"NYU Channels Wall Street: New Documents Show Lavish Pay, Perks and Secret Deals," by Pam Martens (Wall Street on Parade)
Money Quote: "According to documents unearthed in a month-long search of public records, NYU Law School has created an array of nonprofits to funnel money into lavish perks for its professors. The money has been used by professors to buy multi-million dollar brownstones and condos in Manhattan and Brooklyn with portions of some loans forgiven over time. In some cases, even the interest charged on the loans has been reimbursed."
Hat tip to Dybbuk123 for this link.
Quite apart from this being beyond the pale, I've often wondered why unemployed debt slave lawyers don't just form their own non-profits and hire themselves full time to become eligible for loan forgiveness. Good for the goose.
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"3 People, 1 Big Student Loan Debt: My Make-Ends-Meet-Plan," by Colleen Oakley (The Jane Dough)
Money Quote: "The culture of the legal profession is to never talk about your student loan debt because most people who've paid it off are resented by contemporaries who haven't."
Discussions around debt in society in general are verboten.
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More to come.
What is the over/under on NYU Law Profs. not reporting the forgiven loans on their tax returns?
ReplyDeleteAs far as I know, nobody is claiming that the perks weren't reported as income. I'm not sure I see the crime here; isn't NYU itself tax-exempt? They could just as easily chosen to make bonus cash payments to their profs.
DeleteSomeone please tell me what I'm missing here.
"I've often wondered why unemployed debt slave lawyers don't just form their own non-profits and hire themselves full time to become eligible for loan forgiveness."
ReplyDeleteEr, they do! See Cryn Johannsen at All Education Matters.
That's the entire motive behind that "non profit". The profit is that she is half way towards having her mountain of loans forgiven.
"Quite apart from this being beyond the pale, I've often wondered why unemployed debt slave lawyers don't just form their own non-profits and hire themselves full time to become eligible for loan forgiveness."
ReplyDeleteI've wondered the same on a broader level. I haven't thought this through, but I would think there's ways to exploit the system.
Let's say you're rich and you've got a good-for-nothing 22-year old kid. Why not send him to law school, have him draw the max in loans to push $300k. Upon graduation, have him set up a nonprofit. You fund it and claim it as a deduction instead of "paying for deadbeat son," which is not deductible. Pay him a meager salary of $20k to lead it, and fund it with another $30k each year in operating expenses.
Junior won't pay a dime on his debt because his salary is too low. At the end of 10 years, Junior's law school debt and the three years of living expenses go "poof." (I believe you can combine IBR and PLSF - someone correct me if I'm wrong). Daddy gets $50k in tax deductions every year while getting the prestige associated with running a legal aid.
So for the wealthy person, you get roughly 13 years of Junior's living expenses for the price of 10 plus a law school degree for free. Junior won't make enough to pay on the tax hit for debt forgiveness. Daddy has spent $500k that he might have paid in taxes anyway and gets $800k in benefits plus getting Junior 10 years of work experience in a crowded field plus the prestige of funding a charity.
I realize most rich people have better things to do with $500k than fund a legal aid, but it seems clear that we're basically incentivizing people to set up half-baked 501(c)(3) legal aids to get their debts extinguished.