How the Heck Do You Pay Back Sticker? Forum

[NYstate]

I didn't look very much but here is an NALP report with median salaries by firm size and associate year:
http://www.nalp.org/2011_associate_salaries

Most of their reports have information on small, medium and biglaw firms.

[twenty]

Paying back sticker sucks, but doesn't suck as much as it seems people would have you believe. By year four, you're making 210k a year excluding bonuses. If you haven't paid off sticker, you should be preeetty close. At that point, you'll have gone over to a decent in-house/government spot making 100k~

You can then look back at your anthropology degree from your second-tier state school and realize that all in all, your life doesn't actually suck as much as it could have sucked.

[sinfiery]

I didn't look very much but here is an NALP report with median salaries by firm size and associate year:
http://www.nalp.org/2011_associate_salaries

Most of their reports have information on small, medium and biglaw firms.

This is awesome. The amount of salaries being reported is pretty low for small firms but still, this is something to rely on. Now we need school specific data that isn't hidden behind a paywall

[muskies970]

Paying back sticker sucks, but doesn't suck as much as it seems people would have you believe. By year four, you're making 210k a year excluding bonuses. If you haven't paid off sticker, you should be preeetty close. At that point, you'll have gone over to a decent in-house/government spot making 100k~

You can then look back at your anthropology degree from your second-tier state school and realize that all in all, your life doesn't actually suck as much as it could have sucked.

How dare you use statistics and reason to say that attending a T14 school at Sticker won't ruin your life! /s

[NYstate]

Paying back sticker sucks, but doesn't suck as much as it seems people would have you believe. By year four, you're making 210k a year excluding bonuses. If you haven't paid off sticker, you should be preeetty close. At that point, you'll have gone over to a decent in-house/government spot making 100k~

You can then look back at your anthropology degree from your second-tier state school and realize that all in all, your life doesn't actually suck as much as it could have sucked.

How dare you use statistics and reason to say that attending a T14 school at Sticker won't ruin your life! /s

That is right. The plan is get biglaw or go on IBR. It is certain to work out well for every T14 grad. What could possibly go wrong? As long as people have IBR, paying sticker makes perfect sense.

[muskies970]

Paying back sticker sucks, but doesn't suck as much as it seems people would have you believe. By year four, you're making 210k a year excluding bonuses. If you haven't paid off sticker, you should be preeetty close. At that point, you'll have gone over to a decent in-house/government spot making 100k~

You can then look back at your anthropology degree from your second-tier state school and realize that all in all, your life doesn't actually suck as much as it could have sucked.

How dare you use statistics and reason to say that attending a T14 school at Sticker won't ruin your life! /s

That is right. The plan is get biglaw or go on IBR. It is certain to work out well for every T14 grad. What could possibly go wrong? As long as people have IBR, paying sticker makes perfect sense.

I think the only case where it could go wrong is if you end up realizing halfway through you don't want to do law anymore, but you're stuck in that career field. Or if you get laid off while on IBR and can't find work. But again as a T14 student I think that would be very few people.

[Tiago Splitter]

I think the only case where it could go wrong is if you end up realizing halfway through you don't want to do law anymore, but you're stuck in that career field. Or if you get laid off while on IBR and can't find work. But again as a T14 student I think that would be very few people.

IBR really has nothing to do with working in law. You can work as a janitor and be on IBR. Or just be unemployed.

[muskies970]

I think the only case where it could go wrong is if you end up realizing halfway through you don't want to do law anymore, but you're stuck in that career field. Or if you get laid off while on IBR and can't find work. But again as a T14 student I think that would be very few people.

IBR really has nothing to do with working in law. You can work as a janitor and be on IBR. Or just be unemployed.

Well I guess nothing can go wrong then?

I want to know where all the "white knights" "saving" people from gonig to T14 at sticker for lower ranked schools for less have gone now. It's a little frustrating actually when people give advice as so called experts having people give up their dreams and top notch educations/ opportunities by spreading fear saying that the debt is impossible to pay off. Probably the main reason I've been so argumentative in this thread I was hoping one would bite, but now that reason has prevailed and facts they've all disappeared.

See thread http://top-law-schools.com/forums/viewt ... 1&t=208777

[NYstate]

I think the only case where it could go wrong is if you end up realizing halfway through you don't want to do law anymore, but you're stuck in that career field. Or if you get laid off while on IBR and can't find work. But again as a T14 student I think that would be very few people.

IBR really has nothing to do with working in law. You can work as a janitor and be on IBR. Or just be unemployed.

True. That means that a grad never even has to practice law anywhere. It's a win- win if things don't work out.

I'm not sure why it took 8 pages to get to this conclusion. I suppose people need to run the numbers on what they can pay on debt should they get biglaw. This is useful as people can plan for the best possible result. I think many people would go to a T14 at sticker anyway,even if it takes 10 or more years to repay, because biglaw is their best chance at making 6 figures. And then, IBR is the back stop for a 20 year( or 25 year? ) payment plan if they need it.

I may have missed a lot of the thread, but this seems to be the conclusion: biglaw or IBR.

[muskies970]

I think the only case where it could go wrong is if you end up realizing halfway through you don't want to do law anymore, but you're stuck in that career field. Or if you get laid off while on IBR and can't find work. But again as a T14 student I think that would be very few people.

IBR really has nothing to do with working in law. You can work as a janitor and be on IBR. Or just be unemployed.

So can someone who goes to a TTTT, racks up sticker debt, use IBR and be fine after 25 years too?

[Cobretti]

I think the only case where it could go wrong is if you end up realizing halfway through you don't want to do law anymore, but you're stuck in that career field. Or if you get laid off while on IBR and can't find work. But again as a T14 student I think that would be very few people.

IBR really has nothing to do with working in law. You can work as a janitor and be on IBR. Or just be unemployed.

Well I guess nothing can go wrong then?

I want to know where all the "white knights" "saving" people from gonig to T14 at sticker for lower ranked schools for less have gone now. It's a little frustrating actually when people give advice as so called experts having people give up their dreams and top notch educations/ opportunities by spreading fear saying that the debt is impossible to pay off. Probably the main reason I've been so argumentative in this thread I was hoping one would bite, but now that reason has prevailed and facts they've all disappeared.

See thread http://top-law-schools.com/forums/viewt ... 1&t=208777

But that was almost a month ago, times have changed man

but seriously, pretty hilarious. On the other hand though, PAYE hadn't really been talked about on TLS much at all until DF started bringing it up recently, so maybe conventional wisdom actually has begun to change as we're beginning to understand PAYE a little better.

[sinfiery]

I may have missed a lot of the thread, but this seems to be the conclusion: biglaw or IBR.

Don't forget PLSF! Although I do wish there was more info on the difficulty of obtaining said jobs. I'm assuming every job on LST doesn't qualify

[TheZoid]

I think the only case where it could go wrong is if you end up realizing halfway through you don't want to do law anymore, but you're stuck in that career field. Or if you get laid off while on IBR and can't find work. But again as a T14 student I think that would be very few people.

IBR really has nothing to do with working in law. You can work as a janitor and be on IBR. Or just be unemployed.

So can someone who goes to a TTTT, racks up sticker debt, use IBR and be fine after 25 years too?

No. IBR requires you to declare forgiven debt as taxable income. Dat tax bomb.

[muskies970]

I think the only case where it could go wrong is if you end up realizing halfway through you don't want to do law anymore, but you're stuck in that career field. Or if you get laid off while on IBR and can't find work. But again as a T14 student I think that would be very few people.

IBR really has nothing to do with working in law. You can work as a janitor and be on IBR. Or just be unemployed.

So can someone who goes to a TTTT, racks up sticker debt, use IBR and be fine after 25 years too?

No. IBR requires you to declare forgiven debt as taxable income. Dat tax bomb.

how much are we talking about here? I think someone mentioned before if you have 25 years to save up and prepare for it, it shouldn't be impossible...

[A. Nony Mouse]

I may have missed a lot of the thread, but this seems to be the conclusion: biglaw or IBR.

Don't forget PLSF! Although I do wish there was more info on the difficulty of obtaining said jobs. I'm assuming every job on LST doesn't qualify

Do you mean PSLF jobs? There's quite a lot of stuff around the employment forum about the difficulty of obtaining PLSF jobs. Fedgov = pretty difficult (mostly because hiring keeps getting cut); you need very good grades (though not necessarily from a top school) and good experience . State (PD/DA)/legal aid = not as difficult, though it depends on the state (and its economy), and you usually need to gun for this kind of job from the beginning of law school; many PD/DA employers don't look at grades but only hire their own interns, that kind of thing. Something like international human rights/ACLU = very very difficult.

(Jobs that qualify are listed here: http://www.studentaid.ed.gov/repay-loan ... employment. It's pretty broad.)

[dixiecupdrinking]

No. IBR requires you to declare forgiven debt as taxable income. Dat tax bomb.

how much are we talking about here? I think someone mentioned before if you have 25 years to save up and prepare for it, it shouldn't be impossible...

Well, the entire amount of debt that is forgiven is income. So you'd owe your outstanding balance times your tax rate. Hard to say what tax brackets will be in 25 years but conservatively figuring 35%, if you borrow $250,000 and your IBR payments are too small to cover interest payments, you may end up with, say, $300,000 in income at 35% = $105,000 owed in taxes in the year you get forgiveness.

I don't know about you, but to me that seems like a hell of a lot to pay the government for the privilege of making $50k a year.

[untar614]

No. IBR requires you to declare forgiven debt as taxable income. Dat tax bomb.

how much are we talking about here? I think someone mentioned before if you have 25 years to save up and prepare for it, it shouldn't be impossible...

Well, the entire amount of debt that is forgiven is income. So you'd owe your outstanding balance times your tax rate. Hard to say what tax brackets will be in 25 years but conservatively figuring 35%, if you borrow $250,000 and your IBR payments are too small to cover interest payments, you may end up with, say, $300,000 in income at 35% = $105,000 owed in taxes in the year you get forgiveness.

I don't know about you, but to me that seems like a hell of a lot to pay the government for the privilege of making $50k a year.

How would the IRS even handle a case in which one's owed taxes for a year vastly surpassed what that person actually makes in a year? Just put them on a payment plan I guess? lol, back to square one. maybe you can take out some federal loans to cover it

[dixiecupdrinking]

No. IBR requires you to declare forgiven debt as taxable income. Dat tax bomb.

how much are we talking about here? I think someone mentioned before if you have 25 years to save up and prepare for it, it shouldn't be impossible...

Well, the entire amount of debt that is forgiven is income. So you'd owe your outstanding balance times your tax rate. Hard to say what tax brackets will be in 25 years but conservatively figuring 35%, if you borrow $250,000 and your IBR payments are too small to cover interest payments, you may end up with, say, $300,000 in income at 35% = $105,000 owed in taxes in the year you get forgiveness.

I don't know about you, but to me that seems like a hell of a lot to pay the government for the privilege of making $50k a year.

How would the IRS even handle a case in which one's owed taxes for a year vastly surpassed what that person actually makes in a year? Just put them on a payment plan I guess? lol, back to square one. maybe you can take out some federal loans to cover it

I believe this kind of thing actually comes up pretty often. Income is income, whether you're making money or just having someone cancel what you owe them, it's functionally the same. I don't know how they'd handle it if you don't have the cash or other assets to pay, though. A payment plan is probably right, or else they'd settle for pennies on the dollar just to get something.

[Bronte]

Yeah it is not uncommon that a tax bill outstrips earnings. Taxes. Damn.

[Tiago Splitter]

Yeah it is not uncommon that a tax bill outstrips earnings. Taxes. Damn.

Forgiven debt is not supposed to be taxable if you are insolvent, per Pub. 4681, and they define insolvency as having more debt than assets when the debt is forgiven. An example shows someone with 10K in liabilities and 7K in assets when their 5K debt is forgiven. So they have to pay tax on 3K of the 5K.

[Bronte]

Yeah it is not uncommon that a tax bill outstrips earnings. Taxes. Damn.

Forgiven debt is not supposed to be taxable if you are insolvent, per Pub. 4681, and they define insolvency as having more debt than assets when the debt is forgiven. An example shows someone with 10K in liabilities and 7K in assets when their 5K debt is forgiven. So they have to pay tax on 3K of the 5K.

Wasn't really paying attention to the discussion (sorry). I was just saying tax bombs are a thing. Happens with inheritance. Like the gay women in the case before the Supreme Court.

[muskies970]

No. IBR requires you to declare forgiven debt as taxable income. Dat tax bomb.

how much are we talking about here? I think someone mentioned before if you have 25 years to save up and prepare for it, it shouldn't be impossible...

Well, the entire amount of debt that is forgiven is income. So you'd owe your outstanding balance times your tax rate. Hard to say what tax brackets will be in 25 years but conservatively figuring 35%, if you borrow $250,000 and your IBR payments are too small to cover interest payments, you may end up with, say, $300,000 in income at 35% = $105,000 owed in taxes in the year you get forgiveness.

I don't know about you, but to me that seems like a hell of a lot to pay the government for the privilege of making $50k a year.

ehh it's really not that bad. if you're smart, assuming 6% interest rate, you would only have to put in 150 a month into some form of account (1800 a year) in order to come out with 101,000 at the end of 25 y ears.

I konw most people probably don't think this far ahead, and aren't coached to realize this, but I think the point still stands that if you're not paying any of your salary towards the debt, putting under 2000 a year in the form of a payment isn't that terrible

[Tiago Splitter]

I konw most people probably don't think this far ahead, and aren't coached to realize this, but I think the point still stands that if you're not paying any of your salary towards the debt, putting under 2000 a year in the form of a payment isn't that terrible

Well you are paying part of your salary towards the debt, whether under IBR or PAYE, unless you salary is really low. Even under PAYE a person making 50K has to put like 3K a year of after-tax income toward their debt. And of course that goes up as your salary increases.

That said, if your argument is that inflation will make these numbers look a lot better 20 years from now then you're probably right.

[twenty]

Keep in mind that IBR/PAYE/whatever does not justify going to even a T20 school at sticker. If you take a non-legal job and assume you'll get IBR, you'll still be paying anywhere from 50k to 90k even if you're in a PSLF qualifying job. That amount doubles if you're not. So you got a law degree, have wasted three years of your life, and are working for an insurance company in a cubicle next to an undergrad who's both younger than you are and making more than you are.

IBR doesn't really change anything -- it just makes missing the biglaw boat a lot less painful.

That said, the IBR tax bomb is going to blow hamburgers.

Also, fun fact: Getting a dual degree effectively becomes free if you're planning on for-sure relying on IBR (i.e, if you struck out at OCI).

[muskies970]

Keep in mind that IBR/PAYE/whatever does not justify going to even a T20 school at sticker. If you take a non-legal job and assume you'll get IBR, you'll still be paying anywhere from 50k to 90k even if you're in a PSLF qualifying job. That amount doubles if you're not. So you got a law degree, have wasted three years of your life, and are working for an insurance company in a cubicle next to an undergrad who's both younger than you are and making more than you are.

IBR doesn't really change anything -- it just makes missing the biglaw boat a lot less painful.

That said, the IBR tax bomb is going to blow hamburgers.

Also, fun fact: Getting a dual degree effectively becomes free if you're planning on for-sure relying on IBR (i.e, if you struck out at OCI).

Wasted three years of your life? If you're going to end up in the same shitty 50-90k insurance job, why not take three years, arguably more like just one to see how first year grades go, to have a 20-70% shot depending on the school of getting a biglaw 160k paying job and ending up in your desired career path (becoming a lawyer). Of course if you don't want to be a lawyer then yes law school can be viewed as a wasted three years.