From high T3 with full ride to T14

[nataliabalia]

I have a full tuition scholarship to a high T3 law school worth 44k per year, however I don't want to stay in the region after graduation. I am fairly sure I want to join the Army JAG Corps with a 4 year contract after graduating, which has a loan repayment plan that will pay off all of my undergraduate and graduate loans (living expenses), leaving me debt free. My concern is that after the 4 year contract is up, I might have trouble finding a job anywhere other than New York State, especially considering the bad reputation my school is getting for being pricey yet turning out unemployed grads. I'll also add that I do not know where I want to end up, so I'd really like to get into a school with enough power behind it to allow me to keep my options open in the future. 

Should I stay on for the free education and take my chances down the road? Or should I jump ship after the first year and face minimum 1 year (in a few schools), more likely 2 years, with no financial help?

Any advice would be appreciated!

[bigs5068]

If the tier 3 is somewhere you don't want to be then transferring is probably a good idea, but it sounds like that is not the case. Location is probably the most important thing when choosing your school at least in my opinion with cost as a close second. The rankings are pretty irrelevant, but the ELITE schools which are essentially the T14 are often worth the money. Whatever the location is should be a consideration and having no debt would be a lot less stressful.

[nataliabalia]

Thank you for answering! I guess one big part of what I am wondering, is that if I graduate from this tier 3 school and do 4 years in the Army and get out, how much of my worth as a prospective employee will still be judged by my school, and how much by my 4 years of experience?

Also, it's not necessarily that I don't want to be there/here, more like that I am wary of pigeon-holing myself into this region, when I have no idea where I will want to be in 7 years.

 

If the tier 3 is somewhere you don't want to be then transferring is probably a good idea, but it sounds like that is not the case. Location is probably the most important thing when choosing your school at least in my opinion with cost as a close second. The rankings are pretty irrelevant, but the ELITE schools which are essentially the T14 are often worth the money. Whatever the location is should be a consideration and having no debt would be a lot less stressful.

[FalconJimmy]

I have a full tuition scholarship to a high T3 law school worth 44k per year, however I don't want to stay in the region after graduation. I am fairly sure I want to join the Army JAG Corps with a 4 year contract after graduating, which has a loan repayment plan that will pay off all of my undergraduate and graduate loans (living expenses), leaving me debt free. My concern is that after the 4 year contract is up, I might have trouble finding a job anywhere other than New York State, especially considering the bad reputation my school is getting for being pricey yet turning out unemployed grads. I'll also add that I do not know where I want to end up, so I'd really like to get into a school with enough power behind it to allow me to keep my options open in the future. 

Should I stay on for the free education and take my chances down the road? Or should I jump ship after the first year and face minimum 1 year (in a few schools), more likely 2 years, with no financial help?

Any advice would be appreciated!

1.  Are you sure Army JAG offers college loan repayment?  Generally college loan repayment isn't available to non-medical officers.

2.  Yes, always and under ever circumstance, you're better off at a T14 than a T3.  You're also better off playing quarterback for the New England Patriots than for your local high school.  It's getting there that's the issue.

3.  As an attorney, unless you go into practice for yourself, the school you go to will always be important, now, tomorrow and forever.  You never outrun the stink of a bad school.

[nataliabalia]

1. Yes I'm sure.

2. Going down from T14, at which point would the return from the school not be worth giving up my scholarship?

Thanks for your reply

[FalconJimmy]

1. Yes I'm sure.

2. Going down from T14, at which point would the return from the school not be worth giving up my scholarship?

Thanks for your reply

Okay, the way an economist would do this is with an analysis like this:

1.  Look at the incremental cost of attending the T14.  So, let's say you have 2 years and have to pay $30,000 per year in tuition each year.  So, the ADDITIONAL cost to you of giving up your scholarship is $60,000 on the day you graduate.

2.  Then, you take the greater earnings potential of going to the T14 and see if it exceeds $60,000, and if so, in how many years?

So, let's say, for instance, that graduating from the T3 gives you a 90% chance of working pretty much for the rest of your life for $60,000 a year.  However, you also have a 10% chance of getting a really good job that will pay you $150,000 a year.

So, you weigh the salaries and your weighted expected salary is $69,000 per year if you go to the T3.  (Yes, I know this is a grossly simplified model that doesn't account for wage increases which may be really good for those upper-tier jobs.  It's also unrealistic given that chances are you'll either make an impressive salary, or an unmpressive salary and not likely something in the middle.)

Let's then say that the T14 gives you a 60% chance of working for $60,000 a year, and 40% chance of working for $150,000 a year. 

You weigh the salaries and the weighted expected salary out of the T14 is $96,000.


Meaning that in a weighted model, the T14 is $27,000 a year better than the T3.

You're in a $60,000 hole at graduation because you gave up a full-ride.  However, according to this model, sometime in your 3rd working year, you pull ahead.


Now, that having been said, this example is grossly unrealistic since you won't have a weighted-average salary.  Chances are you'll either have a great job, or a not-very-good job at graduation, with not a lot of gradations in-between.

What you're paying for by going to the T14 is the INCREASED OPPORTUNITY TO GET THAT GREAT JOB AT GRADUATION.

All you're doing is improving your chances.  If you go to the T14, and end up NOT getting the big money job, there's a distinct possibility that you'd have been better off (or at least not appreciably worse off) to stay at the T3.

However, if going to the T14 improves your chances and gets you that $150,000 a year job right after graduation, and you wouldn't have had that shot from the T3, then you're so far ahead it's ridiculous.

Basically, there's no guarantee either way.  The better school just improves your odds of a good outcome.

[bigs5068]

You do have to account for the student loan interest as well 8.5 percent generally most t14s are 40 tuition then an additional 20k in living expenses so two years 120,000 accruing 8 percent annually is somewhere in the neighborhood of 8,500 in interest and if you don't get that high paying job the interest will keep blowing up. It is a very tough call graduating debt free will be a lot less stressful, but a t14 school will open more doors.

[FalconJimmy]

You do have to account for the student loan interest as well 8.5 percent generally

Absolutely, and if the payback weren't so immediate based on the model, I probably would have given some time-value to money in there.

most t14s are 40 tuition

Fair enough.  That would put payback somewhere at the end of year 3 or sometime early in year 4.

then an additional 20k in living expenses

Why would living expenses be different?  You are going to have living expenses whether you go to a T3 or a T14.  The only way I could see this factoring is if by going to a T3, you can still live with your parents or something.

so two years 120,000 accruing 8 percent annually is somewhere in the neighborhood of 8,500 in interest and if you don't get that high paying job the interest will keep blowing up. It is a very tough call graduating debt free will be a lot less stressful, but a t14 school will open more doors.

That's basically it.

Plus, there are a lot of other things that make this a difficult equation to solve.  For instance, if you want to go into practice for yourself, I personally believe that in some areas of law (divorce, PI, etc.) the school you went to may be less of a factor.  I wonder if, when a person hires a DUI defense attorney, they say, "Okay, where did you go to school again?  University of Virginia?  Oh, that's nice."  I mean, to the average joe out there, University of Virginia isn't that different than University of Arkansas.