Is NYU full price worth over USC $$$$? Forum

[Intella32]

My current options are:
NYU full price
USC 120k

I realize when its CCN sticker v.s. T20 $$$$, TLS wisdom is that grab $$$$, run, and profit.

However, in my case, fortunately, my parents will be helping me with the law school tuition, and I will pay COL with my savings.

So there won't be any loans or interest payments made, which would reduce total payment from around $400,000 (10 year repayment plan) to $240,000 (total cost of tuition + COL).

In this case, would NYU be a reasonable choice over USC?

I believe if I could make top 30% at USC and land on a biglaw job in LA, the obvious answer would be no.

However, since this is not certain, I am torn whether it would be a reasonable choice to pay 120k+ more for the employment benefit and whatever the claimed "prestige" T14 or T6 has over T20.

I have no preference to work in NY or CA, but would like to look into corporate side, which would be much easier at NYC.

I have some $ offers from other T-14s, but I believe it were minimal enough so that I would choose NYU over them.

I would thankfully take any advice!

[NYC2012]

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[Intella32]

My current options are:
NYU full price
USC 120k

I realize when its CCN sticker v.s. T20 $$$$, TLS wisdom is that grab $$$$, run, and profit.

However, in my case, fortunately, my parents will be helping me with the law school tuition, and I will pay COL with my savings.

So there won't be any loans or interest payments made, which would reduce total payment from around $400,000 (10 year repayment plan) to $280,000 (total cost from NYU website).

In this case, would NYU be a reasonable choice over USC?

I believe if I could make top 30% at USC and land on a biglaw job in LA, the obvious answer would be no.

However, since this is not certain, I am torn whether it would be a reasonable choice to pay 120k+ more for the employment benefit and whatever the claimed "prestige" T14 or T6 has over T20.

I have no preference to work in NY or CA, but would like to look into corporate side, which would be much easier at NYC.

I have some $ offers from other T-14s, but I believe it were minimal enough so that I would choose NYU over them.

I would thankfully take any advice!

Where are you from? Do you have any ties in CA? I'd personally take USC because I'm hell-bent on staying in California, but unless that's true for you, I think NYU is clearly the winner here.

I'm from CA, but I do not have much preference to stay. Thanks for the advice.

[Mack.Hambleton]

Odds are you won't get biglaw at USC. Odds are you will get it at NYU, and with your parents contributing, that seems like the clear choice (unless you get significant money at somewhere that places into biglaw better like Cornell or NU)

[cotiger]

Wait, so your parents are paying tuition?

So your COA is just NYC COL vs LA COL?

I'm confused.

[Intella32]

Wait, so your parents are paying tuition?

So your COA is just NYC COL vs LA COL?

I'm confused.

I'm sorry, should have been more clear on this.

So whatever money my parents contribute to me, I will return it to them later, but without any interests (or inflation), so I still need to consider COAs.

For NYU this would be full 3 year tuition, which is 150k, and for USC, 30k after deducting the scholarship from the tuition.

Other than that, COL will be out of my pocket.

So the issue is whether NYU at 240k (tutiton + COL) is worth over USC 90k (tutition + COL), with no loans or further payments.

[cotiger]

$150k difference over the entire course of repayment? NYU. Not even close.

eta: Though you should factor in tuition increases, just to be totally accurate. NYU will be more like $260,000 and USC will be more like $135,000. So only $125k difference. And actually less because of inflation. Jesus, this just keeps getting more and more clear.

[BigZuck]

It's basically 150K you're losing as an inheritance.

I guess if you really, really want big law somewhere (most likely NYC) then going to NYU would make some sense. But if you're cool with a small firm in CA and would rather live in CA than somewhere else then USC would be defensible.

I guess since CA isn't a preference of yours then NYU makes sense. If this was me, I would pick USC, no question.

[JCougar]

You should have some better options in between. Like a half scholly at DNCG or MVPB even.

How badly do you want to indenture yourself to Biglaw to pay off that NYU debt? If your parents have that much money to give you interest free, get a better price on law school and have them make a huge, interest-free down payment on your mortgage instead.

I personally think NYU at sticker is a poor decision, but then again, I'm also not as high on Biglaw as most on here.

[cotiger]

It's basically 150K you're losing as an inheritance.

I guess if you really, really want big law somewhere (most likely NYC) then going to NYU would make some sense. But if you're cool with a small firm in CA and would rather live in CA than somewhere else then USC would be defensible.

I guess since CA isn't a preference of yours then NYU makes sense. If this was me, I would pick USC, no question.

I don't know, Zuck, two years of biglaw (median outcome at NYU) vs a 50k/yr job (median outcome at UCLA) and he's made up the ($125k) difference. Everything after that is gravy. You don't have to be super biglaw focused to appreciate that.

[cotiger]

You should have some better options in between. Like a half scholly at DNCG or MVPB even.

How badly do you want to indenture yourself to Biglaw to pay off that NYU debt? If your parents have that much money to give you interest free, get a better price on law school and have them make a huge, interest-free down payment on your mortgage instead.

I personally think NYU at sticker is a poor decision, but then again, I'm also not as high on Biglaw as most on here.

It's not really debt though. His parents have $180k liquid that they're willing and able to throw around. NYU sticker debt is a poor decision because it binds your hands and leaves you vulnerable to the catastrophic situation of striking out. OP is not in that situation.

If we're just looking at the expected lifetime value of NYU over UCLA, it's way more than $125k.

[rickgrimes69]

You should have some better options in between. Like a half scholly at DNCG or MVPB even.

How badly do you want to indenture yourself to Biglaw to pay off that NYU debt? If your parents have that much money to give you interest free, get a better price on law school and have them make a huge, interest-free down payment on your mortgage instead.

I personally think NYU at sticker is a poor decision, but then again, I'm also not as high on Biglaw as most on here.

It's not really debt though. His parents have $180k liquid that they're willing and able to throw around. NYU sticker debt is a poor decision because it binds your hands and leaves you vulnerable to the catastrophic situation of striking out. OP is not in that situation.

How is it not really debt? OP said he has to pay them back. Any creditor worth his salt is going to make a six-figure debtor sign a promissory note, regardless of familial status (I know of at least two people whose parents did this). The lack of interest is certainly a bonus but it's still a quarter million dollars in debt we're talking about here.

I guess if you really, really want big law somewhere (most likely NYC) then going to NYU would make some sense. But if you're cool with a small firm in CA and would rather live in CA than somewhere else then USC would be defensible.

I guess since CA isn't a preference of yours then NYU makes sense. If this was me, I would pick USC, no question.

+1 to all of this. Only caveat is that if OP really wants corporate work that will obviously be easier from NYU.

[cotiger]

You should have some better options in between. Like a half scholly at DNCG or MVPB even.

How badly do you want to indenture yourself to Biglaw to pay off that NYU debt? If your parents have that much money to give you interest free, get a better price on law school and have them make a huge, interest-free down payment on your mortgage instead.

I personally think NYU at sticker is a poor decision, but then again, I'm also not as high on Biglaw as most on here.

It's not really debt though. His parents have $180k liquid that they're willing and able to throw around. NYU sticker debt is a poor decision because it binds your hands and leaves you vulnerable to the catastrophic situation of striking out. OP is not in that situation.

How is it not really debt? OP said he has to pay them back. Any creditor worth his salt is going to make a six-figure debtor sign a promissory note, regardless of familial status (I know of at least two people whose parents did this). The lack of interest is certainly a bonus but it's still a quarter million dollars in debt we're talking about here.

It's not a quarter million that he's borrowing from his parents. OP said he's paying COL from savings, so he's just borrowing the $180k tuition.

I mean it's not really debt in the sense that there's not the downside risk that there is when you're taking out GradPLUS loans. If OP strikes out and graduates unemployed or can only find a $50k/yr job (unlikely from NYU, but still), his parents aren't going to start demanding $2500/month payments 6 months after graduation. If he winds up in that situation and can only pay like $5k/year, they're not going to make him pay that for 35 years, and they're also not going to make him pay that for 25 years and then hit him with a tax bomb.

Unless OP's parents are the biggest assholes on the planet.

If they have $180k liquid, then that's not some catastrophic amount of money that they really really need to be able to retire and will hound OP until they get it. There will most likely be some massive debt relief in the unlikely event that OP can't get his biglaw job.

Without that downside risk, you can take the expected value of the degree at face value. OP will most likely get a biglaw job at NYU. He will most likely not get one at USC. At their most likely outcomes, he makes up the cost differential between NYU and USC ($125k) in two years. After that, any money he makes from biglaw is pure profit over USC. If he's biglaw focused, as he states he is, hopefully he could last at least two years in it.

[zman]

You should call USC for more money if you are still interested. according to LSN some people are getting 150,000

[Hutz_and_Goodman]

There's risk both ways. I would personally take the $ at USC. I chose a lower ranked school over Duke/Cornell/UVA and it's worked out for me (Biglaw) but honestly looking back I almost can't believe I made this choice bc if could have gone wrong.

[bananatopia]

deleted

[Nomo]

two years of biglaw (median outcome at NYU) vs a 50k/yr job (median outcome at UCLA) and he's made up the ($125k) difference. Everything after that is gravy. You don't have to be super biglaw focused to appreciate that.

I don't think so because (1) total taxes on the NYC biglaw salary will be above 40% and (2) interest on the NYU loans will be more than at USC since the principal is higher (though I guess this won't matter with his parents paying).

[aboutmydaylight]

two years of biglaw (median outcome at NYU) vs a 50k/yr job (median outcome at UCLA) and he's made up the ($125k) difference. Everything after that is gravy. You don't have to be super biglaw focused to appreciate that.

I don't think so because (1) total taxes on the NYC biglaw salary will be above 40% and (2) interest on the NYU loans will be more than at USC since the principal is higher (though I guess this won't matter with his parents paying).

Total taxes will be around 35%, and California is really not much better.

[Tiago Splitter]

Your parents might already know this, but just in case they don't, OP, make sure you and your parents sign a promisary note and get it notarized to make everything official. The promisary note should specify zero interest, zero late payment penalty, zero early payment penalty, and zero loan origination fee (assuming those terms accurately represents the nature of your agreement with your parents). Then, after graduation, have your parents send you regular statements recording the date and amount of each payment received. Also pay by check (or auto-debit), writing "Student Loan" in the for-line, so you and your parents can keep a copy of each check. Keep copies of all of the other documents too.

All this documentation protects against the possibility that the IRS tries to count your monthly payments as taxable income for your parents. Your parents will be able to show that their assets (with respect to your loan) haven't appreciated, but have merely shifted from a non-liquid financial instrument to liquid cash. This will potentially save your parents $45,000 - $60,000, depending on their tax bracket. IANAL.

Also, NYU by a long shot, but try to negotiate with the rest of the t-13.

This seems a little over the top. The worst case scenario is that the IRS considers the loan payments gifts to OP's parents, and gifts aren't taxable either.

[PrideandGlory1776]

Yea I think you should probably have more options in-between if you have got enough numbers to get into #6 NYU surely you've got money between 7 and #20 USC? If not yea 150k difference over a life-time if you are going for big law and money isn't really a large deterrent cause of your family NYU will get almost all of its students big law who want it so if it's just those two and there are really no other options go with NYU.

[Tiago Splitter]

two years of biglaw (median outcome at NYU) vs a 50k/yr job (median outcome at UCLA) and he's made up the ($125k) difference. Everything after that is gravy. You don't have to be super biglaw focused to appreciate that.

I don't think so because (1) total taxes on the NYC biglaw salary will be above 40% and (2) interest on the NYU loans will be more than at USC since the principal is higher (though I guess this won't matter with his parents paying).

Total taxes will be around 35%, and California is really not much better.

Taxes go up as your income goes up is the point Hideo was making.

[Nomo]

two years of biglaw (median outcome at NYU) vs a 50k/yr job (median outcome at UCLA) and he's made up the ($125k) difference. Everything after that is gravy. You don't have to be super biglaw focused to appreciate that.

I don't think so because (1) total taxes on the NYC biglaw salary will be above 40% and (2) interest on the NYU loans will be more than at USC since the principal is higher (though I guess this won't matter with his parents paying).

Total taxes will be around 35%, and California is really not much better.

Maybe I did the math wrong. Did you count SS and medicare tax? What about New York City income tax?

I didn't check CA, but I would have expected it to be much lower since we're assuming a 50k income.

[cotiger]

Your parents might already know this, but just in case they don't, OP, make sure you and your parents sign a promisary note and get it notarized to make everything official. The promisary note should specify zero interest, zero late payment penalty, zero early payment penalty, and zero loan origination fee (assuming those terms accurately represents the nature of your agreement with your parents). Then, after graduation, have your parents send you regular statements recording the date and amount of each payment received. Also pay by check (or auto-debit), writing "Student Loan" in the for-line, so you and your parents can keep a copy of each check. Keep copies of all of the other documents too.

All this documentation protects against the possibility that the IRS tries to count your monthly payments as taxable income for your parents. Your parents will be able to show that their assets (with respect to your loan) haven't appreciated, but have merely shifted from a non-liquid financial instrument to liquid cash. This will potentially save your parents $45,000 - $60,000, depending on their tax bracket. IANAL.

Also, NYU by a long shot, but try to negotiate with the rest of the t-13.

This seems a little over the top. The worst case scenario is that the IRS considers the loan payments gifts to OP's parents, and gifts aren't taxable either.

Gifts are taxable above $14,000 per recipient per year, so only the first $28,000 per year would be tax free.

[Tiago Splitter]

Gifts are taxable above $14,000 per recipient, so only the first $28,000 would be tax free.

Gifts above $14,000 count against your lifetime gift exemption of $5,340,000. If the OP dies with more than $5,340,000 in assets he'll have to deal with this, keeping in mind that the first $28,000, since he has two parents, won't count each year.

[cotiger]

two years of biglaw (median outcome at NYU) vs a 50k/yr job (median outcome at UCLA) and he's made up the ($125k) difference. Everything after that is gravy. You don't have to be super biglaw focused to appreciate that.

I don't think so because (1) total taxes on the NYC biglaw salary will be above 40% and (2) interest on the NYU loans will be more than at USC since the principal is higher (though I guess this won't matter with his parents paying).

Total taxes will be around 35%, and California is really not much better.

Maybe I did the math wrong. Did you count SS and medicare tax? What about New York City income tax?

I didn't check CA, but I would have expected it to be much lower since we're assuming a 50k income.

100k after taxes on 160k in NYC is what usually gets thrown around here. I was just guessing $40k after taxes on a 50k salary in CA