Columbia v. GTown ($) v. Mich ($) v. UMN ($$$) Forum

[tortuga]

.

[Crowing]

I hate to get all TaipeiMort ITT, but I still haven't seen any actual evidence to suggest a separation of H in particular from CC (unless you are targeting academia or a clerkship). H really doesn't look any more impressive than CC on LST this year; I wish we could more specifically compare things like grade cutoffs at biglaw firms since everybody is just going to cry the unsupportable and undeniable "self-selection" if we look at placement numbers.

[ph5354a]

I hate to get all TaipeiMort ITT, but I still haven't seen any actual evidence to suggest a separation of H in particular from CC (unless you are targeting academia or a clerkship). H really doesn't look any more impressive than CC on LST this year; I wish we could more specifically compare things like grade cutoffs at biglaw firms since everybody is just going to cry the unsupportable and undeniable "self-selection" if we look at placement numbers.

Yeah, I suspect (suspicions > anecdotal, right?) the difference between CC and H is what the "rest" of the class is doing. All three schools hover around 71-72% of 2012 grads being in 100+ firms or federal clerkships. I would guess that a larger portion of the 28% remaining at H would consider themselves in positive outcomes (bigfed, academia), while the portion of that 28% at CC that consider themselves in positive outcomes is smaller. The vast majority (71-72%) of these schools' grads end up in similar outcomes (on paper, at least). I think the degree to which you can split hairs among these three depends on career goals.

EDIT: I now realize that I said basically the exact same point you were making, just less eloquently. In conclusion, I agree.

[SportsFan]

I hate to get all TaipeiMort ITT, but I still haven't seen any actual evidence to suggest a separation of H in particular from CC (unless you are targeting academia or a clerkship). H really doesn't look any more impressive than CC on LST this year; I wish we could more specifically compare things like grade cutoffs at biglaw firms since everybody is just going to cry the unsupportable and undeniable "self-selection" if we look at placement numbers.

Penn has higher A3+biglaw than Harvard. Penn and Michigan are peers. Therefore Michigan is a better choice than HYS.

m i doin dis rite?

[ph5354a]

I hate to get all TaipeiMort ITT, but I still haven't seen any actual evidence to suggest a separation of H in particular from CC (unless you are targeting academia or a clerkship). H really doesn't look any more impressive than CC on LST this year; I wish we could more specifically compare things like grade cutoffs at biglaw firms since everybody is just going to cry the unsupportable and undeniable "self-selection" if we look at placement numbers.

Penn has higher A3+biglaw than Harvard. Penn and Michigan are peers. Therefore Michigan is a better choice than HYS.

m i doin dis rite?

I think Crowing's point was that traditional peer groups don't seem to correlate to A3+big law stats, so the fact that P and M are peers isn't relevant here.

[Crowing]

I hate to get all TaipeiMort ITT, but I still haven't seen any actual evidence to suggest a separation of H in particular from CC (unless you are targeting academia or a clerkship). H really doesn't look any more impressive than CC on LST this year; I wish we could more specifically compare things like grade cutoffs at biglaw firms since everybody is just going to cry the unsupportable and undeniable "self-selection" if we look at placement numbers.

Penn has higher A3+biglaw than Harvard. Penn and Michigan are peers. Therefore Michigan is a better choice than HYS.

m i doin dis rite?

The whole point is to rely on hard data rather than anecdotal impressions. You're cherrypicking from both approaches so of course you're going to get a ridiculous result. You took data from Penn but not Mich, and the reputation of Penn and Mich but not H? These sort of techniques are how metrics like the cooley law school Rankings are constructed.

[banjo]

This isn't the LSAT. You can look at the data, look at the anecdotes and who's telling them, weigh them as you see fit, make some guesses, and take a leap of faith. You won't have an airtight argument free of unsupported assumptions, but so what?

[JamesDean1955]

I hate to get all TaipeiMort ITT, but I still haven't seen any actual evidence to suggest a separation of H in particular from CC (unless you are targeting academia or a clerkship). H really doesn't look any more impressive than CC on LST this year; I wish we could more specifically compare things like grade cutoffs at biglaw firms since everybody is just going to cry the unsupportable and undeniable "self-selection" if we look at placement numbers.

Penn has higher A3+biglaw than Harvard. Penn and Michigan are peers. Therefore Michigan is a better choice than HYS.

m i doin dis rite?

I think Crowing's point was that traditional peer groups don't seem to correlate to A3+big law stats, so the fact that P and M are peers isn't relevant here.

I agree with the above if you exclude HYS, and if you take out the A3 I'd agree with it in general (i.e. only biglaw stats). Traditional arbitrary peer groups are overrated and TLS needs to stop getting such a hard on for them.

ETA:

I'm voting Columbia, I guess.

Although not at all crazy about any of these choices at those prices.

[cassif]

Also a 0L with very little insight except that I've just finished making a somewhat similar choice between a T14 and free tuition at UMN. For my part, if I'd been at all sure that I ultimately wanted to end up in the Twin Cities I would've definitely gone with UMN and its scholarship. That's a lot of money to turn down unless you're positive that you want to work somewhere where that name just doesn't travel easily (NY, CA, etc.). If you know you want to stay in town anyway, why bother taking on the debt? UMN Law's a big enough fish in that particular pond that having a Columbia degree there doesn't seem worth another $200k.

I don't know about BigFed but I'd bet that for government jobs in-state the UMN name does just fine. I've also heard that the school is really working on upping its career services game because they know that's been an issue.

[dixiecupdrinking]

I'd go to Minnesota. $275,000 of non-dischargeable debt can completely ruin your life. These days, going to a school like Columbia without any aid is reserved for the wealthy and those who favor risk to an irrational degree. Even if everything breaks right for you, those loans are a massive psychological burden that you'll be carrying around for a decade. It sucks but that's the current landscape; we are living in a plutocratic age.

I don't get this. Columbia students have a better chance at a positive outcome than students at any other law school in the country. For most applicants (with a few exceptions), if you'd be willing to pay sticker at H/Y/S, you should be willing to pay sticker at Columbia (and Chicago for that matter). If you don't think any school is worth sticker, that's a different matter, but to characterize "a school like Columbia" as being riskier than others is absurd.

What I mean by "a school like Columbia" is "a school that charges $50,000 in tuition, is in an expensive city, and gives comparatively little aid."

Even assuming HYS aren't better than Columbia or Chicago (and they are, but let's assume they aren't), they give actual need-based aid. Columbia doesn't.

A "positive outcome," meaning, really, biglaw, isn't even that positive when you are paying down close to $300,000. A negative outcome is devastating.

[jbagelboy]

I'd go to Minnesota. $275,000 of non-dischargeable debt can completely ruin your life. These days, going to a school like Columbia without any aid is reserved for the wealthy and those who favor risk to an irrational degree. Even if everything breaks right for you, those loans are a massive psychological burden that you'll be carrying around for a decade. It sucks but that's the current landscape; we are living in a plutocratic age.

I don't get this. Columbia students have a better chance at a positive outcome than students at any other law school in the country. For most applicants (with a few exceptions), if you'd be willing to pay sticker at H/Y/S, you should be willing to pay sticker at Columbia (and Chicago for that matter). If you don't think any school is worth sticker, that's a different matter, but to characterize "a school like Columbia" as being riskier than others is absurd.

What I mean by "a school like Columbia" is "a school that charges $50,000 in tuition, is in an expensive city, and gives comparatively little aid."

Even assuming HYS aren't better than Columbia or Chicago (and they are, but let's assume they aren't), they give actual need-based aid. Columbia doesn't.

A "positive outcome," meaning, really, biglaw, isn't even that positive when you are paying down close to $300,000. A negative outcome is devastating.

If you want to work at a law firm and that is your primary goal, honestly, why does it matter if you go to Columbia/Chicago or Harvard? How, in this case, is the debt from Harvard any "better" than debt from CC? I completely understand that HYS are 1) more flexible with need based aid (but if you got into H you got almost always get $ from CC), and 2) are far safer bets for anyone wanting to clerk, go into academia, or have a chance at competitive PI fellowships, since they have much more reasonable repayment programs, the debt will not crush you, not to mention more connections in those areas. But if your goal for the next 5 years is to work at a major law firm in Manhattan, then I agree with tortuga, there's no substantial difference in risk or reward going to Columbia.

[dixiecupdrinking]

I'd go to Minnesota. $275,000 of non-dischargeable debt can completely ruin your life. These days, going to a school like Columbia without any aid is reserved for the wealthy and those who favor risk to an irrational degree. Even if everything breaks right for you, those loans are a massive psychological burden that you'll be carrying around for a decade. It sucks but that's the current landscape; we are living in a plutocratic age.

I don't get this. Columbia students have a better chance at a positive outcome than students at any other law school in the country. For most applicants (with a few exceptions), if you'd be willing to pay sticker at H/Y/S, you should be willing to pay sticker at Columbia (and Chicago for that matter). If you don't think any school is worth sticker, that's a different matter, but to characterize "a school like Columbia" as being riskier than others is absurd.

What I mean by "a school like Columbia" is "a school that charges $50,000 in tuition, is in an expensive city, and gives comparatively little aid."

Even assuming HYS aren't better than Columbia or Chicago (and they are, but let's assume they aren't), they give actual need-based aid. Columbia doesn't.

A "positive outcome," meaning, really, biglaw, isn't even that positive when you are paying down close to $300,000. A negative outcome is devastating.

If you want to work at a law firm and that is your primary goal, honestly, why does it matter if you go to Columbia/Chicago or Harvard? How, in this case, is the debt from Harvard any "better" than debt from CC? I completely understand that HYS are 1) more flexible with need based aid (but if you got into H you got almost always get $ from CC), and 2) are far safer bets for anyone wanting to clerk, go into academia, or have a chance at competitive PI fellowships, since they have much more reasonable repayment programs, the debt will not crush you, not to mention more connections in those areas. But if your goal for the next 5 years is to work at a major law firm in Manhattan, then I agree with tortuga, there's no substantial difference in risk or reward going to Columbia.

The bolded makes everything else you said irrelevant to the question of whether it's wise to go to Columbia with sticker debt. I am certainly not saying it's always a bad idea for anyone to go to Columbia. That would be inane.

[you'rethemannowdawg]

Thanks a lot for all of the responses. this is a tough decision and I appreciate TLS's help.

I have a question about IBR and PAYE. I understand that the prospect owing $270,000 to the government is inherently undesirable for some people (and I admit, it makes me uncomfortable) but using the resources provided for those programs makes it look like I wouldn't really have it that bad.

According to the calculator, if I were making $110,000 (market in MN) with $270,000 in loans, I could qualify for a $1100 monthly payment under IBR and a $777 monthly payment under PAYE.

Am I somehow calculating this wrong? Or is the big concern simply that I can't guarantee that I'll keep a job long enough to reap the benefits of PAYE and still be able to afford the tax bomb at the end?

I also understand the argument that 70k debt is better than 270k debt (believe me, the decision is literally keeping me up at night,) but paying 12,000 a year and then paying the taxes when I'm in my 40s doesn't seem like such a bad deal.

That makes taking Columbia, which all but guarantees a "good" outcome, seem like a better choice than UMN, where a third of the class of 2012 didn't get jobs as lawyers at all and getting the most desirable jobs is harder.

Anyone know anything about PAYE or IBR that could tell me if I'm way off-base?

[jbagelboy]

Thanks a lot for all of the responses. this is a tough decision and I appreciate TLS's help.

I have a question about IBR and PAYE. I understand that the prospect of owing $270,000 to the government may be untenable for some people (and I admit, it makes me uncomfortable) but using the resources provided for those programs makes it look like I wouldn't really have it that bad.

According to the calculator, if I were making $110,000 (market in MN) with $270,000 in loans, I could qualify for a $1100 monthly payment under IBR and a $777 monthly payment under PAYE.

Am I somehow calculating this wrong? Or is the big concern simply that I can't guarantee that I'll keep a job long enough to reap the benefits of PAYE and still be able to afford the tax bomb at the end?

I also understand the argument that 70k debt is better than 270k debt (believe me, the decision is literally keeping me up at night,) but paying 12,000 a year and then paying the taxes when I'm in my 40s doesn't seem like such a bad deal.

That makes taking Columbia, which all but guarantees a "good" outcome, seem like a better choice than UMN, where a third of the class of 2012 didn't get jobs as lawyers at all and getting the most desirable jobs is harder.

Anyone know anything about PAYE or IBR that could tell me if I'm way off-base?

Sorry I'm not going to be able to answer your PAYE/IBR questions right now, but I never really got to respond to your original issue. I agree that Gtown and Michigan are out at those debt levels. Here it goes: If you REALLY want to practice in the twin cities, I'm voting Minnesota. It's a huge fish in a small pond there. And while I know this flies in the face of TLS wisdom (waiting for Noodley to come after me), you scored a 177 LSAT: unless you fuck off, you are NOT going to be below median at a school where most kids are 165-168. I'm assuming your UG grades have a solid explanation for being low. The only real evidence we have of law school success suggests that LSAT scores are the BEST indicator (albeit still a shitty one) of your performance. You also won't be dealing with a culture shock, weather issues, or any other bullshit that would impede your success, and you can use your ties to your advantage 1L/2L.

If you succeed at UMN, which the limited data suggests you would, and get the same firm job making that $110K figure, won't you be so fucking glad you aren't in the exact same spot but with $275K owed to the feds? If you went to CLS, did well, made it back to the twin cities, and got that same job in a firm with a bunch of junior associates from U of Minnesota (and don't tell me NO UMN grads get these jobs, I know plenty of people out of minnesota at good firms in the twin cities), wouldn't you feel like a bit of a dumbass with your massive debt for the same position?

I can only see the columbia debt justified here regardless of the repayment options if you have some desire to practice outside of the minnesota/iowa/dakotas/wisconsin perimeter.

Good luck with your decision!

[BigZuck]

Thanks a lot for all of the responses. this is a tough decision and I appreciate TLS's help.

I have a question about IBR and PAYE. I understand that the prospect of owing $270,000 to the government may be untenable for some people (and I admit, it makes me uncomfortable) but using the resources provided for those programs makes it look like I wouldn't really have it that bad.

According to the calculator, if I were making $110,000 (market in MN) with $270,000 in loans, I could qualify for a $1100 monthly payment under IBR and a $777 monthly payment under PAYE.

Am I somehow calculating this wrong? Or is the big concern simply that I can't guarantee that I'll keep a job long enough to reap the benefits of PAYE and still be able to afford the tax bomb at the end?

I also understand the argument that 70k debt is better than 270k debt (believe me, the decision is literally keeping me up at night,) but paying 12,000 a year and then paying the taxes when I'm in my 40s doesn't seem like such a bad deal.

That makes taking Columbia, which all but guarantees a "good" outcome, seem like a better choice than UMN, where a third of the class of 2012 didn't get jobs as lawyers at all and getting the most desirable jobs is harder.

Anyone know anything about PAYE or IBR that could tell me if I'm way off-base?

Sorry I'm not going to be able to answer your PAYE/IBR questions right now, but I never really got to respond to your original issue. I agree that Gtown and Michigan are out at those debt levels. Here it goes: If you REALLY want to practice in the twin cities, I'm voting Minnesota. It's a huge fish in a small pond there. And while I know this flies in the face of TLS wisdom (waiting for Noodley to come after me), you scored a 177 LSAT: unless you fuck off, you are NOT going to be below median at a school where most kids are 165-168. I'm assuming your UG grades have a solid explanation for being low. The only real evidence we have of law school success suggests that LSAT scores are the BEST indicator (albeit still a shitty one) of your performance. You also won't be dealing with a culture shock, weather issues, or any other bullshit that would impede your success, and you can use your ties to your advantage 1L/2L.

If you succeed at UMN, which the limited data suggests you would, and get the same firm job making that $110K figure, won't you be so fucking glad you aren't in the exact same spot but with $275K owed to the feds? If you went to CLS, did well, made it back to the twin cities, and got that same job in a firm with a bunch of junior associates from U of Minnesota (and don't tell me NO UMN grads get these jobs, I know plenty of people out of minnesota at good firms in the twin cities), wouldn't you feel like a bit of a dumbass with your massive debt for the same position?

I can only see the columbia debt justified here regardless of the repayment options if you have some desire to practice outside of the minnesota/iowa/dakotas/wisconsin perimeter.

Good luck with your decision!

Above median is still getting small law for the most part it seems. The OP would probably have to be in the top 20% or so to have a reasonable shot at a high paying outcome. I don't think a 177 LSAT can guarantee anything close to that class rank.

I would only go to Minnesota if I had Minnesota ties, it was cheap, and I were willing to work at a small firm in Minnesota.

[you'rethemannowdawg]

Thanks a lot for all of the responses. this is a tough decision and I appreciate TLS's help.

I have a question about IBR and PAYE. I understand that the prospect of owing $270,000 to the government may be untenable for some people (and I admit, it makes me uncomfortable) but using the resources provided for those programs makes it look like I wouldn't really have it that bad.

According to the calculator, if I were making $110,000 (market in MN) with $270,000 in loans, I could qualify for a $1100 monthly payment under IBR and a $777 monthly payment under PAYE.

Am I somehow calculating this wrong? Or is the big concern simply that I can't guarantee that I'll keep a job long enough to reap the benefits of PAYE and still be able to afford the tax bomb at the end?

I also understand the argument that 70k debt is better than 270k debt (believe me, the decision is literally keeping me up at night,) but paying 12,000 a year and then paying the taxes when I'm in my 40s doesn't seem like such a bad deal.

That makes taking Columbia, which all but guarantees a "good" outcome, seem like a better choice than UMN, where a third of the class of 2012 didn't get jobs as lawyers at all and getting the most desirable jobs is harder.

Anyone know anything about PAYE or IBR that could tell me if I'm way off-base?

Sorry I'm not going to be able to answer your PAYE/IBR questions right now, but I never really got to respond to your original issue. I agree that Gtown and Michigan are out at those debt levels. Here it goes: If you REALLY want to practice in the twin cities, I'm voting Minnesota. It's a huge fish in a small pond there. And while I know this flies in the face of TLS wisdom (waiting for Noodley to come after me), you scored a 177 LSAT: unless you fuck off, you are NOT going to be below median at a school where most kids are 165-168. I'm assuming your UG grades have a solid explanation for being low. The only real evidence we have of law school success suggests that LSAT scores are the BEST indicator (albeit still a shitty one) of your performance. You also won't be dealing with a culture shock, weather issues, or any other bullshit that would impede your success, and you can use your ties to your advantage 1L/2L.

If you succeed at UMN, which the limited data suggests you would, and get the same firm job making that $110K figure, won't you be so fucking glad you aren't in the exact same spot but with $275K owed to the feds? If you went to CLS, did well, made it back to the twin cities, and got that same job in a firm with a bunch of junior associates from U of Minnesota (and don't tell me NO UMN grads get these jobs, I know plenty of people out of minnesota at good firms in the twin cities), wouldn't you feel like a bit of a dumbass with your massive debt for the same position?

I can only see the columbia debt justified here regardless of the repayment options if you have some desire to practice outside of the minnesota/iowa/dakotas/wisconsin perimeter.

Good luck with your decision!

That's a very good point and it's what I'm wrestling with. I don't want to shell out an extra 200k for the same outcome.

What's holding me up is that, while I know I eventually want to settle in MN, I may want to try living and working somewhere else for awhile, too. going to University of Minnesota seems like it would shut the door on that. I'm just not sure if it's worth that much money for the different opportunities.

[dixiecupdrinking]

Keep in mind with PAYE and those numbers, it looks like you are talking about some serious negative amortization. Just rough math here, but $777 a month means you're paying about $9,300 a year, and interest on $270,000 at 7% will be $18,900. Your outstanding balance will be growing by more than $9,000 a year. In twenty years, when you get forgiveness, you could stand to owe more than $400,000, which is then treated as cancellation of indebtedness and taxed as income. That is an outrageous tax bomb. I suppose you could save and invest for the next couple of decades and try to put away $150,000 or so for the day when that happens, but it sounds totally frightening to me, and also what a depressing way to see your savings go up in smoke. It's just not really a practical option unless congress changes the tax treatment, in my opinion.

[you'rethemannowdawg]

Keep in mind with PAYE and those numbers, it looks like you are talking about some serious negative amortization. Just rough math here, but $777 a month means you're paying about $9,300 a year, and interest on $270,000 at 7% will be $18,900. Your outstanding balance will be growing by more than $9,000 a year. In twenty years, when you get forgiveness, you could stand to owe more than $400,000, which is then treated as cancellation of indebtedness and taxed as income. That is an outrageous tax bomb. I suppose you could save and invest for the next couple of decades and try to put away $150,000 or so for the day when that happens, but it sounds totally frightening to me, and also what a depressing way to see your savings go up in smoke. It's just not really a practical option unless congress changes the tax treatment, in my opinion.

Whoa...I had heard about the taxation at the end but never ran the numbers. Is IBR the same way? Or does PAYE replace IBR?

[Rahviveh]

Keep in mind with PAYE and those numbers, it looks like you are talking about some serious negative amortization. Just rough math here, but $777 a month means you're paying about $9,300 a year, and interest on $270,000 at 7% will be $18,900. Your outstanding balance will be growing by more than $9,000 a year. In twenty years, when you get forgiveness, you could stand to owe more than $400,000, which is then treated as cancellation of indebtedness and taxed as income. That is an outrageous tax bomb. I suppose you could save and invest for the next couple of decades and try to put away $150,000 or so for the day when that happens, but it sounds totally frightening to me, and also what a depressing way to see your savings go up in smoke. It's just not really a practical option unless congress changes the tax treatment, in my opinion.

Doing some more rough math, if he started at $110,000 and had 5% raises for 20 years (making close to 250k at year 20), he would pay roughly $300k over that period, with $383,000 forgiven and an expected tax payment of $126,543

If he put another $520 a month away, that would cover the tax bomb. But now his total payments are 425,000 over 20 years.

My guess is that they will fix the tax treatment. The bigger problem for OP is that he should not rely on PAYE to make a decision since it could be taken away or modified before you graduate. Then you could really regret going to CLS.

ETA: In this example, total payments over a ten-year plan would have been $388,834. It would obviously be less than that if you frontload your repayment as people in biglaw tend to do.

[Tekrul]

On the last point of that amortization, if at any point you should become disqualified from these programs, say if they have an income ceiling, you could end up in more debt than when you started.

[Rahviveh]

On the last point of that amortization, if at any point you should become disqualified from these programs, say if they have an income ceiling, you could end up in more debt than when you started.

You cannot be disqualified from IBR or PAYE. Your payment is also capped at what it would have been if you had done 10-year standard repayment. At sticker debt, the 10-year payment would have been around $3k/month. So if you make a million dollars a year, you will still make that $3k/month payment and be on track for forgiveness at year 20 or 25.

Of course, they could ADD an income ceiling before you enter the program, which is a legitimate concern, but is not part of the current program.

[dixiecupdrinking]

Keep in mind with PAYE and those numbers, it looks like you are talking about some serious negative amortization. Just rough math here, but $777 a month means you're paying about $9,300 a year, and interest on $270,000 at 7% will be $18,900. Your outstanding balance will be growing by more than $9,000 a year. In twenty years, when you get forgiveness, you could stand to owe more than $400,000, which is then treated as cancellation of indebtedness and taxed as income. That is an outrageous tax bomb. I suppose you could save and invest for the next couple of decades and try to put away $150,000 or so for the day when that happens, but it sounds totally frightening to me, and also what a depressing way to see your savings go up in smoke. It's just not really a practical option unless congress changes the tax treatment, in my opinion.

Doing some more rough math, if he started at $110,000 and had 5% raises for 20 years (making close to 250k at year 20), he would pay roughly $300k over that period, with $383,000 forgiven and an expected tax payment of $126,543

If he put another $520 a month away, that would cover the tax bomb. But now his total payments are 425,000 over 20 years.

My guess is that they will fix the tax treatment. The bigger problem for OP is that he should not rely on PAYE to make a decision since it could be taken away or modified before you graduate. Then you could really regret going to CLS.

Yeah, both good points. I didn't include raises to be conservative about it, but I also don't know what is a reasonable mid-career salary for a lawyer in Minneapolis; I would guess that $250,000 is actually a very optimistic estimate, though I could be wrong. I actually have the opposite intuition from you—I think that PAYE and IBR are very unlikely to be eliminated, at least without grandfathering people in, but I doubt that the tax bomb will be changed. Either way, buyer beware.

Whoa...I had heard about the taxation at the end but never ran the numbers. Is IBR the same way? Or does PAYE replace IBR?

IBR has the same tax issue. I'm not sure whether IBR is going to stick around, I think that you can currently elect either plan but PAYE is more generous across the board? Might be wrong on that.

[Rahviveh]

Keep in mind with PAYE and those numbers, it looks like you are talking about some serious negative amortization. Just rough math here, but $777 a month means you're paying about $9,300 a year, and interest on $270,000 at 7% will be $18,900. Your outstanding balance will be growing by more than $9,000 a year. In twenty years, when you get forgiveness, you could stand to owe more than $400,000, which is then treated as cancellation of indebtedness and taxed as income. That is an outrageous tax bomb. I suppose you could save and invest for the next couple of decades and try to put away $150,000 or so for the day when that happens, but it sounds totally frightening to me, and also what a depressing way to see your savings go up in smoke. It's just not really a practical option unless congress changes the tax treatment, in my opinion.

Doing some more rough math, if he started at $110,000 and had 5% raises for 20 years (making close to 250k at year 20), he would pay roughly $300k over that period, with $383,000 forgiven and an expected tax payment of $126,543

If he put another $520 a month away, that would cover the tax bomb. But now his total payments are 425,000 over 20 years.

My guess is that they will fix the tax treatment. The bigger problem for OP is that he should not rely on PAYE to make a decision since it could be taken away or modified before you graduate. Then you could really regret going to CLS.

Yeah, both good points. I didn't include raises to be conservative about it, but I also don't know what is a reasonable mid-career salary for a lawyer in Minneapolis; I would guess that $250,000 is actually a very optimistic estimate, though I could be wrong. I actually have the opposite intuition from you—I think that PAYE and IBR are very unlikely to be eliminated, at least without grandfathering people in, but I doubt that the tax bomb will be changed. Either way, buyer beware.

Whoa...I had heard about the taxation at the end but never ran the numbers. Is IBR the same way? Or does PAYE replace IBR?

IBR has the same tax issue. I'm not sure whether IBR is going to stick around, I think that you can currently elect either plan but PAYE is more generous across the board? Might be wrong on that.

Yeah, but actually including raises is the conservative thing to do because the more you make, the more you pay and the less beneficial the program is..... Obviously if you pay more, your tax bill will be lower, but we don't know if that's going to be an issue or not. His payments will be a lot lower if you assume 3% raises.

IBR is not going anywhere, but PAYE is just too generous at this point. I don't think any changes will be made anytime soon because it was just enacted, but they will have to do something about it such as add an income or debt ceiling. The first people come up for forgiveness for PSLF in a couple years so that will be something to watch.

OP make sure you actually qualify for PAYE. The "old" IBR program is not such a great deal.

[Doorkeeper]

1) If you seriously actually want to work in the Twin Cities, go to UMN.

2) If you secretly really want to work in NYC/DC, then Mich or Columbia. Probably Michigan.

[jbagelboy]

Above median is still getting small law for the most part it seems. The OP would probably have to be in the top 20% or so to have a reasonable shot at a high paying outcome. I don't think a 177 LSAT can guarantee anything close to that class rank.

I would only go to Minnesota if I had Minnesota ties, it was cheap, and I were willing to work at a small firm in Minnesota.

I agree it doesn't guarantee anything more than above median. NU with $ would be the best scenario here but thats not really an option and there's no "retake" here. unless I misread though, OP does have Minnesota ties, its cheap for him to go, and he wants to work there -- now consider the best case scenario for him with these criteria going to UMN: he hits that top 20% class mark and gets the equivalent of a biglaw position by midmarket standards. Best case scenario at CLS: he does respectable well (I honestly I don't know what kind of grades you would need from CLS to get a Dorsey position in the twin cities, but I assume at least top half), and gets that same job but with the extra debt. If he's playing the risks vs rewards I like his minnesota odds slightly better.

So OP you should think of the combination of these two questions: "are you willing to work at a small firm in minnesota if you miss biglaw", and "how much will you like to put off moving back to twin cities and work in NYC biglaw for 5+ years to pay off your debt". If its No/Yes, then go to new york. Yes/No, go to minnesota. No/No isn't an attitude you can safely take. Yes/Yes... both are justifiable.