The New York University School of Law has a great reputation, but it also comes at a high cost. You’ll have a solid chance at a BigLaw job coming out of NYU, but the debt burden you face should make you stop and pause. Is it an NYU Juris Doctor worth $350,000? That’s where the cost of the NYU School of Law is headed.
We’ll show you how the all-in price of the NYU law school leaves you with more debt than expected, what the cost could be for future classes of law students, and how to handle your NYU law school debt if you’ve already got it.
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.
|Health, Registration, |
Service & Tech Fees
|Room & Board||$24,400|
|Books & Supplies||$1,400|
You’d think you’d leave with $290,595 of debt based on this estimate.
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).
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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.
I had a lot of friends who applied to T14 schools out of undergrad. If they were marginal students for the institution, they could expect no scholarships or assistance. However, if they were in the top 10 percent, they’d often get a bunch of 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.
My guess is that 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.
Getting help with big NYU law school debt
We’ve consulted on over half a billion in student loan 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.
If you already have a degree from the NYU School of Law, you’re in a better situation than most. That said, you could easily waste five or even six figures with an inefficient loan repayment strategy. Hit us up at email@example.com to learn how we could help or check our our custom planning service.
Did you know how much the NYU School of Law cost before you signed on? Did the debt surprise you? How are the employment prospects after school? Comment below.