Paying back loans with BigLaw salary- how long? Forum

[testmachine45]

280k in loan is too much. What is the interest rate? I assuming its about 7 percent biannually? This would take more than 10 years to pay off.

[deadhipsters]

Again, I'll have to defer to people who have experienced more in law school grading. But I will point out that my post was not meant to imply that people with similar numbers "should" do well at law schools where the average student has lower numbers. Your point on the randomness of success only takes into account undergraduate grades and LSAT score, the traditional entrance criteria. There is no way for you to take into account other factors like amount of studying, natural talent not associated with GPA or LSAT, writing skill, level of effort, or level of focus. Many of these factors are characteristics that a candidate brings with him or her regardless of school, yet are not reflected in their entrance criteria.

My point was that given the same candidate attending two different law schools, Columbia and Vanderbilt, this candidate will have a higher chance of finishing in the top of the class at Vanderbilt. You can certainly argue that difference is negligible. You can also argue that success is unpredictable. (Though, again, your argument is based only on entrance criteria). But I'm not buying the argument that any one student, given the same natural ability, level of effort, etc., has the same chances of finishing in the top half of the class at Columbia and at Vanderbilt and at Cooley. Unless the professors really do grade exams by throwing darts.

In the theoretical, yes, you're correct. But, in reality, everyone thinks that they will be above median and there is no way of knowing where you will end up until you do it.

I think when you start comparing students in the top 20 LS’s (with the exception of maybe Yale) you will see that they are all similar in terms of everything, GPA, LSAT, EC’s, WE, etc. The ones who attend better schools just have several points higher on the LSAT and in their GPA’s as I illustrated in my last post. Comparing them to Cooley students is absurd. Those students probably all scored a full 15 points lower on the LSAT and have significantly lower GPA’s. Clearly there is a difference in student caliber which will be reflected in law school performance. But at the top the difference is negligible. Which is why the argument that, “I am so smart I should go to school with those idiots at Vanderbilt so I can out perform them ” is ridiculous.

Thanks for reiterating.

Sorry your Cooley comment enraged me.

[cahesu]

haha mentioning Cooley sure excites the passions on TLS

[Letseeletsee]

If nothing else works, you can always sell a kidney.

[deadhipsters]

haha mentioning Cooley sure excites the passions on TLS

Haha. It certainly does. Especially when mentioned in the same breath as Columbia and Vanderbilt. I saw red for a moment. And then I remembered I have been at work for 14 hours and that I was just hallucinating...

[testmachine45]

You should not be in this to pay back loans...you should be in this if you like kicking ass and saving lives.

[xyzbca]

Back on topic.

Assuming the quote of $3200/month payment is correct as a monthly payment over 10 years, the outlook here is pretty bleak.

First, the Bush tax cuts are set to expire and I think Obama is going to break his "$250K households" promise which means taxes are probably going up for those in $160K bracket. Nobody knows what the tax tables are going to look like for 2011 but I'm using the predicted tax tables from this source:

http://www.fivecentnickel.com/2010/02/1 ... tax-rates/

ACKNOWLEDGING THAT I AM NOT FACTORING IN DEDUCTIONS B/C I'M TOO LAZY TO CALCULATE THIS DUDE'S TAXES, the outlook here is bleak.

The taxable income cap for FICA will almost certainly be at least $100K by the 2013 (possibly much higher).

About a month ago the WSJ was saying that NYC effective tax rate for top earners was going to be ~12%.

Federal Income tax: $47K
FICA Taxes: (at least) 7.6K
NYC Taxes: 19.2K

Total Tax liability: $73.8K

160,000 - 74,000 = 86,000

86,000/12 = ~7200

7200 - 3200 (student debt payment) = $4K for everything else.

Can somebody that has experience actually throw out some COL #'s to include things like commuting costs and food?

IMHO, too much needle threading here for this guy to pull this off. He'll have to get Biglaw AND maintain a high salary for 10 years to pull this off...

[deadhipsters]

Back on topic.

Assuming the quote of $3200/month payment is correct as a monthly payment over 10 years, the outlook here is pretty bleak.

First, the Bush tax cuts are set to expire and I think Obama is going to break his "$250K households" promise which means taxes are probably going up for those in $160K bracket. Nobody knows what the tax tables are going to look like for 2011 but I'm using the predicted tax tables from this source:

http://www.fivecentnickel.com/2010/02/1 ... tax-rates/

ACKNOWLEDGING THAT I AM NOT FACTORING IN DEDUCTIONS B/C I'M TOO LAZY TO CALCULATE THIS DUDE'S TAXES, the outlook here is bleak.

The taxable income cap for FICA will almost certainly be at least $100K by the 2013 (possibly much higher).

About a month ago the WSJ was saying that NYC effective tax rate for top earners was going to be ~12%.

Federal Income tax: $47K
FICA Taxes: (at least) 7.6K
NYC Taxes: 19.2K

Total Tax liability: $73.8K

160,000 - 74,000 = 86,000

86,000/12 = ~7200

7200 - 3200 (student debt payment) = $4K for everything else.

Can somebody that has experience actually throw out some COL #'s to include things like commuting costs and food?

IMHO, too much needle threading here for this guy to pull this off. He'll have to get Biglaw AND maintain a high salary for 10 years to pull this off...

Not to continually reiterate, but I think Columbia’s LRAP would be great solution for this guy. 3 years is nothing and if he makes less than 50k per year he will literally pay nothing. Also, factor in 1400 for a shit studio in Morningside Heights including utilities, 100 bucks for commuting, and another 400 for food/other.

[vamedic03]

Back on topic.

Assuming the quote of $3200/month payment is correct as a monthly payment over 10 years, the outlook here is pretty bleak.

First, the Bush tax cuts are set to expire and I think Obama is going to break his "$250K households" promise which means taxes are probably going up for those in $160K bracket. Nobody knows what the tax tables are going to look like for 2011 but I'm using the predicted tax tables from this source:

http://www.fivecentnickel.com/2010/02/1 ... tax-rates/

ACKNOWLEDGING THAT I AM NOT FACTORING IN DEDUCTIONS B/C I'M TOO LAZY TO CALCULATE THIS DUDE'S TAXES, the outlook here is bleak.

The taxable income cap for FICA will almost certainly be at least $100K by the 2013 (possibly much higher).

About a month ago the WSJ was saying that NYC effective tax rate for top earners was going to be ~12%.

Federal Income tax: $47K
FICA Taxes: (at least) 7.6K
NYC Taxes: 19.2K

Total Tax liability: $73.8K

160,000 - 74,000 = 86,000

86,000/12 = ~7200

7200 - 3200 (student debt payment) = $4K for everything else.

Can somebody that has experience actually throw out some COL #'s to include things like commuting costs and food?

IMHO, too much needle threading here for this guy to pull this off. He'll have to get Biglaw AND maintain a high salary for 10 years to pull this off...

4k / month = 48k / year, which is more than most teachers, police officers, firefighters, etc make... plus, every year, you will get a pay increase and some sort of bonus. Put those pay increases and bonuses towards paying off the student loans and you can be debt free around year 5, when you could easily bail to in-house or gov't.

[Connelly]

So if $280k is too much for Columbia, how about $210k (i.e., sticker)?

[LoriBelle]

So if $280k is too much for Columbia, how about $210k (i.e., sticker)?

The OP already has $80K in undergraduate student debt. $210K, being 25% less, is 25% less frightening to me. It's still pretty frightening, but somehow not quite so much. $280K just sounds astronomical. Loan payments on $210K would be about $10K/year less than payments on $280K...thus $10K/year more to live on if need be.

[dogmatic slumber]

So if $280k is too much for Columbia, how about $210k (i.e., sticker)?

Amen. $280k may sound like doom, but sticker at a top school isn't too far behind. Also, I think we can safely assume that a lot of people paying sticker and relying on loans (i.e. a healthy percentage of entering law students; would be interested to know roughly what that percentage is) are also carrying *some* undergraduate or other debt, which will narrow the gap. I think TCR is that $210k+ is not necessarily too much, for reasons discussed in this thread, but it's also not a whole lot more comforting than $280k.

[TTH]

Two years of bonuses at Wachtell and you're in the clear, OP. Don't sweat it.

[testmachine45]

280k with interest over 10 years means you better make partner.

[testmachine45]

Cooley - doesn't mean jack shit. you can still file the same papers we all can. and you can still be a kickass plaintiff's attorney. c'mon, you're gonna give up on life if you go to Cooley? give me a break.

[dominkay]

So if $280k is too much for Columbia, how about $210k (i.e., sticker)?

The OP already has $80K in undergraduate student debt. $210K, being 25% less, is 25% less frightening to me. It's still pretty frightening, but somehow not quite so much. $280K just sounds astronomical. Loan payments on $210K would be about $10K/year less than payments on $280K...thus $10K/year more to live on if need be.

Is the increased earning potential coming out of Columbia worth $10k/yr? Hint: YES IT IS

You are giving terrible, terrible advice.

[testmachine45]

So if $280k is too much for Columbia, how about $210k (i.e., sticker)?

The OP already has $80K in undergraduate student debt. $210K, being 25% less, is 25% less frightening to me. It's still pretty frightening, but somehow not quite so much. $280K just sounds astronomical. Loan payments on $210K would be about $10K/year less than payments on $280K...thus $10K/year more to live on if need be.

Is the increased earning potential coming out of Columbia worth $10k/yr? Hint: YES IT IS

You are giving terrible, terrible advice.

I don't know...after apartment($1200), taxes, and loan paybacks, you're looking at 38k in your pocket....though your salary increases.

EDIT: Which is about the same as making 80k a year. That is, you're after tax, after apartment income in NYC is not that much higher but it is higher. Going to law school will not give you a huge financial boost.

Also my loan paybacks assume a 7 percent rate, which I think is generous. Isn't it like 8-8.5?

[BunkMoreland]

More and more it seems like NY BIGLAW is such a rip-off compared to other cities

[270910]

More and more it seems like NY BIGLAW is such a rip-off compared to other cities

If you look through old guides, you'll see tons of NYC associates bitching about that. They thought they were underpaid

[xyzbca]

So if $280k is too much for Columbia, how about $210k (i.e., sticker)?

The OP already has $80K in undergraduate student debt. $210K, being 25% less, is 25% less frightening to me. It's still pretty frightening, but somehow not quite so much. $280K just sounds astronomical. Loan payments on $210K would be about $10K/year less than payments on $280K...thus $10K/year more to live on if need be.

Is the increased earning potential coming out of Columbia worth $10k/yr? Hint: YES IT IS

You are giving terrible, terrible advice.

I don't think the advice is so terrible. It really comes down to tolerance for risk.

Just using the #'s from earlier in this thread:

@ CLS he has a 54% chance at NLJ250 with the downside being that he'll be in a really, really bad spot if he doesn't make it.

@ Vandy he has a 47% chance at NLJ250 with the downside being not nearly as horrendous if he doesn't make it.

Assuming he takes on an additional $15K/year in debt coming out of Vandy, he's basically looking at a 46% chance of being stuck with $280K against a 53% chance of being stuck with ~$130K in debt.

It basically comes down to tolerance for risk.

*edit for missing word

[lostjake]

You guys realize that people usually only stay in biglaw ~3 years right? Something to consider in your hypos...

[LoriBelle]

Yes. And this was also based on the assumption that OP could get significant $$$ at Vandy, as others with his numbers did. From what I can tell, OP did not apply outside the T14...but I could be wrong. Again, as I said, I'm quite risk-averse.

The real question is, is the career situation coming out of CLS (53% in NLJ250, probably living in a high COL area) so superior to that of VLS (47% in NLJ250, probably living in a more moderate COL area or NYC if you want I guess) that it is worth $14-22K per year? That's a gamble OP is going to have to make. It also largely depends on where OP thinks he is headed career-wise.

It's also true that many cannot thrive in the stressful BigLaw environment and leave after a few years. If OP goes high-debt, he may be stuck in a job he hates for a long time. I also think people underestimate their ability to live frugally when they're plugging away at 80+ hour weeks.

My advice is not bad per se; it just represents a value system different from some other people's.

[lostjake]

Yes. And this was also based on the assumption that OP could get significant $$$ at Vandy, as others with his numbers did. From what I can tell, OP did not apply outside the T14...but I could be wrong. Again, as I said, I'm quite risk-averse.

The real question is, is the career situation coming out of CLS (53% in NLJ250, probably living in a high COL area) so superior to that of VLS (47% in NLJ250, probably living in a more moderate COL area or NYC if you want I guess) that it is worth $14-22K per year? That's a gamble OP is going to have to make. It also largely depends on where OP thinks he is headed career-wise.

It's also true that many cannot thrive in the stressful BigLaw environment and leave after a few years. If OP goes high-debt, he may be stuck in a job he hates for a long time. I also think people underestimate their ability to live frugally when they're plugging away at 80+ hour weeks.

My advice is not bad per se; it just represents a value system different from some other people's.

They're usually asked to leave, they don't leave on their own. The real question should be 'Can I pay my loans off in three years' and the answer is no, he can not. Salaries usually run something like this: 160 160 160 50 60 75 90 100 100. Run those numbers in a calculator even with vandy loans with 70k in debt and it will be disheartening.

[spondee]

They're usually asked to leave, they don't leave on their own. The real question should be 'Can I pay my loans off in three years' and the answer is no, he can not. Salaries usually run something like this: 160 160 160 50 60 75 90 100 100. Run those numbers in a calculator even with vandy loans with 70k in debt and it will be disheartening.

Did you just make these up? They're not right at all. At the very least the three years in Biglaw are wrong; associates do get raises. And the drop to 50K is way too steep for most things people exit into from Biglaw.

[go4hls]

They're usually asked to leave, they don't leave on their own. The real question should be 'Can I pay my loans off in three years' and the answer is no, he can not. Salaries usually run something like this: 160 160 160 50 60 75 90 100 100. Run those numbers in a calculator even with vandy loans with 70k in debt and it will be disheartening.

Did you just make these up? They're not right at all. At the very least the three years in Biglaw are wrong; associates do get raises. And the drop to 50K is way too steep for most things people exit into from Biglaw.

+1

And I'll say this again: on a BigLaw salary, OP can pay off 280k in 4 years, if OP is willing to live on a 40k-a-year budget in NYC. Also, why does everyone assume that you can only pay 10% of your income on the loans?? You can pay as high a percentage as you want!