Is a Harvard JD worth $227,400? Forum

[marcellus]

The cost of attending Harvard Law School 2012-13 is $75,800 at sticker. Times 3 years = $227,400

http://www.law.harvard.edu/current/sfs/ ... udget.html

Is a Harvard JD worth that price?

[WhiteyCakes]

This also assumes that tuition won't increase, when it almost certainly will each year. On another note, how many students actually pay sticker with Harvard's need-based financial aid system?

[bk1]

You're forgetting interest and tuition increases.

[dingbat]

I'd give this an emphatic yes. A TVM calculation of the weighted average outcome indicates that it's absolutely worth it

[Aberzombie1892]

If there ever was a JD worth that much, it would be YS(H). However, law school decisions should never be in abstract from other options. So, in order to evaluate what H is worth, what are your other law school options?

[BlaqBella]

YES.

The debt can be paid off in less than 10 yrs. Some say 4/5 years v. a law degree from Harvard lasting a lifetime (assuming, of course, you are alive to reap the benefits).

This also applies to a law degree from Yale and Stanford.

[BlaqBella]

Let's not forget you're paying not only for the education, but more importantly the networking/alumni/bountiful career options/prestige, etc...


..it is what it is. Nothing in life worth having is free (for the majority of us, at least).

[CanadianWolf]

If this were an auction, you'd have the answer in no uncertain terms.

[WhiteyCakes]

Nothing in life worth having is free (for the majority of us, at least).

Oh to be one of Mitt Romney's 15 kids...

[marcellus]

What price would it take for a Harvard JD to be too expensive? For example, $300,000? $500,000?

Assuming people could get the loans, would they still go for the HLS JD even at 2x, 3x the price?

[CanadianWolf]

Because of the high liklihood of biglaw placement at $160,000 plus, the answer might be around 2 years after-tax compensation.

A better approach for HLS tuition might be 10% of one's gross salary for the 20 years after finishing HLS.

[BlaqBella]

What price would it take for a Harvard JD to be too expensive? For example, $300,000? $500,000?

Assuming people could get the loans, would they still go for the HLS JD even at 2x, 3x the price?

All I will say is if law school ever reaches that amount, starting salaries at law firms better be proportional to such costs.

[BlaqBella]

Nothing in life worth having is free (for the majority of us, at least).

Oh to be one of Mitt Romney's 15 kids...

[dingbat]

What price would it take for a Harvard JD to be too expensive? For example, $300,000? $500,000?

Assuming people could get the loans, would they still go for the HLS JD even at 2x, 3x the price?

I did a detailed analysis of UPenn last year that indicated it would still be a good (but not great) investment at double sticker.

[hurldes]

Do you guys think that other lower ranked law schools are worth sticker if one lands biglaw? Obviously there's no way to know that as an 0L, and that's why everyone says don't go to X law school because there is a 90% chance you'll strike out at OCI and be stuck with $200K in debt and no job. But for the ~10% at the T50 who do get a biglaw job and make $160k, was it worth it to pay sticker at that T50 law school?

I guess what I'm asking is, is it just the near gaurantee of biglaw at YSH that makes it worth over $200,000... or is it their prestige and legacy that makes them worth so much?

[dingbat]

Do you guys think that other lower ranked law schools are worth sticker if one lands biglaw? Obviously there's no way to know that as an 0L, and that's why everyone says don't go to X law school because there is a 90% chance you'll strike out at OCI and be stuck with $200K in debt and no job. But for the ~10% at the T50 who do get a biglaw job and make $160k, was it worth it to pay sticker at that T50 law school?

I guess what I'm asking is, is it just the near gaurantee of biglaw at YSH that makes it worth over $200,000... or is it their prestige and legacy that makes them worth so much?

My analysis is based on expected outcomes for the whole class, not just those that land biglaw. A HYS education isn't worth it for that 1 person who strikes out there, just as it's absolutely worth it for the one Cooley grad who nabs biglaw.

Part of the equation is the typical outcome, part is the weighted average outcome, part of it is the chance of getting the typical outcome or the weighted outcome.
Lastly comes personal risk preference

[BlaqBella]

I guess what I'm asking is, is it just the near gaurantee of biglaw at YSH that makes it worth over $200,000... or is it their prestige and legacy that makes them worth so much?

BOTH. Both the near guarantee of BIGLAW + even if not BIGLAW, you have options + all the added goodies for attending the likes of HYS + LRAPs.

[vanwinkle]

I'll have to watch this thread.

For the lulz.

[jrf12886]

This is a difficult question to answer without knowing more about your goals and what alternatives to law school you have available. I would suggest looking at HLS's need-based aid to see if you would qualify for any (many people do). Also, check out their loan repayment program for public service (if that interests you).

[sinfiery]

let us rustle thy jimmies.
45 years
$100,000 earned per year (After tax) (I'd say more than half of HLS make over $100,000 salary on average over their careers. Anyone remember that UVA study done showing reported incomes over 20 years? It blew 100,000 out of the water.)
4% interest rate
Present Value: $2,072,003.97

versus
45 years
$35,000 earned per year (After tax, don't expect you'll earn more. This is about average after-tax income in America over a career. Half don't even make this much.)

Present Value:$725,201.39


Value of Harvard JD: $1346800

Add in laymen prestige, LIPP taking away any and all risk of being in debt after 10 years, income probabilities skewed to favor the non-JD...


I'd say it's valued at around $1,750,000 for me. $1,300,000 being the floor value.

[marcellus]

sinfiery: if the Harvard JD cost approximately $350,000 over 3 years, it would just about worth it, then?

340,000
4%
45 years
= $2,044,411.48 Future value

So the cost of attending the big H could be about 116,666 per year, and its still a good deal. (Thats about 96,666 in tuition + 20k in living costs).

(correct me if I'm wrong here).

[CanadianWolf]

At one time, Harvard University offered undergraduates the option of paying tuition in the form of 3% (if I recall correctly) of one's lifetime earnings.

[sinfiery]

sinfiery: if the Harvard JD cost approximately $350,000 over 3 years, it would just about worth it, then?

340,000
4%
45 years
= $2,044,411.48 Future value

So the cost of attending the big H could be about 116,666 per year, and its still a good deal. (Thats about 96,666 in tuition + 20k in living costs).

(correct me if I'm wrong here).

The ~$2,000,000 figure I quoted is the present value of a job prospect paying on average, $100,000 per year for 45 years after-tax income.

You compare that number to the 340,000 directly. No need to compute the FV of debt. It's all being compared to the present value.

You also need to account for what else you could be doing if you weren't working with your JD.

That's where the ~700,000 PV figure comes in assuming you earn $35,000 after tax income per year on average for 45 years.


If all these numbers hold true, $340,000 is a god damn steal for a JD as you would compare it directly to the $1,300,000. (Especially considering LIPP and it's implications on having zero debt in 10 years -- If you have zero savings as it does take into account your savings after LS cost paid)

At one time, Harvard University offered undergraduates the option of paying tuition in the form of 3% (if I recall correctly) of one's lifetime earnings.

Assuming $125,000 income and figure based on pre-tax amount: 3,750 a year.
45 years.
4% IR

PV = ~$81,000

Not bad, but dangerous upside and with LIPP already taking away the dangerous downside, I'm not sure if I would take this option.

[jkpolk]

sinfiery: if the Harvard JD cost approximately $350,000 over 3 years, it would just about worth it, then?

340,000
4%
45 years
= $2,044,411.48 Future value

So the cost of attending the big H could be about 116,666 per year, and its still a good deal. (Thats about 96,666 in tuition + 20k in living costs).

(correct me if I'm wrong here).

The ~$2,000,000 figure I quoted is the present value of a job prospect paying on average, $100,000 per year for 45 years after-tax income.

You compare that number to the 340,000 directly. No need to compute the FV of debt. It's all being compared to the present value.

You also need to account for what else you could be doing if you weren't working with your JD.

That's where the ~700,000 PV figure comes in assuming you earn $35,000 after tax income per year on average for 45 years.


If all these numbers hold true, $340,000 is a god damn steal for a JD as you would compare it directly to the $1,300,000. (Especially considering LIPP and it's implications on having zero debt in 10 years -- If you have zero savings as it does take into account your savings after LS cost paid)

At one time, Harvard University offered undergraduates the option of paying tuition in the form of 3% (if I recall correctly) of one's lifetime earnings.

Assuming $125,000 income and figure based on pre-tax amount: 3,750 a year.
45 years.
4% IR

PV = ~$81,000

Not bad, but dangerous upside and with LIPP already taking away the dangerous downside, I'm not sure if I would take this option.

plus you have access to more girls at the bar

[Hat.trick]

Yes.... Its Harvard!