how on earth are we ever going to pay off loans?

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thegor1987
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Re: how on earth are we ever going to pay off loans?

Postby thegor1987 » Sun Jan 03, 2010 10:50 pm

dakatz wrote:
EdmundBurke23 wrote:Good thing my parents are willing to pay sticker prices for me... I don't have to pay a single penny for law school. Not even living expenses:D!!! they're willing to drop $70K a year for my education.


Good lessons they are teaching you.


I don't get it? Making your kids pay tuition is supposed to teach them a lesson?

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rw2264
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Re: how on earth are we ever going to pay off loans?

Postby rw2264 » Sun Jan 03, 2010 10:58 pm

thegor1987 wrote:
dakatz wrote:
EdmundBurke23 wrote:Good thing my parents are willing to pay sticker prices for me... I don't have to pay a single penny for law school. Not even living expenses:D!!! they're willing to drop $70K a year for my education.


Good lessons they are teaching you.


I don't get it? Making your kids pay tuition is supposed to teach them a lesson?



probably a lesson about the value of a dollar. but being rich is funner than learning lessons.

i plan on paying off my student loans by moonlighting as a high end escort a-la nellie from arrested development.

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Whatisthis
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Re: how on earth are we ever going to pay off loans?

Postby Whatisthis » Sun Jan 03, 2010 11:01 pm

CE2JD wrote: I don't really know or care what Opera said.

I was simply replying to a comment that I read as asking whether wage garnishment (actual wage garnishment) ruins your credit or not. It does. And wage garnishment is the result of not being able to pay off your student loans (after a really long time of not paying of course).





I believe she was referring to her loans being forgiven after ten years under IBR. Assuming she meets the requirements and keeps up with her payments, I wouldn't think "loan forgiveness" = default. And I can't see how it would have a negative effect on her credit.

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dresden doll
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Re: how on earth are we ever going to pay off loans?

Postby dresden doll » Sun Jan 03, 2010 11:02 pm

Oh yeah. I now remember why I outlined like a motherfucker over the break.

thegor1987
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Re: how on earth are we ever going to pay off loans?

Postby thegor1987 » Sun Jan 03, 2010 11:22 pm

rw2264 wrote:
probably a lesson about the value of a dollar. but being rich is funner than learning lessons.

i plan on paying off my student loans by moonlighting as a high end escort a-la nellie from arrested development.


lol you don't need to go 100K+ in debt to know a dollar is worthless

edit: I am in a pessimistic mood currently, I think at other times I am appreciative of the value of a dollar,... i think

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CE2JD
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Re: how on earth are we ever going to pay off loans?

Postby CE2JD » Sun Jan 03, 2010 11:42 pm

Whatisthis wrote:
CE2JD wrote: I don't really know or care what Opera said.

I was simply replying to a comment that I read as asking whether wage garnishment (actual wage garnishment) ruins your credit or not. It does. And wage garnishment is the result of not being able to pay off your student loans (after a really long time of not paying of course).





I believe she was referring to her loans being forgiven after ten years under IBR. Assuming she meets the requirements and keeps up with her payments, I wouldn't think "loan forgiveness" = default. And I can't see how it would have a negative effect on her credit.


Put yourself in the shoes of a credit agency and ask yourself what kind of credit you'd be willing to give to a person in this situation.

Maybe you'd have no qualms whatsoever. But I find it hard to believe all credit agencies:

1) even understand what the hell law school loan forgiveness is
and
2) would even care enough if they DID know to try to cut the person some slack.

Credit agencies are going to see a ginormous drop in outstanding loans due with NO payment activity. Looks suspicious to me. But like I said, maybe people are more optimistic about the generosity and benevolence of credit agencies to broke public interest attorneys.

ToTransferOrNot
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Re: how on earth are we ever going to pay off loans?

Postby ToTransferOrNot » Sun Jan 03, 2010 11:55 pm

CE2JD wrote:
Whatisthis wrote:
CE2JD wrote: I don't really know or care what Opera said.

I was simply replying to a comment that I read as asking whether wage garnishment (actual wage garnishment) ruins your credit or not. It does. And wage garnishment is the result of not being able to pay off your student loans (after a really long time of not paying of course).





I believe she was referring to her loans being forgiven after ten years under IBR. Assuming she meets the requirements and keeps up with her payments, I wouldn't think "loan forgiveness" = default. And I can't see how it would have a negative effect on her credit.


Put yourself in the shoes of a credit agency and ask yourself what kind of credit you'd be willing to give to a person in this situation.

Maybe you'd have no qualms whatsoever. But I find it hard to believe all credit agencies:

1) even understand what the hell law school loan forgiveness is
and
2) would even care enough if they DID know to try to cut the person some slack.

Credit agencies are going to see a ginormous drop in outstanding loans due with NO payment activity. Looks suspicious to me. But like I said, maybe people are more optimistic about the generosity and benevolence of credit agencies to broke public interest attorneys.


I would be more inclined to think that, if any aspect of this was going to harm credit, it would be the huge amount of outstanding debt during repayment, not the forgiveness. Your rating drops when you go through bankruptcy, but the credit bureau sees the bankruptcy

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crazycanuck
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Re: how on earth are we ever going to pay off loans?

Postby crazycanuck » Sun Jan 03, 2010 11:57 pm

It doesn't really matter anyways, the world is ending in 2012. Enjoy it while you can.

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CE2JD
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Re: how on earth are we ever going to pay off loans?

Postby CE2JD » Mon Jan 04, 2010 12:01 am

ToTransferOrNot wrote:
CE2JD wrote:
Whatisthis wrote:
CE2JD wrote: I don't really know or care what Opera said.

I was simply replying to a comment that I read as asking whether wage garnishment (actual wage garnishment) ruins your credit or not. It does. And wage garnishment is the result of not being able to pay off your student loans (after a really long time of not paying of course).





I believe she was referring to her loans being forgiven after ten years under IBR. Assuming she meets the requirements and keeps up with her payments, I wouldn't think "loan forgiveness" = default. And I can't see how it would have a negative effect on her credit.


Put yourself in the shoes of a credit agency and ask yourself what kind of credit you'd be willing to give to a person in this situation.

Maybe you'd have no qualms whatsoever. But I find it hard to believe all credit agencies:

1) even understand what the hell law school loan forgiveness is
and
2) would even care enough if they DID know to try to cut the person some slack.

Credit agencies are going to see a ginormous drop in outstanding loans due with NO payment activity. Looks suspicious to me. But like I said, maybe people are more optimistic about the generosity and benevolence of credit agencies to broke public interest attorneys.


I would be more inclined to think that, if any aspect of this was going to harm credit, it would be the huge amount of outstanding debt during repayment, not the forgiveness. Your rating drops when you go through bankruptcy, but the credit bureau sees the bankruptcy


The key is: credit agencies see your PAYMENTS. If a whole bunch of an outstanding loan balance suddenly disappears without any PAYMENT, I'd be shocked if the credit agency software didn't flag the transaction as suspicious.

I'm talkin out of my ass here, but I can't imagine walking into a bank to get a home loan after my law school loans were forgiven. The bank would raise at least a couple dozen WTFs.

bahama
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Re: how on earth are we ever going to pay off loans?

Postby bahama » Mon Jan 04, 2010 12:25 am

Obviously a lot of people on here w/o much experience or understanding of how credit scoring works.

They don't care whether the debt is forgiven through a govt program (IBR), if your rich uncle Ted wrote a check and paid it off, or if you won the lottery and paid it. They will only care that you didn't miss any payments and that the balance is gone and the account is in good standing.

Plus considering how many people will be doing this (IBR applies to a lot more than just law school loans) it is not like this will be an especially unusual or suspicios scenario.

As far as the mortgage goes, most of those decisions are made by a computer. They'll care about your income, your current debts (but mostly just the monthly payments), your assets, and your credit score. They won't ask/care that as a result of fulfilling the requirements of IBR you had some loans forgiven, except as far as that will boost your credit score.

Think big picture about the point of credit scoring for a moment. It exists to measure how likely it is you will fulfill the terms of a financial obligation. Doing 10 yrs public svcs and getting loans forgiven shows you'll hold up your end of the deal the same as writing a check to the bank does because those were the terms you had to fulfill.
ts

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CE2JD
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Re: how on earth are we ever going to pay off loans?

Postby CE2JD » Mon Jan 04, 2010 12:50 am

Well there you go. Someone on the Internet knows what their talking about (and that person is not me).

:wink:

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biggamejames
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Re: how on earth are we ever going to pay off loans?

Postby biggamejames » Mon Jan 04, 2010 1:23 am

bahama wrote:Think big picture about the point of credit scoring for a moment. It exists to measure how likely it is you will fulfill the terms of a financial obligation. Doing 10 yrs public svcs and getting loans forgiven shows you'll hold up your end of the deal the same as writing a check to the bank does because those were the terms you had to fulfill.
ts

How much do student loan payments affect your credit score? I still don't have any credit, but people tell me it's a good thing to create.

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Doritos
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Re: how on earth are we ever going to pay off loans?

Postby Doritos » Mon Jan 04, 2010 1:31 am

biggamejames wrote:
bahama wrote:Think big picture about the point of credit scoring for a moment. It exists to measure how likely it is you will fulfill the terms of a financial obligation. Doing 10 yrs public svcs and getting loans forgiven shows you'll hold up your end of the deal the same as writing a check to the bank does because those were the terms you had to fulfill.
ts

How much do student loan payments affect your credit score? I still don't have any credit, but people tell me it's a good thing to create.



Positively if you pay them on time. But you have to remember the old debt to income ratio. If you have lots of student loan debt and not a lot of income that hurts your ability to qualify for things. I know my score went down after I got a sizeable loan in UG.

09042014
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Re: how on earth are we ever going to pay off loans?

Postby 09042014 » Mon Jan 04, 2010 1:41 am

Doritos wrote:
biggamejames wrote:
bahama wrote:Think big picture about the point of credit scoring for a moment. It exists to measure how likely it is you will fulfill the terms of a financial obligation. Doing 10 yrs public svcs and getting loans forgiven shows you'll hold up your end of the deal the same as writing a check to the bank does because those were the terms you had to fulfill.
ts

How much do student loan payments affect your credit score? I still don't have any credit, but people tell me it's a good thing to create.



Positively if you pay them on time. But you have to remember the old debt to income ratio. If you have lots of student loan debt and not a lot of income that hurts your ability to qualify for things. I know my score went down after I got a sizeable loan in UG.


My UG loans show up on my credit history as having a credit line of X amount, with 0 taken. So it doesn't affect my debt ratio. But mine are government backed, I'm not sure if private loans count.

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atlantalaw
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Re: how on earth are we ever going to pay off loans?

Postby atlantalaw » Mon Jan 04, 2010 2:43 am

itt, we learn that ite becoming a stripper is probably more profitable.

sorry op. that is rough.

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XxSpyKEx
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Re: how on earth are we ever going to pay off loans?

Postby XxSpyKEx » Mon Jan 04, 2010 4:14 am

cookie wrote:It is definitely a concern in today's economy. It is awful for students who expected a healthier economic atmosphere upon graduation from a reputable school, but nowadays I think a careful assessment of loan repayment is key. Going for a figure that will leave you around $60,000 in debt for all your schooling seems healthy compared to loans in the hundred-thousands.

That said, OP, I think you will likely be fine if you continue networking and putting yourself out there. You will be in far better shape than students, for example, coming out of Fordham paying sticker just to enter a saturated NYC market where cost of living is through the roof.

In my opinion and strictly my opinion, go cheap if you can.


What sucks is most people don't realize how difficult it is leaving law school with only $60K in debt. It means you need a full ride (i.e. for tuition) or close to it because you will easily rack up $50K for cost of living, health insurance, etc across 3 years. It also means going to a respectable school to begin with as well that doesn't have a GPA stipulation of making top 1/2 or better (which probably means around half of the students that get schollys lose them after the first year). So then that means you really need some pretty incredible UGPA/LSAT numbers and be willing to give up going to a t14 for most people -- a tough call to make (i.e. whether you are willing to roll the dice on a $200K bet based on how you do on a total or ~8 days. About 6 exams and 2 days of OCI -- all the firms basically come on 2 of the 5 days). It's really insane to sit down and think about it, but yes, a total of how you do on around 8 days (plus callbacks, but that runs off those first 8 days because those determine whether you have any callbacks to worry about) pretty much determines what you can do for the rest of your life and the doors that are open or closed to you. Law school is definitely one hell of a gamble and I'm glad I made it but looking back now, I'm not so sure I would have done it had I fully known what I do now when I signed up for law school.

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XxSpyKEx
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Re: how on earth are we ever going to pay off loans?

Postby XxSpyKEx » Mon Jan 04, 2010 4:19 am

OperaSoprano wrote:
Oblomov wrote:The simple answer is that you're never going to.

Assuming the income based repayment program continues to exist, you'll pay a reasonable chunk of your income for the next ten to thirty years to have the rest of the debt forgiven. Any other time a person would be wise to declare bankruptcy, but that's not going to fix the situation, is it? Welcome to indentured servitude.


This. I will owe in excess of $200k, and I'm never going to pay it back, but then I knew that before I even matriculated. Emphasis here on "reasonable chunk of your income," even without the assistance of your school's LRAP. IBR is the reason many of us can go to law school in the first place. Payments are capped at around 10% of your income (this varies depending upon income bracket and number of dependents), and this is an insanely good deal even for people who won't be doing PI. FYI, debt is forgiven for everyone else after 25 years. At present, there is still a tax penalty for non PI folks, but this may be eliminated by the time we actually need to invoke forgiveness.

It's not ideal to have to borrow like this in the first place, but I believe our education is a privilege that we're seriously lucky to have. I didn't think the price was too great. If I'm unemployed two and a half years hence, maybe I'll think differently, but I expect to make around $40k/year at a nonprofit, and hopefully this expectation is in line with reality.

Note to the above: I'm paying sticker at Fordham, and wouldn't be anywhere else for the world, but then I've been a NYC resident for some time, and know how to live happily here on a modest income. I've calculated exactly what I'll be paying under IBR after my LRAP kicks in, and I'll pay back somewhere in the neighborhood of $25-30k all inclusive, before my loans are forgiven. I've managed to defy the law student stereotype by being a pretty happy (run up to finals excluded) 1L. I'm living on student loans, and do not have a ton of extra money, but I'm surrounded by friends, and I live six blocks north of my school. I would love to be eligible for a 2L scholarship, and I'm trying for a summer PI grant, but those things would be icing at this point.


IBR really is a great program for PI. Not so much for non-PI jobs (i.e. it's better then nothing, but I don't think anyone should go into law school borrowing so much money that they plan to repay for 25 years, and even then not repay everything). At best, IMO, IBR for non-PI jobs should be a fallback for the absolute worst case scenario (as oppose to sleeping in your car).

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XxSpyKEx
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Re: how on earth are we ever going to pay off loans?

Postby XxSpyKEx » Mon Jan 04, 2010 4:39 am

Bankhead wrote:It's funny 1.5 years ago I remember posters would just ASSUME that if they went to a T14 that they would be making 160k coming out. 1L's at Mich would talk about where they were going to live in Manhattan when they got their biglaw jobs. It's almost satisfying to see how that all crumbled. The sense of entitlement some people feel is alarming.


That assumption wasn't all that bad of one around 8 years ago. It's really not that uncommon to see alumni from t14s talk about how large firms were pretty much "giving away" jobs back then (Although I guess it could be better put as law firms where "fighting" for top school grads and having salary wars to pull them into their firm). In my bankruptcy class we had a guest lecturer come in a substitute from our normal prof. The guy graduated 8 years ago from my school and was a partner at a V10 firm. He said that when he left my school he started out doing some bullshit insurance defense gig for a year or two, hated it, and then simply interviewed with the firm he is at (i.e. the v10) and that he got the job because of where he went to school. Stuff like that is completely unheard of nowadays -- hell if you don't end up with a 2L summer associateship you're probably not ever going to get into a large law firm and at that point you still have a year of law school left.

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OperaSoprano
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Re: how on earth are we ever going to pay off loans?

Postby OperaSoprano » Mon Jan 04, 2010 4:53 am

CE2JD wrote:
OperaSoprano wrote:
Oblomov wrote:The simple answer is that you're never going to.

Assuming the income based repayment program continues to exist, you'll pay a reasonable chunk of your income for the next ten to thirty years to have the rest of the debt forgiven. Any other time a person would be wise to declare bankruptcy, but that's not going to fix the situation, is it? Welcome to indentured servitude.


This. I will owe in excess of $200k, and I'm never going to pay it back, but then I knew that before I even matriculated. Emphasis here on "reasonable chunk of your income," even without the assistance of your school's LRAP. IBR is the reason many of us can go to law school in the first place. Payments are capped at around 10% of your income (this varies depending upon income bracket and number of dependents), and this is an insanely good deal even for people who won't be doing PI. FYI, debt is forgiven for everyone else after 25 years. At present, there is still a tax penalty for non PI folks, but this may be eliminated by the time we actually need to invoke forgiveness.

It's not ideal to have to borrow like this in the first place, but I believe our education is a privilege that we're seriously lucky to have. I didn't think the price was too great. If I'm unemployed two and a half years hence, maybe I'll think differently, but I expect to make around $40k/year at a nonprofit, and hopefully this expectation is in line with reality.

Note to the above: I'm paying sticker at Fordham, and wouldn't be anywhere else for the world, but then I've been a NYC resident for some time, and know how to live happily here on a modest income. I've calculated exactly what I'll be paying under IBR after my LRAP kicks in, and I'll pay back somewhere in the neighborhood of $25-30k all inclusive, before my loans are forgiven. I've managed to defy the law student stereotype by being a pretty happy (run up to finals excluded) 1L. I'm living on student loans, and do not have a ton of extra money, but I'm surrounded by friends, and I live six blocks north of my school. I would love to be eligible for a 2L scholarship, and I'm trying for a summer PI grant, but those things would be icing at this point.


So basically, you're okay with wage garnishment?

Wow.


To return to the thread: IBR is not wage garnishment. Provided I make the required payments on time, it should have no effect on my credit. It's only for five years, after my LRAP finishes out, so yeah, I'm okay with it. Most people have to make payments for more than five years.

EDIT: Bahama is indeed well informed. However, I won't be able to buy an apartment here anyway, so it's not going to matter. My goal is to have clean enough credit that I'll be able to rent without a guarantor. Gold digging has been suggested and rejected as a remedy. :lol: There is talk that I may inherit enough to pay my debts in full, but I'm not going to count on that either. The point of my original post is that I expect to have to sacrifice for this, and I am perfectly willing to do so.

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daesonesb
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Re: how on earth are we ever going to pay off loans?

Postby daesonesb » Mon Jan 04, 2010 1:57 pm

thegor1987 wrote:
dakatz wrote:
EdmundBurke23 wrote:Good thing my parents are willing to pay sticker prices for me... I don't have to pay a single penny for law school. Not even living expenses:D!!! they're willing to drop $70K a year for my education.


Good lessons they are teaching you.


I don't get it? Making your kids pay tuition is supposed to teach them a lesson?



Yes. My kids will not pay for their undergrad if I can help it, but they are going to be expected to work for their spending money in the summer, and they are gonna have to take out loans if they go to professional school.

It makes sense. I see kids around me that haven't ever had a job in their life, who take everything they have at undergrad for granted. Most of them are C students. Some people have the gift of self motivation, and can be self starters even when they've been handed everything their whole life... but those people aren't too common. It's the same reason that Bill Gates is only leaving his children 10 million each out of his many billions.

newcritic
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Re: how on earth are we ever going to pay off loans?

Postby newcritic » Mon Jan 04, 2010 2:39 pm

daesonesb wrote:
thegor1987 wrote:
dakatz wrote:
EdmundBurke23 wrote:Good thing my parents are willing to pay sticker prices for me... I don't have to pay a single penny for law school. Not even living expenses:D!!! they're willing to drop $70K a year for my education.


Good lessons they are teaching you.


I don't get it? Making your kids pay tuition is supposed to teach them a lesson?



Yes. My kids will not pay for their undergrad if I can help it, but they are going to be expected to work for their spending money in the summer, and they are gonna have to take out loans if they go to professional school.

It makes sense. I see kids around me that haven't ever had a job in their life, who take everything they have at undergrad for granted. Most of them are C students. Some people have the gift of self motivation, and can be self starters even when they've been handed everything their whole life... but those people aren't too common. It's the same reason that Bill Gates is only leaving his children 10 million each out of his many billions.



Tough times on the horizon for the Gateseses

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KidA23
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Re: how on earth are we ever going to pay off loans?

Postby KidA23 » Mon Jan 04, 2010 3:12 pm

rayiner wrote:
thesealocust wrote:
crazycanuck wrote:It seems that a lot of people who are saying that they were top 30% and at a T14 who missed out at OCI's had no work experience prior to LS. Coincidence? I think not.


This is certainly an attractive theory, but then wouldn't Northwestern be kicking ass and taking names ITE?


We won't really know until more numbers come out. In terms of % of 2L's with jobs lined up (as of this past fall), the numbers I've heard thrown around seem pretty much the same for MVPBDN: 50-60%. The outliers seem to be GULC and Cornell, but I'm not convinced even those numbers are appreciably worse in reality (could be an issue of reporting all jobs versus just biglaw, etc).


Not to derail this thread, but the numbers rumored here around Cornell are precisely in that range 50-60% range you mentioned for those other upper T-14s. Nothing definite or concrete obviously, but that's pretty in line with what must have us have heard there.

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NayBoer
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Re: how on earth are we ever going to pay off loans?

Postby NayBoer » Mon Jan 04, 2010 3:33 pm

pjo wrote:This makes sense but at the same time if you're working for deloitte why go to law school??? Its not like its exactly easy to get a job at one of those big 5 finance firms...
Pretty sure it's Big 4, after the Enron scandal tanked Arthur Andersen.

Edit - or, alternately, subtle BDO trolling?

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dgouzoul
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Re: how on earth are we ever going to pay off loans?

Postby dgouzoul » Mon Jan 04, 2010 4:44 pm

haha subtle trolling...I believe it is big 4 now

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NayBoer
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Re: how on earth are we ever going to pay off loans?

Postby NayBoer » Mon Jan 04, 2010 6:00 pm

dgouzoul wrote:haha subtle trolling...I believe it is big 4 now
Deloitte, PwC, E&Y, KPMG is how I understand it. I'm gearing for tax law so I want to be ready to go big 4 as an alternative to biglaw.




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