To those of you planning to assume law school debt in the six figures:

How do you rationalize your decision? Even with the federal government's new Public Service Loan Forgiveness Program, you would have to commit yourself to working ten years in public service to eliminate the debt. And even if you plan to work in public service until the day you die, you must know that factors outside of your control can affect your life in a way you did not anticipate.

I'm not writing this to be critical. I actually want to understand why so many people are willing to pay so much. Mainly, I am trying to decide if I should ED at a school, knowing that (if accepted) I cannot expect any scholarship money.

Debt is a part of life in America. We learn from our government.

Is this smart? No. Rational? No. Reality? Yes.

Here's a very rough calculation that I would use to justify massive law school debt:

Suppose I can make $30k a year with my BA in liberal arts, which is $24k net (after taxes). I would give up this income and pay $50k in tuition/books for each of 3 years of law school, making my opportunity cost roughly $225k. Living expenses are not counted since I would incur them whether I worked or went to law school. Suppose my law career spans 40 years (graduate at 25, retire at 65), and I spread out my loan payments over that time. This means I pay about $19k in loan payments per year. So law school debt would be worth it if I can take home at least $19k more per year than without a JD, which is $43k net or about $61k gross.

I already decided that I'm not going to assume a large debt. Why? I don't want the ball and chain that is lifelong loan repayment.

If I don't get money at a T14, I'm going to my local (barely) T1 flagship for cheap. I will avoid soul-crushing loans at all costs.

PS- Halibut, I love the avatar. Jeff Buckley is my Elvis.

What's more shocking to me is that students are willing to shell out $200k+ to attend undergrad at the likes of an Ivy League school. With few exceptions, I don't see how it could possibly be worth it when graduate education seems necessary for most to land a lucrative job.

I wouldn't recommend ANYONE spend more than 50-70k TOTAL for a non-T14 JD. ITE, even T14 is a shaky proposition.

The housing crisis should have sent a clear message that taking on huge loans on a bubble asset is a bad, bad, idea. It is bad for the debtor, and it is bad for society.

From a purely economic perspective:
Will the boost in lifetime earnings from going to law school (or going to a better law school) exceed the opportunity cost and debt from doing so? If yes, then it is a good investment, if not then it isn't.

Going to a cheaper school with worse job prospects is often a much riskier decision financially than going to a more expensive school with better job prospects. Unlike undergrad, the difference in outcomes from going to a school ranked top 3 vs top 30 or going to a top 15 vs top 100 is staggering.

Of course for most people it is more than an economic decision. If practicing law is what they want to do for the next 30 or 40 years then $100 or $200k is not that much money, especially if paying that money means the difference between going to a decent school and being able to get a job or not.

As a business major, I view this as a simple financial equation:

My estimated income upon graduation is $70k per year (biz major and I know ppl).

Estimated income upon graduation from law school: $160k per year

Extra 90k EBT per year (Earnings Before Taxes). While I could do all the calculations and such using Net Present Value, etc. the point is that after about 4 and 1/2 years the benefits of going to law school outweigh the costs (both opportunity and realized).


That, of course, assumes two things. 1st that I will get a 160k law job. While I know that that is anything but certain, I believe that if you are in the top 30% of a t-25 you can probably find a biglaw job. Also, it should be noted that a less than 160k job is also worthwhile, it just takes longer for the investment to be realized.

2nd assumption: I could not have gotten a job at Goldman Sachs. If I could have I could be making 180k straight out of undergrad. Problem is, if I had not been focusing on law, I might have been able to get a job there… but then I would have to sell my soul . So it is all good.

A part of the calculation the apparently debt averse on TLS seem to forget. $40k in debt can be pretty annoying anchor when you can't find a job after getting a budget law degree. I'm not saying going to the "best" lawschool is the right play, just that the calculus has to include the likelihood of a finding employment.

Most "budget" school grads will find jobs if they want them. They just won't be making $160k (or even $120k, or $100k). But choosing $40K in debt and a $40k/yr job with potential for future growth isn't necessarily a worse idea than choosing $150k in debt and a $160k job.

I disagree with this. Admittedly, it would likely take the student the same amount of time to pay the loan off as the one with the $150k debt, considering that each pays the same percentage of their loans off per month, but the one with the larger debt/salary will enjoy a much higher disposable income, which is what we all want.

I think you see here what the issue is. It's as if there is no difference betweeen 100K or 200K in debt. A few years back, articles were written not able to understand how people could handle $80K in debt. Now, eh, 100, 200, what's the difference. There's this credit mentality that has people, once they get above a certain level of 'can't afford', just willing to climb endlessly - and so tutions have spiked taking advantage of that. This is how the housing market went - one day, people are haggling between $175K and $190K, a couple years later, prices are so overblown people are haggling between $1.1 and 1.2 mil. The value of $15K vs 100K hasn't changed, but it's just something that happens as numbers get beyond reasonability - people just say, what the heck, it's all more than I'll have anytime soon, 1.1 mil, 1.3, whatever - when what is in between is possibly all they should really be borrowing.

Just like with housing the general idea is that it is better to buy than rent applies that it is better to have a good law degree than a poor one, but like when I went to buy a house a few years ago the market was so overpriced that there is no good decision to make. I would say just get the best degree you get a good scholarship for, but then again, having the right degree is more important than ever with competition worse than ever. I've done a more than a bit of hiring - and being hired - and when you get that resume with the right school on it, you almost automatically interview the person, and you do view them differently - and honestly, they tend to come better prepared/qualified. You get a boost in chances to interview and desire to hire you. Also, getting beyond entry jobs - there is a cieling for many jobs. To break through from mid-level to top-level, you have to interview with Boards or Administration or Partners, and from my experience, they basically all went to the right school, and they still talk about it and it does matter where you went. It is like a closed fraternity/sorority. I just saw a person with very little experience in the field, who sucked A$#$ and was an abysmal person, get a senor level job wit one of the top non-profits in the country - with only a few years of non-profit experience. Why? They had a USC JD, and in this town, that's balls.

So it all depends on career goals. For me, I either want to obivously be a lawyer straight out, but also have the option to run a non-profit, using the experience I have. If I can combine my experience with the right law degree, I can very likely get to run a non-profit/move up quickly at a law firm. From my experience, if I get a medium-grade degree - that's what my career will be.

Fortunately the math may be a little kinder to me - with my background, adding the right JD can instantly bump my already solid salary easily another $30-50K a year, or more. Of course, who knows what the economy will do, but senior-level non-profit positions will exist somewhere, and running one pays more. So I'd say a min of $15K takehome extra per year out of the gate, likely more, not to mention a much better career role - and all o fthis just as a backup if going straight into law doesn't work out. It's still not pleasant to do that much debt, nor reasonable, but for me at this point in my career, the math seems to be there.

And just to hit one last point I briefly mentioned above - going to the right school does apparently prepare people better. It's not just about being able to better get the interview, or having that name on your resume. There usually is a reason those schools have those reps - they tend to turn out people who are better prepared/truly a step above.

What amazes me is that people assume that if one goes to a particular law school one will excel and make $160k a year, as a guarantee. Even with the most conservative planning and thoughtful estimation of starting salary and COL after graduation (which, assuming a $160k starting salary is NOT conservative), a bad economy or unforeseen life events could make obtaining that job extremely difficult or undisirable. People don't seem to consider these things.

I also see a parallel to home buying when it comes to choosing a law school. So many people want to get into the biggest one with all the bells and whistles, in a great neighborhood with the best schools. They take on a mortgage that they can just make, but when something unforseen happens and they lose a job or have to settle for a lower salary, their only contingency plan is utter failure and financial ruin because there's no cushion. There has to be some kind of contingency plan that doesn't just involve defaulting, especially since ed debt stays with you.

Not saying that $100k+ debt is a bad idea for everyone, because it could work out for them. But I think many more people will be burned.

I am torn between this and EDing at UVA. I am not sure I am that good of a candidate for RD at most T14s and I could go to UNC for cheap. Ultimately I know I want to do public interest though, so public interest repayment options weigh heavily into my decisions.

I too want to do PI. However, I have a quirky opposition to being tied down to anything. Whether it's PI for 10 years or biglaw for a few, I don't like anything that limits my options. I realize going to a school outside the T14 is limiting in itself, which is why I'll be banking on money.

There's going to be fewer and fewer $160K jobs in the next 3-4 years, even in BIGLAW. Having a biglaw name on your resume now doesn't guarantee that type of cash anymore. A lot of firms have already moved to $145K and 130K, or some figures around there. The big big boys will likely remain at $160 in the short term, but the lockstep model is slowly crumbling (as many in the V25-100 have already done away with lockstep or adjusted their payscales). If you honestly think you can land a biglaw job, I'd really budget expecting to make $130K, and then be pleasantly surprised if you wind up with something better.

Big difference between getting a mortgage you can't afford the monthly payment on becuase you are speculating you can flip the house in a few years for a big profit and getting a degree that increases your earning potential by 3x or more. It all depends on what school you are talking about. For some $200k is a good investment, for some $100k, and for others it is not worth anything. For the financial benefit you get, paying full tuition and COL at Yale is a huge bargain. Paying anything to go to some law schools is a waste of money.

Paying more to go to a law school that provides better opportunities makes sense if the value of the add'l opportunities you get is more than what extra you are paying.

If you are trying to figure out how much you can afford to borrow for law school (or a house or whatever) you need to look at some potential bad outcomes not just the best case scenario and have a workable plan for that, not just the best case "I will keep getting raises and house values will go up" or "I'll make $160 when I graduate and will be able to stay in big law as long as I want."

If one really wanted to be a lawyer because they thought they'd enjoy the work, it would make sense have less disposable income then to work in a job they didn't like for more money. And, there is real growth potential for JD's outside of the market-paying biglaw firms. 10 years out, a JD that started making $40k could be making $160k once they have a client base and some expertise, but only a few 1st yr biglaw associates will stick around and make income partners. Most instead just "buy" back more of their free time and keep incomes flat.

Thank you! This point usually gets lost in the shuffle. It would have been unwise to say as much to the admissions office, but my Fordham degree is not worth $200,000. If I were to calculate its true value, including things far harder to quantify than lifetime earning potential, I might hit a number with an extra zero on the end. It is difficult to imput life satisfaction or "utils" of happiness on a spreadsheet. For what I'm personally getting out of this, $200k is a bargain.

I'm not being facetious, nor have I taken on this debt without a plan to pay it back. IBR (graduated payments), loan forgiveness, and my school's LRAP will take care of at least three quarters of my debt (these numbers work just fine for calculation in Excel). There is also some discussion that I may inherit this sum from my grandfather's estate, but it would be unwise and kind of disgusting to count on something like that. My grandfather is 90 years old, and I hope he makes it to 100... he just made a profile for himself on Facebook.

Tell gramps to fork it over while he's stil alive. Tell him via Facebook.