift]

similar situation here ...I have a modest size scholly to this school. I have a decent/small scholarship to Santa Clara but dont think I am doing this either...The price is just too high for Santa Clara and the Job prospects area just bleak for USF...Think I'm officially putting myself in the June LSAT for a retake

[General Tso]

I am going to disagree with everyone else that posted here. The conventional wisdom on TLS is "no 100k+ for anything outside T1." There's some merit to that argument, but it usually centers around biglaw prospects. Which is fine. Biglaw is good and everything if you can get it. But it really ignores the long-term financial benefit that even a 20k salary increase can provide. I've crunched the numbers and borrowing up to 150k to go to law school is a good investment if you are confident that you will raise your yearly salary by at least 20k.

Raising your salary by 20k increases your 30 year earnings by almost a million dollars, even after accounting for the ~300-350k worth of loan payments.

[Kohinoor]

I am considering attending USF but will need to take out at least $120,000 in loans. Is the debt worth it considering USF's ranking? I'm worried about the employment/salary prospects after graduating. Appreciate any comments on this.

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[Kohinoor]

I am going to disagree with everyone else that posted here. The conventional wisdom on TLS is "no 100k+ for anything outside T1." There's some merit to that argument, but it usually centers around biglaw prospects. Which is fine. Biglaw is good and everything if you can get it. But it really ignores the long-term financial benefit that even a 20k salary increase can provide. I've crunched the numbers and borrowing up to 150k to go to law school is a good investment if you are confident that you will raise your yearly salary by at least 20k.

Raising your salary by 20k increases your 30 year earnings by almost a million dollars, even after accounting for the ~300-350k worth of loan payments.

Wouldn't that only be around 400,000 after taxes not even accounting for the ~300-350k worth of loan payments and 3 years of lost salary?

[General Tso]

I am going to disagree with everyone else that posted here. The conventional wisdom on TLS is "no 100k+ for anything outside T1." There's some merit to that argument, but it usually centers around biglaw prospects. Which is fine. Biglaw is good and everything if you can get it. But it really ignores the long-term financial benefit that even a 20k salary increase can provide. I've crunched the numbers and borrowing up to 150k to go to law school is a good investment if you are confident that you will raise your yearly salary by at least 20k.

Raising your salary by 20k increases your 30 year earnings by almost a million dollars, even after accounting for the ~300-350k worth of loan payments.

Wouldn't that only be around 400,000 after taxes not even accounting for the ~300-350k worth of loan payments and 3 years of lost salary?

No...this accounts for 30% taxes. And I didn't even factor in a tax break for the loan payments.

Lost salary @ 45k per year would take total down to about 800k (down from 930k).

[Kohinoor]

I am going to disagree with everyone else that posted here. The conventional wisdom on TLS is "no 100k+ for anything outside T1." There's some merit to that argument, but it usually centers around biglaw prospects. Which is fine. Biglaw is good and everything if you can get it. But it really ignores the long-term financial benefit that even a 20k salary increase can provide. I've crunched the numbers and borrowing up to 150k to go to law school is a good investment if you are confident that you will raise your yearly salary by at least 20k.

Raising your salary by 20k increases your 30 year earnings by almost a million dollars, even after accounting for the ~300-350k worth of loan payments.

Wouldn't that only be around 400,000 after taxes not even accounting for the ~300-350k worth of loan payments and 3 years of lost salary?

No...this accounts for 30% taxes. And I didn't even factor in a tax break for the loan payments.

Lost salary @ 45k per year would take total down to about 800k (down from 930k).

Show your math please. I just did 14k a year *30 which gave me 420,000 dollars which doesn't include the aforementioned costs. I'm not sure how you got triple that.

[snotrocket]

No.

[General Tso]

I am going to disagree with everyone else that posted here. The conventional wisdom on TLS is "no 100k+ for anything outside T1." There's some merit to that argument, but it usually centers around biglaw prospects. Which is fine. Biglaw is good and everything if you can get it. But it really ignores the long-term financial benefit that even a 20k salary increase can provide. I've crunched the numbers and borrowing up to 150k to go to law school is a good investment if you are confident that you will raise your yearly salary by at least 20k.

Raising your salary by 20k increases your 30 year earnings by almost a million dollars, even after accounting for the ~300-350k worth of loan payments.

Wouldn't that only be around 400,000 after taxes not even accounting for the ~300-350k worth of loan payments and 3 years of lost salary?

No...this accounts for 30% taxes. And I didn't even factor in a tax break for the loan payments.

Lost salary @ 45k per year would take total down to about 800k (down from 930k).

Show your math please. I just did 14k a year *30 which gave me 420,000 dollars which doesn't include the aforementioned costs. I'm not sure how you got triple that.

2 scenarios: 1st, the person does not go to law school. Earns 45k per year, taxed at 30%, increasing at 4% per year. The 30 year total in this scenario is $1,766,675.53.

2nd scenario: person goes to law school, incurs 150k in debt. Earns 65k per year, taxed at 30%, increasing at 4% per year. The 30 year total in this scenario is $2,994,610.72. Now we need to subtract the 45k over 3 years (-135k) as well as the -352k in loan repayments (borrowed 150k @ 7% interest). After subtracting these, the 30 year total is $2,507,572.92.

The difference between the 2 scenarios is $740,896.92.

[jr0008]

I am going to disagree with everyone else that posted here. The conventional wisdom on TLS is "no 100k+ for anything outside T1." There's some merit to that argument, but it usually centers around biglaw prospects. Which is fine. Biglaw is good and everything if you can get it. But it really ignores the long-term financial benefit that even a 20k salary increase can provide. I've crunched the numbers and borrowing up to 150k to go to law school is a good investment if you are confident that you will raise your yearly salary by at least 20k.

Raising your salary by 20k increases your 30 year earnings by almost a million dollars, even after accounting for the ~300-350k worth of loan payments.

Thanks swheat. I'm trying to remain as realistic as possible about attending USF, taking out a minimum of $120,000 in loans, and maintaining a decent QOL afterwards. I'm assuming, correct me if I'm wrong, with USF's reputation and with decent grades I can count on landing a job with a small or midsize firm @ 90-110k? Just seems like I'd need to be making that much to make the payments on my loans.

[spinsta]

No. To me, 120k in loans is only worth it for T14. If you don't go T14, go to the best school where you get a really big scholly (full tuition would be best).

[General Tso]

I am going to disagree with everyone else that posted here. The conventional wisdom on TLS is "no 100k+ for anything outside T1." There's some merit to that argument, but it usually centers around biglaw prospects. Which is fine. Biglaw is good and everything if you can get it. But it really ignores the long-term financial benefit that even a 20k salary increase can provide. I've crunched the numbers and borrowing up to 150k to go to law school is a good investment if you are confident that you will raise your yearly salary by at least 20k.

Raising your salary by 20k increases your 30 year earnings by almost a million dollars, even after accounting for the ~300-350k worth of loan payments.

Thanks swheat. I'm trying to remain as realistic as possible about attending USF, taking out a minimum of $120,000 in loans, and maintaining a decent QOL afterwards. I'm assuming, correct me if I'm wrong, with USF's reputation and with decent grades I can count on landing a job with a small or midsize firm @ 90-110k? Just seems like I'd need to be making that much to make the payments on my loans.

I think 90-110k might be a little bit overstated. If you are top of your class, definitely. But I think a more likely scenario is 70-85k for a middle of the pack grad. Which is still great. And as my analysis shows, anything over 65k is worth your while from a pure financial standpoint.

[snotrocket]

No...this accounts for 30% taxes. And I didn't even factor in a tax break for the loan payments.

That's good, since there isn't one.* Is your $1 million figure (or $930k ... or $800k, or whatever it is) nominal value or net present value?

(*) Student loan interest deduction doesn't count -- deduction is limited to $2,500 and income capped at $70k. This will cut at most $625 from your total tax bill, if you even qualify to take it.

[General Tso]

No...this accounts for 30% taxes. And I didn't even factor in a tax break for the loan payments.

That's good, since there isn't one.* Is your $1 million figure (or $930k ... or $800k, or whatever it is) nominal value or net present value?

(*) Student loan interest deduction doesn't count -- deduction is limited to $2,500 and income capped at $70k. This will cut at most $625 from your total tax bill, if you even qualify to take it.

Check my math above. I didn't factor in any tax breaks, which is good considering they don't really exist.

[Kohinoor]

Show your math please. I just did 14k a year *30 which gave me 420,000 dollars which doesn't include the aforementioned costs. I'm not sure how you got triple that.

2 scenarios: 1st, the person does not go to law school. Earns 45k per year, taxed at 30%, increasing at 4% per year. The 30 year total in this scenario is $1,766,675.53.

2nd scenario: person goes to law school, incurs 150k in debt. Earns 65k per year, taxed at 30%, increasing at 4% per year. The 30 year total in this scenario is $2,994,610.72. Now we need to subtract the 45k over 3 years (-135k) as well as the -352k in loan repayments (borrowed 150k @ 7% interest). After subtracting these, the 30 year total is $2,507,572.92.

The difference between the 2 scenarios is $740,896.92.

Most of that profit comes from an unrealistic assumption of yearly 4% raises for 30 years which makes the salary that started higher get exponentially better over time.

[Helmholtz]

I think 90-110k might be a little bit overstated. If you are top of your class, definitely. But I think a more likely scenario is 70-85k for a middle of the pack grad. Which is still great. And as my analysis shows, anything over 65k is worth your while from a pure financial standpoint.

$80,000 in San Francisco isn't a lot of money. $80k in San Francisco is equal, in cost of living, to around $40,000 in a city like Philadelphia (which has a pretty average COL).

[hypermeganet]

2 scenarios: 1st, the person does not go to law school. Earns 45k per year, taxed at 30%, increasing at 4% per year. The 30 year total in this scenario is $1,766,675.53.

2nd scenario: person goes to law school, incurs 150k in debt. Earns 65k per year, taxed at 30%, increasing at 4% per year. The 30 year total in this scenario is $2,994,610.72. Now we need to subtract the 45k over 3 years (-135k) as well as the -352k in loan repayments (borrowed 150k @ 7% interest). After subtracting these, the 30 year total is $2,507,572.92.

The difference between the 2 scenarios is $740,896.92.

Difference = 30.769%, even with raises (as the raises are identical). Your math is incorrect, as you show the difference to be 41.0%. Double check your math.

[General Tso]

Show your math please. I just did 14k a year *30 which gave me 420,000 dollars which doesn't include the aforementioned costs. I'm not sure how you got triple that.

2 scenarios: 1st, the person does not go to law school. Earns 45k per year, taxed at 30%, increasing at 4% per year. The 30 year total in this scenario is $1,766,675.53.

2nd scenario: person goes to law school, incurs 150k in debt. Earns 65k per year, taxed at 30%, increasing at 4% per year. The 30 year total in this scenario is $2,994,610.72. Now we need to subtract the 45k over 3 years (-135k) as well as the -352k in loan repayments (borrowed 150k @ 7% interest). After subtracting these, the 30 year total is $2,507,572.92.

The difference between the 2 scenarios is $740,896.92.

Most of that profit comes from an unrealistic assumption of yearly 4% raises for 30 years which makes the salary that started higher get exponentially better over time.

Salary.com claims that raises average 4.1% per year. This article mentions a 3% raise as being low due to the bad economy:
http://www.salary.com/personal/layoutsc ... art=par171

[sbalive]

Most of that profit comes from an unrealistic assumption of yearly 4% raises for 30 years which makes the salary that started higher get exponentially better over time.

Well, one of the benefits of moving to a higher salary range is to increase the base on which you add COL raises. Also, while you can argue that a typical 4% COL raise might be unrealistic in a recession, to be fair the recession would also batter the hypothetical person at the lower salary.

I'm not arguing in favor of going to USF - I'm not convinced it would guarantee a $20K/year higher salary or a secure job - but if you went to a school that gave you a shot at that, then the calculations are fine.

[General Tso]

2 scenarios: 1st, the person does not go to law school. Earns 45k per year, taxed at 30%, increasing at 4% per year. The 30 year total in this scenario is $1,766,675.53.

2nd scenario: person goes to law school, incurs 150k in debt. Earns 65k per year, taxed at 30%, increasing at 4% per year. The 30 year total in this scenario is $2,994,610.72. Now we need to subtract the 45k over 3 years (-135k) as well as the -352k in loan repayments (borrowed 150k @ 7% interest). After subtracting these, the 30 year total is $2,507,572.92.

The difference between the 2 scenarios is $740,896.92.

Difference = 30.769%, even with raises (as the raises are identical). Your math is incorrect, as you show the difference to be 41.0%. Double check your math.

Show your calculations please.

[sbalive]

I think 90-110k might be a little bit overstated. If you are top of your class, definitely. But I think a more likely scenario is 70-85k for a middle of the pack grad. Which is still great. And as my analysis shows, anything over 65k is worth your while from a pure financial standpoint.

$80,000 in San Francisco isn't a lot of money. $80k in San Francisco is equal, in cost of living, to around $40,000 in a city like Philadelphia (which has a pretty average COL).

That's pretty ridiculous.

But, even a more reasonable statement would still be limited. People make way too much out of COL differences between cities. What happens is that you make different choices about how you spend your money in San Francisco as opposed to Philadelphia. What really matters is the overall quality of life.

[General Tso]

I think 90-110k might be a little bit overstated. If you are top of your class, definitely. But I think a more likely scenario is 70-85k for a middle of the pack grad. Which is still great. And as my analysis shows, anything over 65k is worth your while from a pure financial standpoint.

$80,000 in San Francisco isn't a lot of money. $80k in San Francisco is equal, in cost of living, to around $40,000 in a city like Philadelphia (which has a pretty average COL).

That's pretty ridiculous.

But, even a more reasonable statement would still be limited. People make way too much out of COL differences between cities. What happens is that you make different choices about how you spend your money in San Francisco as opposed to Philadelphia. What really matters is the overall quality of life.

Exactly...my SO and I are living comfortably in the East Bay on 75k combined salary. Nice apartment, nice things, nice clean city. I don't get to save as much as I would like but I am able to put away $500 or so per month. Could we afford to live comfortably in SF on this salary? No...but if our combined income was, say 120k I believe we could do alright in SF even with ~700-900 in student loan payments per month.

[hypermeganet]

2 scenarios: 1st, the person does not go to law school. Earns 45k per year, taxed at 30%, increasing at 4% per year. The 30 year total in this scenario is $1,766,675.53.

2nd scenario: person goes to law school, incurs 150k in debt. Earns 65k per year, taxed at 30%, increasing at 4% per year. The 30 year total in this scenario is $2,994,610.72. Now we need to subtract the 45k over 3 years (-135k) as well as the -352k in loan repayments (borrowed 150k @ 7% interest). After subtracting these, the 30 year total is $2,507,572.92.

The difference between the 2 scenarios is $740,896.92.

Difference = 30.769%, even with raises (as the raises are identical). Your math is incorrect, as you show the difference to be 41.0%. Double check your math.

Show your calculations please.

I didn't do any, but I tossed these figures into excel and your first number is correct, the sum of all future cash flows of 45k, taxed at 30% for 30 years is 1,766,676. The sum of future cash flows of 65k is 2,551,865 not 2,994,610. That's your error.

So, you have 2551865-359266-1766676 = $425923 total difference. Account for lost wages: 425923-98330 = $327,593. This is the total amount earned in excess by going to law school. Nearly 10k a year more. Not bad.

[Kohinoor]

Most of that profit comes from an unrealistic assumption of yearly 4% raises for 30 years which makes the salary that started higher get exponentially better over time.

Well, one of the benefits of moving to a higher salary range is to increase the base on which you add COL raises. Also, while you can argue that a typical 4% COL raise might be unrealistic in a recession, to be fair the recession would also batter the hypothetical person at the lower salary.

I'm not arguing in favor of going to USF - I'm not convinced it would guarantee a $20K/year higher salary or a secure job - but if you went to a school that gave you a shot at that, then the calculations are fine.

The initial premise of swheat was "I've crunched the numbers and borrowing up to 150k to go to law school is a good investment if you are confident that you will raise your yearly salary by at least 20k." Now we've narrowed it down to "I've crunched the numbers and borrowing up to 150k to go to law school is a good investment if you are confident that you will raise your yearly salary by at least 20k and find a job in an industry with a compensation structure where annual raises of roughly 4% are the norm". Now, biglaw doesn't work that way period and I'm not sure which jobs that require a JD do work that way.