UT or GULC at sticker vs. WUSTL (114k) Forum

[beachbum]

Thank you

He may take the same side as you on this debate, but I doubt he finds your posts ITT any less uninformed than the rest of us. 2k posts and 5 months on TLS and you still don't have a clue.

Well, I suppose you have two years on me. I only hope to be as informed as you are in 2013.

In romo's defense, it ain't exactly rocket science here. Simply browsing TLS and ATL for a little while will give you a pretty good indication that the numbers you were using (e.g. anything self-reported from just about any law school) are complete bullshit. A better comparison might use NLJ250+clerkship placement weighted against debt.

[thexfactor]

The problem is at a T1 non T14 school, he might not get to know whether or not he hates biglaw work lol.
T14 will give you the most options.

What makes a school like WUSTL a tough option is the cost, which is hard to handle with our poor biglaw placement. A free degree from WUSTL is not a bad option. It's not like people don't get jobs here. Will he get something at OCI? Probably not, based on our NLJ numbers. Will he wind up completely unemployed? It is certainly possible, but not likely.

Both the best case and worst case scenarios are in WUSTL's favor. Worst case at either school? Unemployment. Better to have no debt than tons of it if you're unemployed. Best case at either school? A well-paying job. Difference is, he'll have little or no loan payments after law school form WUSTL. In the middle of the class is where Georgetown starts to pay off. He'll have much better biglaw odds at median from Georgetown than he will at WUSTL (virtually no shot with median at WUSTL, although I know a few people with slightly above median grades and NLJ jobs). But at least he won't need biglaw from WUSTL. If he's median at Georgetown and strikes out, he's totally screwed.

Law school has made me a lot of things, but it's mostly made me debt-averse. Maybe that's a personal thing, but the difference in cost here is just so big that I think it makes WUSTL an objectively better decision. If we were comparing a school like Chicago with WUSTL, then I'm in your camp for sure. But to go from 25% odds at biglaw to maybe a coin flip isn't worth six-figs to me.

The worst case is:
1. 200k debt GULC degree + no job
2. 70k debt WUSTL degree + no job.

The chances of him getting the best case scenario is pretty low at WUSTL. If you check WUSTL's clerkship+ nlj250 I doubt it is more than 25%. GULC is prob roughly around 50%.

So at WUSTL there is a 75% chance of not getting a good job. Il assume that at WUSTL 25% of the kids get some kind of decent job ie 50-75k job( I think that might be too generous). Therefore there is likely a 50% chance of scenario 2 happening.

At GULC its roughly 50% of clerkship+ NLJ250. Lets assume the same about 25% of kids get some kind of OK job.. ( aka paying 50-75K). Therefore this leaves only 25% of the kids being totally screwed and the odds of #1 happening.

The key is that #2 isnt THAT much worse off than #1.

Both will suck extremely bad because you give up 3 years of your life to go study law. However, with IBR it makes #1 only slightly more worse off than #2. IBR limits your loans to 10% of each year's income and 20 years. If you don't get a biglaw job you will likely be making under 50k in both circumstances. With the interest, you will likely have to use IBR for in both cases.
However with GULC and option 1, you get 20-30% extra chance of a good job.. ie biglaw/midlaw/big clerkship/fed/good PI jobs.

Furthermore, if you do public service or get a job with the government, all your debt is paid off in 10 years.

I think people here discount the value of the IBR program... AKA US gov's bailout of students.

[Bronck]

Right, but you have to pay taxes on the total amount discharged after the 25 years. What does that come out to on 200k principal? My guess is that it'll be a hefty sum since the ~7.9% interest will be accruing on that.

[charliep]

Right, but you have to pay taxes on the total amount discharged after the 25 years. What does that come out to on 200k principal? My guess is that it'll be a hefty sum since the ~7.9% interest will be accruing on that.

yeah. how will people afford that?

[bk1]

The key is that #2 isnt THAT much worse off than #1... However, with IBR it makes #1 only slightly more worse off than #2. IBR limits your loans to 10% of each year's income and 20 years. If you don't get a biglaw job you will likely be making under 50k in both circumstances... I think people here discount the value of the IBR program.

Completely disagree. In scenario #1 you won't have to use IBR and will be debt free in under 10 years (which is the worst case scenario). In scenario #2 you will have to use IBR for decades and will be debt free in 25 years (not to mention the tax bomb).

It would make no sense to use IBR when you're under 100k debt. Furthermore, I think you're discounting how awful it would be to be under student loans for the better part of 3 decades (not to mention the tax bomb at the end). And yes, PSLF exists but it isn't necessarily that easy to get a job that qualifies. Of course you could broaden it to include working the counter at the DMV, but would you really rather be working at some shitty government job in a non-legal capacity rather than working for a small firm?

[Bronck]

\Furthermore, I thin you're discounting how awful it would be to be under student loans for the better part of 3 decades (not to mention the tax bomb at the end).

+1. To have that looming over your head for so long? That sounds miserable.

[thexfactor]

The key is that #2 isnt THAT much worse off than #1... However, with IBR it makes #1 only slightly more worse off than #2. IBR limits your loans to 10% of each year's income and 20 years. If you don't get a biglaw job you will likely be making under 50k in both circumstances... I think people here discount the value of the IBR program.

Completely disagree. In scenario #1 you won't have to use IBR and will be debt free in under 10 years (which is the worst case scenario). In scenario #2 you will have to use IBR for decades and will be debt free in 25 years (not to mention the tax bomb).

It would make no sense to use IBR when you're under 100k debt. Furthermore, I thin you're discounting how awful it would be to be under student loans for the better part of 3 decades (not to mention the tax bomb at the end). And yes, PSLF exists but it isn't necessarily that easy to get a job that qualifies. Of course you could broaden it to include working the counter at the DMV, but would you really rather be working at some shitty government job in a non-legal capacity rather than working for a small firm?

With the new law, all loans are forgiven in 20 years.

[Tiago Splitter]

With the new law, all loans are forgiven in 20 years.

And the forgiven debt is taxed. Add 200K (plus interest) to your income and see what happens.

There are plenty of people out there who think the government will change this policy, but it hasn't happened yet.

[Paul Campos]

With the new law, all loans are forgiven in 20 years.

And the forgiven debt is taxed. Add 200K (plus interest) to your income and see what happens.

There are plenty of people out there who think the government will change this policy, but it hasn't happened yet.

If you have 200K in initial debt at 7% interest and are making $40K a year that's going to balloon to close to a million dollars if you're in IBR for 20 years. The "good news" is that the tax liability at the end of that can be discharged in bankruptcy after three years. For those 23 years it's going to be impossible to get a mortgage or a car loan, and it will take several years to qualify after filing for BK at the end of it all. This all assumes that IBR won't be eliminated at some point which is far from a safe assumption.

[Edit: As pointed out by a poster below, in IBR interest accrues but doesn't capitalize, so after 20 years the total debt in this scenario would be "only" around a half million dollars. It would be more than $800,000 if the unpaid interest capitalized.]

[albusdumbledore]

With the new law, all loans are forgiven in 20 years.

And the forgiven debt is taxed. Add 200K (plus interest) to your income and see what happens.

There are plenty of people out there who think the government will change this policy, but it hasn't happened yet.

If you have 200K in initial debt at 7% interest and are making $40K a year that's going to balloon to close to a million dollars if you're in IBR for 20 years. The "good news" is that the tax liability at the end of that can be discharged in bankruptcy after three years. For those 23 years it's going to be impossible to get a mortgage or a car loan, and it will take several years to qualify after filing for BK at the end of it all. This all assumes that IBR won't be eliminated at some point which is far from a safe assumption.

Lol. This isn't even close to true. First of all, interest only capitalizes on the original principal in IBR. Secondly, even if it didn't, $200k would still not balloon to a million dollars in 20 years at 7% even if you never paid a dime. Math - try it some time.

EDIT: That's not to say I think IBR is necessarily a good idea, but seriously, you undermine the message when you misrepresent things.

[bk1]

With the new law, all loans are forgiven in 20 years.

I didn't know that IBR was being modified, but I still think that 20 years is a huge difference from 10 years or less. For your average person graduating at 25, they would be debt free by 35 at worst from WUSTL whereas they wouldn't be debt free from GULC under IBR until 45. I think that's a pretty big.

[thexfactor]

With the new law, all loans are forgiven in 20 years.

I didn't know that IBR was being modified, but I still think that 20 years is a huge difference from 10 years or less. For your average person graduating at 25, they would be debt free by 35 at worst from WUSTL whereas they wouldn't be debt free from GULC under IBR until 45. I think that's a pretty big.

Yes I agree but there is a 50/50 chance of getting a good job at GULC ie biglaw/midlaw/clerkship/fed gov vs 25% or so at wustl. I think the increase in odds is also pretty big.

Wustl's numbers are similar to lower t14s numbers ( check out cornell's numbers). The only difference is that we have 1/2 the job placement rate as cornell.

Please don't assume thatt there are a lot of "midlaw" or small law jobs that pay 75-100k. Wustl law is like a microcosm of the us. There are a decent amount people at wustl that are taking summer jobs at v50s and there is also a sizable amount of people that are going to be unemployed.

[bk1]

Yes I agree but there is a 50/50 chance of getting a good job at GULC ie biglaw/midlaw/clerkship/fed gov vs 25% or so at wustl. I think the increase in odds is also pretty big.

Not disagreeing.

Wustl's numbers are similar to lower t14s numbers ( check out cornell's numbers). The only difference is that we have 1/2 the job placement rate as cornell.

How can you have stats that differ by a factor of 2 and yet "similar" numbers?

Please don't assume thatt there are a lot of "midlaw" or small law jobs that pay 75-100k. Wustl law is like a microcosm of the us. There are a decent amount people at wustl that are taking summer jobs at v50s and there is also a sizable amount of people that are going to be unemployed.

I'm not sure if this is directed at me, but if it is then I didn't assume this. Even if you start out at a small firm making around 40-60k you can still pay off 100k debt in roughly 10 years. I also agree that not getting a full time legal job is a concern, but not a huge one for most top regional schools (e.g. WUSTL). I mean it does suck, but it seems to me to be better to come out of WUSTL with around 100k debt and no full time legal job than to come out of a T14 with around 200k debt and a full time legal job that pays around 50k. This doesn't hold for all strong regionals in my mind. Whereas T14 is something like 5-10% chance of not getting a full time legal job, the better off strong regionals are around 20%, maybe 25%. Thing get dicey at strong regionals that have even more people ending up without full time legal jobs with percentages in the 30-40% range (e.g. UCH, UCD, CU-Boulder, etc).

[Robespierre]

The COA at WUSTL is ~190K. He has a 114K scholly and he mentions a small "savings." So he might get away with as little as 50K debt. At GULC he's looking at about 185K debt even after spending the savings. The disparity is just too big. 50K debt won't destroy you; 185K debt might.

GULC has a lot more placement clout than WUSTL. But the way the numbers play out for this particular OP, it's not worth taking on the debt to purchase the clout.