My Thoughts on Full Ride vs T14 (includes spreadsheet) Forum

[GuilleButtersnaps]

OK, obviously there are a lot of questions out there like this, "I got a full ride to GULC and was accepted to Harvard. WHAT SHOULD I DO?" I think these are legitimate questions. You're considering school debt and status vs no school debt, less status, but still a good school (just not as good as HYS). I feel like there are a lot of misconceptions on the value of a scholarship. We think $200,000 of debt and we freak out--I could never pay that off!. I'm afraid that many people misunderstand the comparison between a bigger salary in the long term and the value of a scholarship in the short term. In my opinion, you must think of how much is a scholarship worth as an 0L (i.e. the present value). How much is a salary worth as an 0L? You must calculate the present value of these amounts to make an objective numbers-based conclusion. I made a spreadsheet. Check it out:

https://docs.google.com/spreadsheets/d/ ... sp=sharing

As you can see, the present value of a scholarship is much less than the present value of seven years of BigLaw pay. And that is less than a decade of pay! What about a whole career of pay? My point is this: In the grand scheme of things, when you think of scholarship money compared to a career of earnings, scholarship money is not worth very much. I understand it seems like it is an exorbitant amount--and it IS--but we too often have short-term thinking. Be mindful that I'm talking numbers, not subjective feelings. When you factor in subjective feelings, I feel like you need to trust your gut. If you got a full ride at one school school, but must pay sticker (or close to it) at HYS, trust your gut! If you've always dreamed of going to Stanford, and you got in, it's a no brainer. I don't care what other schools are offering you. It's just money. Money is a very fleeting thing. It does not last and gets really old. A degree from a world-class institution will provide you many opportunities to quickly recoup your debt.

That's my two cents. Bring on the hate.

[acr]

your model ignores fundamental risk analysis concerns that factor heavily into this decision

you cannot assume that going to a T-14 will definitively result in biglaw despite marginally better odds and that going to a non-T14 will not result in biglaw despite marginally worse odds

also, 190K

[RZ5646]

How many people make it 7 years in big law? I've always heard that the average person makes it 2 or 3 years and then leaves.

[lymenheimer]

Also ignores the interest implications of loans, other loans (car+UG+etc.), and the fact that many people don't last in biglaw for such an extended period of time. Also, you don't need a spreadsheet to do the basic math with minimal example that you provided.

edit: scooped on time in biglaw

[star fox]

OK, obviously there are a lot of questions out there like this, "I got a full ride to GULC and was accepted to Harvard. WHAT SHOULD I DO?" I think these are legitimate questions. You're considering school debt and status vs no school debt, less status, but still a good school (just not as good as HYS). I feel like there are a lot of misconceptions on the value of a scholarship. We think $200,000 of debt and we freak out--I could never pay that off!. I'm afraid that many people misunderstand the comparison between a bigger salary in the long term and the value of a scholarship in the short term. In my opinion, you must think of how much is a scholarship worth as an 0L (i.e. the present value). How much is a salary worth as an 0L? You must calculate the present value of these amounts to make an objective numbers-based conclusion. I made a spreadsheet. Check it out:

https://docs.google.com/spreadsheets/d/ ... sp=sharing

As you can see, the present value of a scholarship is much less than the present value of seven years of BigLaw pay. And that is less than a decade of pay! What about a whole career of pay? My point is this: In the grand scheme of things, when you think of scholarship money compared to a career of earnings, scholarship money is not worth very much. I understand it seems like it is an exorbitant amount--and it IS--but we too often have short-term thinking. Be mindful that I'm talking numbers, not subjective feelings. When you factor in subjective feelings, I feel like you need to trust your gut. If you got a full ride at one school school, but must pay sticker (or close to it) at HYS, trust your gut! If you've always dreamed of going to Stanford, and you got in, it's a no brainer. I don't care what other schools are offering you. It's just money. Money is a very fleeting thing. It does not last and gets really old. A degree from a world-class institution will provide you many opportunities to quickly recoup your debt.

That's my two cents. Bring on the hate.

If you're talking intra-T14 full rides then you should realize you'll probably end up getting BigLaw out of Law School anyways (statistically) and thus, the salary difference doesn't really come into play like you're saying. So you'll bascially always be the Initial Loan + All the Compounding Interest until your debt is paid off behind where you would have been. For that to be negligible you gotta become crazy rich in a way that's probably not going to happen. What makes a "dream" school anways? At the end of the day, it's still Law School no matter what. The prestige factor will fade almost entirely after like a week of classes. So yeah, you may recoup your debt (eventually) and it may be "just money" but we're talking a lot of money that can have a huge effect on the quality of your life in a much more tangible way than "A degree from world-class institution."

[GuilleButtersnaps]

your model ignores fundamental risk analysis concerns that factor heavily into this decision

you cannot assume that going to a T-14 will definitively result in biglaw despite marginally better odds and that going to a non-T14 will not result in biglaw despite marginally worse odds

First, it's not "marginally better odds." Look at the stats. Secondly, as with any model, assumptions must be made. Even if I did a risk analysis, which I could do (I just don't feel like it), it would bear out that there is must less risk the higher you move up the rankings. That's why you would forego the full ride, and that's why people ask these types of questions. Third, USE SOME PUNCTUATION. Fourth, troll???

[GuilleButtersnaps]

Also ignores the interest implications of loans, other loans (car+UG+etc.), and the fact that many people don't last in biglaw for such an extended period of time. Also, you don't need a spreadsheet to do the basic math with minimal example that you provided.

edit: scooped on time in biglaw

The spreadsheet was a visual aid, and it's way faster than using a calculator. And even if you don't factor in an extended time in big law, my point still stands. I used an extended time in biglaw as an example. It's a model, it's not all-inclusive. Whether or not I include the interest implications of loans is irrelevant. It doesn't change the fact that a higher-ranked legal education provides better opportunities for jobs that can recoup that debt, irrespective of the interest that debt can accrue.

[A. Nony Mouse]

I love how frequently people think they've reinvented the wheel by making this kind of argument.

[GuilleButtersnaps]

If you're talking intra-T14 full rides then you should realize you'll probably end up getting BigLaw out of Law School anyways (statistically) and thus, the salary difference doesn't really come into play like you're saying. So you'll bascially always be the Initial Loan + All the Compounding Interest until your debt is paid off behind where you would have been. For that to be negligible you gotta become crazy rich in a way that's probably not going to happen. What makes a "dream" school anways? At the end of the day, it's still Law School no matter what. The prestige factor will fade almost entirely after like a week of classes. So yeah, you may recoup your debt (eventually) and it may be "just money" but we're talking a lot of money that can have a huge effect on the quality of your life in a much more tangible way than "A degree from world-class institution."

I feel you. But my issue is that we value quality of life too much. Living on less to pay off debt is not a bad thing. In fact, it may be a very good thing--allowing you to appreciate what you have. In 30 years, you won't care. I supposed in 30 years you won't care you went to HYS, So where does that leave us? I guess that's my point. In the grand scheme of things, just go with your gut and stress out less.

[lymenheimer]

Also ignores the interest implications of loans, other loans (car+UG+etc.), and the fact that many people don't last in biglaw for such an extended period of time. Also, you don't need a spreadsheet to do the basic math with minimal example that you provided.

edit: scooped on time in biglaw

The spreadsheet was a visual aid, and it's way faster than using a calculator. And even if you don't factor in an extended time in big law, my point still stands. I used an extended time in biglaw as an example. It's a model, it's not all-inclusive. Whether or not I include the interest implications of loans is irrelevant. It doesn't change the fact that a higher-ranked legal education provides better opportunities for jobs that can recoup that debt, irrespective of the interest that debt can accrue.

The visual representation could just as easily be shown in the OP or by a screenshot of the excel sheet (but I guess you can't post photos yet) that way people don't have to go to an alternate/less-anon sight to see your point. Also, debt is a huge aspect of a person's future. Suppose someone learns in 2 months of working that they don't like biglaw work. Well they took on that extra 200k in debt because it gave them a better opportunity at biglaw, so they'll have to trudge it out to make it worth it rather than dropping to a lesser-intensive job that they much prefer. Also, your post-tax for biglaw is for a place like TX...NYC is sub-100k take-home. And that's assuming a market-rate firm. I get that it's just a model/example/single case/whatever, but there are only a certain number of jobs of this nature available and many more JD candidates who won't get them, each of whom have different preferences for risk-aversion and different responsibilities as far as previous loans, family, home, etc. And the loans taken out (60k?) is assuming some sort of scholarship. 180k is way different than 250k+, which would represent taking full COA loans at many T14s. Starting out your career 250k+ in the hole is a towering consideration to make.

[libertttarian]

You gotta take into consideration the marginal differences in the expected value of a degree from any two schools. You can't just compare the present value of the scholly vs a carer big law.

Say, for instance, that H gives you an 80% chance at big law and Georgetown 30%. Say also that everyone who doesn't get biglaw gets shitlaw.

If "big" denotes the present value of a career in biglaw, and "shit" denotes the present value of a career in shitlaw, then the expected income of an H degree is .8*big + .2*shit, while a G degree has an expected income of .3*big + .7*shit.

In our example, then, the marginal increase in income between G and H is .5*big - .5*shit = (1/2)(big-shit)

Also, say G gives you 100k over three years. You can't just determine the present value of that money. You would need to calculate the present value of the total amount of money you would pay back at H, minus the present value of the total amount of money you'd pay back at G.

But doing so would require you to come up with several payment plans for both H and G, depending on whether you do PAYE, get laid off, etc., along with the probability of each payment plan being the one you take. Then you'd have to add up those payment plans, weighted by their probability, to come up with the expected payment plans for H and G. The difference between the present value of those two expected payment plans would be the amount of money you'd save picking G over H.

Then you'd have to compare the difference between the expected income and expected payment plan for H, and the same for G. Whichever one is a bigger number wins.

PLEASE do this OP, I will gladly read your scholarly musings on the financiering of lol school.

[Hikikomorist]

If you're talking intra-T14 full rides then you should realize you'll probably end up getting BigLaw out of Law School anyways (statistically) and thus, the salary difference doesn't really come into play like you're saying. So you'll bascially always be the Initial Loan + All the Compounding Interest until your debt is paid off behind where you would have been. For that to be negligible you gotta become crazy rich in a way that's probably not going to happen. What makes a "dream" school anways? At the end of the day, it's still Law School no matter what. The prestige factor will fade almost entirely after like a week of classes. So yeah, you may recoup your debt (eventually) and it may be "just money" but we're talking a lot of money that can have a huge effect on the quality of your life in a much more tangible way than "A degree from world-class institution."

I feel you. But my issue is that we value quality of life too much. Living on less to pay off debt is not a bad thing. In fact, it may be a very good thing--allowing you to appreciate what you have. In 30 years, you won't care. I supposed in 30 years you won't care you went to HYS, So where does that leave us? I guess that's my point. In the grand scheme of things, just go with your gut and stress out less.

WTF?

[lymenheimer]

I think the tldr is that you can't assume the present value of a career in biglaw if you don't have a career in biglaw.

[GuilleButtersnaps]

The visual representation could just as easily be shown in the OP or by a screenshot of the excel sheet (but I guess you can't post photos yet) that way people don't have to go to an alternate/less-anon sight to see your point. Also, debt is a huge aspect of a person's future. Suppose someone learns in 2 months of working that they don't like biglaw work. Well they took on that extra 200k in debt because it gave them a better opportunity at biglaw, so they'll have to trudge it out to make it worth it rather than dropping to a lesser-intensive job that they much prefer. Also, your post-tax for biglaw is for a place like TX...NYC is sub-100k take-home. And that's assuming a market-rate firm. I get that it's just a model/example/single case/whatever, but there are only a certain number of jobs of this nature available and many more JD candidates who won't get them, each of whom have different preferences for risk-aversion and different responsibilities as far as previous loans, family, home, etc. And the loans taken out (60k?) is assuming some sort of scholarship. 180k is way different than 250k+, which would represent taking full COA loans at many T14s. Starting out your career 250k+ in the hole is a towering consideration to make.

I'll concede the link to a separate page...maybe i'm just annoying. Disagree with the school debt part. I thought I was being conservative on that amount...see this link (yeaaaahhh i know another link..): http://grad-schools.usnews.rankingsandr ... t-rankings Am i looking at bad info?

[lymenheimer]

I'll concede the link to a separate page...maybe i'm just annoying. Disagree with the school debt part. I thought I was being conservative on that amount...see this link (yeaaaahhh i know another link..): http://grad-schools.usnews.rankingsandr ... t-rankings Am i looking at bad info?

haha nah, I was just saying for the sake of simplicity, since it was minimal, basic info in the spreadsheet, couldve easily just been transferred here. As for that, it shows the average indebtedness. I was pointing out the total COA loan disbursement. $80,937 2015-16 at Duke. $85,964 2015-16 at NYU. Taking that over 3 years would put you at 250k+. The average is likely more realistic, but it is, afterall, only the average. Putting many people above and below that figure.

[star fox]

If you're talking intra-T14 full rides then you should realize you'll probably end up getting BigLaw out of Law School anyways (statistically) and thus, the salary difference doesn't really come into play like you're saying. So you'll bascially always be the Initial Loan + All the Compounding Interest until your debt is paid off behind where you would have been. For that to be negligible you gotta become crazy rich in a way that's probably not going to happen. What makes a "dream" school anways? At the end of the day, it's still Law School no matter what. The prestige factor will fade almost entirely after like a week of classes. So yeah, you may recoup your debt (eventually) and it may be "just money" but we're talking a lot of money that can have a huge effect on the quality of your life in a much more tangible way than "A degree from world-class institution."

I feel you. But my issue is that we value quality of life too much. Living on less to pay off debt is not a bad thing. In fact, it may be a very good thing--allowing you to appreciate what you have. In 30 years, you won't care. I supposed in 30 years you won't care you went to HYS, So where does that leave us? I guess that's my point. In the grand scheme of things, just go with your gut and stress out less.

I actually disagree. I think you may reflect as you approach 60 about how much better prepared for retirement would be if you put all the money you spent over the years towards student loans into a Mutual Fund. The pride of having your degree say "Harvard"? I don't know. Maybe for some that's about equal to whatever that difference would be.

[GuilleButtersnaps]

If you're talking intra-T14 full rides then you should realize you'll probably end up getting BigLaw out of Law School anyways (statistically) and thus, the salary difference doesn't really come into play like you're saying. So you'll bascially always be the Initial Loan + All the Compounding Interest until your debt is paid off behind where you would have been. For that to be negligible you gotta become crazy rich in a way that's probably not going to happen. What makes a "dream" school anways? At the end of the day, it's still Law School no matter what. The prestige factor will fade almost entirely after like a week of classes. So yeah, you may recoup your debt (eventually) and it may be "just money" but we're talking a lot of money that can have a huge effect on the quality of your life in a much more tangible way than "A degree from world-class institution."

I feel you. But my issue is that we value quality of life too much. Living on less to pay off debt is not a bad thing. In fact, it may be a very good thing--allowing you to appreciate what you have. In 30 years, you won't care. I supposed in 30 years you won't care you went to HYS, So where does that leave us? I guess that's my point. In the grand scheme of things, just go with your gut and stress out less.

I actually disagree. I think you may reflect as you approach 60 about how much better prepared for retirement would be if you put all the money you spent over the years towards student loans into a Mutual Fund. The pride of having your degree say "Harvard"? I don't know. Maybe for some that's about equal to whatever that difference would be.

I'm going to get railed for this but...I don't believe in retirement. That doesn't mean I don't think financial security is important--I do. In that case, I think you have a good point there. But saving up money so that you can do nothing for the rest of your life is not what I'm about. Nor do I believe that someone should throw money away just so they can drop the H-bomb. However, I do think that going to HYS can provide amazing opportunities that other schools can't offer. And that's why some people reject these full ride offers. I just thought it would be helpful for some people to know that foregoing a full ride to a non t14 school isn't financial suicide. In fact, it can be a good decision. Perhaps my example of Gtown v Harvard was a bad example--since I titled my thread full ride v T14. Like you said, differences intr-t14 are not as big.

[anyriotgirl]

op how old are you?

maybe take some time to work and live on 35k before going to law school

maybe you'll even find something better to do with your life

[Auxilio]

When I saw a spreadsheet I thought it was going to be a table that assigned equal level between say X school at full, Y school at half, Z school at sticker in an interesting and detailed (if obviously subjective) analysis of different school's weight. Instead I got this. . .

[GuilleButtersnaps]

op how old are you?

maybe take some time to work and live on 35k before going to law school

maybe you'll even find something better to do with your life

hmmmmmm.... married w children livin on 30k....maybe you should grow up

[180kickflip]

op how old are you?

maybe take some time to work and live on 35k before going to law school

maybe you'll even find something better to do with your life

hmmmmmm.... married w children livin on 30k....maybe you should grow up

Not sure how many people will buy the family story, but if it's true, that makes things even more unfortunate =\

[Theresa87]

Living on an AmeriCorps stipend of 12,000 yr, and I'm perfectly content. It's not easy but the value of doing something I love more than makes up for any dissatisfaction from loss of money.

[GuilleButtersnaps]

op how old are you?

maybe take some time to work and live on 35k before going to law school

maybe you'll even find something better to do with your life

hmmmmmm.... married w children livin on 30k....maybe you should grow up

Not sure how many people will buy the family story, but if it's true, that makes things even more unfortunate =\

What's unfortunate is that you all are a bunch of jerks. Consider this my last ever comment on this forum. Nobody made you all respond. If you didn't agree with what I had to say, then you could have easily have moved on to the next thread. But you didn't. Instead you had to completely rip on me, cause that's super helpful for everyone. Thanks for nothing.

[BigZuck]

I just kind of skimmed a lot of what it said because the whole thing was too long; didn't read but were people even that mean to the OP? Seemed like kind of an odd ragequit to me.

Whatever the OP was trying to say did seem dumb though.

[lymenheimer]

I just kind of skimmed a lot of what it said because the whole thing was too long; didn't read but were people even that mean to the OP? Seemed like kind of an odd ragequit to me.

Whatever the OP was trying to say did seem dumb though.

Nah. Most people were just saying how basic the OPs premise was, pointing out that for "only going by the numbers" (or whatever he claimed), he was sure leaving out a lot of numbers. Def a ragequit.