<p>How in the hell does one manage his/her debt after graduation? Just based on the fact that the average indebtedness of law graduates is about $80k plus undergrad and/or graduate debt, how can one recover financially from that? This scares me. Additionally, could debt affect employment opportunities at law firms post graduation?</p>
<p>well, if you graduate from a t20 and go to a job that pays 130K, you'll gross about 100K. Put 40K/yr. into your loans for the first 2 years you are employed and BOOM, youre done! </p>
<p>it may suck that for the 1st 2 years after busting your asss in law school, you have to pay 40K of your salary to loans, but youll get over it.</p>
<p>Plus, you'll still have 60K/year to spend durin those 2 years....thats not that bad for a 25 year old.</p>
<p>Umm...thanks GoldenBear10; however, how credible are you? Is this a testimonial indicating that you've done just that? Without offense, I would like a response from someone who has finished law school, embarked on a career in law or what have you, and has had to handle such a crisis (yes, debt is a crisis). Members such as lskinner, sallyawp, greybeard, jonri, etc. Thanks though GoldenBear10.</p>
<p>... GB: Hello, taxes?</p>
<p>oh sorrry, i meant after grossing 130K, you'll net about 100K.</p>
<p>And fizzle, why do you have to ask someone who's gone through this? Dont the numbers speak for themselves? Some things just dont need "personal testimonials."</p>
<p>
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oh sorrry, i meant after grossing 130K, you'll net about 100K.
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That's my point. Hello... *actual *taxes, not happy-land taxes?</p>
<p>
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why do you have to ask someone who's gone through this?
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Because of that.</p>
<p>I ask for someone who has experienced this because I don't believe it's just that simple. Take for instance someone who has a family to provide for, a car note to pay, (if living in a house) rental/mortgage, medical expenses not covered by insurance, and other financial obligations. Sure theoretically it seems just about right to be able to pay off all loans within a few years of practice; however, the theory fails to take into account other barriers as aforementioned. </p>
<p>But anyway, your response makes me feel a bit more secure about this whole thing because I do indeed plan to enroll into a top 20 school and persist a job that compensates a high, six-figure salary (just so I can tackle those damn loans).</p>
<p>Akafizzle, sallyawp has addressed this in the following thread <a href="http://talk.collegeconfidential.com/showthread.php?t=329111%5B/url%5D">http://talk.collegeconfidential.com/showthread.php?t=329111</a>. Have fun! :)</p>
<p>"That's my point. Hello... actual taxes, not happy-land taxes?"</p>
<p>Alright smartass bluedevil......</p>
<p>If youre single, your tax rate when making 130K is 28%....thus your grossing about 94K.</p>
<p>So, when I said you'll net "about 100K," I was completely on target.</p>
<p>Sales taxes. Property taxes. Payroll taxes. State taxes.</p>
<p>Fine, let's do the actual exercise.</p>
<p>Federal taxes paid would be $30,731 (since brackets are graduated).</p>
<p>Say you live in California and rent rather than own a place. Suppose that you're employed rather than an entrepreneur, and suppose further that you never make a single purchase on anything. Your California income tax is $9,961.35. Payroll taxes (~6.2%+1.45%) are $8,085.</p>
<p>Your post-tax income under these very generous assumptions (no purchases, ever) is thus $81,222.65. Payroll taxes double if you are self-employed and property taxes increase if you own a place.</p>
<p>(Frankly I'm already suprised at how high this number is. I had expected a net income of around $70K.)</p>
<hr>
<p>And this is only the most obvious criticism. I'd be shocked if anything close to the majority of T20 law students land $130K offers, for example. Or if you actually managed to find an interest-free loan.</p>
<hr>
<p>This is why the OP was exactly right to ask for someone who's actually been through it -- because those who haven't are liable to not realize how many different financial pressures people face. (Goodness knows I don't.)</p>
<hr>
<p>On the bright side, think of the alternative: you could try to go to medical school.
<a href="http://talk.collegeconfidential.com/showthread.php?t=307704%5B/url%5D">http://talk.collegeconfidential.com/showthread.php?t=307704</a></p>
<p>
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How in the hell does one manage his/her debt after graduation?
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</p>
<p>First of all,the idea that you will live austerely and pay off the debt fast is usually just a fantasy. As someone else pointed out, expenses come up that need to be paid. Also, after finally obtaining a good paying job, it's really hard to avoid the temptation to increase your standard of living. Particularly if you are married or soon to be married. For example, many law graduates with jobs decide that they want to buy a house. Usually that entails saving and spending many thousands of dollars. </p>
<p>In my case, I was married after taking the bar and started having kids shortly thereafter. So paying off student loans took something of a back seat. </p>
<p>
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Just based on the fact that the average indebtedness of law graduates is about $80k plus undergrad and/or graduate debt, how can one recover financially from that?
[/quote]
</p>
<p>If you incur $80k in debt, the monthly payment will be about $1000. That's roughly $12,000 per year after taxes. So if the law degree adds $20k or so to your earning power, the obvious solution is to just suck it up and make the monthly payments.</p>
<p>The bigger problem is if the degree doesn't enhance your earning power all that much. For example, what if you go to a lower tier law school and the best job you can find pays $50k per year? A smart college grad can easily get a sales job that pays $50k per year. </p>
<p>It seems to me that before entering that situation, you need to ask yourself how important to you it is to be a lawyer. If you really really want to be an attorney,you can always hang out a shingle and go into forbearance (or possibly even default) until you can afford to pay $1000 per month. I believe you get 3 years of forbearance pretty much automatically.</p>
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This scares me.
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</p>
<p>It scared me too. When I graduated law school 10 years ago, I had about $60k in debt. Even with some help from my parents, I am still making student loan payments today. </p>
<p>
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Additionally, could debt affect employment opportunities at law firms post graduation?
[/quote]
</p>
<p>I doubt it. Why would it? If anything, law firms ought to prefer new hires who have a lot of debt because they will be less likely to up and quit after a short while. In any event, no employer ever asked me about my debt situation.</p>
<p>Akafizzle,</p>
<p>My personal experience on this subject is too stale to be of any use. People get angry when I tell them how low the tuition was at Boalt when I started.</p>
<p>My monthly student loan payments were within a couple of dollars of the amount of my first monthly car payment. I paid them over over a nine-year period.</p>
<p>$80K in debt is manageable if you have a job that pays $130K, but far from everyone gets a job that pays that much.</p>
<p>I really like practicing law. But if I were 22 again, and thinking about taking on $80K or more in debt to go to law school, I'm not at all sure that I would go.</p>
<p>This is one reason why it's as important to look at loan forgiveness programs as it is to look at the actual cost of law school. </p>
<p>Right now, there's one proposal in Congress which would allow state prosecutors up to $60,000 in federal loan forgiveness. It would help a lot if it passes. The US attorneys already have a similar program.</p>
<p>Some students agree in advance to join the military as lawyers after graduation. JAG is a good program. </p>
<p>Some top law schools have very good loan forgiveness programs. Take a public interest type job paying less $ and the school will forgive a portion of your loan or even make the payments for you. So, some students choose schools which have such programs, so that they will be free to choose a less lucrative career. </p>
<p>Some students accept merit $. Contrary to what some folks here think, this isn't limited to the very best students. If you are willing to go a bit lower down the totem pole, it can mean less debt. </p>
<p>Some students work for a few years between college and law school and live very frugally, so that savings can cover part of the cost.</p>
<p>Some students go to night law school.</p>
<p>Some students work during law school. My own favorite law student (a/k/a my kid) worked all but one semester during law school. This does mean passing up some opportunities, but work experience is good to have too.</p>
<p>And lots of people stretch those payments out over 15 years or more.With inflation and the natural progression in earnings most people experience, payments further down the road are usually less onerous than they are the first few years.</p>
<p>There's no one right way to do it.</p>
<p>As Jonri pointed out, if you are willing to drop in the rankings you may be able to pick up some merit money. In my case, in very rough terms, it worked out that for every five spots down the rankings I picked up another 33%-tuition merit money.</p>
<p>Are there any outside scholarships offered for law students?</p>
<p>Top Tier School = Debt</p>
<p>Law degree wages (<.>)Long Term Debt</p>
<p>You can go through law school with no debt. I am doing just that. I am not going to the best school that accepted me; I am going to the best school that gave me a full ride. I am not borrowing money to live on; I saved before hand. I don't blame others for borrowing money, but to say you have to is inaccurate.</p>
<p>akafizzle: if you are really serious about going into Big Law I really don't think you should worry too much about the debt. I've said this before to many people who were looking to go into i-banking/biglaw that you should avoid reading the advice of mass-market self-proclaimed "personal finance gurus" who really don't understand the type of money to be made nor the level of prestige an opportunities such jobs afford you. </p>
<p>I'm not a lawyer, I'm in finance (hedge fund) but the numbers are similar. I took on a lot of debt for college, I could've gone to a lesser school for free but instead I wasn't going to let the lack of money at a young age stop me from going to a school that opens up a lot of doors. If you work in BigLaw or I-Banking and your goal is to get rid of your student loans you can likely pay them off within a year or two after graduating. I had over $80k in loans after graduating (undergrad) but received just about that much in my first year's bonus check. Then it was double that the next year. I consolidated my loans and locked in a very low rate so I have no intention of paying them off early (I pay just 3% interest) but if I want to I could easily write a check for the whole amount without blinking. Not trying to be cocky, I'm in my late 20s so have been working for a while and just trying to say that if I had gone to a lesser school for free I know my chances of being where I am and making the money I make would have been very slim. Wall Street, just like Big Law, still focuses heavily on the prestige factor of a school. If your goal is to work there going to a good school is the single biggest thing a young person can do to make their chances strong and if you get there the student loan debt will eventually look like a fairly small amount of money.</p>
<p>1.) Don't forget that young lawyers will be about three years older than you when they begin earning income.</p>
<p>2.) It sounds vaguely like your income -- at least after the first year -- is considerably higher than that of most young lawyers.</p>
<p>3.) Oh, yeah -- congratulations. (No sarcasm.) Obviously you've landed a nice job and excelled in it.</p>
<p>Well, as the cost of attendance for law school increases every year (not to mention interest rates, but I won't go into that), do salaries increase relative to the increase of school costs? For instance, the cost of attendance for Columbia Law is relatively $60k a year. By the time I enroll into law school, which is 3 years from now (provided I complete my Master in Finance program), I'm sure the cost for Columbia Law would have increased greatly--probably to almost $70k. So do salaries increase relative to the increase of school costs?</p>