Is Sticker Debt for a T-10 worth it in 2016? Forum

[TheSpanishMain]

UVA posted something about 60% of their class paying sticker. Is TLS wisdom that the majority of that 60% is out of their mind crazy and making a big mistake?

If it's debt financed sticker, yup. Ditto any other law school.

[RZ5646]

Thanks for the responses guys. I know you can't give specific advice; I was just looking for general advice regarding school tiers and their relative values. It seems that there is a real difference between the T14 and the T15-20, and it's worth some money. The T6 and HYS jumps seem less valuable unless you're gunning for some very prestigious outcome.

[pterodactyls]

If you're interested in public sector work, it's also important to consider LRAP. Especially at the top 3-5 schools that do non-IBR repayment. If you're planning to do PI work and have a lower salary, you could cover much of your debt this way. But, I know this is only a consideration for a small portion of students attending law school.

[jbagelboy]

It's almost always absolutely never worth it. If you were one of the very very few people each year for whom it was, you wouldn't need an online forum to prove it/for advise.

The point is not just that there are usually better law school choices than sticker, but that more generally there are far better life choices than paying such an extortionate amount for a law degree.

[mabes]

If you're interested in public sector work, it's also important to consider LRAP. Especially at the top 3-5 schools that do non-IBR repayment. If you're planning to do PI work and have a lower salary, you could cover much of your debt this way. But, I know this is only a consideration for a small portion of students attending law school.

yeah only learning this nuance recently... even at NYU, the LRAP doesn't actually pay any of your debt, just holds you off until the (supposed) PSLF payoff

[pterodactyls]

If you're interested in public sector work, it's also important to consider LRAP. Especially at the top 3-5 schools that do non-IBR repayment. If you're planning to do PI work and have a lower salary, you could cover much of your debt this way. But, I know this is only a consideration for a small portion of students attending law school.

yeah only learning this nuance recently... even at NYU, the LRAP doesn't actually pay any of your debt, just holds you off until the (supposed) PSLF payoff

Yeah I it's only HYS and I think Columbia that actually pay down your debt. Which, if you were admitted to one of those schools and thinking PI, would be something to consider.

[js7981]

If you're interested in public sector work, it's also important to consider LRAP. Especially at the top 3-5 schools that do non-IBR repayment. If you're planning to do PI work and have a lower salary, you could cover much of your debt this way. But, I know this is only a consideration for a small portion of students attending law school.

yeah only learning this nuance recently... even at NYU, the LRAP doesn't actually pay any of your debt, just holds you off until the (supposed) PSLF payoff

Can you be more specific about the distinction you're making? By 'holds you off,' you mean they pay according to IBR, meaning they don't make a dent in your principal?

[mabes]

If you're interested in public sector work, it's also important to consider LRAP. Especially at the top 3-5 schools that do non-IBR repayment. If you're planning to do PI work and have a lower salary, you could cover much of your debt this way. But, I know this is only a consideration for a small portion of students attending law school.

yeah only learning this nuance recently... even at NYU, the LRAP doesn't actually pay any of your debt, just holds you off until the (supposed) PSLF payoff

Can you be more specific about the distinction you're making? By 'holds you off,' you mean they pay according to IBR, meaning they don't make a dent in your principal?

yeah exactly. With NYU/most of the T14, you enroll in IBR and they make any payments for you, but not touching the principal. Your debt remains the same size, just chillin over your head, until PSLF 10 years later (assuming you remain completely eligible the whole time, etc.). The differences between T14 LRAPs are the fine print conditions and salary caps.

[pterodactyls]

If you're interested in public sector work, it's also important to consider LRAP. Especially at the top 3-5 schools that do non-IBR repayment. If you're planning to do PI work and have a lower salary, you could cover much of your debt this way. But, I know this is only a consideration for a small portion of students attending law school.

yeah only learning this nuance recently... even at NYU, the LRAP doesn't actually pay any of your debt, just holds you off until the (supposed) PSLF payoff

Can you be more specific about the distinction you're making? By 'holds you off,' you mean they pay according to IBR, meaning they don't make a dent in your principal?

Here's the long-winded answer:

The federal government now has a Public Service Loan Forgiveness program. So, if you work in the public sector (government or nonprofit) for 10 years, and pay your loans for 10 years, the federal government will "forgive" any balance you have at the end of 10 years. This is for anyone, not just law. The only way to actually receive benefit from this plan is to make "income-based repayments" in either the IBR or PAYE plan.

The default loan repayment option is the standard plan, which just means you're going to pay off your loans completely in 10 years. So you would pay 1/10th of your loans (principal and interest) each year. The "income based" IBR/PAYE plans basically means you tell your loan servicer "I work in a low-income job and I can't afford to pay my full (standard) payment." So instead, the federal government's IBR/PAYE plans let you pay something like 10% or 15% of your adjusted gross income.

Say you have $200,000 in loans (principal and interest). Standard plan means you should pay $20,000 per year for 10 years. But you only make $60,000, so you take the PAYE plan and pay 10% of your income, so you pay only $6,000 per year. This means it should take you much longer than 10 years to pay off your loans. But, if you are working in the public sector, the federal government will forgive the balance at the end of 10 years. In this case, at the end of year 10 you would have a balance of $140,000ish (because you only paid $6k/year instead of $20k), but that $140k magically goes poof and disappears thanks to the feds.

The major problem is that if you don't fulfill the 10 years, or the program changes before your 10 years are up, you're going to be left with a huge bill that you didn't anticipate. You must hit year 10 (or 120 months) to receive the benefit, otherwise you receive nothing. And worse, your loans will end up costing more in the long run, because when you don't make the full payment, the interest on your loans may compound.

So now the LRAP programs come in.

Most schools will assist you in paying part of your income-based repayment within the federal program. So this means you're going to do the 10 years in the public sector, pay the absolute minimum payments, and have your balance forgiven at the end of 10 years. The law school assists you in your payments, so instead of paying $6,000, maybe you only pay $2,000 or only pay $0 (and the law school covers the other $4,000 or $6,000). But, you are still relying on that huge benefit at the end of 10 years.

If you receive a great offer for a job in the private sector, and you're in year 8, you either have to decline the offer or you're left with a huge $150,000 bill. So the program restricts your career options, as you must fulfill 10 years. And there is always the (relatively low) political risk that the PSLF program changes.

Now, about four law schools (HYS and Columbia) do not require income-based repayment. They will require you to kick in some, but they will cover the rest of your standard loan repayment each year. So, say you have $200,000 in loans and you would need to pay $20,000/year. Stanford may ask you to kick in $3,000, but Stanford will pay the full remaining $17,000 each year. So instead of "kicking the can down the road" and waiting until year 10, your loan bill actually decreases by 10% each year.

So, if you get that great private sector job offer in year 8, your loans are 80% paid off. You are left with a $40,000 bill instead of a $150,000 bill. If you are lucky enough to go to one of these schools, you have much greater flexibility.

I obviously estimated a lot for this example, in true life it would be a little more complicated as to whether you're paying off interest v. principal and the capitalization/compounding of interest.

TL;DR: Most schools pay a small portion of your loan bill each year, and wait for the federal government to forgive the rest at the end of 10 years. If you don't make it to the 10th year of working in the public sector, you're left with a huge bill. HYS and Columbia actually pay off 1/10th of your total bill each year, and some of them will cover low-income jobs in the private sector as well.

[js7981]

Thanks to you both! That is really helpful.

[fliptrip]

^^Couldn't read the above without noticing a lack of proper incorporation of the way loan amortization works, but conceptually, it's correct enough.

Another great benefit of PSLF is that the forgiven amount is not taxable, so if you can make it the full 10 years you are able to walk away without having to deal with any tax bombs. Gotta make it the full 10 years and make 120 on-time payments though.

[pterodactyls]

Thanks to you both! That is really helpful.

No problem! It's really important to understand because there's a huge difference between the two plans.

And it's not to say that the IBR/PLSF plans aren't generous. You could go to Berkeley or Cornell and work a job in the public sector that you love, making $60k/year, and end up paying nothing in student loans (undergrad loans included). But, you have to fulfill those 10 years. So if you were planning on being in the public sector the whole time anyways, it's great. But it's something to keep in mind if you think you may move between public/private sectors.

And last thing I didn't mention, the PSLF 10 years doesn't have to be consecutive. You could work 8 years in public sector, leave to private sector for a year, come back to public sector and finish the 2 years. But, you have to hit 10 years total before you get the benefit.

[js7981]

PSLF seems like an amazing program, I am just super skeptical that it will be there when I need it to be, if I were to really commit to a PI career path. In a Clinton presidency/if the Ds can win the Senate, maybe. But every Republican budget is going to propose cutting the program entirely, I would assume. And as a OL starting school this fall, I can't even assume I'd be grandfathered in.

[abl]

It's almost always absolutely never worth it. If you were one of the very very few people each year for whom it was, you wouldn't need an online forum to prove it/for advise.

The point is not just that there are usually better law school choices than sticker, but that more generally there are far better life choices than paying such an extortionate amount for a law degree.

Can you elaborate? I'm not picking a fight: I'm genuinely curious to know. Most of the people I know in the 25-35 age range (most of whom are not lawyers) are at best lukewarm about their careers. There's a strong implication running through these threads that a lot of T14 students probably shouldn't be going to law school at all. But if not law school, then what?

I know for me, personally, the idea of being a professor in my undergraduate major sounds attractive. But that's one of the few career paths that's pretty objectively worse than law.

[pterodactyls]

^^Couldn't read the above without noticing a lack of proper incorporation of the way loan amortization works, but conceptually, it's correct enough.

I noted that I left that out in order to keep it short. I could have included those details but it would have been twice as long, and I thought it was long enough already.

[js7981]

It's almost always absolutely never worth it. If you were one of the very very few people each year for whom it was, you wouldn't need an online forum to prove it/for advise.

The point is not just that there are usually better law school choices than sticker, but that more generally there are far better life choices than paying such an extortionate amount for a law degree.

Can you elaborate? I'm not picking a fight: I'm genuinely curious to know. Most of the people I know in the 25-35 age range (most of whom are not lawyers) are at best lukewarm about their careers. There's a strong implication running through these threads that a lot of T14 students probably shouldn't be going to law school at all. But if not law school, then what?

I know for me, personally, the idea of being a professor in my undergraduate major sounds attractive. But that's one of the few career paths that's pretty objectively worse than law.

Yeah, I tried this for ten years. It's literally impossible.

[James.K.Polk]

It's almost always absolutely never worth it. If you were one of the very very few people each year for whom it was, you wouldn't need an online forum to prove it/for advise.

The point is not just that there are usually better law school choices than sticker, but that more generally there are far better life choices than paying such an extortionate amount for a law degree.

Can you elaborate? I'm not picking a fight: I'm genuinely curious to know. Most of the people I know in the 25-35 age range (most of whom are not lawyers) are at best lukewarm about their careers. There's a strong implication running through these threads that a lot of T14 students probably shouldn't be going to law school at all. But if not law school, then what?

I know for me, personally, the idea of being a professor in my undergraduate major sounds attractive. But that's one of the few career paths that's pretty objectively worse than law.

People on TLS could appreciate this more, I think. I was a chemistry/biochem double major and if you're not getting an MD, your job prospects are wayyyyy worse than law. At least in law, we have the t14 and supposed "guaranteed" jobs. In chemistry, this does not exist. You will be a post-doc for a while, and some people are post docs forever. Plus, even if you get an academic job, you're fighting tooth and nail for grant money. If you're in industry... it's pretty likely you'll get fired when your project gets dropped or outsourced to India/China.

The law market sucks, but other markets are much worse.

[pterodactyls]

PSLF seems like an amazing program, I am just super skeptical that it will be there when I need it to be, if I were to really commit to a PI career path. In a Clinton presidency/if the Ds can win the Senate, maybe. But every Republican budget is going to propose cutting the program entirely, I would assume. And as a OL starting school this fall, I can't even assume I'd be grandfathered in.

Personally I think it's a decently safe bet that the program will stay around, and that we would be grandfathered into the existing program given any changes. I've read into it some.

Basically, the government could technically change the program, but it would be politically difficult. When you begin borrowing federal loans, each party agrees to the terms of the loans, and PSLF is sort-of implied with the terms (but not exactly). So, they could change it for us but it's unlikely and would be unprecedented (to not grandfather). When the government has made any changes to loan programs in the past, the changes have been for new borrowers only (everyone else gets grandfathered).

This is, at least, what I was able to gather from internet articles last time I read into it. Nothing super official. Definitely worth reading into more if you're considering one of these programs. Just google "PSLF risk" or "PSLF politics."

[js7981]

It's almost always absolutely never worth it. If you were one of the very very few people each year for whom it was, you wouldn't need an online forum to prove it/for advise.

The point is not just that there are usually better law school choices than sticker, but that more generally there are far better life choices than paying such an extortionate amount for a law degree.

Can you elaborate? I'm not picking a fight: I'm genuinely curious to know. Most of the people I know in the 25-35 age range (most of whom are not lawyers) are at best lukewarm about their careers. There's a strong implication running through these threads that a lot of T14 students probably shouldn't be going to law school at all. But if not law school, then what?

I know for me, personally, the idea of being a professor in my undergraduate major sounds attractive. But that's one of the few career paths that's pretty objectively worse than law.

People on TLS could appreciate this more, I think. I was a chemistry/biochem double major and if you're not getting an MD, your job prospects are wayyyyy worse than law. At least in law, we have the t14 and supposed "guaranteed" jobs. In chemistry, this does not exist. You will be a post-doc for a while, and some people are post docs forever. Plus, even if you get an academic job, you're fighting tooth and nail for grant money. If you're in industry... it's pretty likely you'll get fired when your project gets dropped or outsourced to India/China.

The law market sucks, but other markets are much worse.

Being on the academic job market for two years definitely shaped my perspective. The law school I'm heading to this fall has a 95% employment score to law school transparency. This doesn't mean that I am guaranteed a great, secure job that I love. But it does mean that nearly everyone is employed.

Compare that to the school I got my humanities PhD from, which has job announcements on its website from the last grads to get tenure-track jobs (i.e., the only jobs we're competing for/want), which were from 2009. That should be illegal, imo. It is illegal for law schools to misrepresent themselves like that.

I understand that there are huge risks associated with law school and a legal career, but some of us are willing to take those risks because it's really not as simple as just going and getting a good job.

[js7981]

PSLF seems like an amazing program, I am just super skeptical that it will be there when I need it to be, if I were to really commit to a PI career path. In a Clinton presidency/if the Ds can win the Senate, maybe. But every Republican budget is going to propose cutting the program entirely, I would assume. And as a OL starting school this fall, I can't even assume I'd be grandfathered in.

Personally I think it's a decently safe bet that the program will stay around, and that we would be grandfathered into the existing program given any changes. I've read into it some.

Basically, the government could technically change the program, but it would be politically difficult. When you begin borrowing federal loans, each party agrees to the terms of the loans, and PSLF is sort-of implied with the terms (but not exactly). So, they could change it for us but it's unlikely and would be unprecedented (to not grandfather). When the government has made any changes to loan programs in the past, the changes have been for new borrowers only (everyone else gets grandfathered).

This is, at least, what I was able to gather from internet articles last time I read into it. Nothing super official. Definitely worth reading into more if you're considering one of these programs. Just google "PSLF risk" or "PSLF politics."

This is reassuring, thanks. I am pretty set on a career in government for personal reasons, i.e. not just in it for loan forgiveness, but the reliability of PSLF will still definitely influence my decisions, I think. I'll have to read up on it more myself.

[pterodactyls]

This is reassuring, thanks. I am pretty set on a career in government for personal reasons, i.e. not just in it for loan forgiveness, but the reliability of PSLF will still definitely influence my decisions, I think. I'll have to read up on it more myself.

I'm in a similar boat! I think it's likely that there will be changes to the program, but unlikely that the changes will affect us.

[totesTheGoat]

People on TLS could appreciate this more, I think. I was a chemistry/biochem double major and if you're not getting an MD, your job prospects are wayyyyy worse than law. At least in law, we have the t14 and supposed "guaranteed" jobs. In chemistry, this does not exist. You will be a post-doc for a while, and some people are post docs forever. Plus, even if you get an academic job, you're fighting tooth and nail for grant money. If you're in industry... it's pretty likely you'll get fired when your project gets dropped or outsourced to India/China.

The law market sucks, but other markets are much worse.

It's all about the debt. Other markets may be worse, but they don't average $180k in student loan debt.

[abl]

People on TLS could appreciate this more, I think. I was a chemistry/biochem double major and if you're not getting an MD, your job prospects are wayyyyy worse than law. At least in law, we have the t14 and supposed "guaranteed" jobs. In chemistry, this does not exist. You will be a post-doc for a while, and some people are post docs forever. Plus, even if you get an academic job, you're fighting tooth and nail for grant money. If you're in industry... it's pretty likely you'll get fired when your project gets dropped or outsourced to India/China.

The law market sucks, but other markets are much worse.

It's all about the debt. Other markets may be worse, but they don't average $180k in student loan debt.

Law is not unique in requiring lots of debt. Med, architecture, business, and vet schools also tend to be incredibly expensive. And as med school indicates, it's not actually all about the debt: I think few people would argue that being a newly-minted MD with ~$200k in student loan debt is generally preferable from a financial standpoint to being a newly minted PhD with $0 debt.

[James.K.Polk]

People on TLS could appreciate this more, I think. I was a chemistry/biochem double major and if you're not getting an MD, your job prospects are wayyyyy worse than law. At least in law, we have the t14 and supposed "guaranteed" jobs. In chemistry, this does not exist. You will be a post-doc for a while, and some people are post docs forever. Plus, even if you get an academic job, you're fighting tooth and nail for grant money. If you're in industry... it's pretty likely you'll get fired when your project gets dropped or outsourced to India/China.

The law market sucks, but other markets are much worse.

It's all about the debt. Other markets may be worse, but they don't average $180k in student loan debt.

I suppose that's true. But when you consider you're earning a $28,000 stipend for your 6-year PhD and then at least 5 years at $42,000 as a post-doc, it's really not that much better. But I appreciate your point.

[Otunga]

People on TLS could appreciate this more, I think. I was a chemistry/biochem double major and if you're not getting an MD, your job prospects are wayyyyy worse than law. At least in law, we have the t14 and supposed "guaranteed" jobs. In chemistry, this does not exist. You will be a post-doc for a while, and some people are post docs forever. Plus, even if you get an academic job, you're fighting tooth and nail for grant money. If you're in industry... it's pretty likely you'll get fired when your project gets dropped or outsourced to India/China.

The law market sucks, but other markets are much worse.

It's all about the debt. Other markets may be worse, but they don't average $180k in student loan debt.

I suppose that's true. But when you consider you're earning a $28,000 stipend for your 6-year PhD and then at least 5 years at $42,000 as a post-doc, it's really not that much better. But I appreciate your point.

If nothing else, the PhD student is supposed to be "doing what they love". That said, I'm sure the low compensation eats at most people over the years.