NYU (sticker) vs GULC (40k/yr scholarship)

(Rankings, Profiles, Tuition, Student Life, . . . )

Which of the following is the best option?

NYU (sticker)
34
57%
GULC (40k/yr scholarship)
26
43%
 
Total votes: 60

User avatar
jbagelboy
Posts: 9651
Joined: Thu Nov 29, 2012 7:57 pm

Re: NYU (sticker) vs GULC (40k/yr scholarship)

Postby jbagelboy » Wed Jul 10, 2013 2:39 am

timbs4339 wrote:
moshei24 wrote:
timbs4339 wrote:I'm not sure whether that's a possible $8500 per year or one-time. It looks like it is annually. If it's one-time, the COA figure for NYU seems a bit low since tuition+fees+books are 57K. If it's one-time, you'll be looking at about 170K all said and done from NYU (that's going to be 200K with interest and origination fee), and probably 60K from Georgetown.

125K is a lot different from 200K.

Additionally, if you want to do criminal defense and make a lot of money, it's a good idea to start out in biglaw if you don't want to work your way up in the DAs office and can't get DOJ. White collar practice is big money, but if you want to do more "blue collar" crime, you can move from there into a prosecutor's job and eventually into a boutique criminal firm.



It would be yearly, and I'm hoping my grandparents would be willing to give me a little money as an interest free loan. That would reduce my total costs.

What do you mean by moving to a prosecutor job and then to a criminal firm? I can't just go from BigLaw straight to a criminal law firm if I choose to do blue collar?

Let's say I choose to do litigation. What are my options there?


I think you're still underestimate the price, even without considering the interest, but including SA position and not including interest 125,000 sounds about right. Probably more like 150 at the end of it all.

You could go straight to a small crim defense boutique, but I think the more common route is to go to a DA or USAO (US Attorney Office) to get the trial experience that you will probably never get in biglaw outside of pro bono. If you tough it out in a prosecutor's office you also might be able to go back to a firm as a partner in general lit or white collar defense.

Remember that if you leave biglaw, it is going to take you a long time to see that kind of money, if you ever see it. The market for upscale crim defense work is exceedingly small. Take this guy, Gerald Shargel, thought of as maybe one of the best trial lawyers alive and one of the top criminal lawyers in NYC. His office consisted of himself, three associates, and a paralegal.

http://blogs.wsj.com/law/2013/06/10/def ... to-biglaw/


Its worth noting that while I disagree with nothing above, many of these trajectories are very uncertain and excessively ambitious, such as going from a few years at a DA or district prosecution to partner at a well paying crim defense firm, even out of nyu. Its far from a certain track, and when timbs says these are options, while I know anecdotally the DA/PD -> partner route has occurred, I would qualify to say its uncommon and the # of positions makes it extremely unlikely.

moshei24
Posts: 252
Joined: Wed May 22, 2013 9:43 pm

Re: NYU (sticker) vs GULC (40k/yr scholarship)

Postby moshei24 » Wed Jul 10, 2013 2:44 am

jbagelboy wrote:
timbs4339 wrote:
moshei24 wrote:
timbs4339 wrote:I'm not sure whether that's a possible $8500 per year or one-time. It looks like it is annually. If it's one-time, the COA figure for NYU seems a bit low since tuition+fees+books are 57K. If it's one-time, you'll be looking at about 170K all said and done from NYU (that's going to be 200K with interest and origination fee), and probably 60K from Georgetown.

125K is a lot different from 200K.

Additionally, if you want to do criminal defense and make a lot of money, it's a good idea to start out in biglaw if you don't want to work your way up in the DAs office and can't get DOJ. White collar practice is big money, but if you want to do more "blue collar" crime, you can move from there into a prosecutor's job and eventually into a boutique criminal firm.



It would be yearly, and I'm hoping my grandparents would be willing to give me a little money as an interest free loan. That would reduce my total costs.

What do you mean by moving to a prosecutor job and then to a criminal firm? I can't just go from BigLaw straight to a criminal law firm if I choose to do blue collar?

Let's say I choose to do litigation. What are my options there?


I think you're still underestimate the price, even without considering the interest, but including SA position and not including interest 125,000 sounds about right. Probably more like 150 at the end of it all.

You could go straight to a small crim defense boutique, but I think the more common route is to go to a DA or USAO (US Attorney Office) to get the trial experience that you will probably never get in biglaw outside of pro bono. If you tough it out in a prosecutor's office you also might be able to go back to a firm as a partner in general lit or white collar defense.

Remember that if you leave biglaw, it is going to take you a long time to see that kind of money, if you ever see it. The market for upscale crim defense work is exceedingly small. Take this guy, Gerald Shargel, thought of as maybe one of the best trial lawyers alive and one of the top criminal lawyers in NYC. His office consisted of himself, three associates, and a paralegal.

http://blogs.wsj.com/law/2013/06/10/def ... to-biglaw/


Its worth noting that while I disagree with nothing above, many of these trajectories are very uncertain and excessively ambitious, such as going from a few years at a DA or district prosecution to partner at a well paying crim defense firm, even out of nyu. Its far from a certain track, and when timbs says these are options, while I know anecdotally the DA/PD -> partner route has occurred, I would qualify to say its uncommon and the # of positions makes it extremely unlikely.



Oh, I understand that that isn't a sure route, and actually is a difficult one. I don't even know if I'm going to end up on that route. I'm just looking for the confidence that going to NYU will give me the options to pay off my debt and live at least a comfortable lifestyle. Or will the loans ruin that for me and GULC would give me the better chance at that? By comfortable, I mean that I could put money away, have a nice home, raise a family, go on a vacation once or twice a year, and not have money as a concern. Does NYU give me the better chance at that than GULC? What's your breakdown on this?

Thanks!!

timbs4339
Posts: 2733
Joined: Sat Apr 02, 2011 12:19 pm

Re: NYU (sticker) vs GULC (40k/yr scholarship)

Postby timbs4339 » Wed Jul 10, 2013 2:57 am

moshei24 wrote:
timbs4339 wrote:
moshei24 wrote:
timbs4339 wrote:I'm not sure whether that's a possible $8500 per year or one-time. It looks like it is annually. If it's one-time, the COA figure for NYU seems a bit low since tuition+fees+books are 57K. If it's one-time, you'll be looking at about 170K all said and done from NYU (that's going to be 200K with interest and origination fee), and probably 60K from Georgetown.

125K is a lot different from 200K.

Additionally, if you want to do criminal defense and make a lot of money, it's a good idea to start out in biglaw if you don't want to work your way up in the DAs office and can't get DOJ. White collar practice is big money, but if you want to do more "blue collar" crime, you can move from there into a prosecutor's job and eventually into a boutique criminal firm.



It would be yearly, and I'm hoping my grandparents would be willing to give me a little money as an interest free loan. That would reduce my total costs.

What do you mean by moving to a prosecutor job and then to a criminal firm? I can't just go from BigLaw straight to a criminal law firm if I choose to do blue collar?

Let's say I choose to do litigation. What are my options there?


I think you're still underestimate the price, even without considering the interest, but including SA position and not including interest 125,000 sounds about right. Probably more like 150 at the end of it all.

You could go straight to a small crim defense boutique, but I think the more common route is to go to a DA or USAO (US Attorney Office) to get the trial experience that you will probably never get in biglaw outside of pro bono. If you tough it out in a prosecutor's office you also might be able to go back to a firm as a partner in general lit or white collar defense.

Remember that if you leave biglaw, it is going to take you a long time to see that kind of money, if you ever see it. The market for upscale crim defense work is exceedingly small. Take this guy, Gerald Shargel, thought of as maybe one of the best trial lawyers alive and one of the top criminal lawyers in NYC. His office consisted of himself, three associates, and a paralegal.

http://blogs.wsj.com/law/2013/06/10/def ... to-biglaw/



It would be that much even with a SA position? How? Would you mind giving me your breakdown?

So BigLaw to DA/USAO to small criminal defense firm? How much do you think they pay? Like, I would still need to go to BigLaw to pay my loans, right? Also, given my situation, do you think NYU is the correct choice?

Thanks!!


Sticker, not including COL, is 56.5K (http://www.law.nyu.edu/financialaid/bud ... /index.htm)
Minus $8500 per year, is around 48K.
48k x 3 = 146K (-25K for SA position).

I'm not sure exactly what the accrued interest and origination fee will be on 120K in debt, but I think it will be 20K or more.

You would still likely need to go into biglaw to pay down your debt, which you could probably do in three years on a 160K salary. However, I'd still probably pick NYU in this instance because of the likelihood of getting biglaw.

I don't have much of an idea what a boutique crim defense firm pays. Those places are black boxes. For an associate with no book of business, probably high five figures/low six.

timbs4339
Posts: 2733
Joined: Sat Apr 02, 2011 12:19 pm

Re: NYU (sticker) vs GULC (40k/yr scholarship)

Postby timbs4339 » Wed Jul 10, 2013 3:05 am

jbagelboy wrote:
timbs4339 wrote:
moshei24 wrote:
timbs4339 wrote:I'm not sure whether that's a possible $8500 per year or one-time. It looks like it is annually. If it's one-time, the COA figure for NYU seems a bit low since tuition+fees+books are 57K. If it's one-time, you'll be looking at about 170K all said and done from NYU (that's going to be 200K with interest and origination fee), and probably 60K from Georgetown.

125K is a lot different from 200K.

Additionally, if you want to do criminal defense and make a lot of money, it's a good idea to start out in biglaw if you don't want to work your way up in the DAs office and can't get DOJ. White collar practice is big money, but if you want to do more "blue collar" crime, you can move from there into a prosecutor's job and eventually into a boutique criminal firm.



It would be yearly, and I'm hoping my grandparents would be willing to give me a little money as an interest free loan. That would reduce my total costs.

What do you mean by moving to a prosecutor job and then to a criminal firm? I can't just go from BigLaw straight to a criminal law firm if I choose to do blue collar?

Let's say I choose to do litigation. What are my options there?


I think you're still underestimate the price, even without considering the interest, but including SA position and not including interest 125,000 sounds about right. Probably more like 150 at the end of it all.

You could go straight to a small crim defense boutique, but I think the more common route is to go to a DA or USAO (US Attorney Office) to get the trial experience that you will probably never get in biglaw outside of pro bono. If you tough it out in a prosecutor's office you also might be able to go back to a firm as a partner in general lit or white collar defense.

Remember that if you leave biglaw, it is going to take you a long time to see that kind of money, if you ever see it. The market for upscale crim defense work is exceedingly small. Take this guy, Gerald Shargel, thought of as maybe one of the best trial lawyers alive and one of the top criminal lawyers in NYC. His office consisted of himself, three associates, and a paralegal.

http://blogs.wsj.com/law/2013/06/10/def ... to-biglaw/


Its worth noting that while I disagree with nothing above, many of these trajectories are very uncertain and excessively ambitious, such as going from a few years at a DA or district prosecution to partner at a well paying crim defense firm, even out of nyu. Its far from a certain track, and when timbs says these are options, while I know anecdotally the DA/PD -> partner route has occurred, I would qualify to say its uncommon and the # of positions makes it extremely unlikely.


Right. We have almost no data on what happens to people more than a few years out. Your career can take you in unexpected directions. I know one lawyer who did murder trials for the DAs office. Now he's a mass tort lawyer making millions (this is just for illustrative purposes, you should not go into a DA office expecting to strike it rich in mass tort law).

moshei24
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Re: NYU (sticker) vs GULC (40k/yr scholarship)

Postby moshei24 » Wed Jul 10, 2013 3:13 am

timbs4339 wrote:
moshei24 wrote:
timbs4339 wrote:
moshei24 wrote:
I think you're still underestimate the price, even without considering the interest, but including SA position and not including interest 125,000 sounds about right. Probably more like 150 at the end of it all.

You could go straight to a small crim defense boutique, but I think the more common route is to go to a DA or USAO (US Attorney Office) to get the trial experience that you will probably never get in biglaw outside of pro bono. If you tough it out in a prosecutor's office you also might be able to go back to a firm as a partner in general lit or white collar defense.

Remember that if you leave biglaw, it is going to take you a long time to see that kind of money, if you ever see it. The market for upscale crim defense work is exceedingly small. Take this guy, Gerald Shargel, thought of as maybe one of the best trial lawyers alive and one of the top criminal lawyers in NYC. His office consisted of himself, three associates, and a paralegal.

http://blogs.wsj.com/law/2013/06/10/def ... to-biglaw/



It would be that much even with a SA position? How? Would you mind giving me your breakdown?

So BigLaw to DA/USAO to small criminal defense firm? How much do you think they pay? Like, I would still need to go to BigLaw to pay my loans, right? Also, given my situation, do you think NYU is the correct choice?

Thanks!!


Sticker, not including COL, is 56.5K (http://www.law.nyu.edu/financialaid/bud ... /index.htm)
Minus $8500 per year, is around 48K.
48k x 3 = 146K (-25K for SA position).

I'm not sure exactly what the accrued interest and origination fee will be on 120K in debt, but I think it will be 20K or more.

You would still likely need to go into biglaw to pay down your debt, which you could probably do in three years on a 160K salary. However, I'd still probably pick NYU in this instance because of the likelihood of getting biglaw.

I don't have much of an idea what a boutique crim defense firm pays. Those places are black boxes. For an associate with no book of business, probably high five figures/low six.


Thank you for the breakdown. Okay, that's not too bad. Three years of BigLaw isn't that much, and even without a SA job, it still isn't an insane number. So even though going to GULC wouldn't for sure necessitate BigLaw, as my costs would probably be about $90-95k less, you would still suggest NYU, given the better career prospects it offers? Are you a current law student? Grad?

Thanks again for the advice. I appreciate it.

moshei24
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Re: NYU (sticker) vs GULC (40k/yr scholarship)

Postby moshei24 » Wed Jul 10, 2013 3:16 am

And right, I get what you're saying, and part of why I, personally, think NYU is a better choice is because my law path really is so unpredictable. NYU is a much better school than GULC, and having those better job prospects would likely give me more options down the line. Does that make any sense? Please correct me if I'm wrong.

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rickgrimes69
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Re: NYU (sticker) vs GULC (40k/yr scholarship)

Postby rickgrimes69 » Wed Jul 10, 2013 9:17 am

Here's the thing. DA / Crim Defense work is a bit of a crapshoot. It's sort of like P.I. in that they generally want to hire people with a demonstrated interest in criminal work. While I'm sure moving from Biglaw to a D.A. spot, or vice versa, has occurred, it's not a common career trajectory, and it won't be dependent on whether you attend NYU or GULC.

NYU is undoubtedly the better school in pretty much every metric that matters. Your primary consideration should be whether you feel comfortable with the knowledge that you will be required to work Biglaw for at least a couple years to pay down your loans. If you're cool with that, and with the knowledge that you may never do criminal work, NYU is the clear choice. GULC gives you slightly more flexibility in that you can gun hard for criminal work and it doesn't matter if you miss the biglaw boat because your loans are so low. But if you decide later on that you do want Biglaw, GULC makes your task more difficult.

If these were my choices, I'd pick GULC because debt scares me. However, it's clear that you want NYU, and it is far and away the better school, so you should go there.

P.S. I still think your COA figures are misleadingly low, and it's skewing the analysis. Especially for GULC - I just don't see how your total COA is $35k, when tuition alone will cost you close to $30k post-scholly.

DClaw2014
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Re: NYU (sticker) vs GULC (40k/yr scholarship)

Postby DClaw2014 » Wed Jul 10, 2013 10:00 am

I would recommend looking here for information about employment rates following graduation: http://www.lawschooltransparency.com/

The Class of 2012 at Georgetown had a 73.2% employment rate with 12.8% considered underemployed. http://www.lstscorereports.com/?school=gulc
The Class of 2012 at NYU had a 91.1% employment rate with 2.7% considered underemployed. http://www.lstscorereports.com/?school=nyu

I personally would go to the school with the better employment rates, but that's just me. I don't know much about NY's legal market, but DC's is pretty good. If you decide to go to GULC, you'll have a decent shot at BigLaw. From my experience, students at Georgetown do not have as much luck in government/public interest though, so if you're really interested in being a public defender or doing DOJ honors, you might want to consider other options. Hope this helps!

Also, a quick note about interest free loans- any money your grandparents loan you interest free or at a below market interest rate is taxable (ie there's no such thing as a free loan). If it's below market, it's taxed at the difference in market rate and the rate they're charging you. They can gift you a certain amount per year, but not loan it to you. Just so you know.

moshei24
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Re: NYU (sticker) vs GULC (40k/yr scholarship)

Postby moshei24 » Wed Jul 10, 2013 10:25 am

rickgrimes69 wrote:Here's the thing. DA / Crim Defense work is a bit of a crapshoot. It's sort of like P.I. in that they generally want to hire people with a demonstrated interest in criminal work. While I'm sure moving from Biglaw to a D.A. spot, or vice versa, has occurred, it's not a common career trajectory, and it won't be dependent on whether you attend NYU or GULC.

NYU is undoubtedly the better school in pretty much every metric that matters. Your primary consideration should be whether you feel comfortable with the knowledge that you will be required to work Biglaw for at least a couple years to pay down your loans. If you're cool with that, and with the knowledge that you may never do criminal work, NYU is the clear choice. GULC gives you slightly more flexibility in that you can gun hard for criminal work and it doesn't matter if you miss the biglaw boat because your loans are so low. But if you decide later on that you do want Biglaw, GULC makes your task more difficult.

If these were my choices, I'd pick GULC because debt scares me. However, it's clear that you want NYU, and it is far and away the better school, so you should go there.

P.S. I still think your COA figures are misleadingly low, and it's skewing the analysis. Especially for GULC - I just don't see how your total COA is $35k, when tuition alone will cost you close to $30k post-scholly.



Thank you. It's so low because my parents and grandparents will prob cover $8.5k of my yearly tuition.

moshei24
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Re: NYU (sticker) vs GULC (40k/yr scholarship)

Postby moshei24 » Wed Jul 10, 2013 10:26 am

DClaw2014 wrote:I would recommend looking here for information about employment rates following graduation: http://www.lawschooltransparency.com/

The Class of 2012 at Georgetown had a 73.2% employment rate with 12.8% considered underemployed. http://www.lstscorereports.com/?school=gulc
The Class of 2012 at NYU had a 91.1% employment rate with 2.7% considered underemployed. http://www.lstscorereports.com/?school=nyu

I personally would go to the school with the better employment rates, but that's just me. I don't know much about NY's legal market, but DC's is pretty good. If you decide to go to GULC, you'll have a decent shot at BigLaw. From my experience, students at Georgetown do not have as much luck in government/public interest though, so if you're really interested in being a public defender or doing DOJ honors, you might want to consider other options. Hope this helps!

Also, a quick note about interest free loans- any money your grandparents loan you interest free or at a below market interest rate is taxable (ie there's no such thing as a free loan). If it's below market, it's taxed at the difference in market rate and the rate they're charging you. They can gift you a certain amount per year, but not loan it to you. Just so you know.



So a loan from them would be essentially pointless?

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francesfarmer
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Re: NYU (sticker) vs GULC (40k/yr scholarship)

Postby francesfarmer » Wed Jul 10, 2013 10:52 am

DClaw2014 wrote:I would recommend looking here for information about employment rates following graduation: http://www.lawschooltransparency.com/

The Class of 2012 at Georgetown had a 73.2% employment rate with 12.8% considered underemployed. http://www.lstscorereports.com/?school=gulc
The Class of 2012 at NYU had a 91.1% employment rate with 2.7% considered underemployed. http://www.lstscorereports.com/?school=nyu

I personally would go to the school with the better employment rates, but that's just me. I don't know much about NY's legal market, but DC's is pretty good. If you decide to go to GULC, you'll have a decent shot at BigLaw. From my experience, students at Georgetown do not have as much luck in government/public interest though, so if you're really interested in being a public defender or doing DOJ honors, you might want to consider other options. Hope this helps!

Also, a quick note about interest free loans- any money your grandparents loan you interest free or at a below market interest rate is taxable (ie there's no such thing as a free loan). If it's below market, it's taxed at the difference in market rate and the rate they're charging you. They can gift you a certain amount per year, but not loan it to you. Just so you know.

Come on, nobody pays taxes on their below-market-interest-rate personal loans. Get real.

moshei24
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Re: NYU (sticker) vs GULC (40k/yr scholarship)

Postby moshei24 » Wed Jul 10, 2013 11:03 am

francesfarmer wrote:
DClaw2014 wrote:I would recommend looking here for information about employment rates following graduation: http://www.lawschooltransparency.com/

The Class of 2012 at Georgetown had a 73.2% employment rate with 12.8% considered underemployed. http://www.lstscorereports.com/?school=gulc
The Class of 2012 at NYU had a 91.1% employment rate with 2.7% considered underemployed. http://www.lstscorereports.com/?school=nyu

I personally would go to the school with the better employment rates, but that's just me. I don't know much about NY's legal market, but DC's is pretty good. If you decide to go to GULC, you'll have a decent shot at BigLaw. From my experience, students at Georgetown do not have as much luck in government/public interest though, so if you're really interested in being a public defender or doing DOJ honors, you might want to consider other options. Hope this helps!



Also, a quick note about interest free loans- any money your grandparents loan you interest free or at a below market interest rate is taxable (ie there's no such thing as a free loan). If it's below market, it's taxed at the difference in market rate and the rate they're charging you. They can gift you a certain amount per year, but not loan it to you. Just so you know.

Come on, nobody pays taxes on their below-market-interest-rate personal loans. Get real.



Sarcasm?

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francesfarmer
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Re: NYU (sticker) vs GULC (40k/yr scholarship)

Postby francesfarmer » Wed Jul 10, 2013 11:14 am

moshei24 wrote:
francesfarmer wrote:
DClaw2014 wrote:I would recommend looking here for information about employment rates following graduation: http://www.lawschooltransparency.com/

The Class of 2012 at Georgetown had a 73.2% employment rate with 12.8% considered underemployed. http://www.lstscorereports.com/?school=gulc
The Class of 2012 at NYU had a 91.1% employment rate with 2.7% considered underemployed. http://www.lstscorereports.com/?school=nyu

I personally would go to the school with the better employment rates, but that's just me. I don't know much about NY's legal market, but DC's is pretty good. If you decide to go to GULC, you'll have a decent shot at BigLaw. From my experience, students at Georgetown do not have as much luck in government/public interest though, so if you're really interested in being a public defender or doing DOJ honors, you might want to consider other options. Hope this helps!



Also, a quick note about interest free loans- any money your grandparents loan you interest free or at a below market interest rate is taxable (ie there's no such thing as a free loan). If it's below market, it's taxed at the difference in market rate and the rate they're charging you. They can gift you a certain amount per year, but not loan it to you. Just so you know.

Come on, nobody pays taxes on their below-market-interest-rate personal loans. Get real.



Sarcasm?

I'm not being sarcastic.

moshei24
Posts: 252
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Re: NYU (sticker) vs GULC (40k/yr scholarship)

Postby moshei24 » Wed Jul 10, 2013 11:20 am

francesfarmer wrote:
moshei24 wrote:
francesfarmer wrote:
DClaw2014 wrote:I would recommend looking here for information about employment rates following graduation: http://www.lawschooltransparency.com/

The Class of 2012 at Georgetown had a 73.2% employment rate with 12.8% considered underemployed. http://www.lstscorereports.com/?school=gulc
The Class of 2012 at NYU had a 91.1% employment rate with 2.7% considered underemployed. http://www.lstscorereports.com/?school=nyu

I personally would go to the school with the better employment rates, but that's just me. I don't know much about NY's legal market, but DC's is pretty good. If you decide to go to GULC, you'll have a decent shot at BigLaw. From my experience, students at Georgetown do not have as much luck in government/public interest though, so if you're really interested in being a public defender or doing DOJ honors, you might want to consider other options. Hope this helps!



Also, a quick note about interest free loans- any money your grandparents loan you interest free or at a below market interest rate is taxable (ie there's no such thing as a free loan). If it's below market, it's taxed at the difference in market rate and the rate they're charging you. They can gift you a certain amount per year, but not loan it to you. Just so you know.

Come on, nobody pays taxes on their below-market-interest-rate personal loans. Get real.



Sarcasm?

I'm not being sarcastic.



So how would an interest free loan work? If its an unofficial loan, shouldn't that be fine? Basically a gift that I will pay back...

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francesfarmer
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Re: NYU (sticker) vs GULC (40k/yr scholarship)

Postby francesfarmer » Wed Jul 10, 2013 11:35 am

moshei24 wrote:So how would an interest free loan work? If its an unofficial loan, shouldn't that be fine? Basically a gift that I will pay back...

Basically. Gifts under $14,000 per year are exempt from taxes. I don't know if the receiver has to pay taxes on the gift--but if you're in law school making no income that shouldn't really be an issue.

http://www.irs.gov/Businesses/Small-Bus ... Gift-Taxes

moshei24
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Re: NYU (sticker) vs GULC (40k/yr scholarship)

Postby moshei24 » Wed Jul 10, 2013 12:01 pm

francesfarmer wrote:
moshei24 wrote:So how would an interest free loan work? If its an unofficial loan, shouldn't that be fine? Basically a gift that I will pay back...

Basically. Gifts under $14,000 per year are exempt from taxes. I don't know if the receiver has to pay taxes on the gift--but if you're in law school making no income that shouldn't really be an issue.

http://www.irs.gov/Businesses/Small-Bus ... Gift-Taxes



It says tuition gifts don't apply. So can I say that I'm in the clear? :)

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francesfarmer
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Re: NYU (sticker) vs GULC (40k/yr scholarship)

Postby francesfarmer » Wed Jul 10, 2013 1:38 pm

moshei24 wrote:
francesfarmer wrote:
moshei24 wrote:So how would an interest free loan work? If its an unofficial loan, shouldn't that be fine? Basically a gift that I will pay back...

Basically. Gifts under $14,000 per year are exempt from taxes. I don't know if the receiver has to pay taxes on the gift--but if you're in law school making no income that shouldn't really be an issue.

http://www.irs.gov/Businesses/Small-Bus ... Gift-Taxes



It says tuition gifts don't apply. So can I say that I'm in the clear? :)

IDK I'm not an accountant. Sure.

Stop smiling at me. I dislike you a lot.

moshei24
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Re: NYU (sticker) vs GULC (40k/yr scholarship)

Postby moshei24 » Wed Jul 10, 2013 1:49 pm

francesfarmer wrote:
moshei24 wrote:
francesfarmer wrote:
moshei24 wrote:So how would an interest free loan work? If its an unofficial loan, shouldn't that be fine? Basically a gift that I will pay back...

Basically. Gifts under $14,000 per year are exempt from taxes. I don't know if the receiver has to pay taxes on the gift--but if you're in law school making no income that shouldn't really be an issue.

http://www.irs.gov/Businesses/Small-Bus ... Gift-Taxes



It says tuition gifts don't apply. So can I say that I'm in the clear? :)

IDK I'm not an accountant. Sure.

Stop smiling at me. I dislike you a lot.



I really should've listened in my tax classes, LOL.

That's okay. I like you. :)

EdBurke
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Re: NYU (sticker) vs GULC (40k/yr scholarship)

Postby EdBurke » Wed Jul 10, 2013 2:13 pm

moshei24 wrote:
francesfarmer wrote:
moshei24 wrote:So how would an interest free loan work? If its an unofficial loan, shouldn't that be fine? Basically a gift that I will pay back...

Basically. Gifts under $14,000 per year are exempt from taxes. I don't know if the receiver has to pay taxes on the gift--but if you're in law school making no income that shouldn't really be an issue.

http://www.irs.gov/Businesses/Small-Bus ... Gift-Taxes



It says tuition gifts don't apply. So can I say that I'm in the clear? :)


It depends on whether it is a gift or a loan. A gift is property given while nothing is received in return (or something of less than full value is received in return). If it is a true gift, responsibility for the tax is on the giver, and it is incredibly unlikely your parents or grandparents would owe any money (especially if it is for education). If you intend to "gift" your grandparents back money equal to their "gift" a few years down the road, neither of those things are gifts at all...it sounds like an interest-free loan.

Since it sounds like it is a loan, there can be quite a few tax consequences depending on the amount and duration. I won't get into specifics without knowing more details, but the IRS imputes two transfers occurring, whether or not they actually occur if an exception doesn't apply. They credit the lender with interest income earned equal to the minimum applicable federal rate (currently 1.22% for a 3-9 year note) and then assume the lender gifted the borrower the amount of interest. The lender owes tax on that interest unless an exemption applies (there is a blanket one for loans under $10,000 and a more limited one for loans under $100,000). 8.5k/year in tuition works out to a few hundred bucks of interest (assuming no exemption applies) that may technically need to be reported.

moshei24
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Re: NYU (sticker) vs GULC (40k/yr scholarship)

Postby moshei24 » Wed Jul 10, 2013 2:21 pm

EdBurke wrote:
moshei24 wrote:
francesfarmer wrote:
moshei24 wrote:So how would an interest free loan work? If its an unofficial loan, shouldn't that be fine? Basically a gift that I will pay back...

Basically. Gifts under $14,000 per year are exempt from taxes. I don't know if the receiver has to pay taxes on the gift--but if you're in law school making no income that shouldn't really be an issue.

http://www.irs.gov/Businesses/Small-Bus ... Gift-Taxes



It says tuition gifts don't apply. So can I say that I'm in the clear? :)


It depends on whether it is a gift or a loan. A gift is property given while nothing is received in return (or something of less than full value is received in return). If it is a true gift, responsibility for the tax is on the giver, and it is incredibly unlikely your parents or grandparents would owe any money (especially if it is for education). If you intend to "gift" your grandparents back money equal to their "gift" a few years down the road, neither of those things are gifts at all...it sounds like an interest-free loan.

Since it sounds like it is a loan, there can be quite a few tax consequences depending on the amount and duration. I won't get into specifics without knowing more details, but the IRS imputes two transfers occurring, whether or not they actually occur if an exception doesn't apply. They credit the lender with interest income earned equal to the minimum applicable federal rate (currently 1.22% for a 3-9 year note) and then assume the lender gifted the borrower the amount of interest. The lender owes tax on that interest unless an exemption applies (there is a blanket one for loans under $10,000 and a more limited one for loans under $100,000). 8.5k/year in tuition works out to a few hundred bucks of interest (assuming no exemption applies) that may technically need to be reported.



Interesting. The 8.5k would be gifts from two sources, actually. I'm looking to get a "gift" with the intention to gift them back once I have the money to do so. Legally, I don't think it should be a problem, as there would be nothing official to it. Either way, my grandfather has been practicing accounting for over 50 years, and I'm sure he'll know what the deal is with it, if he even agrees to give me a loan...

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francesfarmer
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Re: NYU (sticker) vs GULC (40k/yr scholarship)

Postby francesfarmer » Wed Jul 10, 2013 2:51 pm

EdBurke wrote:
moshei24 wrote:
francesfarmer wrote:
moshei24 wrote:So how would an interest free loan work? If its an unofficial loan, shouldn't that be fine? Basically a gift that I will pay back...

Basically. Gifts under $14,000 per year are exempt from taxes. I don't know if the receiver has to pay taxes on the gift--but if you're in law school making no income that shouldn't really be an issue.

http://www.irs.gov/Businesses/Small-Bus ... Gift-Taxes



It says tuition gifts don't apply. So can I say that I'm in the clear? :)


It depends on whether it is a gift or a loan. A gift is property given while nothing is received in return (or something of less than full value is received in return). If it is a true gift, responsibility for the tax is on the giver, and it is incredibly unlikely your parents or grandparents would owe any money (especially if it is for education). If you intend to "gift" your grandparents back money equal to their "gift" a few years down the road, neither of those things are gifts at all...it sounds like an interest-free loan.

Since it sounds like it is a loan, there can be quite a few tax consequences depending on the amount and duration. I won't get into specifics without knowing more details, but the IRS imputes two transfers occurring, whether or not they actually occur if an exception doesn't apply. They credit the lender with interest income earned equal to the minimum applicable federal rate (currently 1.22% for a 3-9 year note) and then assume the lender gifted the borrower the amount of interest. The lender owes tax on that interest unless an exemption applies (there is a blanket one for loans under $10,000 and a more limited one for loans under $100,000). 8.5k/year in tuition works out to a few hundred bucks of interest (assuming no exemption applies) that may technically need to be reported.

Nobody is going to report that. It's a non-issue.

gaucholaw
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Re: NYU (sticker) vs GULC (40k/yr scholarship)

Postby gaucholaw » Wed Jul 10, 2013 8:46 pm

Not to hijack this thread, but I'm actually incredibly confused as to how the tax situation works with parents paying COL. In undergrad my parents gave me a stipend every month, and I never once filed it on my IRS forms.... is that Illegal? My folks will be covering my COL in LS as well, and I wasn't planning on letting Uncle Same know - would the IRS really audit a student getting money from their parents?

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Nelson
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Re: NYU (sticker) vs GULC (40k/yr scholarship)

Postby Nelson » Wed Jul 10, 2013 8:52 pm

gaucholaw wrote:Not to hijack this thread, but I'm actually incredibly confused as to how the tax situation works with parents paying COL. In undergrad my parents gave me a stipend every month, and I never once filed it on my IRS forms.... is that Illegal? My folks will be covering my COL in LS as well, and I wasn't planning on letting Uncle Same know - would the IRS really audit a student getting money from their parents?

If you're still a dependent (which you would be if you're under 24, full time student, and supported by your parents) it's not an issue.

moshei24
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Re: NYU (sticker) vs GULC (40k/yr scholarship)

Postby moshei24 » Wed Jul 10, 2013 9:02 pm

gaucholaw wrote:Not to hijack this thread, but I'm actually incredibly confused as to how the tax situation works with parents paying COL. In undergrad my parents gave me a stipend every month, and I never once filed it on my IRS forms.... is that Illegal? My folks will be covering my COL in LS as well, and I wasn't planning on letting Uncle Same know - would the IRS really audit a student getting money from their parents?



Does the same apply to grandparents?

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nickb285
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Re: NYU (sticker) vs GULC (40k/yr scholarship)

Postby nickb285 » Wed Jul 10, 2013 9:09 pm

gaucholaw wrote:Not to hijack this thread, but I'm actually incredibly confused as to how the tax situation works with parents paying COL. In undergrad my parents gave me a stipend every month, and I never once filed it on my IRS forms.... is that Illegal? My folks will be covering my COL in LS as well, and I wasn't planning on letting Uncle Same know - would the IRS really audit a student getting money from their parents?


I know that each parent can give a child up to $13,000/year as a tax free gift, so if your annual expenses are <=$26k, you should be fine without declaring it. Anything over that, you might have to see if they could claim it as an educational expense, I'm not sure.




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