Can we talk about T-14 at sticker? Forum

[cotiger]

Certainly not clear from my post, but there are people in this thread claiming that sticker at HYS isn't even worth it from a ROI perspective, and those schools are in the "biglaw practically guaranteed" category, and have great LRAPs. (*Full disclosure: Attending H at sticker.*) At that point, such claims are ridiculous.

And yeah, sure, maybe you won't like being a lawyer. So maybe what you should do instead of limiting your career choices and possible lifetime earnings potential by taking a full scholarship at a lower ranked school is to become a paralegal for a little while and see what's what. And you should also realize that almost any job where an individual is earning over $100,000 is going to require 60+ hrs/wk. If you think that sounds horrible, cool, but then 1) Don't go to law school, and 2) Stop dreaming of individually earning that much.

For someone who can get into a top law school and then do well enough in it to land a biglaw job, the issue is probably not that they have an aversion to hard work. The hours of biglaw are well documented. Anecdotally I've met a couple of people who went into biglaw after law school thinking that that's absolutely what they wanted to do but then grew to really dislike the job and after 5 years were burned out of being a lawyer at all. I've read plenty of stories about similar experiences.

I think it's totally reasonable to factor in that possibility when making a decision to take out $270k in debt. Again, not that that needs to be the main consideration. But it's definitely a possible outcome that should be considered.

I agree with you that YHS are different. The biggies: 1) relatively assured employment outcomes take away that monster downside risk, 2) much greater chance at desirable non-biglaw employment, and to a lesser extent 3) the free-range HLS and (especially) YLS LRAPs (any job that utilizes a JD for H, and any job at all for Y).

ETA: This being said, if a person's goals were strictly biglaw/financial stability (as yours seem to be?), and they had the numbers for H, I think they should be looking long and hard about taking the guaranteed 150k scholly at ED Northwestern for 90k in debt there vs. 270k in debt at H.

Also, folks, you're gonna have some sorta debt hanging over your head your entire life. Would you refuse to buy a house because the prospect of a mortgage is "terrifying"? Would you not have a kid because you'll lose $200k over 20 years?

A mortgage is not an appropriate comparison. The worst that happens with a mortgage is that the house loses 30% of its value. If you go to law school at sticker and strike out, you've lost 100% of that money and (so I've heard) made it more difficult to be employable outside the field.

[twenty]

the free-range HLS and (especially) YLS LRAPs (any job that utilizes a JD for H, and any job at all for Y).

I feel like a lot of people give HYS LRAPs a pass because after all, it's HYS. Straight-up PAYE is a significantly better LRAP than any of HYS' in the majority of situations an HYS grad would find themselves in. The only real advantage HYS' LRAPs enjoy is that it's not tied to the federal program, and thus can widen its range of acceptable jobs. But those extra jobs that HYS LRAPees have access to that PAYE-10 years don't are jobs that would have been just as easily accessible from a T1 on a full ride (i.e, self employed, continued education, etc.)

Use the calculators available from HLS, and then compare that number to PAYE's calculator. You pay more over the course of ten years on a 60k salary increasing at 7% per year on HLS' LRAP than you would on PAYE (straight up, no LRAP) making 110k a year.

There is some increased element of exit freedom from HLS' LRAP in that if you choose to leave the program prematurely, a pro-rate figure gets forgiven in relation to the number of years worked -- but this is true of NYU, Columbia and Penn's LRAPs as well.

[Monochromatic Oeuvre]

Sticker debt will probably approximate around $300k upon full repayment. You will very likely be able to work five years of BigLaw if you seriously intend to (nearly all the < 3 year dropoff is voluntary/burnout and plenty more in years 4-5 are due to people essentially finding out they have no future at the firm). At standard lockstep + Cravath-Scale for 2012, that's 163k + 180k + 199k + 230k + 257k = 1.029M. Take an average of 40% out for taxes in NYC and you're left with $617k. Compare that to an entry-level humanities job making 40k with a 5% raise each year, and you get $221k minus maybe 20% = 177k.

That leaves with a difference of $440k, suggesting the $300k investment should pay off if the realization chance (i.e. your odds of getting Biglaw if you want it) is 68%. This covers at least sticker justification for T6 by itself.

Now consider your post-Biglaw earnings. All of these discussions seem to be 22-year-olds who never give serious contemplation to life after 30. Most post-Biglaw lawyers seem to be making in the low six figures. Suppose it were $125k, which is a number that has been tossed around. Compare it to the $50k-ish in Year Six of your humanities job. That's an after-tax gap of, say, $50k. If that gap stayed constant over ten years (it would likely grow), you'd have another $500k in the JD column. Stretching it out to 40, you'd have a difference of $940k, marking the payoff point at 32%. That easily covers all of the T14 and suggests even UT/UCLA/USC/Vandy would be a reasonable investment. (Important note: Though I think people are justified in attending the last four at sticker under certain circumstances, most TLS posters do not endorse doing so.) Add in uncertainty/risk aversion variables as you please, but eventually the lifetime wage gap will be staggering enough to make T14 at sticker financially valuable.

Essentially the only paths left to an upper-middle-class lifestyle before age 40 are law, finance, medicinie, or STEM. If you don't have the skill set for one of the other three, then Biglaw at sticker is financially sensible.

Of course, all of that is predicated on the notion you view law school as a purely financial decision. You should be placing some sort of premium on attending if you actually want to study the law, and you should not be going if you don't.

[cotiger]

Sticker debt will probably approximate around $300k upon full repayment. You will very likely be able to work five years of BigLaw if you seriously intend to (nearly all the < 3 year dropoff is voluntary/burnout and plenty more in years 4-5 are due to people essentially finding out they have no future at the firm). At standard lockstep + Cravath-Scale for 2012, that's 163k + 180k + 199k + 230k + 257k = 1.029M. Take an average of 40% out for taxes in NYC and you're left with $617k. Compare that to an entry-level humanities job making 40k with a 5% raise each year, and you get $221k minus maybe 20% = 177k.

That leaves with a difference of $440k, suggesting the $300k investment should pay off if the realization chance (i.e. your odds of getting Biglaw if you want it) is 68%. This covers at least sticker justification for T6 by itself.

Now consider your post-Biglaw earnings. All of these discussions seem to be 22-year-olds who never give serious contemplation to life after 30. Most post-Biglaw lawyers seem to be making in the low six figures. Suppose it were $125k, which is a number that has been tossed around. Compare it to the $50k-ish in Year Six of your humanities job. That's an after-tax gap of, say, $50k. If that gap stayed constant over ten years (it would likely grow), you'd have another $500k in the JD column. Stretching it out to 40, you'd have a difference of $940k, marking the payoff point at 32%. That easily covers all of the T14 and suggests even UT/UCLA/USC/Vandy would be a reasonable investment. (Important note: Though I think people are justified in attending the last four at sticker under certain circumstances, most TLS posters do not endorse doing so.) Add in uncertainty/risk aversion variables as you please, but eventually the lifetime wage gap will be staggering enough to make T14 at sticker financially valuable.

Essentially the only paths left to an upper-middle-class lifestyle before age 40 are law, finance, medicinie, or STEM. If you don't have the skill set for one of the other three, then Biglaw at sticker is financially sensible.

Of course, all of that is predicated on the notion you view law school as a purely financial decision. You should be placing some sort of premium on attending if you actually want to study the law, and you should not be going if you don't.

As I have said before. Long-run biglaw is an OBVIOUS FINANCIAL WIN. Literally no one denies this. Even 5 years of biglaw and then the rest of your life at 125k+ (no clue of the accuracy of that number) is an obvious financial win.

The problem, that you just sort of assume away, is the risk.

Issue #1:

You will very likely be able to work five years of BigLaw if you seriously intend to (nearly all the < 3 year dropoff is voluntary/burnout)

You should be placing some sort of premium on attending if you actually want to study the law, and you should not be going if you don't.

You seem to be assuming that the people who drop out of law never really wanted it to begin with and therefore should have known better. But every lawyer under 35 that I've talked to (ranging from biglaw, to ex-biglaw, to PI) offers the same unsolicited advice: "DON'T GO TO LAW SCHOOL," while those in law school tend to love it. I'm ignoring their advice, but I'm also aware that there is a sizable contingent of people who get the job they think they want and then end up hating it. You HAVE to take that into consideration.

Issue #2:

The $300k investment should pay off if the realization chance (i.e. your odds of getting Biglaw if you want it) is 68%. This covers at least sticker justification for T6 by itself.

Essentially the only paths left to an upper-middle-class lifestyle before age 40 are law, finance, medicine, or STEM. If you don't have the skill set for one of the other three, then Biglaw at sticker is financially sensible.

If someone with enough intelligence for T14 but no "hard" skills has a primary goal of upper-middle class financial stability, then there's also accounting and (though harder to get) consulting. Which makes it not really fair to use a job that pays 50k after being there for 7 years for comparison (also, your calc neglected foregone income).

Despite this, let's just use your numbers: 68% biglaw chance is the break-even point over 8 years (3 years school, 5 years biglaw). The problem with using a plain expected value calculation is that the life-satisfaction outcomes on either side aren't equal. Not getting biglaw and having 300k debt with no feasible way to pay it back is going to have a much larger negative impact on your life (both short and long-term) than the rewards of big law are going to have a positive.

This is why when given the chance to play a game where you flip a coin with heads winning $105k but tails losing $100k, people will not play, despite the expected value being positive. Avoiding the big negative outweighs the big positive.

Lastly,

All of these discussions seem to be 22-year-olds who never give serious contemplation to life after 30.

At risk of being rude, but Mono aren't you a 22 year old K-JD? That's exactly the kind of person who is most at risk of thinking that they have everything figured out but then realizing after a few years that they actually don't like what they're doing. This why TLS is always telling people to take a few years off.

The idea I could know what I wanted to do the rest of my life as a senior in college, and be so sure of it that I was willing to go $270k in debt to do it, is insane. Especially when a decently large percentage of the people who also felt like they knew they wanted to do that same thing end up hating it.

I'm different and have different perspectives after living in the "real world" for 3 years than I was at my college graduation parties. So is everyone. You can't just blithely assume that 30-something Mono will be the same person as 20-something Mono. He may still really love being a lawyer, or he may not really care but love the compensation. Or he may just really hate all of it. And it's not absurd to keep that possibility in mind.

ETA: I want to be clear that I'm not trying to say that T14 sticker is for sure not worth it. I think it's debatable and obviously varies based on your personality and personal circumstances. But the number of people who act like it's a no-brainer is crazy to me.
Also, while I personally wouldn't do a K-JD at all, I would 100% argue against anyone doing a K-JD while taking on $270k in debt.

[cotiger]

I feel like a lot of people give HYS LRAPs a pass because after all, it's HYS. Straight-up PAYE is a significantly better LRAP than any of HYS' in the majority of situations an HYS grad would find themselves in. The only real advantage HYS' LRAPs enjoy is that it's not tied to the federal program, and thus can widen its range of acceptable jobs. But those extra jobs that HYS LRAPees have access to that PAYE-10 years don't are jobs that would have been just as easily accessible from a T1 on a full ride (i.e, self employed, continued education, etc.)

Use the calculators available from HLS, and then compare that number to PAYE's calculator. You pay more over the course of ten years on a 60k salary increasing at 7% per year on HLS' LRAP than you would on PAYE (straight up, no LRAP) making 110k a year.

There is some increased element of exit freedom from HLS' LRAP in that if you choose to leave the program prematurely, a pro-rate figure gets forgiven in relation to the number of years worked -- but this is true of NYU, Columbia and Penn's LRAPs as well.

Twenty, I saw a post of yours where you analyzed the various LRAPs and seemed to conclude that YHS's were significantly more accessible and feasible than others'. Given what you're saying about PAYE and the possibility of accessing those jobs from even T1, do you think that all LRAPs are generally useless? Or YHS's aren't actually better than say NYU, Columbia, and Penn?

Note: I have no idea about what these kinds of jobs even actually are, just curious if the YHS LRAPs should ever really factor into someone's decision.

[chem]

This response paper Im writing is the worst, so Im going to reply to cotigers points two posts above in the same rambling style as this response paper

1) All of the lawyers under 35 I have talked to have said that they LOVE their job. But as always, anecdotal evidence is andectodal. I think most lawyers say don't go to law school because most law students, just numberically, go to shittier schools, so the default reaction is usually good.

If you are going to devote three years of your life to law school AND go in debt for it, you should have given serious consideration to whether or not you want the job you think you want, and whether you would be happy with other options

Most of my "is law school worth it" is based on financials, and obviously, biglaw. Lots of people hate their job. You know whats great about biglaw? You make enough money that you can switch to something else a few years after the break even point. That kind of freedom is unprecedented in most fields.

2) For the first point. I have no idea about accounting and consulting. From what Ive read, both require a prestigious undergrad. Prestigious law schools dont require a prestigious undergrad. For STEM fields, there is often a salary cap at around 120, at least for engineering, unless you go into management.

300k in debt with no way to pay it back? blatant strawman. PAYE. 10% of discretionary income for 25 years. Come on

3) I don't even know where to start. Three years in the real world does not a man make you. You have no idea what experiences Mono has had. He could have more figured out then you. Hell, Im a K-JD, but law made sense for me. Coming from engineering, I did the required engineering internships and co-ops. I knew exactly what industry and jobs I could have had, and experienced them for a few months. A few months was enough. Patent Law+ big law couldn't (at least for me) be worse than designing pipes, and at least I'd be paid more for my trouble

[Monochromatic Oeuvre]

As I have said before. Long-run biglaw is an OBVIOUS FINANCIAL WIN. Literally no one denies this. Even 5 years of biglaw and then the rest of your life at 125k+ (no clue of the accuracy of that number) is an obvious financial win.

Yup. And given that you have a 50-95% of getting it if you want it, depending on which T14 you go to, it's fairly clear that T14 sticker pays itself a few times over in the long run. So I think the basic financial question should be somewhat settled.

You seem to be assuming that the people who drop out of law never really wanted it to begin with and therefore should have known better. But every lawyer under 35 that I've talked to (ranging from biglaw, to ex-biglaw, to PI) offers the same unsolicited advice: "DON'T GO TO LAW SCHOOL," while those in law school tend to love it. I'm ignoring their advice, but I'm also aware that there is a sizable contingent of people who get the job they think they want and then end up hating it. You HAVE to take that into consideration.

I'm not assuming that. Certainly some never wanted Biglaw in the first place, as there are many people in for three years who just want to pay down debt. Others discover how shitty it can be to bill 300 hours in a month or have a narcissistic partner scream at you because he thinks you're entirely expendable. Or maybe spending week after week studying German securities regulations is not the Atticus Finch life they had it mind. It's perfectly reasonable when people decide "fuck this" and leave. I'm just merely saying it's voluntary. At that point, no one is forcing you to leave, except in rare cases.

If someone with enough intelligence for T14 but no "hard" skills has a primary goal of upper-middle class financial stability, then there's also accounting and (though harder to get) consulting. Which makes it not really fair to use a job that pays 50k after being there for 7 years for comparison (also, your calc neglected foregone income).

True (I was lumping in accounting/other business-related degrees with finance, but I know they're distinct). The opportunity cost weighs very heavily on what financial decisions are proper. From a pure financial perspective, if someone was looking at around $80k (a little lower for consulting, a little higher for good SV), I wouldn't say don't go for sticker outside of T6. If someone was looking at $40k, then I'd say something like, say, $60k at USC might be a worthwihle dice roll. The foregone income is important (that's why the above is just back-of-the-envelope), but of course over the longer time frame the lost investment opportunities will overtake it in terms of financial significance.

Despite this, let's just use your numbers: 68% biglaw chance is the break-even point over 8 years (3 years school, 5 years biglaw). The problem with using a plain expected value calculation is that the life-satisfaction outcomes on either side aren't equal. Not getting biglaw and having 300k debt with no feasible way to pay it back is going to have a much larger negative impact on your life (both short and long-term) than the rewards of big law are going to have a positive.

True. Biglaw may be much less valuable to someone than its salary would indicate. That's why we can only speak in objective terms in finance, rather than overall utility. I would hope the lower life satisfaction of Biglaw is countered by the enthusiasm someone actually has for practicing law. As you said, that's no guarantee you won't hate Biglaw. But it at least gives you a chance at being satisfied, whereas someone working 3000 hours a year who finds their job boring has almost no chance of being happy. That's why I advise people to go to law school only if they actually intend to practice law. Given a long enough time frame, t's just impossible to do the work you'll need to do if you absolutely hate it.

This is why when given the chance to play a game where you flip a coin with heads winning $105k but tails losing $100k, people will not play, despite the expected value being positive. Avoiding the big negative outweighs the big positive.

Risk aversion is an altogether different concept. It's why most people will not advise applicants to attend UCLA/USC/UT/Vandy at sticker even though you could demonstrate the expected value salary-wise is a net positive over most other jobs given a long enough time frame. Not to say it's invalid, but its utility is difficult to quantufy.

At risk of being rude, but Mono aren't you a 22 year old K-JD?

What?!? No! I resent even the mere notion! I'm 21

That's exactly the kind of person who is most at risk of thinking that they have everything figured out but then realizing after a few years that they actually don't like what they're doing. This why TLS is always telling people to take a few years off.

Yup. I agree that time off is good for people who are looking at law school because of money or the ever-popular "I don't know what else to do." I don't think it's unreasonable for those who actually are interested in law to get going, though. I think we both agree that young twentysomethings tend to have tunnel vision about the very near future while deeming the distant future effectively irrelevant.

The idea I could know what I wanted to do the rest of my life as a senior in college, and be so sure of it that I was willing to go $270k in debt to do it, is insane. Especially when a decently large percentage of the people who also felt like they knew they wanted to do that same thing end up hating it.

Eh, I think the risk goes both ways. There is the risk of "I wish I hadn't gone into debt for that" risk, but then there's also the "Man, I really wish I hadn't dicked around doing whatever in my twenties, I could be five years further advanced in my career" risk. The downside risk of the realized debt is very salient, but the lost upside risk from the never-gained advancement is less "real" to people and tends to weigh less in their minds, even if ex ante something may have been the right decision. Making the right balance is just a tough thing to know at 22.

I'm different and have different perspectives after living in the "real world" for 3 years than I was at my college graduation parties. So is everyone. You can't just blithely assume that 30-something Mono will be the same person as 20-something Mono. He may still really love being a lawyer, or he may not really care but love the compensation. Or he may just really hate all of it. And it's not absurd to keep that possibility in mind.

Sure. But again, that's true for any job you go into, and going into a non-law job presented an unrealized upside risk just as it presents a downside risk. I've liked law since I was about 13. I spent some time in college seeing if there was anything I loved. Didn't really find it. So in the absence of something I love, I found something I like that happens to pay well and that I think I'm decent at. I jumped at it early than almost anyone else because I didn't want to sit around waiting for "the one", job-wise, when I'm fairly confident my career is going to involve law in some capacity. Narrowing my options? Yeah, of course. But that's the risk of specializing in anything. Again, hard to say what the optimal level of risk aversion is.

ETA: I want to be clear that I'm not trying to say that T14 sticker is for sure not worth it. I think it's debatable and obviously varies based on your personality and personal circumstances. But the number of people who act like it's a no-brainer is crazy to me.

Law's not a no-brainer for anyone. Just because you got into Yale doesn't mean you should be a lawyer. That's why my starting point is "Do you want to practice law?" That doesn't mean anyone who does should be a lawyer, but it's a pretty good fork for deciding for whom law school is likely to be a worthwhile investment.[/quote]

Also, while I personally wouldn't do a K-JD at all, I would 100% argue against anyone doing a K-JD while taking on $270k in debt.

I think K-JDs are in a better position to make this decision if they've taken some time to really think about it. By fourteen, I was seriously considering a career in law. By sixteen, I was looking into what I'd need to do to become a lawyer. By eighteen, I had a formulated plan for how I was going to go to law school (I had projected myself to be around a 3.6/174 back then, which actually isn't all that far off from what I eventually became). At nineteen I spent a decent amount of time with LSAT prep and then the real McCoy. And I went through the application process at twenty. Like I said, it's not like the very thought of law sends a tingle down my loins. But I thought I would like it, and I thought I'd be good at it. And after two months in school, I can say that my guess was pretty on target: Though I don't absolutely adore law, I like law and find it interesting, even though it's a lot of work and it's a really stressful/anxious endeavor for me. I don't know if my guess for myself in Biglaw will be as on target, but I think I'm in a better position to be able to assess the pros and cons the more and more research I do.

Of course, I generally had a handle on what type of person I wanted to be and I was pretty good at incorporating change into my life. I think I was particularly lucky in that respect; that's not a unique skill of me. But the research was important to being able to formulate strategies and long-term plans and goals. I couldn't imagine going to law school by being a senior in November who says, "Well, I don't know what else to do" or "the job market's terrible, I'll just ride it out in law school."

[twenty]

Twenty, I saw a post of yours where you analyzed the various LRAPs and seemed to conclude that YHS's were significantly more accessible and feasible than others'. Given what you're saying about PAYE and the possibility of accessing those jobs from even T1, do you think that all LRAPs are generally useless? Or YHS's aren't actually better than say NYU, Columbia, and Penn?

Note: I have no idea about what these kinds of jobs even actually are, just curious if the YHS LRAPs should ever really factor into someone's decision.

LRAPs are like beautiful and unique snowflakes in that there is never a "clear cut" winner for best LRAP. HYS' LRAPs (H/Y in particular) are quite a bit more accessible in that the requirements to qualify are broader, but this is offset by the fact they are far less financially beneficial to the participant. My contention is the jobs that are available* to HYS grads with their broader LRAPs are just as accessible to someone who graduated from a T1 with no debt. You don't get any "name" advantage, per se. (*With some notable exceptions.)

The vast majority of these kinds of jobs are going to be self-employment, non-legal positions, continued education, volunteer/international legal work, and so forth. So the HYS name impresses your family and friends, but probably isn't worth the 40k-100k you'll end up paying over ten years for that privilege when you could have obtained the same result having gone to your local school and living with your parents for far less cost.

Think of it like this: School "T14" will pay all your student loans until you make 75k a year, and then you have to pay a third over that amount. This is contingent on being in a public interest legal job. School "H/Y" will pay all your student loans until you make 46k a year, and then you have to pay a third over that amount. This is contingent on being in any job. By that analysis, assuming you could get a public interest legal job out of either school, the "T14" school is far preferable to "H/Y" in terms of financial benefit.

However, as with everything, there's always a catch. H/Y will provide LRAP benefits based on the 10-year repayment, NOT the PAYE repayment, so at year 9 your loan will be substantially lower with H/Y than at most T14 schools. If you bail on public interest after five years with H/Y, you'll have half your debt to repay. With T14 LRAP, you'll probably have more debt than when you graduated. Furthermore, a lot of schools have restrictions on when you can participate, whereas H/Y you can participate whenever you feel like it.

[cotiger]

2) For the first point. I have no idea about accounting and consulting. From what Ive read, both require a prestigious undergrad. Prestigious law schools dont require a prestigious undergrad. For STEM fields, there is often a salary cap at around 120, at least for engineering, unless you go into management.

300k in debt with no way to pay it back? blatant strawman. PAYE. 10% of discretionary income for 25 years. Come on

Wasn't referring to MBB or Big4, which to my knowledge do require top undergrad, but rather to the next tier of consulting/accounting, which are accessible from a wider range of schools. They don't pay biglaw, but they do allow for upper-middle class. The point was about opportunity cost. If you're primarily looking for financial security, be a CPA. Long-term you'll make somewhat less than if you succeed in law, but without the downside risk.

As for PAYE, I'm not too knowledgable about the specifics of the program, but what I will say is that I don't know how trusting I would be of the government over that timeframe. You have to rely on the fact that despite its current and projected financial situation, they will a) continue to give away taxpayer money to those scummy lawyers, and b) fix the tax bomb (again, giving money to those scummy lawyers).

3) I don't even know where to start. Three years in the real world does not a man make you. You have no idea what experiences Mono has had. He could have more figured out then you. Hell, Im a K-JD, but law made sense for me. Coming from engineering, I did the required engineering internships and co-ops. I knew exactly what industry and jobs I could have had, and experienced them for a few months. A few months was enough. Patent Law+ big law couldn't (at least for me) be worse than designing pipes, and at least I'd be paid more for my trouble

I didn't say that Mono in particular was making a poor or unthoughtful decision*, just that as a whole K-JDs were at the highest risk of jumping into something they would later regret, and that a bit of life experience post-graduation generally helps to clarify what you want. Do you disagree with that sentiment?

Mono seems to have a good handle on who he is/what he wants for a 21 year old, which makes his decision much more defensible. I still wouldn't want to be doing it with 270k debt.**

What's closer to the standard K-JD rationale is "I hate my major (or, my major's useless) and even if I hate law, at least I'll get big monies." Which is significantly more problematic.

*It's funny, I was going to say that it's possible he could have been planning this since he was a kid and then did law-related work all through college to make sure... and lo-and-behold, that's what he did!

**Which, I might add, we don't actually know he has. If he has parental and/or scholly money, that makes a significant difference.

[Monochromatic Oeuvre]

I didn't say that Mono in particular was making a poor or unthoughtful decision*, just that as a whole K-JDs were at the highest risk of jumping into something they would later regret, and that a bit of life experience post-graduation generally helps to clarify what you want. Do you disagree with that sentiment?

K-JDs may be at a higher risk for an impulsive decision. I still think the criteria for a K-JD and someone with WE is the same: Go to law school only if you intend to practice law and it's something you've given serious pro/con thought to. If there is uncertainty, I certainly endorse taking a little time to learn more about oneself.

Mono seems to have a good handle on who he is/what he wants for a 21 year old, which makes his decision much more defensible. I still wouldn't want to be doing it with 270k debt.**

I don't think we're suggesting people shouldn't take a deep gulp before deciding to plunge into what is really a life-ruining amount of debt if you can't service it. We're just saying that for all the pessimism of TLS, most of us endorse T14 at sticker because of the positive expected net financial outcome, but I don't think that's really in dispute beyond OP.

What's closer to the standard K-JD rationale is "I hate my major (or, my major's useless) and even if I hate law, at least I'll get big monies." Which is significantly more problematic.

The "I don't know what else to do" and "DEM DOLLAZ THO" are bad reasons no matter how old you are, but I think you're right in that K-JDs may be more susceptible to them.

*It's funny, I was going to say that it's possible he could have been planning this since he was a kid and then did law-related work all through college to make sure... and lo-and-behold, that's what he did!

I think the uncertainty of today's Biglaw means that having specific goals necessitates having done the research to back it up. It doesn't have to be a years-long thing like it was with me but I'd recommend anyone applying take six months to do extensive research, and really, really think about the prospect of sitting at a desk writing a ton and reading several tons for hours and hours and hours and really decide if that's something they want to do with their lives. It's very helpful to come across things like attrition data to combat the necessary "It won't happen to me" syndrome plaguing every law school applicant ever. Sometimes only after a little research will it become apparent how much you don't know. I was probably a year and a half into mine before I discovered I had been mentally mispronouncing "Cravath" the whole time. Coming across something like that makes you realize pretty quickly that you're not an expert.

**Which, I might add, we don't actually know he has. If he has parental and/or scholly money, that makes a significant difference.

I actually have zero debt--though my family isn't "rich" by traditional income analyses, we came across some fortuitous circumstances that make $250k more doable than the average family in our income bracket. So though I think I have a pretty good idea of how pants-shitting terrifying the notion of paying back $275k, I admit that I can't fully empathize with the feeling, having not been there myself. Of course, I would have made a different decision under different circumstances. I went with sticker at CLS and turned down $75k at UVA, a decision that most people shouldn't make.

[Summerz]

I am hitting this from a different angle. To live OK. Net after taxes, $60K (5K monthly). Then figure another $2K monthly for tuition. To make this happen the Ballpark range of a gross salary needs to be . . . $120K. If you are working in NYC/LA/DC you need more, which is probably why these markets pay more.

[norkanite]

.

[Monochromatic Oeuvre]

Important note: Back in the early fifties NYC Biglaw used to pay $5k a year. This was only slightly more than the median income of the time. Biglaw subsequently went on a fifty-year winning streak, which is an unprecedented amount of time for an industry to grow relative to its peers.

I don't think things were ever better than in 2000:

Total starting compensation (Cravath): $165k
PPP (Cravath): $2.3M
Tuition (Penn--the only one with easily accessible data): $26.6k

From 2000-2012, change in real value:

Total compensation: -22.7%
PPP: +11%
Tuition: +28.9%

And that's the new calculus.

[cotiger]

I actually have zero debt--though my family isn't "rich" by traditional income analyses, we came across some fortuitous circumstances that make $250k more doable than the average family in our income bracket. So though I think I have a pretty good idea of how pants-shitting terrifying the notion of paying back $275k, I admit that I can't fully empathize with the feeling, having not been there myself. Of course, I would have made a different decision under different circumstances. I went with sticker at CLS and turned down $75k at UVA, a decision that most people shouldn't make.

This is why I'm not against sticker in all circumstances. If you have the cash to pay sticker, then the risk associated with the "big loss" (either striking out or hating being a lawyer) isn't catastrophic, so it makes sense to just use the standard expected value calculation that shows sticker to be worth it.

Debt changes things, though. If faced between no debt Columbia vs no debt UVA with an extra 75k in the bank, I'd most likely pick CLS. But if it was 25k debt for UVA vs 100k debt for CLS, I'd be more likely to pick UVA. The marginal value of a dollar not going into debt is higher than the marginal value of positive money. If totally debt financing both (200k debt vs 275k), I'd be likely to just not go at all.

[jbagelboy]

I actually have zero debt--though my family isn't "rich" by traditional income analyses, we came across some fortuitous circumstances that make $250k more doable than the average family in our income bracket. So though I think I have a pretty good idea of how pants-shitting terrifying the notion of paying back $275k, I admit that I can't fully empathize with the feeling, having not been there myself. Of course, I would have made a different decision under different circumstances. I went with sticker at CLS and turned down $75k at UVA, a decision that most people shouldn't make.

This is why I'm not against sticker in all circumstances. If you have the cash to pay sticker, then the risk associated with the "big loss" (either striking out or hating being a lawyer) isn't catastrophic, so it makes sense to just use the standard expected value calculation that shows sticker to be worth it.

Debt changes things, though. If faced between no debt Columbia vs no debt UVA with an extra 75k in the bank, I'd most likely pick CLS. But if it was 25k debt for UVA vs 100k debt for CLS, I'd be more likely to pick UVA. The marginal value of a dollar not going into debt is higher than the marginal value of positive money. If totally debt financing both (200k debt vs 275k), I'd be likely to just not go at all.

That's rarely ever the real consideration though. Law Students aren't paying their own way, their parents are spending their paychecks or trust on their children's graduate education. The familial relationship inserts a critical wrinkle into your stated "debt" v "positive value" financial arithmetic: first, Mono's parents (as an example) support his continuing education, being that education constitutes a foundational value of the american (upper) middle class, responsible choice, upstanding boomer profession, ect. It not like they would hand him a 7 series BMW or a monetary equivalent if he took the UVA offer over CLS. He wouldnt personally be any richer.

Second, some people may have some flexibility with their parents finances, but opt out for a personal reason linked to that familial dynamic hence incurring debt (as one example, I know several people whose parents would pay for their apartment, but not under the current "illicit" and "immoral" circumstances). Alternatively, for people committed to LRAP, why take liquid cash and flush it when LRAP could give you a near-free education? And if your relationship with your parents is already strained and they would expect you to pay them back at some point, maybe its best psychologically to just avoid their involvement.

Lastly, there's a cash flow issue. The student may take out debt at some point with the expectation that family may help when they are able, but just not now. So

[cotiger]

That's rarely ever the real consideration though. Law Students aren't paying their own way, their parents are spending their paychecks or trust on their children's graduate education. The familial relationship inserts a critical wrinkle into your stated "debt" v "positive value" financial arithmetic: first, Mono's parents (as an example) support his continuing education, being that education constitutes a foundational value of the american (upper) middle class, responsible choice, upstanding boomer profession, ect. It not like they would hand him a 7 series BMW or a monetary equivalent if he took the UVA offer over CLS. He wouldnt personally be any richer.

True*. But that doesn't really affect the point I was making.

Yeah, of course for the 0L no debt CLS>no debt UVA. But what I was saying was that even if that extra 75k at UVA is going directly to the student's pocket, I think they're still more likely to choose CLS than they are in the example where it's 25k debt vs 100k debt. That 75k isn't as valuable when it makes your bank account go from 0 -> 75 than it is when it takes you from -75 -> 0. Each dollar is worth more the less of them you have.

Second, some people may have some flexibility with their parents finances, but opt out for a personal reason linked to that familial dynamic hence incurring debt (as one example, I know several people whose parents would pay for their apartment, but not under the current "illicit" and "immoral" circumstances). Alternatively, for people committed to LRAP, why take liquid cash and flush it when LRAP could give you a near-free education? And if your relationship with your parents is already strained and they would expect you to pay them back at some point, maybe its best psychologically to just avoid their involvement.

Yeah, that's another consideration that I left out for simplicity's sake, but it still supports my point. If you're anticipating a fat inheritance, the big loss isn't really that big. You can and do use the standard expected value calculation that indicates sticker being worth it.

If, on the other hand, you're getting zilch from your family when they die, and you royally screw up your finances, you're in big trouble. Suddenly that 30% (or whatever) of big-time trouble looms larger than the 70% chance at biglaw uber-success.

All of which is to say that whether or not sticker is worth it depends on your circumstances. If you need to take out sticker because your family literally can't help you out, then it's probably a bad idea. If your family has the ability to pay for it all (even if they don't), then it's a perfectly fine idea. If you're somewhere in between, that's where it gets tricky.

*Side note: I know that this is pretty standard practice, but it seems weird to me. It would (totally hypothetically) incentivize choosing sticker at CLS over a full-ride at Penn. It would be irritating to me if my parents were willing to give me $250k for going to CLS but would only cover the 60k COL of Penn. I think a much better idea is for the parent to give 50% of any scholarship to the student in cash. That way, earning a scholarship is win-win for both parent and student and allows the student to decide for himself what he thinks is best.

[Monochromatic Oeuvre]

Mono's parents (as an example) support his continuing education, being that education constitutes a foundational value of the american (upper) middle class, responsible choice, upstanding boomer profession, ect. It not like they would hand him a 7 series BMW or a monetary equivalent if he took the UVA offer over CLS. He wouldnt personally be any richer.

Side note: I know that this is pretty standard practice, but it seems weird to me. It would (totally hypothetically) incentivize choosing sticker at CLS over a full-ride at Penn. It would be irritating to me if my parents were willing to give me $250k for going to CLS but would only cover the 60k COL of Penn. I think a much better idea is for the parent to give 50% of any scholarship to the student in cash. That way, earning a scholarship is win-win for both parent and student and allows the student to decide for himself what he thinks is best.

It is a little irritating, as far as being completely financed to the tune of $250k can be considered "irritating" at all. I brought up that exact point. The eventual COA difference is going to work out to probably $125k. I asked my dad if I could have the difference, not to buy anything but to put in a mutual fund. He shook his head. I asked if he could do anything with that money--nothing doing. He stated very forcefully that the money was earmarked for education only, even if I'd rather have a UVA degree and a $125k mutual fund than a CLS degree. The money was only for "the best school."

I pushed the point until I could tell he was starting to get pissed and, well, you don't piss off the guy who's about to pay your entire three-year bill. It's a boomer thing, along with the "Every respectable young man needs to spend time in New York" and dat Ivy preftige. (My father and his two siblings have a combined seven Ivy degrees between them, so I guess Columbia saves him the shame of telling his friends his son is at a *gasp* STATE SCHOOL.)

[norkanite]

.

[jbagelboy]

That's rarely ever the real consideration though. Law Students aren't paying their own way, their parents are spending their paychecks or trust on their children's graduate education. The familial relationship inserts a critical wrinkle into your stated "debt" v "positive value" financial arithmetic: first, Mono's parents (as an example) support his continuing education, being that education constitutes a foundational value of the american (upper) middle class, responsible choice, upstanding boomer profession, ect. It not like they would hand him a 7 series BMW or a monetary equivalent if he took the UVA offer over CLS. He wouldnt personally be any richer.

How rare? I always assumed at least a third of any school's students would be paying their own way through schollies and debt. Are there any stats on this?

Of course, most students are self-sustaining by the government loans and some are on scholarship. I was referring to those specifically paying tuition and CoL out of pocket using cash on hand rather than loans -- those people are very very rarely "paying their own way" per se

[Steveloblaw]

So being a stripper to pay for law school isn't a thing anymore?

[star fox]

Probably not worth it but probably your best option if you want to be a lawyer. Curse you higher education and your exponential tuition increases.

[bruinfan10]

I'd just like to clarify that if you get a SA position ($30K in a summer), are paying sticker or some sort of tuition afterward, have a decent accountant and aren't incredibly irresponsible, you should pay *no* taxes on that 30K and could possibly get money back from the government. I worked all through UG, made large cash payments directly to the school, which combined with other deductions I claimed towards work and commuting expenses, meant that I was always well below the poverty line (even when I made $30k+) and I never owed anything. Some years I even got a check from the government (which I put directly towards another tuition payment).

This seems wrong, based on the tax rates my firm's associates and fellow SAs reported. Student loan interest deductions and the Lifetime Learning Credit are capped, so unless you paid a LOT for transportation, odds are you wouldn't fare great during an audit...

[BigZuck]

Mono's parents (as an example) support his continuing education, being that education constitutes a foundational value of the american (upper) middle class, responsible choice, upstanding boomer profession, ect. It not like they would hand him a 7 series BMW or a monetary equivalent if he took the UVA offer over CLS. He wouldnt personally be any richer.

Side note: I know that this is pretty standard practice, but it seems weird to me. It would (totally hypothetically) incentivize choosing sticker at CLS over a full-ride at Penn. It would be irritating to me if my parents were willing to give me $250k for going to CLS but would only cover the 60k COL of Penn. I think a much better idea is for the parent to give 50% of any scholarship to the student in cash. That way, earning a scholarship is win-win for both parent and student and allows the student to decide for himself what he thinks is best.

It is a little irritating, as far as being completely financed to the tune of $250k can be considered "irritating" at all. I brought up that exact point. The eventual COA difference is going to work out to probably $125k. I asked my dad if I could have the difference, not to buy anything but to put in a mutual fund. He shook his head. I asked if he could do anything with that money--nothing doing. He stated very forcefully that the money was earmarked for education only, even if I'd rather have a UVA degree and a $125k mutual fund than a CLS degree. The money was only for "the best school."

I pushed the point until I could tell he was starting to get pissed and, well, you don't piss off the guy who's about to pay your entire three-year bill. It's a boomer thing, along with the "Every respectable young man needs to spend time in New York" and dat Ivy preftige. (My father and his two siblings have a combined seven Ivy degrees between them, so I guess Columbia saves him the shame of telling his friends his son is at a *gasp* STATE SCHOOL.)

What was your dad going to do with that 125K? Light it on fire? I thought you were an only child, you were never going to get that money (even as an inheritance)? I don't know what 125K will be worth in 30-40 years (both in terms of inflation and the interest that would accrue on it as it rotted away in some savings account) but it sounds crazy to me that you weren't going to get it eventually.

Anyway, I think we can all agree: lolrichboomers

[Fussell]

I think, generally, it is a poor decision to accrue significant debt in law school. If you do you will likely feel/have the need to work biglaw, or work in Public Interest with the constant fear of losing your job and PILF. Why box yourself into a need to work in biglaw or the public sector? One's ability to potentially pursue alternate career paths or be entrepreneurial is seriously undermined by debt.

Obviously, opportunity cost is a consideration, as has been mentioned earlier. However, I think it would likely not be wise to attend, say, T6 at sticker over T14 with a substantial scholarship. I put my money where my mouth is and choose a school over HS for a substantial scholarship. I feel I made the right decision absolutely. I experience minimal stress about grades and OCI because, should things not go perfectly, I'll have so little debt I can do anything I'd like after graduation. That in itself has immense value.

[Tiago Splitter]

I think, generally, it is a poor decision to accrue significant debt in law school. If you do you will likely feel/have the need to work biglaw, or work in Public Interest with the constant fear of losing your job and PILF. Why box yourself into a need to work in biglaw or the public sector? One's ability to potentially pursue alternate career paths or be entrepreneurial is seriously undermined by debt.

Obviously, opportunity cost is a consideration, as has been mentioned earlier. However, I think it would likely not be wise to attend, say, T6 at sticker over T14 with a substantial scholarship. I put my money where my mouth is and choose a school over HS for a substantial scholarship. I feel I made the right decision absolutely. I experience minimal stress about grades and OCI because, should things not go perfectly, I'll have so little debt I can do anything I'd like after graduation. That in itself has immense value.

1. Your post history indicates you hadn't been accepted to any of HYS as of mid-July. I'm also not sure how you experienced minimal stress about OCI if you just signed up for this game.

2. If you have the numbers for HYS (and with a 171/3.98, you'd qualify) there tend to be large scholarship options within the T-14. When someone asks "Is T-14 at sticker worth it?" they typically aren't talking about Harvard.

3. For many splitters simply going a little further down the rankings to pick up extra scholarship money isn't possible. And once you get outside the T-14 the job prospects usually drop off so quickly as to make law school itself a questionable choice, even if close to free.