NYU and the slow coming wave of “free” school

A couple of weeks ago, NYU announced that they were making medical school tuition free for every student. Dean Robert Grossman stated, “This decision recognizes a moral imperative that must be addressed, as institutions place an increasing debt burden on young people who aspire to become physicians.”

My first thought on this news was, Man, Harvard is going to be so pissed that they weren’t first.

The idea of free tuition has been discussed and debated in multiple contexts across Ivy-type schools for years. These institutions are not immune to the burgeoning reality that their educations are financially untenable for most people and crippling for others. With many such schools fostering endowments numbering in the tens of billions of dollars, actual tuition dollars are no longer the bedrock of a healthy world-class institution. Over the past ten or so years, Harvard has often led the way on increasingly generous undergraduate financial aid, and many similar schools have made corresponding efforts to make undergraduate education more affordable, but until now, no one has taken meaningful steps to fix graduate schools, many of which are now considered mandatory for advancement across many industries. Even this move is largely a token effort, as every other extremely expensive NYU school will still keep its top-dollar cost in the shadow of this brilliant PR stunt.

As an illustration of the numbers involved in making one small school free:

The annual NYU med tuition was an exorbitant $55k per year, and there are 442 total active medical students, which gives a total cost of $24 million per year. “Paying” this requires (according to NYU) an endowment of $600 million because the school is utilizing the famous 4% rule that would make this massive endowment essentially guaranteed to last forever based on historical stock market returns.

Numbers aside, I do agree with the words of the dean (though I would expand them). There is a moral imperative to fix the cost as well as the delivery of medical education. The length, cost, and inefficiency are all otherwise mutable strong arms that are breaking healthcare and squeezing the joy out of young doctors in training from coast to coast.

NYU will not be the only school to offer free tuition. Other rich schools in and outside of medicine likely have been and certainly will be shoring up their endowments to join the club as is feasible. I anticipate this is the first in a salvo of private schools slowly making various programs free, and this will speed up if/when PSLF is eventually canceled, as the program is basically the only justification for charging otherwise unmanageable amounts of money to students who are destined to never be able to actually service their debt. Beleaguered state schools with their chronically strapped budgets will struggle.

 

My second thought is that free tuition will now make NYU about as affordable as the best-priced state schools (because the cost of living in New York is otherwise so high). Four years of living expenses will never be cheap, and it’s much harder to scrounge time to be gainfully employed during medical school compared with college. Clinical rotations are inflexible more-than-full-time jobs.

This will also result in, I imagine, a huge increase in applications to NYU. When my wife and I applied to medical school, we only applied to state institutions back in Texas where we were still residents while away for college. We were not keen to spend as much in a single year as we could on the whole package. People like me may now decide to add NYU to the list, especially since NYC is glamorous.

 

So, good on NYU for being the first to pull the trigger. I hope more schools join their ranks, and I hope most of all that this well-publicized confrontation of medical training costs will lead to a paradigm shift that allows schools and hospitals to rethink the whole process. We can do so much better, for our doctors and for our patients

2 Comments

  1. As a Harvard Med grad I have to say I doubt they are thinking “man NYU beat us to it”. Unlike other top tier schools, Harvard offers next to no merit aid (or didn’t when I matriculated), compared to say Penn or U Chicago and Harvard doesn’t seem overly bothered by this fact. Until the US News ranking schemes change, Harvard has very little incentive to make meaningful changes to tuition, etc. because they are basically guaranteed to hold on to the #1 med school slot. If they were to slip to #2, then that’d be a different story :)

    Also 1000% agree re delivery of med ed.

    Reply
    • I have a different take/perspective. Harvard, at every level, has zero interest in merit scholarships (at least in the modern era). Even recruited undergrad athletes don’t get a dime.

      The incentive for increasing undergraduate financial aid has zero to do with merit, because, according to the argument, every student at Harvard has merit. The purpose is that Harvard (and other schools with a similar mindset, say, Yale) want to have the very best most diverse student body possible, and being super expensive precludes that from becoming a reality. If you really want to take on all comers, you have to remove cost as part of the equation. However, I completely accept your cynical counter-argument about the US News rankings as a reasonable competing view.

      I’d argue that while the undergraduate college is bigger, has more money, and makes a lot more headlines, it doesn’t have a monopoly on the logic expanding “need” based aid, particularly as the gulf between what a Harvard med student pays and Harvard med graduate earns moves further out of his/her favor.

      Reply

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