Lieut Kaffee wrote:Nomo wrote:I'm going to assume you're talking about paying with debt (the numbers are a little better if you can pay in cash).
Georgetown at sticker puts you at 293k debt at repayment. The interest rates on that debt are absurd. On a 10 year repayment plan you're looking at $3,400 per month. That's approximately 40% of your take home pay as a first-year biglaw associate. Even on a 25 year plan you're paying over 2k a month.
The only way you pay off that kind of loan at that kind of interest rate is if you get into biglaw, stay for 5 or 6 years, exit into a high paying job, and stay in that job 10+ years. Borrowing that kind of money you are literally trapping yourself in a workplace, culture, and lifestyle that most people dislike. You aren't going to get out of debt until your mid 40's, and even then you're just going to be another person with a ton of debt and no assets. I don't think anyone should borrow that kind of money for Georgetown (which doesn't give you a great shot at biglaw). I don't think you should borrow it for Chicago, which does give you a good shot at biglaw - because you're still trapped. Maybe its worth it at a school with a really good LRAP plan, that's not tied to IBR/PAYE/PSLF, but even then I don't know that anyone wants that kind of debt hanging over their head. Better pray that the LRAP doesn't change or go away.
How did you arrive at the bolded figure?
Assumed this person is entering repayment at age 28. Assumed the first 5 years on a 10 year repayment plan. Assumed this person would be able to refinance into a new 10 year repayment plan at about 4% interest once the principal had decreased. And would take the full 10 years to pay it off. Putting the person at 43 when the debt is fully repaid.
I realize that this is a pretty ambitious plan. But I think it can be done if you can last 5 years in biglaw and then lateral into something that minimizes your paycut. If you're 3 years in biglaw and then lateral into a 100k/yr. w/ an average of 6% pay increases per year (which isn't a terrible outcome) its a very different ball game.