Top Law Schools

I want to make sure I'm not missing something. When I think of getting/repaying student loans, my thinking is that I will either be making enough money to make payments on the standard 10 year repayment plan and it won't be a problem or I won't be making enough money and I'll utilize the income-based repayment plan (15% of my discretionary income). Really, my only concern is whether or not/how much this debt will negatively impact me being able to buy a house after school. But many people seem VERY concerned about student loan debt (specifically being able to make the monthly payments). If there is something that I am not seeing or understanding here I would love to know before I take on any amount of debt

If you attend at sticker, even a BigLaw job in NYC won't give you enough post-tax disposable income to service your debt on the 10-year plan, unless you truly live like a pauper, which is extraordinarily difficult when working in BigLaw.

Lincoln wrote:If you attend at sticker, even a BigLaw job in NYC won't give you enough post-tax disposable income to service your debt on the 10-year plan, unless you truly live like a pauper, which is extraordinarily difficult when working in BigLaw.

I'm not trying to say that loan repayment isn't hard and that living in NYC isn't expensive (I live here), but let's not compare living on 30k or whatever amount a year in the city to "truly living like a pauper." Having roommates and being unable to save anything but a paltry amount of money every month =/= begging on the street. Come on.

ETA: OP, your options in your other thread are still bad unless you can save money and live at home while attending UNLV.

When I say "pauper" I don't mean living in actual poverty. But living on $30k a year is very difficult when you don't have time to do the things that save normal people money. Suffice to say that not a single one of my friends who took sticker-sized loans are doing the 10-year plan at the moment.

Lincoln wrote:When I say "pauper" I don't mean living in actual poverty. But living on $30k a year is very difficult when you don't have time to do the things that save normal people money. Suffice to say that not a single one of my friends who took sticker-sized loans are doing the 10-year plan at the moment.

are they in NYC?

francesfarmer wrote:

Lincoln wrote:If you attend at sticker, even a BigLaw job in NYC won't give you enough post-tax disposable income to service your debt on the 10-year plan, unless you truly live like a pauper, which is extraordinarily difficult when working in BigLaw.

I'm not trying to say that loan repayment isn't hard and that living in NYC isn't expensive (I live here), but let's not compare living on 30k or whatever amount a year in the city to "truly living like a pauper." Having roommates and being unable to save anything but a paltry amount of money every month =/= begging on the street. Come on.

ETA: OP, your options in your other thread are still bad unless you can save money and live at home while attending UNLV.

Thanks for taking the time to respond to both of my threads I have to agree with you to disagree with Lincoln - after looking at some very rough numbers it doesn't look to me like BigLaw in NYC, even with sticker debt, would be THAT bad. Not great, of course, but doable.

Regarding my other thread, there is not a way for me to live at home or receive other assistance. My cost of living in Vegas is as low as I can get it. Graduating with $73k in debt is the least amount of debt I will ever be looking at. My question in the other thread was if a degree from either of the other schools was worth increasing that debt (sounds like it's not). Even if I retake & get into a higher ranked school, I'm still faced with deciding if a degree from X school will be worth the extra debt, and what my options are for repaying that debt (hence this thread).

Thanks again for your insight

I mean, IBR is great for making payments (I'm on it), but it doesn't do a whole lot for paying down your debt, and if you're not on PSLF (or if PSLF gets capped or eliminated), you're looking at 20-25 years of debt you're not making a big dent in. There have been comments about how, say, buying a house is based on your monthly obligations rather than your total debt, so I'm not sure specifically how that plays out. But the thought of having ~$200k debt hanging over your head for 20 years isn't much fun. Also saving for retirement and paying off debt tend to conflict.

Lincoln wrote:When I say "pauper" I don't mean living in actual poverty. But living on $30k a year is very difficult when you don't have time to do the things that save normal people money. Suffice to say that not a single one of my friends who took sticker-sized loans are doing the 10-year plan at the moment.

Eh, I live on about that much post-tax, I spend money on literally whatever I want to all of the time, and I still manage to save money. I guess I'm at an advantage having lived in the city for a long time on much, much less than $30k.

Pneumonia wrote:

Lincoln wrote:When I say "pauper" I don't mean living in actual poverty. But living on $30k a year is very difficult when you don't have time to do the things that save normal people money. Suffice to say that not a single one of my friends who took sticker-sized loans are doing the 10-year plan at the moment.

are they in NYC?

Yes.

All you others who "disagree" with me, I note that none of you are actually in Big Law. I'm not saying living in NYC on $30k is impossible. I made $45k pre-tax when I first moved to NYC and lived very comfortably, taking nice vacations, going out several times a week, etc. Before that I made like $20k/year while living in SF, and it was fine.

But living in NYC on $30k while working in Big Law is difficult if you want to have any semblance of a life. Living somewhere reasonably close to work (and trust me, you'll want to) costs money; dry cleaning and wash-n-fold costs money; taking a cab when you're running late to see your friends costs money; eating out because neither you nor your friends have time to cook when you want to hang out costs money; taking a flight back to see the family the day before christmas (as opposed to taking a flight when exams end) costs money; taking a cab to the airport when you're running late for the flight because of work costs money; dating when your only option to meet people is going on actual dates because you don't have time to "hang out" costs money; your fancy health insurance costs money; your fancy gym costs money, etc. It's easy to look at it on paper and say "$90k/yr paid out is so much money!"; it's a lot harder in practice. You can disagree with me all you want, but until you've tried it you're not really speaking with any kind of authority.

Lincoln wrote:

Pneumonia wrote:

Lincoln wrote:When I say "pauper" I don't mean living in actual poverty. But living on $30k a year is very difficult when you don't have time to do the things that save normal people money. Suffice to say that not a single one of my friends who took sticker-sized loans are doing the 10-year plan at the moment.

are they in NYC?

Yes.

All you others who "disagree" with me, I note that none of you are actually in Big Law. I'm not saying living in NYC on $30k is impossible. I made $45k pre-tax when I first moved to NYC and lived very comfortably, taking nice vacations, going out several times a week, etc. Before that I made like $20k/year while living in SF, and it was fine.

But living in NYC on $30k while working in Big Law is difficult if you want to have any semblance of a life. Living somewhere reasonably close to work (and trust me, you'll want to) costs money; dry cleaning and wash-n-fold costs money; taking a cab when you're running late to see your friends costs money; eating out because neither you nor your friends have time to cook when you want to hang out costs money; taking a flight back to see the family the day before christmas (as opposed to taking a flight when exams end) costs money; taking a cab to the airport when you're running late for the flight because of work costs money; dating when your only option to meet people is going on actual dates because you don't have time to "hang out" costs money; your fancy health insurance costs money; your fancy gym costs money, etc. It's easy to look at it on paper and say "$90k/yr paid out is so much money!"; it's a lot harder in practice. You can disagree with me all you want, but until you've tried it you're not really speaking with any kind of authority.

To be fair I basically do all of that minus living close to work, which I understand is a huge expense, but I don't think I will ever feel justified spending the amount of money it costs to live in Manhattan (minus Harlem etc.).

That said I wouldn't worry about people taking my advice on this topic (not that I'm really offering advice so much as my 0L experience living here). OP isn't asking about NYC anyway.

Lincoln wrote:When I say "pauper" I don't mean living in actual poverty. But living on $30k a year is very difficult when you don't have time to do the things that save normal people money. Suffice to say that not a single one of my friends who took sticker-sized loans are doing the 10-year plan at the moment.

I don't disagree with your overall point, but I'd like to at least tease out the assumptions in your post. The repayment on the standard 10 year plan is less than 40k/year and NYC biglawyers take home over 90k/year. Even underestimating take home salary and overestimating debt payments, you should be able to live on at least 50k/year.

Now if you're talking about something like a reverse graduated repayment plan that tries to take into account the eventual salary reduction that accompanies exiting biglaw then the 30k makes sense. But strictly speaking, you will have significantly more than 30k/year to live off of if you're adhering to the standard 10 year plan. I'm not saying that 50k/year is necessarily "easy" (in a relative sense) to live off of in biglaw, but it isn't 30k.

To add to the "taking out debt impacts how you live if you get a job," IBR/PAYE/etc is also impacted by how much money you take out. Because there's a decent chance you will have to pay tax on the amount forgiven (unless they legislate that away), the more you take out the more you will have to pay in taxes at the end. Even though taking out an extra $1000 won't require you to pay back an extra $1000, it might still cost $500 in taxes when that $1000 plus interest gets forgiven.

bk1 wrote:

Lincoln wrote:When I say "pauper" I don't mean living in actual poverty. But living on $30k a year is very difficult when you don't have time to do the things that save normal people money. Suffice to say that not a single one of my friends who took sticker-sized loans are doing the 10-year plan at the moment.

I don't disagree with your overall point, but I'd like to at least tease out the assumptions in your post. The repayment on the standard 10 year plan is less than 40k/year and NYC biglawyers take home over 90k/year. Even underestimating take home salary and overestimating debt payments, you should be able to live on at least 50k/year.

Now if you're talking about something like a reverse graduated repayment plan that tries to take into account the eventual salary reduction that accompanies exiting biglaw then the 30k makes sense. But strictly speaking, you will have significantly more than 30k/year to live off of if you're adhering to the standard 10 year plan. I'm not saying that 50k/year is necessarily "easy" (in a relative sense) to live off of in biglaw, but it isn't 30k.

What is the take home for 1st years? Does anyone have the number? I know my health insurance which includes dental and eye coverage is over $500 a month. I have no idea what a first year actually brings home.

NYSprague wrote:What is the take home for 1st years? Does anyone have the number? I know my health insurance which includes dental and eye coverage is over $500 a month. I have no idea what a first year actually brings home.

Lincoln seemed to be talking in the context of take home as everything after tax/SS/etc withholdings but not other stuff (since he mentioned health insurance in the same breath as going on a date).

bk1 wrote:

NYSprague wrote:What is the take home for 1st years? Does anyone have the number? I know my health insurance which includes dental and eye coverage is over $500 a month. I have no idea what a first year actually brings home.

Lincoln seemed to be talking in the context of take home as everything after tax/SS/etc withholdings but not other stuff (since he mentioned health insurance in the same breath as going on a date).

Yes I understand that, but there are other deductions too. I just have no idea how much people are bringing home. I have the most expensive health insurance, so people can probably do less, but it has gone up noticeably every year. So who knows what it will cost by the time you graduate?

I grew up in NYC and I have no idea how people live on $30,000 a year, but I have always lived in Manhattan. My rent is more than that a year. I'm sure it is possible but I have only known 1 first year who manage to live really frugally. She is a Sabbath Observer and she always had Friday night and Saturday off, as well as all the holidays, somehow I think that helped her with not being exhausted and with spending less money. I don't know, she grew up relatively poor in a large family and was incredibly disciplined. And the debt loads of those 1st years were much lower than what people are looking at now.

I would say that it is difficult to stick to a very strict budget when you work biglaw in NYC. That you will be able to keep living like a student isn't a definite assumption to make, anymore than the assumption you will get biglaw in the first place.

Lincoln wrote:If you attend at sticker, even a BigLaw job in NYC won't give you enough post-tax disposable income to service your debt on the 10-year plan, unless you truly live like a pauper, which is extraordinarily difficult when working in BigLaw.

assuming 250k in loans with starting salary of 160k.

Monthly net after taxes is $7,821.

Monthly Debt + Housing (fixed costs) = $5971

Remaining Income = $1850*12= $22,200

muskies970 wrote:

Lincoln wrote:If you attend at sticker, even a BigLaw job in NYC won't give you enough post-tax disposable income to service your debt on the 10-year plan, unless you truly live like a pauper, which is extraordinarily difficult when working in BigLaw.

assuming 250k in loans with starting salary of 160k.

Monthly net after taxes is $7,821.

Monthly Debt + Housing (fixed costs) = $5971

Remaining Income = $1850*12= $22,200

You need to take out all the other deductions, 401(k) and insurance. I just checked my insurance premium is $537.11 a month but that is the most expensive one. It isn't negligible though, you can't assume you will have $1850 a month to take home after taxes, debt and housing. How much are you allowing for housing there? Does that include utilities, etc?

muskies970 wrote:

Lincoln wrote:If you attend at sticker, even a BigLaw job in NYC won't give you enough post-tax disposable income to service your debt on the 10-year plan, unless you truly live like a pauper, which is extraordinarily difficult when working in BigLaw.

assuming 250k in loans with starting salary of 160k.

Monthly net after taxes is $7,821.

Monthly Debt + Housing (fixed costs) = $5971

Remaining Income = $1850*12= $22,200

My bi-weekly net after taxes, insurance, $300 for 401k, paying back my advance, etc., is a smidgen over $3100.

Edited to account for bi-weekly, not semi-monthly, paychecks.

NYSprague wrote:

muskies970 wrote:

Lincoln wrote:If you attend at sticker, even a BigLaw job in NYC won't give you enough post-tax disposable income to service your debt on the 10-year plan, unless you truly live like a pauper, which is extraordinarily difficult when working in BigLaw.

assuming 250k in loans with starting salary of 160k.

Monthly net after taxes is $7,821.

Monthly Debt + Housing (fixed costs) = $5971

Remaining Income = $1850*12= $22,200

You need to take out all the other deductions, 401(k) and insurance. I just checked my insurance premium is $537.11 a month but that is the most expensive one. It isn't negligible though, you can't assume you will have $1850 a month to take home after taxes, debt and housing. How much are you allowing for housing there? Does that include utilities, etc?

I got the info from here
https://www.law.umich.edu/financialaid/ ... lator.aspx

Assuming it is pretty accurate. I think the biggest take away from this is to not live in NYC

muskies970 wrote:

NYSprague wrote:

muskies970 wrote:

Lincoln wrote:If you attend at sticker, even a BigLaw job in NYC won't give you enough post-tax disposable income to service your debt on the 10-year plan, unless you truly live like a pauper, which is extraordinarily difficult when working in BigLaw.

assuming 250k in loans with starting salary of 160k.

Monthly net after taxes is $7,821.

Monthly Debt + Housing (fixed costs) = $5971

Remaining Income = $1850*12= $22,200

You need to take out all the other deductions, 401(k) and insurance. I just checked my insurance premium is $537.11 a month but that is the most expensive one. It isn't negligible though, you can't assume you will have $1850 a month to take home after taxes, debt and housing. How much are you allowing for housing there? Does that include utilities, etc?

I got the info from here
https://www.law.umich.edu/financialaid/ ... lator.aspx

Assuming it is pretty accurate. I think the biggest take away from this is to not live in NYC

True. But by far most of the biglaw jobs are here. Most people won't have the option of living somewhere else and still getting biglaw.

We have already shown that the take home is probably overestimated. You have to repay advances if you have them, you have to have health insurance and you should put money into 401(k).

The numbers on that page show debt repayment at $3,325 and housing at $2,646 on an income of $160,000 (which they show at 75% of income). I didn't see which fixed costs were included in housing. At lower level of income (up to $60,000) they show housing as being $2304, so I am not sure why they increased it at $65,000 and up.

I'm also not sure why they show loan plus housing as over 100% of income without a clearer demarcation in the graph. Like a big huge red line. It makes the graph misleading when you glance at it when it shows fixed costs can go above 100% of what you earn.

At $250,000 of debt fixed costs in NYC are over 100% of income on both the 10 year and 25 year repayment plans until you earn at least $100, 000. If you earn $100,000 and are on the 25 year plan, you will have less than $500 a month to live on, but you are still under water on the 10 year plan.

At $150,000 of debt you are underwater on fixed costs on both the 10 year and 25 year plans until you make at least $75,000, at which point you will have $173 left a month to live on if you are on the 25 year plan. You only come under the 100% of income for debt and fixed costs on the 10 year plan if you are making $100,000, and then you will have just under $600 a month to live on.

The graph "only" goes to $250,000 of debt, but sticker at many schools is closer to $300,000.

This graph makes it obvious that the only way to go is 15% IBR on federal plan.