How the Heck Do You Pay Back Sticker? Forum

[beepboopbeep]

I know the question is about sticker, but tuition's so high that even big-sounding grants leave you on the hook for 100k+, easily. My 85k CLS award sounds awesome but once you factor in interest, I'll still end up with about 200k of debt (excluding anything from 2L SA). This is ostensibly a half-tuition scholarship.

So I don't know if the "sticker" question is as relevant as, "How the heck do you pay off a credential as expensive as a house or 3-5 cars?"

[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).

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.

Slight misunderstanding there, though I no-doubt worded the above a bit nebulously. Even with IBR, you're still paying somewhere between 50k (assuming PSLF and a 40k a year job) and up to 165k (assuming no PSLF and a 100k a year job). Even 50k is WAY too much money for a three-year long advanced degree that might give you a 30% chance (generous) of a biglaw job.

So, yeah, IBR/PAYE makes the downside of sticker less awful, but it doesn't make previously bad decisions suddenly become good decisions.

EDIT>

"How the heck do you pay off a credential as expensive as a house or 3-5 cars?"

This is less important, since coming out of CLS, you have an 88.9% chance of getting a kick-ass job that will let you pay off most/all of your loans in 3-4 years, or else get a kick-ass job that will allow you to not make any payments if your salary's under 71k a year. That makes me think that CLS, even at sticker, is worth it.

[jbagelboy]

I know the question is about sticker, but tuition's so high that even big-sounding grants leave you on the hook for 100k+, easily. My 85k CLS award sounds awesome but once you factor in interest, I'll still end up with about 200k of debt (excluding anything from 2L SA). This is ostensibly a half-tuition scholarship.

So I don't know if the "sticker" question is as relevant as, "How the heck do you pay off a credential as expensive as a house or 3-5 cars?"

No way its 200. You are overestimating or calclating something wrong. Its 288 with interest at max loan.. You arent being charged interest on your scholarship so it should be at most $185-188K

[A. Nony Mouse]

I know the question is about sticker, but tuition's so high that even big-sounding grants leave you on the hook for 100k+, easily. My 85k CLS award sounds awesome but once you factor in interest, I'll still end up with about 200k of debt (excluding anything from 2L SA). This is ostensibly a half-tuition scholarship.

So I don't know if the "sticker" question is as relevant as, "How the heck do you pay off a credential as expensive as a house or 3-5 cars?"

No way its 200. You are overestimating or calclating something wrong. Its 288 with interest at max loan.. You arent being charged interest on your scholarship so it should be at most $185-188K

$185-188K is close enough to $200K for me, for casual conversation.

[Peyton]

I just ran into this HLS nifty loan payback calculator. Plug in income, take out tax and loan. On $120K in, minus tax and loan, you still have $5K a month left over. Click below and work your own payback magic. (Fill in #1 and skip down to #5 and go on from there.)


http://www.law.harvard.edu/apps/sfs/cal ... home-calc/

[jbagelboy]

I just ran into this HLS nifty loan payback calculator. Plug in income, take out tax and loan. On $120K in, minus tax and loan, you still have $5K a month left over. Click below and work your own payback magic. (Fill in #1 and skip down to #5 and go on from there.)


http://www.law.harvard.edu/apps/sfs/cal ... home-calc/

this is assuming a 10 year payment structure tho

[Monochromatic Oeuvre]

I just ran into this HLS nifty loan payback calculator. Plug in income, take out tax and loan. On $120K in, minus tax and loan, you still have $5K a month left over. Click below and work your own payback magic. (Fill in #1 and skip down to #5 and go on from there.)


http://www.law.harvard.edu/apps/sfs/cal ... home-calc/

this is assuming a 10 year payment structure tho

And as demonstrated above, if you have Biglaw and it takes you 10 years to pay back your loans, you're leaving five figures on the table in interest when you don't have to if you were a bit more frugal.

Also, the highest tax burden it shows is 35%. I was under the impression that an NYC resident in Biglaw is paying 37-39% combined federal/state/local, is this not the case?

[Elston Gunn]

DF claims there is a bill that has gotten out of committee in the House with bipartisan support that would eliminate the tax bomb. I can't find it though.

H.R. 1330 eliminates the tax bomb, but it is still in committee.

SEC. 9. EXCLUDING LOANS FORGIVEN UNDER CERTAIN REPAYMENT PROGRAMS FROM GROSS INCOME.

1. Income-Contingent Repayment- Section 455(e)(2) of the Higher Education Act of 1965 (20 U.S.C. 1087e(e)(2)) is amended--
   1. in the subsection heading, by inserting `and Forgiveness' after `Repayment'; and
   2. by adding at the end the following: `The amount of the principal and interest on a borrower's loans forgiven pursuant to income contingent repayment shall not be included in the gross income of the borrower for purposes of the Internal Revenue Code of 1986.'.
2. Pay as You Earn Repayment- The amount of the principal and interest on a borrower's loans forgiven pursuant to the income-contingent repayment plan (based on the President's `Pay As You Earn' repayment initiative) implemented in parts 674, 682, and 685 of title 34, Code of Federal Regulations, as amended by the final regulations published by the Department of Education in the Federal Register on November 1, 2012 (77 Fed. Reg. 66088 et seq.), shall not be included in the gross income of the borrower for purposes of the Internal Revenue Code of 1986."

Obama's 2014 budget proposal also includes language to eliminate the tax bomb.

Provide exclusion from income for student loan forgiveness for students in certain income-based or income-contingent repayment programs who have completed payment obligations

Thanks.

[Bronck]

I know the question is about sticker, but tuition's so high that even big-sounding grants leave you on the hook for 100k+, easily. My 85k CLS award sounds awesome but once you factor in interest, I'll still end up with about 200k of debt (excluding anything from 2L SA). This is ostensibly a half-tuition scholarship.

So I don't know if the "sticker" question is as relevant as, "How the heck do you pay off a credential as expensive as a house or 3-5 cars?"

No you won't. The CoA figures are highly inflated at CLS. You can easily get by with borrowing 7-8k less/yr than listed. Assuming a 2L SA I imagine you'll be looking at less than 150k of debt.

[Peyton]

Also, the highest tax burden it shows is 35%. I was under the impression that an NYC resident in Biglaw is paying 37-39% combined federal/state/local, is this not the case?

If I had been thinking NYC, I would have plugged in $160 pay. After boasting their idiotic tax rate another 4%, it still leaves +5K to live in the Apple. That is with no bonus, increase, etc. For most other cities $120 pay handles the debt while allowing a weekly sit-down at Ruth Chris.

[ph5354a]

This spreadsheet is much more useful to this thread than the HLS calculator. With 10 years of big law, paying off sticker is nothing. You have to take into account the likelihood of leaving big law after 3-5 years and lateraling to a lower-paying job so it's important to pay off loans as quickly as possible. I'm just gonna say it, if you're in big law and you're only making the minimum loan payments, you're a damn fool.

https://docs.google.com/spreadsheet/ccc ... sp=sharing

[Peyton]

This spreadsheet is much more useful to this thread than the HLS calculator. With 10 years of big law, paying off sticker is nothing. You have to take into account the likelihood of leaving big law after 3-5 years and lateraling to a lower-paying job so it's important to pay off loans as quickly as possible. I'm just gonna say it, if you're in big law and you're only making the minimum loan payments, you're a damn fool.

When you say Big Law, are you exclusively using salary or are you referring to a V-100 (or whatever) ranked firm? There are a number of +$100K available jobs from firms that aren’t high atop a ranking chart — Law Firms where people stay for years (and usually end up in a partner position in 4-6 years).

To rephrase the question, where does Big Law begin… at a particular salary or. . .

[ph5354a]

This spreadsheet is much more useful to this thread than the HLS calculator. With 10 years of big law, paying off sticker is nothing. You have to take into account the likelihood of leaving big law after 3-5 years and lateraling to a lower-paying job so it's important to pay off loans as quickly as possible. I'm just gonna say it, if you're in big law and you're only making the minimum loan payments, you're a damn fool.

When you say Big Law, are you exclusively using salary or are you referring to a V-100 (or whatever) ranked firm? There are a number of +$100K available jobs from firms that aren’t high atop a ranking chart — Law Firms where people stay for years (and usually end up in a partner position in 4-6 years).

To rephrase the question, where does Big Law begin… at a particular salary or. . .

The definition of big law might be a little ambiguous, but I think it's generally a firm of 100+ lawyers. In New York the market salary for these jobs is $160k. In other cities, market salary might be slightly less than that, but it's probably made up by lower cost of living. There might be a number of $100k+ jobs where people stay for years, but that's certainly not the norm for first year associates.

ETA: I didn't mean to get back to the attrition argument, since that's already been discussed. I meant to say that I don't think there are a lot non-big law jobs like the ones you referred to in your post that are entry-level.

[Rahviveh]

This spreadsheet is much more useful to this thread than the HLS calculator. With 10 years of big law, paying off sticker is nothing. You have to take into account the likelihood of leaving big law after 3-5 years and lateraling to a lower-paying job so it's important to pay off loans as quickly as possible. I'm just gonna say it, if you're in big law and you're only making the minimum loan payments, you're a damn fool.

https://docs.google.com/spreadsheet/ccc ... sp=sharing

wasn't there a version of this with bonuses? cant find it now

[ph5354a]

This spreadsheet is much more useful to this thread than the HLS calculator. With 10 years of big law, paying off sticker is nothing. You have to take into account the likelihood of leaving big law after 3-5 years and lateraling to a lower-paying job so it's important to pay off loans as quickly as possible. I'm just gonna say it, if you're in big law and you're only making the minimum loan payments, you're a damn fool.

https://docs.google.com/spreadsheet/ccc ... sp=sharing

wasn't there a version of this with bonuses? cant find it now

I brought up bonuses, but banana didn't add it in so the spreadsheet was a more conservative estimate of pay-off, which is smart. I made my own version of this spreadsheet with putting 50% of after-tax bonuses (using the cravath structure --I can dream) towards loan repayment and I got rid of $230k in about four years. To be fair, I was being a little more aggressive with loan payments, giving myself about $4,000 after-tax income in the first year.

[Peyton]

The definition of big law might be a little ambiguous, but I think it's generally a firm of 100+ lawyers. In New York the market salary for these jobs is $160k. In other cities, market salary might be slightly less than that, but it's probably made up by lower cost of living. There might be a number of $100k+ jobs where people stay for years, but that's certainly not the norm for first year associates.

How does one quantify a "boutique" paying at the +100K level with fewer than 50 or so attorneys? Generally speaking (if there is a "generally"), are these the types of firms that usually provide employment over the long haul (speaking specifically of firms that continue to be successful)?

I know of someone (an SA) who bypassed Big Law to go the Boutique route (at about the same pay), focusing on stability and circumventing the lateral process.

[ph5354a]

The definition of big law might be a little ambiguous, but I think it's generally a firm of 100+ lawyers. In New York the market salary for these jobs is $160k. In other cities, market salary might be slightly less than that, but it's probably made up by lower cost of living. There might be a number of $100k+ jobs where people stay for years, but that's certainly not the norm for first year associates.

How does one quantify a "boutique" paying at the +100K level with fewer than 50 or so attorneys? Generally speaking (if there is a "generally"), are these the types of firms that usually provide employment over the long haul (speaking specifically of firms that continue to be successful)?

I know of someone who bypassed Big Law to go the Boutique route (at about the same pay), focusing on stability and circumventing the lateral process.

There are categories that small on the employment surveys, so if you look at a school (Columbia linked below), you can see how many grads end up in this size firm. Columbia has about 2.1% of grads (7.665 people) going to a firm with fewer than 100 lawyers. No idea about how long people stay here.

http://www.lstscorereports.com/?school= ... =employers

[jbagelboy]

The definition of big law might be a little ambiguous, but I think it's generally a firm of 100+ lawyers. In New York the market salary for these jobs is $160k. In other cities, market salary might be slightly less than that, but it's probably made up by lower cost of living. There might be a number of $100k+ jobs where people stay for years, but that's certainly not the norm for first year associates.

How does one quantify a "boutique" paying at the +100K level with fewer than 50 or so attorneys? Generally speaking (if there is a "generally"), are these the types of firms that usually provide employment over the long haul (speaking specifically of firms that continue to be successful)?

I know of someone who bypassed Big Law to go the Boutique route (at about the same pay), focusing on stability and circumventing the lateral process.

There are categories that small on the employment surveys, so if you look at a school (Columbia linked below), you can see how many grads end up in this size firm. Columbia has about 2.1% of grads (7.665 people) going to a firm with fewer than 100 lawyers. No idea about how long people stay here.

http://www.lstscorereports.com/?school= ... =employers

awwww yea there it is.

PS why doesn't TLS include academia when we compute basic employment metric? Typically to be a legal academic you need stellar grades and credentials, which would easily place you in the running at a school like HYSCC for biglaw. I would think (AIII fed clerkship + NLJ250 + Academia) might be more accurate as far as "chances at biglaw" are concerned. Thoughts?

[NYstate]

The definition of big law might be a little ambiguous, but I think it's generally a firm of 100+ lawyers. In New York the market salary for these jobs is $160k. In other cities, market salary might be slightly less than that, but it's probably made up by lower cost of living. There might be a number of $100k+ jobs where people stay for years, but that's certainly not the norm for first year associates.

How does one quantify a "boutique" paying at the +100K level with fewer than 50 or so attorneys? Generally speaking (if there is a "generally"), are these the types of firms that usually provide employment over the long haul (speaking specifically of firms that continue to be successful)?

I know of someone who bypassed Big Law to go the Boutique route (at about the same pay), focusing on stability and circumventing the lateral process.

There are categories that small on the employment surveys, so if you look at a school (Columbia linked below), you can see how many grads end up in this size firm. Columbia has about 2.1% of grads (7.665 people) going to a firm with fewer than 100 lawyers. No idea about how long people stay here.

http://www.lstscorereports.com/?school= ... =employers

awwww yea there it is.

PS why doesn't TLS include academia when we compute basic employment metric? Typically to be a legal academic you need stellar grades and credentials, which would easily place you in the running at a school like HYSCC for biglaw. I would think (AIII fed clerkship + NLJ250 + Academia) might be more accurate as far as "chances at biglaw" are concerned. Thoughts?

Doesn't academia often mean school funded jobs?

[BitterSplitter]

.

[beepboopbeep]

PS why doesn't TLS include academia when we compute basic employment metric? Typically to be a legal academic you need stellar grades and credentials, which would easily place you in the running at a school like HYSCC for biglaw. I would think (AIII fed clerkship + NLJ250 + Academia) might be more accurate as far as "chances at biglaw" are concerned. Thoughts?

I think it's mostly because it's pretty rare straight out of JD, and the people who get it right away tend to already have Ph.Ds in other fields first. Or, as NYState pointed out, it's kind of a misclassification of school-funded work.

It's a hard thing to quantify because most legal academic hiring comes after a few years of experience (firm/regulator/clerking/etc) or another degree, and schools don't really track students that long (or, well, they probably do, they just don't release the data). So you have to look at hiring announcements and faculty webpages and such, or rely on self-reported data. Basically what Leiter tries to do.

This is mostly based on talking to a couple profs at NYU about it, so I defer any points to someone with more personal experience. Interestingly enough they both talked about the importance of T10 (rather than T14).

[Paul Campos]

Nobody gets a legal academic job straight out of law school except in the very rare case of somebody who is already an academic who was picking up a JD. In the nine-month NALP stats "academia" means doing clerical work at your alma mater for $15 an hour.

[jbagelboy]

PS why doesn't TLS include academia when we compute basic employment metric? Typically to be a legal academic you need stellar grades and credentials, which would easily place you in the running at a school like HYSCC for biglaw. I would think (AIII fed clerkship + NLJ250 + Academia) might be more accurate as far as "chances at biglaw" are concerned. Thoughts?

I think it's mostly because it's pretty rare straight out of JD, and the people who get it right away tend to already have Ph.Ds in other fields first. Or, as NYState pointed out, it's kind of a misclassification of school-funded work.

It's a hard thing to quantify because most legal academic hiring comes after a few years of experience (firm/regulator/clerking/etc) or another degree, and schools don't really track students that long (or, well, they probably do, they just don't release the data). So you have to look at hiring announcements and faculty webpages and such, or rely on self-reported data. Basically what Leiter tries to do.

This is mostly based on talking to a couple profs at NYU about it, so I defer any points to someone with more personal experience. Interestingly enough they both talked about the importance of T10 (rather than T14).

lol, adcomms and profs at schools ranked that year in the top 10 USNWR will talk about the "T10 schools" just as DNCG will talk about "T14" and UMN will talk about "T20". It's all relative to their positionality in the ranking.

Wouldn't the bolded indicate that its even more difficult to be considered legal academia immediately out of LS (the statistics that are tracked and labeled?)

Doesn't academia often mean school funded jobs?

good question, depends on the school. I suppose we would have to locate the intersection of school funded and academia in the set of all jobs and delete it from the metric to get an accurate read.

Nobody gets a legal academic job straight out of law school except in the very rare case of somebody who is already an academic who was picking up a JD. In the nine-month NALP stats "academia" means doing clerical work at your alma mater for $15 an hour.

if this is universally true than I retract my statement, but I met some pretty young (like 27-28) year old law profs on some campus visitations that wouldn't have had much other legal experience (maybe they did a joint Ph.D though)

[dixiecupdrinking]

PS why doesn't TLS include academia when we compute basic employment metric? Typically to be a legal academic you need stellar grades and credentials, which would easily place you in the running at a school like HYSCC for biglaw. I would think (AIII fed clerkship + NLJ250 + Academia) might be more accurate as far as "chances at biglaw" are concerned. Thoughts?

I think it's mostly because it's pretty rare straight out of JD, and the people who get it right away tend to already have Ph.Ds in other fields first. Or, as NYState pointed out, it's kind of a misclassification of school-funded work.

It's a hard thing to quantify because most legal academic hiring comes after a few years of experience (firm/regulator/clerking/etc) or another degree, and schools don't really track students that long (or, well, they probably do, they just don't release the data). So you have to look at hiring announcements and faculty webpages and such, or rely on self-reported data. Basically what Leiter tries to do.

This is mostly based on talking to a couple profs at NYU about it, so I defer any points to someone with more personal experience. Interestingly enough they both talked about the importance of T10 (rather than T14).

lol, adcomms and profs at schools ranked that year in the top 10 USNWR will talk about the "T10 schools" just as DNCG will talk about "T14" and UMN will talk about "T20". It's all relative to their positionality in the ranking.

Wouldn't the bolded indicate that its even more difficult to be considered legal academia immediately out of LS (the statistics that are tracked and labeled?)

Doesn't academia often mean school funded jobs?

good question, depends on the school. I suppose we would have to locate the intersection of school funded and academia in the set of all jobs and delete it from the metric to get an accurate read.

Nobody gets a legal academic job straight out of law school except in the very rare case of somebody who is already an academic who was picking up a JD. In the nine-month NALP stats "academia" means doing clerical work at your alma mater for $15 an hour.

if this is universally true than I retract my statement, but I met some pretty young (like 27-28) year old law profs on some campus visitations that wouldn't have had much other legal experience (maybe they did a joint Ph.D though)

At the very least, those professors probably clerked. And I would suspect if there are actually 20-something law professors out there, they're adjuncts teaching legal writing courses, which is not really the same thing.

[Micdiddy]

lol, adcomms and profs at schools ranked that year in the top 10 USNWR will talk about the "T10 schools" just as DNCG will talk about "T14" and UMN will talk about "T20". It's all relative to their positionality in the ranking.

And yet TLSers know it's really t13.