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My situation: in at NYU (have to pay sticker), I live in Phoenix now and make $45k/yr. Based on my calculations I've come up with the following:

Assume $250k in debt at time of graduation. Even IF I land a market-paying salary (which seems to be a little bit better odds than a coin-flip coming out of NYU), I have to pay around 38k in Federal taxes, around $10.5k in State taxes (assuming NY - which is the most likely outcome for most NYU graduates) & around $36k in loan repayments (on a 10-year repayment schedule). So the following list lays out this 10-year payment schedule during what would be the 1st 7 years of market paying biglaw (including standard lockstep raises and bonuses).

10-YEAR REPAYMENT SCHEDULE (total loan payment: $362,400)
YEAR 1: 167k (gross) = $75,517.50 (Manhattan Net) = $36,981.91 (PHX Metro Translation)
YEAR 2: 180k (gross) = $87,733 (Manhattan Net) = $40,802.77 (PHX Metro Translation)
YEAR 3: 200k (gross) = $99,803 (Manhattan Net) = $46,416.27 (PHX Metro Translation)
YEAR 4: 230k (gross) = $117,908 (Manhattan Net) = $54,836.52 (PHX Metro Translation)
YEAR 5: 255k (gross) = $132,995.5 (Manhattan Net) = $61,853.40 (PHX Metro Translation)
YEAR 6: 285k (gross) = $151,100 (Manhattan Net) = $70,273.42 (PHX Metro Translation)
YEAR 7: 302k (gross) = $161,360 (Manhattan Net) = $75,045.13 (PHX Metro Translation)

after 7 years, you've paid $252,000 back on your loan, but still owe another $110,400

the total loan payment on a 25-year schedule is $ 573,903.00 - after 7 years, you would still owe $413,210


Someone let me know if I'm missing something, but should I go to NYU???

Thanks for all your help/insights

Can't pretend I have a good answer for you but that's a really interesting analysis.

Just wondering: Is the $75.5k take-home in NYC being compared to a $35k salary or net income in Phoenix? Where did you get the numbers for comparison?

splitbrain wrote:Can't pretend I have a good answer for you but that's a really interesting analysis.

Just wondering: Is the $75.5k take-home in NYC being compared to a $35k salary or net income in Phoenix? Where did you get the numbers for comparison?

A cost of living calculator on-line (it's actually one of the more optimistic ones I found) - not sure if it accounts for net-income vs. gross income.

Also, in the interest of getting you an answer, are your only choices NYU or nothing? Do you have alternatives?

Any reason why you didn't apply to ASU? I bet you would've gotten a very healthy scholarship, unless your URM status holds less bearing in Arizona.

Can you factor in predicted raises? Assuming Biglaw, your income will rise. I think 5 years out, you will be at about 235k. I dunno what your increases in income would be on the 45k/yr in Phoenix, but maybe this should factor in?

boosk wrote: I have to pay around 38k in Federal taxes, around $10.5k in State taxes

damn liberals

splitbrain wrote:Also, in the interest of getting you an answer, are your only choices NYU or nothing? Do you have alternatives?

Michigan (havent heard about aid)
Texas ($28,500 total scholarship)

superbloom wrote:Any reason why you didn't apply to ASU? I bet you would've gotten a very healthy scholarship, unless your URM status holds less bearing in Arizona.

Because of their employment stats and my desire to live somewhere else for at least three years

Few things, good and bad.

1) You may not be in big law for 25 years

1.5) You may not get big law at all.

2) You will get raises

2.5) You may also get raises in your current gig

3) You don't include benefits in big law (pretty sweet as I understand)

Just some things I've been thinking about. My skepticism about T-14 at sticker has been growing steadily since I began researching it.

superbloom wrote:Any reason why you didn't apply to ASU? I bet you would've gotten a very healthy scholarship, unless your URM status holds less bearing in Arizona.

Maybe because Asu is shit and he has the numbers for NYU. That's just one reason besides being urm.

camelcrema wrote:Can you factor in predicted raises? Assuming Biglaw, your income will rise. I think 5 years out, you will be at about 235k. I dunno what your increases in income would be on the 45k/yr in Phoenix, but maybe this should factor in?

Can't really predict my AZ raises, I could run an analysis based on lock-step biglaw raises + bonuses and see how the take-home salary would change over a 7 and 8 year period. I'll probly do that soon, thanks.

boosk wrote:My situation: in at NYU (have to pay sticker), I live in Phoenix now and make $45k/yr. Based on my calculations I've come up with the following:

Assume $250k in debt at time of graduation. Even IF I land a market-paying salary (which seems to be a little bit better odds than a coin-flip coming out of NYU), I have to pay around 38k in Federal taxes, around $10.5k in State taxes (assuming NY - which is the most likely outcome for most NYU graduates) & around $36k in loan repayments (on a 10-year repayment schedule). so,

160k-38k-36k-10.5k = $75,500

you take home $75,500
In Manhattan, this is equivalent to: $35,113.46 in Phoenix.

with a 25-year repayment schedule you take home 88,500
In Manhattan, this is equivalent to: $41,159.48 in Phoenix.

Someone let me know if I'm missing something, but should I go to NYU???

Thanks for all your help/insights

And people think NY biglaw overpays
The thing to keep in mind is that if you bust your balls, there's always the year end bonus and guaranteed annual raises - not to mention the (near im)possibility of one day making partner and making stupid money

You're not factoring in bonuses of almost $10k pre-tax. You're not factoring in raises of $10k+/year pre-tax.

1. Do you want to be a lawyer?
2. Do you want to do biglaw?
3. Do you want to do the kinds of things that biglaw can get you in to (e.g. in house counsel, USAO, etc)?
4. Do you want to work in NYC?

boosk wrote:My situation: in at NYU (have to pay sticker), I live in Phoenix now and make $45k/yr. Based on my calculations I've come up with the following:

Assume $250k in debt at time of graduation. Even IF I land a market-paying salary (which seems to be a little bit better odds than a coin-flip coming out of NYU), I have to pay around 38k in Federal taxes, around $10.5k in State taxes (assuming NY - which is the most likely outcome for most NYU graduates) & around $36k in loan repayments (on a 10-year repayment schedule). so,

160k-38k-36k-10.5k = $75,500

you take home $75,500
In Manhattan, this is equivalent to: $35,113.46 in Phoenix.

with a 25-year repayment schedule you take home 88,500
In Manhattan, this is equivalent to: $41,159.48 in Phoenix.

Someone let me know if I'm missing something, but should I go to NYU???

Thanks for all your help/insights

Which is why people shouldn't be gunning for biglaw, but rather non-NYC biglaw

MachineLemon wrote:Few things, good and bad.

1) You may not be in big law for 25 years

1.5) You may not get big law at all.

2) You will get raises

2.5) You may also get raises in your current gig

3) You don't include benefits in big law (pretty sweet as I understand)

Just some things I've been thinking about. My skepticism about T-14 at sticker has been growing steadily since I began researching it.

1. yup
1.5. yuuup
2. yuuuuuup
2.5. yuuuuuuuuup
3. I have good basic benefits where I am (although no gym membership/taxi service/lunch allowance/whatever else)

does anyone know how biglaw matches 401k contributions? I'm currently getting a 75% match on up to 6% of my income.

Thanks

PMan99 wrote:Which is why people shouldn't be gunning for biglaw, but rather non-NYC biglaw

This is such pointless advice.

1. Some people want to do the kind of work that gets done by big firms in NYC that doesn't really get done as much elsewhere.
2. It's generally easier to get NYC biglaw.
3. Some people actually want to live/work in NYC despite the higher CoL (shocking, I know).

If you come to NYU, you will stand a very good chance of getting an NYC biglaw job, but even that seems to pale in the face of a quarter million dollars in debt. I go to NYU, love the school, and think it was among the best decisions of my life to come here, but I know that I could personally never deal with that insane a debt burden. Most people don't work in biglaw long enough to pay off debt like that. And god forbid you end up toward the bottom of the class with that debt since you would be screwed. As great a place as I think NYU is, I don't think any school justifies a quarter million bucks of debt.

bk187 wrote:You're not factoring in bonuses of almost $10k pre-tax. You're not factoring in raises of $10k+/year pre-tax.

1. Do you want to be a lawyer?
2. Do you want to do biglaw?
3. Do you want to do the kinds of things that biglaw can get you in to (e.g. in house counsel, USAO, etc)?
4. Do you want to work in NYC?

1. Yes
2. Yes
3. Not sure, there is no exhaustive list for that so probably
4. Yes, because I feel like thats where the highest-level legal work is done... but I wouldn't mind coming back to Phoenix or working in other major or secondary markets.

You can factor in the various outcomes better by using a multiplier for the probability of that outcome. E.g. if the chance of getting biglaw at NYU is 55%, you can multiply your take home pay by .55. You should include all the possible outcomes, e.g. PI, solo practitioner, other non-legal job, and what each one's take home is. Then sum all these values together. Then compare that to what you would expect to make if you stayed where you were.

Given that the other outcomes probably pay significantly less, the picture is a bit less rosy.

boosk wrote:1. Yes
2. Yes
3. Not sure, there is no exhaustive list for that so probably
4. Yes, because I feel like thats where the highest-level legal work is done... but I wouldn't mind coming back to Phoenix or working in other major or secondary markets.

Then NYU at sticker seems to get all the things you want. Is it risky? Of course. But if those are the things you want you are pretty much going to have to go to a T14 and at your numbers right now that is likely to be at sticker.

If you really abhor the prohibitive dent that the debt puts on your take-home then I would retake the LSAT to get scholarships to T14's.

run26.2 wrote:You can factor in the various outcomes better by using a multiplier for the probability of that outcome. E.g. if the chance of getting biglaw at NYU is 55%, you can multiply your take home pay by .55. You should include all the possible outcomes, e.g. PI, solo practitioner, other non-legal job, and what each one's take home is. Then sum all these values together. Then compare that to what you would expect to make if you stayed where you were.

Given that the other outcomes probably pay significantly less, the picture is a bit less rosy.

The problem with this type of analysis is that it basically averages all the possible salaries which ignores the legal field's bimodal salary distribution. If 50% of people got jobs at 160 and 50% of people got jobs at 60, the expected salary would look like 110k. At 110k you might be able to feasibly pay off 250k debt in 10 years if you factored in raises and scrimped/scrounged. But that's not the reality. The reality is that 1/2 of those people can pay off 250k debt in 10 years and the other 1/2 can't.

bk187 wrote:

boosk wrote:1. Yes
2. Yes
3. Not sure, there is no exhaustive list for that so probably
4. Yes, because I feel like thats where the highest-level legal work is done... but I wouldn't mind coming back to Phoenix or working in other major or secondary markets.

Then NYU at sticker seems to get all the things you want. Is it risky? Of course. But if those are the things you want you are pretty much going to have to go to a T14 and at your numbers right now that is likely to be at sticker.

If you really abhor the prohibitive dent that the debt puts on your take-home then I would retake the LSAT to get scholarships to T14's.

oh no you DIDN'T! had to pop my cherry some time I guess...

Cost of living calculators really aren't that practical. It would cost twice as much to live in NYC if you tried to buy a 2500 square foot house with a pool like everyone has here in PHX, but no one lives like that in NYC.

You also will have your loans paid off pretty quickly if you are paying 3K per month on them. So after five years your standard of living should skyrocket if you stay in Biglaw, or alternatively you can switch into a lesser paying job (but still something that lets you live much better than you do now.)

Having said all that, I might be facing the same decision and have thought long and hard about these questions. It's not easy to stomach the thought of all that debt.

Tiago Splitter wrote:So after five years your standard of living should skyrocket if you stay in Biglaw, or alternatively you can switch into a lesser paying job (but still something that lets you live much better than you do now.)

The issue I think is that years 4-5 is pretty critical. Even someone who started as a first year associate pouring 3k/month into their loans and then dumped every cent from their raises/bonuses into it is still going to have around 150k debt at the end of year 3 (assuming sticker price debt). The problem is that a lot of people don't make it past year 3 and even if you exit to a 100k/year job, paying back 150k debt on a 100k/year job sucks.