65k a year makes law school worth it? Forum

[jcunni5]

http://volokh.com/2010/02/04/the-break- ... er-salary/

check out this link apparently nu came out with an analysis that asserts law school is a good investment if u can earn a salary of 65k a year that's good news ITE but don't know if it's accurate seeing what u guys thought of it

[ScaredWorkedBored]

As in that thread, depends what you are thinking in terms of lifestyle & location. Personally, I think it is a no-brainer to subordinate just about everything to the high interest, nondischargable debt rather than the other way around. But there are a lot of people who don't want to face that reality. Hell, even people that get $160K jobs will post on ATL about how they can't make ends meet living in Manhatten with $200K in student loans. Then it turns out they're trying to live a lifestyle that you'd need close to $300K gross to attempt if you didn't have major debt.

There's a logic breakdown somewhere in there, probably at the "lawyers have nice stuff like this, I am a lawyer" part.

[edcrane]

For northwestern, this is almost certainly wrong. The estimate implies that the average NU student (who has 1+ year of WE) would only be able to earn something like $30k/year without a JD. This opportunity cost estimate strikes me as being unreasonable. A back of the envelope calculation suggests that a more reasonable break even point would be something like $80-$90k.

Of course this is a purely economic approach. Obviously job satisfaction is another major consideration that is not easy to quantify but may weigh heavily in favor of LS, even if economics do not.

[AngryAvocado]

For northwestern, this is almost certainly wrong. The estimate implies that the average NU student (who has 1+ year of WE) would only be able to earn something like $30k/year without a JD. This opportunity cost estimate strikes me as being unreasonable. A back of the envelope calculation suggests that a more reasonable break even point would be something like $80-$90k.

Of course this is a purely economic approach. Obviously job satisfaction is another major consideration that is not easy to quantify but may weigh heavily in favor of LS, even if economics do not.

That's why I never pay attention to these articles. So much of what makes law school a "worthwhile" investment depends on opportunity cost, and that differs tremendously from person to person.

[TTT-LS]

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[thesealocust]

edit: never mind

[Veyron]

Yah, I have great respect for what the dean of NU is trying to do here. It gives the idea that not every law school (or even most) are worthwhile investments much more credence when the dean of a T-14 is saying it. For whatever its worth, I think that the cutoff for schools above the 'break even' would be #70 which is about how many law schools we should have in this country anyways.

Its also cool that NU is focused on adding value to legal employers (although I personally still prefer a hybrid theoretical/practical approach - if I wanted to go to trade-school, I would have become a mechanic).

Van Zant has been one of the guys instrumental in getting the word out about the quality drop off between T-14 and non which is kinda cool, he was definitely be an Auto-Admit poaster in another life.

[bigben]

(although I personally still prefer a hybrid theoretical/practical approach - if I wanted to go to trade-school, I would have become a mechanic).

lol. law school = trade school

[Connelly]

Throwing out a number draws students' attention to actually thinking of law school in terms of a cost benefit analysis, but the number is arbitrary and not applicable to a lot of people's situations. Scholarships, going part-time, IBR, loan forgiveness, and lifetime earning potential are all financial factors that this ignores for the most part.

The focus on starting salaries seems a little misplaced in conversations like this. Government jobs typically escalate in pay quickly. People can pick up second jobs if their low-paying legal jobs don't require 60 hours a week. Even the "lucky" ones that make $160k straight out of law school end up leaving their first law firm after a couple of years - what are their exit options like in this economy? The assumption that you will always make your starting salary plus a 3% increase every year just does not fit with reality. Some generalizations can be made about where people start and where they end up, but most lawyers I talk to seem to change jobs every few years, and it's generally based on something unexpected (either good or bad).

[beesknees]

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[thesealocust]

edit: never mind

[TTT-LS]

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[TTTennis]

I think this thread, and the NU Dean's study (although I have yet to see the methodology used to determine the break even point) is, for the most part, useless. There is no one salary that makes law school worthwhile and is universally applicable. There are too many variables to control for, especially considering the variability of each law school applicant's financial situation. How can you compare a person who enters law school with $40,000 in UG debt and will pay full price for their law school education (lets say $120,000) to someone who is entering the same law school with no UG debt and going on a full ride, and then say that $65,000 is the salary both need to make in order for law school to be a good investment. I understand this is a pre-law/law website and people on here love to argue, however relevant the arguments are, but this is the most pointless discussion ever.

However, I am wildly entertained by the people who get on tls and shout that going to a t14 school or strong t1 school is the only economically sound decision. Really? Can any of you honestly say that going to say Northwestern at ~$172,000 (taken out in loans) is more financially sound that attending say DePaul for free? Even if that NU grad comes out making $130,000 a year, the Depaul grad. made a worthwhile investment because he could be a manager at Target (maybe this opportunity wasn't available upon graduation from college, and this is a bad example I know) with his JD and not have to worry about debt. Now, this is where opportunity cost comes into play, but like I said earlier, each person's job opportunities, UG loan situation, COL, etc. straight out of undergrad vary so widely that trying to assign a break even point is meaningless.

[underachiever]

Interesting data point: Justice Thomas didn't pay off his student loans (LinkRemoved) from YLS until his third term AS A SUPREME COURT JUSTICE. Pretty unreal when you think about that.

POTUS and wife didn't pay their HLS loans off until 2000-2001, with money from his books.

[Kohinoor]

Interesting data point: Justice Thomas didn't pay off his student loans (LinkRemoved) from YLS until his third term AS A SUPREME COURT JUSTICE. Pretty unreal when you think about that.

Eh. I bet that when he went to law school it was much cheaper and his loans were locked in at a much lower rate.

CT revealed that he didn’t manage to pay off his student loans until his third term on the Court, and only then because his “wife accelerated it — she was tired of these payments to Yale.”

seems like they were just tired of the monthly invoices.

edit: Yea, CT went to YLS in 1974. In 1970, tuition at comparable schools was ~2K a year.

[Aeroplane]

Interesting data point: Justice Thomas didn't pay off his student loans (LinkRemoved) from YLS until his third term AS A SUPREME COURT JUSTICE. Pretty unreal when you think about that.

Eh. I bet that when he went to law school it was much cheaper and his loans were locked in at a much lower rate.

CT revealed that he didn’t manage to pay off his student loans until his third term on the Court, and only then because his “wife accelerated it — she was tired of these payments to Yale.”

seems like they were just tired of the monthly invoices.

+1. I'll never pay ahead on my UG loans no matter how much money I make, since they're locked in at 2.6% which is, on avg, less than inflation.

[Aeroplane]

I think this thread, and the NU Dean's study (although I have yet to see the methodology used to determine the break even point) is, for the most part, useless. There is no one salary that makes law school worthwhile and is universally applicable. There are too many variables to control for, especially considering the variability of each law school applicant's financial situation. How can you compare a person who enters law school with $40,000 in UG debt and will pay full price for their law school education (lets say $120,000) to someone who is entering the same law school with no UG debt and going on a full ride, and then say that $65,000 is the salary both need to make in order for law school to be a good investment. I understand this is a pre-law/law website and people on here love to argue, however relevant the arguments are, but this is the most pointless discussion ever.

However, I am wildly entertained by the people who get on tls and shout that going to a t14 school or strong t1 school is the only economically sound decision. Really? Can any of you honestly say that going to say Northwestern at ~$172,000 (taken out in loans) is more financially sound that attending say DePaul for free? Even if that NU grad comes out making $130,000 a year, the Depaul grad. made a worthwhile investment because he could be a manager at Target (maybe this opportunity wasn't available upon graduation from college, and this is a bad example I know) with his JD and not have to worry about debt. Now, this is where opportunity cost comes into play, but like I said earlier, each person's job opportunities, UG loan situation, COL, etc. straight out of undergrad vary so widely that trying to assign a break even point is meaningless.

One could make a formula though. Of course such a formula would only address financial break-evens, w/o considering subjective value. I nominate rayiner to make a formula/calculator.

[98234872348]

Interesting data point: Justice Thomas didn't pay off his student loans (LinkRemoved) from YLS until his third term AS A SUPREME COURT JUSTICE. Pretty unreal when you think about that.

I was at that speech and it gave me a new found respect for CT, fwiw.

[Kohinoor]

they're locked in at 2.6%

HOW?

[Aeroplane]

they're locked in at 2.6%

HOW?

I'm old. Well, relatively. I consolidated back in 2005. The true" rate is 2.8xx% but you get .25% off for doing direct-debit. Also, half of them are subsidized, so those didn't accrue any interest while I was in school. This included the two years that I was enrolled PT for my master's, even though I was working FT. Borrowing from the gov't is awesome.

[beesknees]

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[TTTennis]

If you actually do the math (pick a locality, calculate taxes, find a loan calculator, experiment with interest rates and repayment lengths) you can see 200K is serviceable even on 40K in annual income. You'll be a sad panda financially, but it's not objective ruin. I hate it when people throw around the word 'impossible'.

Yes, it may require a 30 year loan repayment plan. That's a painful pill to swallow, but there's no reason not to do it if practicing law is your goal rather than using law school as a tool of socioeconomic mobility.

Did you do the math?? Monthly payments for $200k loan, on a 30 yr. repayment plan with a 6.8% interest rate, is $1,304 a month. After taxes that $40k becomes approximately $32k. After MINIMUM loan payments you're looking at ~$16k. Do you plan on paying rent or bills, eating, or owning a car? I'm not sure where you are planning to live on the $16k/yr, but I'm assuming it's nowhere near a city? And if this is your situation for 30 years, you can maybe save what, $4/yr for retirement? Retirement would be AWESOME!

Oh well, I hope NO ONE is coming out with $200k in debt and is making $40k/yr.

[TTTennis]

Yah, I have great respect for what the dean of NU is trying to do here. It gives the idea that not every law school (or even most) are worthwhile investments much more credence when the dean of a T-14 is saying it. For whatever its worth, I think that the cutoff for schools above the 'break even' would be #70 which is about how many law schools we should have in this country anyways.

Credence? what? Why, because he is the dean of a t14? Does that somehow make him more qualified to do an economic analysis of the opportunity costs of attending law school? Or did you just see Northwestern associated with his name and automatically become impressed, and believe because he was able to get a position in the t14 his study is flawless? I'm not saying the guy isn't extraordinarily smart or that his credentials aren't impressive (because he probably is and they are), but come on. Do you ever ask questions about the validity of a study or the logic used (I'm assuming so, since you are obviously smart enough to get into a t14 yourself)?

And don't you think his information could be just a little bit biased? "Hey only go to schools that report a median starting salary (which is usually inaccurate info in the first place) of above $65k. Did I mention Northwestern's median private sector starting salary is $160k?" haha. Yea, I will gladly admit that I don't have the numbers, or LSAT at least, to get into any of the t14's and that I would LOVE to attend any of them (because they are exceptional schools), but don't run around acting like something someone coming from one of those institutions says somehow gives credence to an idea -- unless it is deserved.

FWIW, I also have respect for what he is trying to do...whether or not he did a great job is a different story.

[Connelly]

Oh well, I hope NO ONE is coming out with $200k in debt and is making $40k/yr.

While I certainly would neither do this nor encourage it, there are some other factors that make this less dire. Living with someone (like an employed significant other) could make it work. A second job could help pay the loan back faster and/or let you eat. It doesn't mean you'll be making $40k per year for the rest of your life. There are many ways to out-pace inflation. Government jobs seem to escalate in pay pretty quickly. Beyond that, government jobs could provide retirement without one having to put money away for it. IBR/loan forgiveness/i.e. making everyone else pay for it could work as well.

Again, I would classify that as "crushing debt," but if someone really wants to make it work, it's possible. I'm with you in that someone would need to take a long, hard look before even thinking about trying to make it work. Most people couldn't do it.

[sumus romani]

It is true that the Dean's analysis is deeply inadequate: having a threshold of expected salary without it somehow being compared to what people would pay in tuition. Still though, I wonder why people have not proposed a fairly simple formula that people can use which takes into account tuition payments and job expectations. The idea is that it would be a rough guide which would not hold for everyone (since some people have a sure job if they just graduate from any law school, etc.). But it would give a lot of guidance for many people. Presumably, someone could even make money off a website which included such a formula. This is not something that is particular to law school, and so would be of general interest.