NYU School of Law: How to Pay Huge Loan Bills 2020 Updates.
NYU School of Law: The Law School at New York University has a great reputation but it comes at a high expense as well. You’ll have a solid chanceat a BigLaw job coming out of NYU, but the debt burden you face will make you stop and pause. Is it a doctor worth $350,000 from NYU Juris? That is where NYU Law School’s expense is headed.
We’ll show you how the NYU law school’s all – in price leaves you with more debt than anticipated, what the cost could be for future law students ‘ courses, and how to manage your NYU law school debt if you have it already.
In this post:
How Does the Cost of the NYU School of Law Get So High?
NYU School of Law cost of attendance is one of the highest in the nation. The school itself charges a hefty price for tuition, but the location in New York City also raises the expense of borrowing substantially. It’s a lot more expensive to pay for rent in Manhattan compared to some other comparable law school locations.
NYU’s law school also ranks as one of the highest in the country. It’s consistently rated in the five to seven range by most media sites such as U.S. News & World Report. The Princeton Review even rated the NYU School of Law No. 1 for career prospects in 2019. It’s long been considered a premier T14 school.
With that value comes a very high price for NYU law school tuition and other fees. Here’s the estimated NYU law student budget for 2018-2019 school year.
Service & Tech Fees
Room & Board
Books & Supplies
You’d think you’d leave with $290,595 of debt based on this estimate.
NYU School of Law hidden fees
This $96,845 would generate 7 percent interest for three years in a row. So, 0.07 * 3 *$96,845 = $20,337. For the debt from 2L, the interest would be $13,558. For 3L, the cost is $6,779.
In the 2017-18 school year, the total cost was $92,906, according to the Internet Archive’s Wayback Machine. In 2016-2017, the cost was $89,342. For the past two years, the NYU School of Law’s cost of attendance went up 4.2 percent and 4 percent, respectively.
Let’s assume the cost of attendance at NYU law goes up by 4 percent for future school years.
The loan fee estimate is also woefully understated. Law students borrowing more than $20,500 per year need to take out Grad PLUS loans, and this debt type has an origination fee of around 4.25 percent. For a $96,845 amount borrowed, the loan fee would be about $3,450 (1 percent of $20,500 and 4.25% of the remainder). We’ll add in about $2,000 per year because of this understatement.
Here’s a look at the projected debt from NYU law for the 1L class of 2021 (assuming no scholarships).
The grand total of NYU law debt would therefore be $351,949 at graduation for the class of 2021. That number would likely increase by 4 percent per year.
How could NYU law school scholarships decrease this stated cost?
To their credit, the NYU School of Law offers a host of scholarships for law students. Some of these could conceivably cover a substantial portion of the cost of attendance.
Many students out of school apply for this. However, those in the top 10% are those who get a better chance or merit aid. This is a game a lot of law schools play, and I’d imagine NYU does it too. The top law students have a much better negotiating position than they did during the mid-2000s, even though the stated prices are far higher.
Of course, if you check the average reported law school debt from NYU, only 59% of grads have debt, according to U.S. News & World Report. Those who do have an average of $167,441. Perhaps, NYU engages in aggressive tuition discounting to get top students, utilizes scholarships to lower the stated price, and, frankly, has a lot of students from wealthy families.
If you can go to the NYU School of Law for a low price, that would clearly be a great deal if your goal is to work in the legal profession. But the stated price is what you should be wary of. From my experience, schools play games with statistics to conceal the debt burden of the highest quarter of borrowers in their law school classes.
How to tackle NYU law school debt at different levels
If you end up with more law school debt than you thought you’d have, you’re not alone. At a high level, you can go for forgiveness or refinancing for your NYU law school loans.
Refinancing usually makes a lot of sense if you work in BigLaw and owe less than 1.5 times your salary. If you work in New York City or California, First Republic Bank usually has the best deals.
If you don’t qualify, you could check with our list of lenders that all offer cash back bonuses in addition to the lower interest rate.
You might consider forgiveness if you owe more than 1.5 times your salary. At a government or 501c3 employer, you’d want to pursue Public Service Loan Forgiveness (PSLF). This program forgives your debt tax-free after 10 years of payments based on your income while you work at a qualifying employer full time.
Assuming you got a non-BigLaw private sector job with huge NYU law school debt, you could pursue income-driven repayment loan forgiveness. Select Revised Pay As You Earn (REPAYE) or Pay As You Earn (PAYE) and make payments for 20 to 25 years. At the end, you must pay income tax on the forgiven debt. This form of forgiveness is less generous than PSLF.
An added complication is when you get married, you can choose to exclude your spouse’s income on certain repayment plans.
NYU Loan Repayment Assistance Program Plus
The Law School has recently enhanced its Loan Repayment Assistance Program (LRAP) to meet the growing needs of future graduates. It’s called LRAP Plus, because a great program is now even better.
1. NYU Law offers one of the nation’s most generous LRAPs.
Beginning with the Class of 2019, most participants can earn up to $100,000 a year and have no monthly payment on their law school loans.
Non-law educational debt up to $30,000 in original principalis included in LRAP Plus (on top of a $10,000 allowance for bar loans).
LRAP Plus also includes a new dependent allowance of$10,000 per eligible dependent.
2. Our LRAP is for graduates committed to public service.
NYU Law’s far-reaching program comprises both an income-driven plan, which leverages the power of the federal government’s Public Service Loan Forgiveness Program(PSLFP), and a traditional 10-year plan similar to other law schools. Between them, they cover a wide range of employment,including full-time jobs in federal, tribal, state, and local government and nonprofit organizations, as well as judicial clerkships, jobs in legal academia, some self-employment, and for-profit organizations serving the public interest.
If you stay with our income-driven plan for 10 years until completion, your loans can be fully forgiven withthe lowest overall out-of-pocket expenses (And, you may pay nothing toward your loans each month, even as you advance in your career.)
3. NYU Law’s LRAP Plus lets you make choices.
Beginning with the Class of 2019, participants in our new LRAP Plus will have increased flexibility—qualified participants may opt into the income-driven plan or the traditional one.
If you choose to explore other career opportunities after three years in the income-driven plan, we offer one-time payment assistanceto help you stay on track with your loan payments.
It’s possible to defer for up to two yearsto start a family, pursue education, or deal with unforeseen hardship.
It’s never too late to join LRAP Plus. Qualified participants can apply at any time.
4. You can count on our LRAP.
NYU Law is committed to covering all LRAP participants now and in the future. If for any reason the PSLFP were no longer available, the Law School would provide income-driven plan participants with the benefits of our traditional plan.
Q: What kind of NYU School of Law financial aid is available to international students?
A: International JD students may be eligible receive NYU School of Law institutional funding. International LLM students are eligible for merit-based scholarship funding only, as determined by the Office of Graduate Admissions.
Q: As an international student, what types of loans am I eligible to receive?
A: You may be eligible for loans from you own country and some private educational loans through US lenders. Most US lenders will require non-US citizens to have a credit-worthy US citizen co-signer.
Q: Does NYU offer any loans?
A: No. We are unable to offer loans to our students. We also cannot co-sign a loan for a student.
Q: How do I apply for a private loan?
A: Most private lenders who offer private educational loans have web-based and telephone application processes.
Q: If I purchase a computer, should I request a budget increase?
A: If you have not borrowed up to the budget, you do not need a budget increase. If you have borrowed up to the budget and require additional loan funds to bear the computer expense, you may request a budget increase for the purchase. You will need to complete the NYU School of Law Request for Budget Increase Form and attach supporting documentation of the computer expenses.
Getting help with big NYU law school debt
NYU law grads have options, which is a good thing. You could pay off your debt or go for forgiveness, so your choices are more complex than someone who went to a third-tier school who has no choice but to rely on income-driven repayment.
You can also file married filing jointly or married filing separately. That has big implications for your payments and your taxes as well. And most Certified Public Accountants you talk to about how this tax filing decision affects your student loans will be clueless.
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