Thinking about dropping out

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tetrahydrocannabinol
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Re: Thinking about dropping out

Postby tetrahydrocannabinol » Wed Sep 09, 2009 6:11 pm

thesealocust wrote:Also, that $1,300 above becomes $550 under the new federal IBR rules, and is forgiven after 25 years instead of being paid for 30.

Epic standard of living win!

Yes, you won't be a prince, and you won't have models and bottles and boats. But as I mentioned in my first reply - if you WANT to be a lawyer, you can make a living at 60K / year with 180K in debt. Kids in my high school used to do it all the time, it was no big deal.


Don't forget the tax bill in 25 years. So basically you pay 15% a year for 25 years, and then get hit with a $200K tax bill, and then bankrupt 25 years down the road because you have no way to pay it.

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thesealocust
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Re: Thinking about dropping out

Postby thesealocust » Wed Sep 09, 2009 6:12 pm

Uh... paying off student loans over a period of 30 years is neither unreasonable nor uncommon. You've got your perceptions of the world and your plans and that's fine, you can keep them.

Fun fact: America has a whole lot of people for whom an after tax/loan income of $2,000 per month would be a huge sum.

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rayiner
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Re: Thinking about dropping out

Postby rayiner » Wed Sep 09, 2009 6:14 pm

tetrahydrocannabinol wrote:Well I'm no rocket scientist (unlike you) but doesn't OP have to pay tax, which would be another $20K a year (about a 1/3 of his $60K salary)?

Also, it odd to say whatever OP spent for 1L is a sunk cost and just not consider it at all because you are arguing that post loans it would be like having a $40K a year job. But that's not true because even if it is a sunk cost OP still has to pay it (meaning his loans aren't just $20K a year, but more then that). The reason that should be considered is because if his loans are actually $24K /year and he is making $40K a year post-tax, then that leaves him with $16K a year to live off. That's poverty if you ask me.


1) OP has to pay taxes on his $40k/year job as well. I was being a bit fuzzy with my math, because I didn't want to bother calculating the exact tax. It looks like the break-even point is just about $70k/year. In NY, with a $40k/year job, your take-home is about $30k. With a $70k/year job, it's $50k. If you're paying $20k/year extra in loans in the second case, you're basically breaking even.

2) The reason the 1L loans don't matter is because OP has to pay them in either case. Payments on that debt are on both sides of the equation and thus cancel out. Say OP needs to pay $5k/year on his 1L debt, on top of any additional loans he takes out.

If he takes the $40k/year job, he has $30k/year take-home, minus $5k/year in loan payments, = $25k/year.

If he takes the $140k in debt and the $70k/year job, he has $50k/year take-home, minus $20k/year on the 2L/3L debt, minus $5k/year on the 1L debt, = $25k/year.

See how the two numbers are equal regardless of what the 1L debt happens to be? It doesn't matter when we're considering the incremental economic benefit/cost of dropping out.

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tetrahydrocannabinol
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Re: Thinking about dropping out

Postby tetrahydrocannabinol » Wed Sep 09, 2009 6:19 pm

rayiner wrote:
tetrahydrocannabinol wrote:Well I'm no rocket scientist (unlike you) but doesn't OP have to pay tax, which would be another $20K a year (about a 1/3 of his $60K salary)?

Also, it odd to say whatever OP spent for 1L is a sunk cost and just not consider it at all because you are arguing that post loans it would be like having a $40K a year job. But that's not true because even if it is a sunk cost OP still has to pay it (meaning his loans aren't just $20K a year, but more then that). The reason that should be considered is because if his loans are actually $24K /year and he is making $40K a year post-tax, then that leaves him with $16K a year to live off. That's poverty if you ask me.


1) OP has to pay taxes on his $40k/year job as well. I was being a bit fuzzy with my math, because I didn't want to bother calculating the exact tax. It looks like the break-even point is just about $70k/year. In NY, with a $40k/year job, your take-home is about $30k. With a $70k/year job, it's $50k. If you're paying $20k/year extra in loans in the second case, you're basically breaking even.

2) The reason the 1L loans don't matter is because OP has to pay them in either case. Payments on that debt are on both sides of the equation and thus cancel out. Say OP needs to pay $5k/year on his 1L debt, on top of any additional loans he takes out.

If he takes the $40k/year job, he has $30k/year take-home, minus $5k/year in loan payments, = $25k/year.

If he takes the $140k in debt and the $70k/year job, he has $50k/year take-home, minus $20k/year on the 2L/3L debt, minus $5k/year on the 1L debt, = $25k/year.

See how the two numbers are equal regardless of what the 1L debt happens to be? It doesn't matter when we're considering the incremental economic benefit/cost of dropping out.


Dude this is brutal. $25K a year post taxes, and that's assuming OP can find a job making $70K a year... This was exactly where I came up with my drop out statement (although my math is no where near as clean or correct as yours). Just imagine if he makes $60K or $50K at a smaller firm...

Oblomov
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Re: Thinking about dropping out

Postby Oblomov » Wed Sep 09, 2009 6:23 pm

thesealocust wrote:Fun fact: America has a whole lot of people for whom an after tax/loan income of $2,000 per month would be a huge sum.


Fun Fact: Africa has a whole lot of people for whom $100 a month is a dream.

The overall point of this thread is what is prudent for the OP (and people like him), not what is possible or what is acceptable to some people. This might smack of elitism, but someone who attends CLS is likely not someone who considered a 35k income as acceptable. They didn't work the last X number of years toward that end. Saying X is possible or Z has it worse is not really saying anything at all. Obviously you can pay off the debt on a low income; the real question is will you be living better doing that than if you drop out. Rayiner summed up the answer to that pretty well.
Last edited by Oblomov on Wed Sep 09, 2009 6:25 pm, edited 1 time in total.

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rayiner
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Re: Thinking about dropping out

Postby rayiner » Wed Sep 09, 2009 6:24 pm

tetrahydrocannabinol wrote:This is the dumbest post I have ever read. WHO THE FUCK PLANS ON PAYING OFF STUDENT LOANS FOR 30 YEARS?!!?!??!?!? I mean seriously, forget about getting a house, having kids and everything else because you take home a pitiful $2K a month to live off prior to paying additional loans on your home mortgage and other things you need to buy in life. I guess if you plan on being homeless and living out of a cardboard box, like reasonable_man probably does, then it is all good, but otherwise hell no this isn't a good deal.


Dude, you're hurting my head. Please, try and run the numbers yourself. Say you decide to go with the 30-year repayment plan. That means your payments on the $140k extra debt will be $1k/month, or $12k/year.

If you get a $70k/year job with your CLS degree, you net $50k after taxes and $38k after loan payments.

If you get that $40k/year job with your CLS degree, you net $30k after taxes.

If you can make mortgage payments, etc, on $30k/year, you can do it on $38k/year.

Also, you're ignoring raises, which are keyed as a percentage of base salary (usually). If your raises in the first 10 years after LS amount to 2% over inflation, then after 10 years at that initial $70k job, you'll be making $85k/year adjusted for inflation. In the same case with the $40k job, you'll be making $49k adjusted for inflation. The initial $30k/year difference grows to a $36k/year difference. After 30 years the difference grows to $54k/year.

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OperaSoprano
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Re: Thinking about dropping out

Postby OperaSoprano » Wed Sep 09, 2009 6:25 pm

teaadntoast wrote:
Oblomov wrote:
thesealocust wrote:Is it impossible to pay off debt without a six figure salary? No.


Almost. Let's say you make 50k before taxes. For simplicities sake, we'll be conservative and say you take home 36k. If you have 160k in debt at 7% interest, if you paid 1k a month, you'd never touch the principle, but only be covering the interest. 1/3 of your post-tax income just to not fall deeper in the hole.

Even paying it off 160k when you make 90 is not exactly fun.


True, but still assumes that an individual's starting salary is carved in stone, world without end, amen.

People get raises, people get new jobs, people change careers.


Yes, Sealocust, you do. :D

Thank god for IBR, right? I don't plan to pay off more than a quarter of my debt. Even someone working at a small firm can make the IBR payments for 25 years. My understanding is that the current tax liability at the end may be changed. This will cap your payments at well under 15% of your income.

Even I can live on $2k per month, in a brownstone six blocks north of my school, and one block west of Central Park. If I moved to Brooklyn I could even accumulate savings.

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thesealocust
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Re: Thinking about dropping out

Postby thesealocust » Wed Sep 09, 2009 6:26 pm

Oblomov wrote:
thesealocust wrote:Fun fact: America has a whole lot of people for whom an after tax/loan income of $2,000 per month would be a huge sum.


Fun Fact: Africa has a whole lot of people for whom $100 a month is a dream.

The overall point of this thread is what is prudent for the OP (and people like him), not what is possible or what is acceptable to some people. This might smack of elitism, but someone who attends CLS is likely not someone who considered a 35k income as acceptable. They didn't work the last X number of years toward that end. Saying X is possible or Z has it worse is not really saying anything at all. Obviously you can pay off the debt on a low income; the real question is will you be living better doing that than if you drop out. Rayner summed up the answer to that pretty well.


I don't disagree. My advice to OP has always been "If you want to be a lawyer, you can. If you want a very high income, especially in the near term, it may be wise to look elsewhere"

What I have been pushing back against were the statements that one could 'never pay off' the loan w/ a 60K/year job. That is just flat out false. It might not be easy, and it might not be what one 'expects' from CLS, but there is a huge difference between 'not possible' and 'difficult'. For somebody that wants to be a lawyer, difficult might mean stay in while impossible would certainly mean drop out. That's why I ran the numbers six ways from sunday to try and show the difference.

Anonymous User
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Re: Thinking about dropping out

Postby Anonymous User » Wed Sep 09, 2009 6:26 pm

---why--- wrote:As some of you know, I'm a transfer student at Columbia. I was top 20% at Indiana. I ended up with two callbacks. One rejection so far and the other firm didn't sound too encouraging. Since you all will ask, I consider myself an above average/very good interviewer. I will apply for government jobs, but realize that they are difficult to get and don't pay that well. I can make 40k a year doing other things (besides gov. work) and save a bunch of money. I will probably also attend the undergraduate job fair and see what they have to offer. I am open to doing pretty much anything. For what its worth, I don't feel like I deserve anything. I am a little bit down, but not "giving up." I simply wonder if this is the best decision. I also don't regret transferring. I will answer questions as well.


First of all, you DO deserve something. If you are working your tail off to learn the law and serve society, you deserve a decent paying job. Obviously, you have worked hard, if you were good enough at IU to warrant transfer-admission to CLS. Don't apologize for wanting what you deserve. Some of the financial companies are hiring now. Look into Golman Sachs, Smith Barney or Ameriprise Financial. Goldman Sachs has a legal department that hires newbies. It's called Legal Management and Controls, so you can keep your feet wet in the legal world while gaining experience in the financial sector making strategic decisions. Goldman's is an awsome company.

This will be valuable experience when the BigLaw market turns around. And if it doesn't, you will have a foot in the door doing in-house corporate law, and those jobs pay as well or higher than BigLaw corporate jobs. You are going to have to really work hard to get in there, as there are not many of those jobs, but they are there, I landed one last year. Ameriprise was laying people off and still offered me a position. You can do this.
Last edited by Anonymous User on Wed Sep 09, 2009 6:31 pm, edited 1 time in total.

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rayiner
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Re: Thinking about dropping out

Postby rayiner » Wed Sep 09, 2009 6:28 pm

tetrahydrocannabinol wrote:Dude this is brutal. $25K a year post taxes, and that's assuming OP can find a job making $70K a year... This was exactly where I came up with my drop out statement (although my math is no where near as clean or correct as yours). Just imagine if he makes $60K or $50K at a smaller firm...


Yea, $25k/year post taxes isn't great, but did you miss the part how this is exactly the same as he'd be making with his $40k/year alternative job? That's the only thing we need to compare here: the results from dropping out versus the results from not dropping out. It's not like OP can go back in time, major in engineering, and have a $70k/year job to fall back on. :lol:

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thesealocust
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Re: Thinking about dropping out

Postby thesealocust » Wed Sep 09, 2009 6:29 pm

OperaSoprano wrote:Even I can live on $2k per month, in a brownstone six blocks north of my school, and one block west of Central Park. If I moved to Brooklyn I could even accumulate savings.


Exactly. I think in some respects you're the poster child of who SHOULD be going to law school in this economy. Aware of the risks and willing to live with the results even if said results don't include penthouses.

One of my parents spent years as a poor lawyer servicing massive student loans having graduated from a top law school. She doesn't regret her decision in the slightest, and has been practicing law for almost 30 years now. You know what made the difference when finances were the most tight? She wanted to be a lawyer, and enjoyed being a lawyer. There seems to be a generation of students who want to make 160K and expect to enjoy making 160K with no regard for what they will actually be doing to make that happen...

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thesealocust
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Re: Thinking about dropping out

Postby thesealocust » Wed Sep 09, 2009 6:29 pm

rayiner wrote:
tetrahydrocannabinol wrote:Dude this is brutal. $25K a year post taxes, and that's assuming OP can find a job making $70K a year... This was exactly where I came up with my drop out statement (although my math is no where near as clean or correct as yours). Just imagine if he makes $60K or $50K at a smaller firm...


Yea, $25k/year post taxes isn't great, but did you miss the part how this is exactly the same as he'd be making with his $40k/year alternative job? That's the only thing we need to compare here: the results from dropping out versus the results from not dropping out. It's not like OP can go back in time, major in engineering, and have a $70k/year job to fall back on. :lol:


Captain THC up there hasn't exactly grasped the nuance of the numbers in any previous post, I'm not sure why you would expect him/her to start doing so now.

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pleasetryagain
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Re: Thinking about dropping out

Postby pleasetryagain » Wed Sep 09, 2009 6:36 pm

USAIRS wrote:
---why--- wrote:For what its worth, I'm not sure that it is so easy to go from government to biglaw. I also tend to think that the old model will never come back. Things will get better, but the structure was just silly.

Also, this whole idea that "once you get the biglaw blinders off, things will be better" idea is just wrong. Frankly, it is biglaw or bust. There isn't this big middle ground of options that some people seem to think. I went to career services today and asked every possible question about alternatives to government and biglaw. There really isn't anything out there. I have nothing against government work (I work for legal aid now), but I don't want to do that forever.

One last point. For those whose backup plan is legal aid, the two people I work with both went to Harvard and one worked for S&C.


Sounds like you know all you need to know. Best of luck to you!


oh man, what a pretentious.. douche..

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Learning Hand
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Re: Thinking about dropping out

Postby Learning Hand » Wed Sep 09, 2009 6:40 pm

Were you on the lower end of the top 20 percent, and if so, how'd you manage Columbia?

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tetrahydrocannabinol
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Re: Thinking about dropping out

Postby tetrahydrocannabinol » Wed Sep 09, 2009 6:42 pm

rayiner wrote:
tetrahydrocannabinol wrote:Dude this is brutal. $25K a year post taxes, and that's assuming OP can find a job making $70K a year... This was exactly where I came up with my drop out statement (although my math is no where near as clean or correct as yours). Just imagine if he makes $60K or $50K at a smaller firm...


Yea, $25k/year post taxes isn't great, but did you miss the part how this is exactly the same as he'd be making with his $40k/year alternative job? That's the only thing we need to compare here: the results from dropping out versus the results from not dropping out. It's not like OP can go back in time, major in engineering, and have a $70k/year job to fall back on. :lol:


So moral of the story- OP's life sucks either way.

I guess if I were in that position I would stick around to.

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GATORTIM
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Re: Thinking about dropping out

Postby GATORTIM » Wed Sep 09, 2009 6:48 pm

Do you want to be an attorney?
If YES ----> do not drop out and f'n make it happen, nobody is going to give you shit in life (job after OCI or anything else)

If NO -----> quit and do something else, but simply giving up does not mean you are certain to find a position doing something else where you will be both happy and achieve your desired standard of living.

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Re: Thinking about dropping out

Postby Anonymous User » Wed Sep 09, 2009 7:29 pm

OP - I didn't read all of the posts in front of me, but congrats on the callbacks you did get. That's still really great. I wanted you to keep in mind, too, that another option if you wanted to stay at CLS and find a biglaw job is to maybe wait a little further in the recruiting season - it sounds like at least Orrick and I think possibly (?) Pillsbury, and probably a few more, are not going to start their recruiting season until at least November. So there are still firms out there that are still assessing need. You may have a shot at those still.

There is also 3L recruiting too, which, while tough, might be an option if you want biglaw.

Have you also considered being a staff attorney at circuit or district courts? That would be a pretty good filler position, and it's typically only 2-3 yr gig so you could get a feel for the work and maybe scope out other employers and ride out the market in the meantime, too.

good luck!

ANON - because I'd like to retain some anonymity re: region and summer experience if possible for now. thanks.

---why---
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Re: Thinking about dropping out

Postby ---why--- » Wed Sep 09, 2009 8:17 pm

I was in class. Thanks for all the replies. First, the people that think that the bottom 10% of CLS will make 60k at some gov. gig are crazy. Legal Aid, I believe, starts around 40k a year. Second, as much as I appreciate the loan discussion, I paid my way through undergrad and am paying a large chunk of law school by playing poker. I won't have a ton of loans either way. And yes, I can make more than 40k a year playing poker, but I don't want to be 50 and playing poker for a living. My very rough alternative to law school is to drop out, play poker for a year or two, then invest in some real estate. Before telling me this is a dumb idea, I admittedly know very little about real estate and would need to do a bunch of research.

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underdawg
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Re: Thinking about dropping out

Postby underdawg » Wed Sep 09, 2009 10:16 pm

rayiner, tell us when this recession is gonna end, enlightened one

and operasoprano, no one gives a crap now whether people at CLS are nice or not. get your head out of your ass

usairs comes off as a douche sometimes but im pretty sure he means well. i remember him from before

i didn't read weed man's posts but i assume they suck

tcr is "no one knows"

this post was really unnecessary

Bankhead
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Re: Thinking about dropping out

Postby Bankhead » Wed Sep 09, 2009 10:26 pm

it sounds like Columbia's CSO are being unhelpful pricks. are they not used to having to help people find jobs? shouldn't they be reassuring you that you'll be ok and not to drop out?

transferguy
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Re: Thinking about dropping out

Postby transferguy » Wed Sep 09, 2009 10:30 pm

Bankhead wrote:it sounds like Columbia's CSO are being unhelpful pricks. are they not used to having to help people find jobs? shouldn't they be reassuring you that you'll be ok and not to drop out?


You just described 95% of CSOs.

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dresden doll
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Re: Thinking about dropping out

Postby dresden doll » Wed Sep 09, 2009 10:45 pm

underdawg wrote:rayiner, tell us when this recession is gonna end, enlightened one


I'm really not sure what inspired that comment. He did some math (an activity most of us are too lazy for) and you accuse him of pretentiousness?

---why---
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Re: Thinking about dropping out

Postby ---why--- » Wed Sep 09, 2009 10:48 pm

Indiana has the worst, most horrible, very bad OCS. There are many great aspects of the school, that is not one of them.

Bankhead
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Re: Thinking about dropping out

Postby Bankhead » Wed Sep 09, 2009 10:52 pm

They might have been able to help you get a job in Indy or Fort Wayne.

articulably suspect
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Re: Thinking about dropping out

Postby articulably suspect » Wed Sep 09, 2009 11:17 pm

You transferred to CLS with top 20%? I thought you had to be in at least the top 10% to have a shot? If I was you I'd stay. What type of law are you interested in? Are you willing to head to regions other than the major cities (ie Chicago, DC, NYC)? There are a lot of jobs in govt outside of DOJ, maybe look into those.




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