Law school, a ticket to economic security? Forum

[REALLYBIGLAW]

Law school, a ticket to economic security? Better run the numbers
The National Law Journal
December 12, 2011

http://www.law.com/jsp/nlj/PubArticleNL ... slreturn=1

You've graduated from law school. You've landed a job as an attorney. Now you want to buy a house and cement your status in the professional class.

But can you afford it? Probably not — unless you can count on earning three times your annual tuition, assuming you're borrowing the money.

That's according to University of Louisville Louis D. Brandeis School of Law Dean Jim Chen. In an academic paper, "A Degree of Practical Wisdom: The Ratio of Educational Debt to Income as a Basic Measurement of Law School Graduate's Economic Viability," Chen uses qualification for a home loan while paying off student debt as a measure of whether a legal education makes economic sense. (click link for the rest of the article)

[superbloom]

Good thing I want to rent.

[Grizz]

Dawg I'm living with my parents.

[prezidentv8]

Dawg I'm living with my parents.

AWW YEAH

[BeenDidThat]

So if you get biglaw, you're good at most skoolz. And if you don't, you can't buy a house out the gate. So sad. You know, I thought bright 25 year olds were guaranteed the right to buy a house. My mind is blown.

Cool story bro.

[neimanmarxist]

You know, I thought bright 25 year olds were guaranteed the right to buy a house. My mind is blown.

occupy wall street.

[bk1]

Gotta cement yo place in dat professional class.

[071816]

[neimanmarxist]

also,

Chen paper is slated to appear in a future edition of the William Mitchell Law Review, he said.

nobody on this forum is ever going to buy a house, I guess.

[BeenDidThat]

You know, I thought bright 25 year olds were guaranteed the right to buy a house. My mind is blown.

occupy wall street.

OCCUPYIVORYTOWER

[kapital98]

You know, I thought bright 25 year olds were guaranteed the right to buy a house. My mind is blown.

occupy wall street.

OCCUPYIVORYTOWER

THANK YOU!!!

Keep on racking up the debt. Is there a maximum cap on gov't loans? $20,000 in lump sum loans + going to school is pretty damn appealing to me.

Especially if you have wealthy relatives.

[ignatiusr]

I know a little about the law school at Louisville (I'm from the area), and I can tell you that the relative value of the school is one of their most consistent selling points. Professors/recruiters from UL always point out that it's a top-rated "value school." I'm not suggesting that Dean Chen is misrepresenting his numbers, but his research is likely tailored to a fairly narrow agenda. What to do if you're a talented student looking at an expensive t14/25 school with little or no scholarship? If you want to buy a house, apparently, you should opt for a scholarship from a low-cost school like UL instead.

[dixiecupdrinking]

Seems like a load of horseshit. Why should the amount you make need to be a linear function of how much your tuition is?

The person who graduates with $48,000 in debt and makes $48,000 a year is going to be living worse than the person who graduates with $144,000 in debt and makes $144,000 a year.

According to the finaid.org loan calculator, $48k in debt is a $552/month loan payment. You make $4,000 gross a month. That's $3,448 pre-tax, post-loan payment.

$144k in debt is a $1,657/month loan payment. You make $12,000 a month gross. That's $10,343 pre-tax, post-loan payments.

Yeah then you pay more in taxes yadda yadda. But there is just no way I can see this being a defensible method of calculating anything meaningful.

[IAFG]

$144k in debt is a $1,657/month loan payment. You make $12,000 a month gross. That's $10,343 pre-tax, post-loan payments.

Yeah then you pay more in taxes yadda yadda. But there is just no way I can see this being a defensible method of calculating anything meaningful.

You pay taxes on your student loan payments too

[dixiecupdrinking]

$144k in debt is a $1,657/month loan payment. You make $12,000 a month gross. That's $10,343 pre-tax, post-loan payments.

Yeah then you pay more in taxes yadda yadda. But there is just no way I can see this being a defensible method of calculating anything meaningful.

You pay taxes on your student loan payments too

Yeah okay. I still just don't see any way the higher debt, higher income person doesn't have significantly more money left over.

If you take home $90,000 post-tax on $144,000, that's $7,500 a month, minus $1,657 is $5,843. Your take home after taxes and after loan payments is still higher than the $48k graduate's pre-tax, pre-loan payment income.

I hope there's more nuance in the actual journal article because this seems boneheaded to me.

Christ I need to go study something.

[AreJay711]

I could happily live off 30K post-tax post-loan. Most law school grads can swing that.

[IAFG]

I could happily live off 30K post-tax post-loan. Most law school grads can swing that.

Sure, as long as you never plan to reproduce. Or save for retirement. And your health insurance is subsidized.

[AreJay711]

I could happily live off 30K post-tax post-loan. Most law school grads can swing that.

Sure, as long as you never plan to reproduce. Or save for retirement. And your health insurance is subsidized.

Eh, I've lived on less (though in MD we can stay on our parents health insurance until we are 26) and if I have kids I like to imagine my SO would have a job. My gf makes 27k as an assistant manager at a retail place so not living in NYC that is pretty comfortable. Contrary to TLS belief you don't need a shit ton of money to be happy.

That doesn't make a law degree a very good investment but ending up with a wash isn't the worst thing in the world.

[IAFG]

I could happily live off 30K post-tax post-loan. Most law school grads can swing that.

Sure, as long as you never plan to reproduce. Or save for retirement. And your health insurance is subsidized.

Eh, I've lived on less (though in MD we can stay on our parents health insurance until we are 26) and if I have kids I like to imagine my SO would have a job. My gf makes 27k as an assistant manager at a retail place so not living in NYC that is pretty comfortable. Contrary to TLS belief you don't need a shit ton of money to be happy.

That doesn't make a law degree a very good investment but ending up with a wash isn't the worst thing in the world.

I just see people batting around numbers here for "what they could live on" that don't take into account grown-up expenses like health insurance, car insurance, retirement savings... then if you buy a house that can be a big expense too, and I am not just talking about the mortgage. What you can afford to live on at 23 is a lot different than what you need at 35.

[indo]

You know, I thought bright 25 year olds were guaranteed the right to buy a house. My mind is blown.

occupy wall street.

OCCUPYIVORYTOWER

Occupied White House and Capitol Hill.lol

[luthersloan]

I could happily live off 30K post-tax post-loan. Most law school grads can swing that.

Sure, as long as you never plan to reproduce. Or save for retirement. And your health insurance is subsidized.

Eh, I've lived on less (though in MD we can stay on our parents health insurance until we are 26) and if I have kids I like to imagine my SO would have a job. My gf makes 27k as an assistant manager at a retail place so not living in NYC that is pretty comfortable. Contrary to TLS belief you don't need a shit ton of money to be happy.

That doesn't make a law degree a very good investment but ending up with a wash isn't the worst thing in the world.

I just see people batting around numbers here for "what they could live on" that don't take into account grown-up expenses like health insurance, car insurance, retirement savings... then if you buy a house that can be a big expense too, and I am not just talking about the mortgage. What you can afford to live on at 23 is a lot different than what you need at 35.

It does not make sense to save for retirement when you have loans with an interest rate of 8 percent. Also, you don't need a car if you live in NYC. Health care expenses will depend a lot on your type of employment, but might not be that bad. If you really have no change in your lifestyle, the amount of money you will need to spend at 35 will not be that much greater then the amount you need to spend at 23, it is just that not that many people are happy with that. They want to have kids, or buy stuff, or take vacations and so forth.

[IAFG]

It does not make sense to save for retirement when you have loans with an interest rate of 8 percent.

But that's exactly the point, isn't it. If you can't afford to provide for "life" then your life plan is fail.

Also, you don't need a car if you live in NYC. Health care expenses will depend a lot on your type of employment, but might not be that bad.

Have you looked at what health insurance costs recently? Even if your employer subsidizes (and many in law don't at all or don't very much) it's expensive as fuck in the U.S.

If you really have no change in your lifestyle, the amount of money you will need to spend at 35 will not be that much greater then the amount you need to spend at 23, it is just that not that many people are happy with that. They want to have kids, or buy stuff, or take vacations and so forth.

You sound dumb young.

[luthersloan]

You know, you could have responded without being a prick. Not being able to save for retirement is fine so long as you can pay down your loans in a reasonable time frame, say 10 to 15 years, as that will still leave you with 20 years or so to build up retirement savings.

Health care really will be contextual, but yes in many cases it will increase your expenses significantly, hence my use of the word "might".

[lexdiamonds]

Sure, as long as you never plan to reproduce. Or save for retirement. And your health insurance is subsidized.

Eh, I've lived on less (though in MD we can stay on our parents health insurance until we are 26) and if I have kids I like to imagine my SO would have a job. My gf makes 27k as an assistant manager at a retail place so not living in NYC that is pretty comfortable. Contrary to TLS belief you don't need a shit ton of money to be happy.

That doesn't make a law degree a very good investment but ending up with a wash isn't the worst thing in the world.

I just see people batting around numbers here for "what they could live on" that don't take into account grown-up expenses like health insurance, car insurance, retirement savings... then if you buy a house that can be a big expense too, and I am not just talking about the mortgage. What you can afford to live on at 23 is a lot different than what you need at 35.

It does not make sense to save for retirement when you have loans with an interest rate of 8 percent. Also, you don't need a car if you live in NYC. Health care expenses will depend a lot on your type of employment, but might not be that bad. If you really have no change in your lifestyle, the amount of money you will need to spend at 35 will not be that much greater then the amount you need to spend at 23, it is just that not that many people are happy with that. They want to have kids, or buy stuff, or take vacations and so forth.

LMAO good luck surviving in NYC on 30k. Even cops and MTA workers make 50k in this city and they can't afford to live here.

If you're planning on paying back your loan in 10 years you're talking 1750 a month at least. Factor in rent (which is around the same per month as your student loan), utilities, transportation and bills and you haven't got much of anything left over. Hell, you may not have anything left over and end up in the red at the end of the month.

[luthersloan]

The 30K figure posted above was post loan payments. If you lived with two roommates in Brooklyn you could live on that, who would want too, but you could do it.