Law school, a ticket to economic security?

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REALLYBIGLAW
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Law school, a ticket to economic security?

Postby REALLYBIGLAW » Tue Dec 13, 2011 8:47 pm

Law school, a ticket to economic security? Better run the numbers
The National Law Journal
December 12, 2011

http://www.law.com/jsp/nlj/PubArticleNL ... slreturn=1

You've graduated from law school. You've landed a job as an attorney. Now you want to buy a house and cement your status in the professional class.

But can you afford it? Probably not — unless you can count on earning three times your annual tuition, assuming you're borrowing the money.

That's according to University of Louisville Louis D. Brandeis School of Law Dean Jim Chen. In an academic paper, "A Degree of Practical Wisdom: The Ratio of Educational Debt to Income as a Basic Measurement of Law School Graduate's Economic Viability," Chen uses qualification for a home loan while paying off student debt as a measure of whether a legal education makes economic sense. (click link for the rest of the article)

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superbloom
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Re: Law school, a ticket to economic security?

Postby superbloom » Tue Dec 13, 2011 8:51 pm

Good thing I want to rent. 8)

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Grizz
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Re: Law school, a ticket to economic security?

Postby Grizz » Tue Dec 13, 2011 8:52 pm

Dawg I'm living with my parents.

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prezidentv8
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Re: Law school, a ticket to economic security?

Postby prezidentv8 » Tue Dec 13, 2011 8:54 pm

Grizz wrote:Dawg I'm living with my parents.

AWW YEAH

BeenDidThat
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Re: Law school, a ticket to economic security?

Postby BeenDidThat » Tue Dec 13, 2011 9:01 pm

So if you get biglaw, you're good at most skoolz. And if you don't, you can't buy a house out the gate. So sad. You know, I thought bright 25 year olds were guaranteed the right to buy a house. My mind is blown.

Cool story bro.

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neimanmarxist
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Re: Law school, a ticket to economic security?

Postby neimanmarxist » Tue Dec 13, 2011 9:44 pm

BeenDidThat wrote:You know, I thought bright 25 year olds were guaranteed the right to buy a house. My mind is blown.



occupy wall street. :lol:

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bk1
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Re: Law school, a ticket to economic security?

Postby bk1 » Tue Dec 13, 2011 9:47 pm

Gotta cement yo place in dat professional class.

071816
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Re: Law school, a ticket to economic security?

Postby 071816 » Tue Dec 13, 2011 9:51 pm

Image

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neimanmarxist
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Re: Law school, a ticket to economic security?

Postby neimanmarxist » Tue Dec 13, 2011 9:52 pm

also,
Chen paper is slated to appear in a future edition of the William Mitchell Law Review, he said.


nobody on this forum is ever going to buy a house, I guess.

BeenDidThat
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Re: Law school, a ticket to economic security?

Postby BeenDidThat » Tue Dec 13, 2011 10:01 pm

neimanmarxist wrote:
BeenDidThat wrote:You know, I thought bright 25 year olds were guaranteed the right to buy a house. My mind is blown.



occupy wall street. :lol:


OCCUPYIVORYTOWER

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kapital98
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Re: Law school, a ticket to economic security?

Postby kapital98 » Tue Dec 13, 2011 10:03 pm

BeenDidThat wrote:
neimanmarxist wrote:
BeenDidThat wrote:You know, I thought bright 25 year olds were guaranteed the right to buy a house. My mind is blown.



occupy wall street. :lol:


OCCUPYIVORYTOWER


THANK YOU!!!

Keep on racking up the debt. Is there a maximum cap on gov't loans? $20,000 in lump sum loans + going to school is pretty damn appealing to me.

Especially if you have wealthy relatives.

ignatiusr
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Re: Law school, a ticket to economic security?

Postby ignatiusr » Tue Dec 13, 2011 10:57 pm

I know a little about the law school at Louisville (I'm from the area), and I can tell you that the relative value of the school is one of their most consistent selling points. Professors/recruiters from UL always point out that it's a top-rated "value school." I'm not suggesting that Dean Chen is misrepresenting his numbers, but his research is likely tailored to a fairly narrow agenda. What to do if you're a talented student looking at an expensive t14/25 school with little or no scholarship? If you want to buy a house, apparently, you should opt for a scholarship from a low-cost school like UL instead.
Last edited by ignatiusr on Tue Dec 13, 2011 11:16 pm, edited 1 time in total.

dixiecupdrinking
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Re: Law school, a ticket to economic security?

Postby dixiecupdrinking » Tue Dec 13, 2011 11:10 pm

Seems like a load of horseshit. Why should the amount you make need to be a linear function of how much your tuition is?

The person who graduates with $48,000 in debt and makes $48,000 a year is going to be living worse than the person who graduates with $144,000 in debt and makes $144,000 a year.

According to the finaid.org loan calculator, $48k in debt is a $552/month loan payment. You make $4,000 gross a month. That's $3,448 pre-tax, post-loan payment.

$144k in debt is a $1,657/month loan payment. You make $12,000 a month gross. That's $10,343 pre-tax, post-loan payments.

Yeah then you pay more in taxes yadda yadda. But there is just no way I can see this being a defensible method of calculating anything meaningful.

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IAFG
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Re: Law school, a ticket to economic security?

Postby IAFG » Tue Dec 13, 2011 11:14 pm

dixiecupdrinking wrote:$144k in debt is a $1,657/month loan payment. You make $12,000 a month gross. That's $10,343 pre-tax, post-loan payments.

Yeah then you pay more in taxes yadda yadda. But there is just no way I can see this being a defensible method of calculating anything meaningful.

You pay taxes on your student loan payments too

dixiecupdrinking
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Re: Law school, a ticket to economic security?

Postby dixiecupdrinking » Tue Dec 13, 2011 11:41 pm

IAFG wrote:
dixiecupdrinking wrote:$144k in debt is a $1,657/month loan payment. You make $12,000 a month gross. That's $10,343 pre-tax, post-loan payments.

Yeah then you pay more in taxes yadda yadda. But there is just no way I can see this being a defensible method of calculating anything meaningful.

You pay taxes on your student loan payments too

Yeah okay. I still just don't see any way the higher debt, higher income person doesn't have significantly more money left over.

If you take home $90,000 post-tax on $144,000, that's $7,500 a month, minus $1,657 is $5,843. Your take home after taxes and after loan payments is still higher than the $48k graduate's pre-tax, pre-loan payment income.

I hope there's more nuance in the actual journal article because this seems boneheaded to me.

Christ I need to go study something.

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AreJay711
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Re: Law school, a ticket to economic security?

Postby AreJay711 » Tue Dec 13, 2011 11:50 pm

I could happily live off 30K post-tax post-loan. Most law school grads can swing that.

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IAFG
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Re: Law school, a ticket to economic security?

Postby IAFG » Tue Dec 13, 2011 11:53 pm

AreJay711 wrote:I could happily live off 30K post-tax post-loan. Most law school grads can swing that.

Sure, as long as you never plan to reproduce. Or save for retirement. And your health insurance is subsidized.

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AreJay711
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Re: Law school, a ticket to economic security?

Postby AreJay711 » Wed Dec 14, 2011 12:03 am

IAFG wrote:
AreJay711 wrote:I could happily live off 30K post-tax post-loan. Most law school grads can swing that.

Sure, as long as you never plan to reproduce. Or save for retirement. And your health insurance is subsidized.


Eh, I've lived on less (though in MD we can stay on our parents health insurance until we are 26) and if I have kids I like to imagine my SO would have a job. My gf makes 27k as an assistant manager at a retail place so not living in NYC that is pretty comfortable. Contrary to TLS belief you don't need a shit ton of money to be happy.

That doesn't make a law degree a very good investment but ending up with a wash isn't the worst thing in the world.

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IAFG
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Re: Law school, a ticket to economic security?

Postby IAFG » Wed Dec 14, 2011 12:06 am

AreJay711 wrote:
IAFG wrote:
AreJay711 wrote:I could happily live off 30K post-tax post-loan. Most law school grads can swing that.

Sure, as long as you never plan to reproduce. Or save for retirement. And your health insurance is subsidized.


Eh, I've lived on less (though in MD we can stay on our parents health insurance until we are 26) and if I have kids I like to imagine my SO would have a job. My gf makes 27k as an assistant manager at a retail place so not living in NYC that is pretty comfortable. Contrary to TLS belief you don't need a shit ton of money to be happy.

That doesn't make a law degree a very good investment but ending up with a wash isn't the worst thing in the world.

I just see people batting around numbers here for "what they could live on" that don't take into account grown-up expenses like health insurance, car insurance, retirement savings... then if you buy a house that can be a big expense too, and I am not just talking about the mortgage. What you can afford to live on at 23 is a lot different than what you need at 35.

indo
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Re: Law school, a ticket to economic security?

Postby indo » Wed Dec 14, 2011 12:57 am

BeenDidThat wrote:
neimanmarxist wrote:
BeenDidThat wrote:You know, I thought bright 25 year olds were guaranteed the right to buy a house. My mind is blown.



occupy wall street. :lol:


OCCUPYIVORYTOWER


Occupied White House and Capitol Hill.lol

luthersloan
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Re: Law school, a ticket to economic security?

Postby luthersloan » Wed Dec 14, 2011 1:04 am

IAFG wrote:
AreJay711 wrote:
IAFG wrote:
AreJay711 wrote:I could happily live off 30K post-tax post-loan. Most law school grads can swing that.

Sure, as long as you never plan to reproduce. Or save for retirement. And your health insurance is subsidized.


Eh, I've lived on less (though in MD we can stay on our parents health insurance until we are 26) and if I have kids I like to imagine my SO would have a job. My gf makes 27k as an assistant manager at a retail place so not living in NYC that is pretty comfortable. Contrary to TLS belief you don't need a shit ton of money to be happy.

That doesn't make a law degree a very good investment but ending up with a wash isn't the worst thing in the world.

I just see people batting around numbers here for "what they could live on" that don't take into account grown-up expenses like health insurance, car insurance, retirement savings... then if you buy a house that can be a big expense too, and I am not just talking about the mortgage. What you can afford to live on at 23 is a lot different than what you need at 35.


It does not make sense to save for retirement when you have loans with an interest rate of 8 percent. Also, you don't need a car if you live in NYC. Health care expenses will depend a lot on your type of employment, but might not be that bad. If you really have no change in your lifestyle, the amount of money you will need to spend at 35 will not be that much greater then the amount you need to spend at 23, it is just that not that many people are happy with that. They want to have kids, or buy stuff, or take vacations and so forth.

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IAFG
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Re: Law school, a ticket to economic security?

Postby IAFG » Wed Dec 14, 2011 1:14 am

luthersloan wrote:It does not make sense to save for retirement when you have loans with an interest rate of 8 percent.

But that's exactly the point, isn't it. If you can't afford to provide for "life" then your life plan is fail.
luthersloan wrote:Also, you don't need a car if you live in NYC. Health care expenses will depend a lot on your type of employment, but might not be that bad.

Have you looked at what health insurance costs recently? Even if your employer subsidizes (and many in law don't at all or don't very much) it's expensive as fuck in the U.S.
luthersloan wrote:If you really have no change in your lifestyle, the amount of money you will need to spend at 35 will not be that much greater then the amount you need to spend at 23, it is just that not that many people are happy with that. They want to have kids, or buy stuff, or take vacations and so forth.
You sound dumb young.

luthersloan
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Re: Law school, a ticket to economic security?

Postby luthersloan » Wed Dec 14, 2011 1:21 am

You know, you could have responded without being a prick. Not being able to save for retirement is fine so long as you can pay down your loans in a reasonable time frame, say 10 to 15 years, as that will still leave you with 20 years or so to build up retirement savings.

Health care really will be contextual, but yes in many cases it will increase your expenses significantly, hence my use of the word "might".

lexdiamonds
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Re: Law school, a ticket to economic security?

Postby lexdiamonds » Wed Dec 14, 2011 3:52 am

luthersloan wrote:
IAFG wrote:
AreJay711 wrote:
IAFG wrote:Sure, as long as you never plan to reproduce. Or save for retirement. And your health insurance is subsidized.


Eh, I've lived on less (though in MD we can stay on our parents health insurance until we are 26) and if I have kids I like to imagine my SO would have a job. My gf makes 27k as an assistant manager at a retail place so not living in NYC that is pretty comfortable. Contrary to TLS belief you don't need a shit ton of money to be happy.

That doesn't make a law degree a very good investment but ending up with a wash isn't the worst thing in the world.

I just see people batting around numbers here for "what they could live on" that don't take into account grown-up expenses like health insurance, car insurance, retirement savings... then if you buy a house that can be a big expense too, and I am not just talking about the mortgage. What you can afford to live on at 23 is a lot different than what you need at 35.


It does not make sense to save for retirement when you have loans with an interest rate of 8 percent. Also, you don't need a car if you live in NYC. Health care expenses will depend a lot on your type of employment, but might not be that bad. If you really have no change in your lifestyle, the amount of money you will need to spend at 35 will not be that much greater then the amount you need to spend at 23, it is just that not that many people are happy with that. They want to have kids, or buy stuff, or take vacations and so forth.


LMAO good luck surviving in NYC on 30k. Even cops and MTA workers make 50k in this city and they can't afford to live here.

If you're planning on paying back your loan in 10 years you're talking 1750 a month at least. Factor in rent (which is around the same per month as your student loan), utilities, transportation and bills and you haven't got much of anything left over. Hell, you may not have anything left over and end up in the red at the end of the month.

luthersloan
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Re: Law school, a ticket to economic security?

Postby luthersloan » Wed Dec 14, 2011 3:57 am

The 30K figure posted above was post loan payments. If you lived with two roommates in Brooklyn you could live on that, who would want too, but you could do it.




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