5 Key Questions About NYU’s Tuition-Free Policy for Medical School

In these days of near-universal concern about tuition prices and student-loan debt, colleges promote new affordability efforts pretty frequently. But when New York University announced on Thursday that it would offer full-tuition scholarships to “all current and future students” in its doctor-of-medicine program “regardless of need or merit,” it left college-pricing experts a bit stunned.

“It’s hard to fathom how you go from charging this high price to zero,” said Sandy Baum, a nonresident fellow in the Education Policy Program at the Urban Institute, who wondered if the program would even be sustainable. NYU has said it would raise $600 million to endow the effort, which it estimates will cost $24 million a year.

Announcing that a program will be tuition-free is guaranteed to make a splash, said Lucie Lapovsky, a principal of Lapovsky Consulting and a former college president. “It’s a much clearer message,” she said, than a price cut or waiving tuition for particular students. “It’s a bold move.”

In its announcement, the medical school — among the top-ranked in the country — cast going tuition-free as a way to address two concerns: the lack of socioeconomic diversity among medical students, and their tendency to choose prestigious and well-paid specialties that don’t align with the need to provide basic health care in large swaths of the country.

Could NYU’s program move the needle on those problems? And what lessons might it offer higher ed more generally? Let’s consider some key questions.

Why don’t more institutions do something like this?

Plenty of commenters on social media wanted to know why other medical schools — or colleges generally — don’t stop charging tuition. The short answer? “If enough money drops out of a helicopter, they can,” said Robert Kelchen, an assistant professor of higher education at Seton Hall University. Few of the country’s colleges, he pointed out, have institutional endowments as large as the $600 million that NYU is raising just for this effort.

Few colleges have the same fund-raising opportunities, either, said Amy Li, an assistant professor of higher education at the University of Northern Colorado. The alumni base of an elite private university’s medical school has unusually deep pockets.

Another reason most colleges won’t waive tuition: They need this revenue to keep the lights on. Among the many data points the federal government collects in its Integrated Postsecondary Education Data System is one that looks at how much of an institution’s core revenue comes from tuition. Not many colleges could feasibly abandon that income stream, said Jon Boeckenstedt, associate vice president for enrollment management and marketing at DePaul University, who has analyzed those data.

“Harvard could,” Baum said. “It would sound great, but it wouldn’t be socially beneficial.”

Even the Harvards of the world use the tuition revenue they bring in, and they spend it on things that presumably make the educational experience they provide worthwhile to the many families that can and do pay full price to attend. They also offer significant financial aid to support their less-advantaged undergraduates. At such colleges, this category refers to family incomes that reach into the six figures.

But even a student paying full freight at Harvard is receiving a subsidy from the endowment, said Donald Hossler, a senior scholar at the Center for Enrollment Research Policy at the University of Southern California’s education school. Their tuition is expensive, but it doesn’t cover what the university is spending to educate them.

Endowments also come with strings, Boeckenstedt said: “People think of endowments as a big pool of money you can use to do whatever you want,” but most of the funds are set aside for specific purposes.

Could NYU’s announcement pressure other institutions to try something similar?

Higher education is a competitive industry, so other top medical schools no doubt have taken notice. While they are likely to do something in response, that doesn’t necessarily mean they’ll try to replicate the program, experts said.

While elite medical schools are already out there asking for donations, NYU’s announcement might push them to consider raising money for an affordability initiative — which is bound to receive lots of favorable buzz — instead of launching yet another cancer-research center, said Boeckenstedt.

“It’ll be interesting to see if other schools jump on the bandwagon,” said Lapovsky, who suspects that other med schools will be inclined to show that they, too, are doing something to promote affordability.

The financial pressures of becoming a doctor weigh disproportionately on women and underrepresented minorities, she said. And those are two populations that medical schools may be especially keen to attract.

NYU’s program is expensive and hard to replicate, Baum said. If it had instead reduced the price for low-income students, the idea would stand a better chance of being adopted by more medical schools, much the way “no loan” financial-aid policies, in which loans are not included in the aid packages of some or all undergraduates, have become ubiquitous among elite colleges.

Colleges will probably also discuss the possibility of an undergraduate version of the program, Hossler said. But he doesn’t expect that to result in the birth of “no tuition” programs at the undergraduate level. A boost in financial aid, he thought, is more likely.

Is this the best way to spend $600 million?

Baum, for one, was struck by the fact that, out of all the students it educates, NYU had decided to raise this much money to support medical students — a group that’s disproportionately likely to both come from and end up in the high end of the income spectrum. After all, she pointed out, NYU often finds itself in the news for the significant loan burden faced by its undergraduates.

A $600-million effort could go a long way, she said, toward making their education more affordable. “You have to ask, from a university perspective, what their priorities are.”

Even if the goal were to help medical students in particular, Baum said, NYU’s program is untargeted. There’s no requirement that students be low-income to have their tuition waived. An effort that raised $600 million for scholarships that low-income students could use at the medical school of their choice, she said, would do a great deal more to improve the profession’s diversity.

But it’s not as if the university got to decide its donors’ intentions, Lapovsky said. Given the apparent interest of big donors in supporting medical-school affordability, she said, this was “an exciting way to do it.”

When policy makers design a program that will use tax dollars, it makes sense to ask whether they’re using those dollars as efficiently as possible, said Beth Akers, a senior fellow with the Manhattan Institute. But that concern is not as pressing when private donors are putting their own money toward something they value.

Will this make the NYU medical school’s student body more diverse?

One medical school getting rid of tuition might not much change the socioeconomic diversity of the country’s doctors. Still, diversity is an important goal in its own right: Colleges argue that all students receive a better education when their classmates come from varied backgrounds.

But would NYU’s new scholarships make the med school itself more diverse? It could go either way.

Going tuition-free could make diversity harder for NYU’s medical school to achieve, Hossler said. The school is bound to see an increase in applications, and to receive applications from even more of the country’s top applicants. Whatever other factors its admissions process might consider, it’s not easy to turn away applicants with top grades and test scores, Hossler said. And for a host of reasons that may have little to do with ability, students from financially privileged backgrounds are more likely to have those.

Kelchen is more optimistic. With a larger pool of students to choose from, and no revenue expectations, NYU’s medical school would have more power to shape its class as it sees fit. If it wanted to become more diverse, he thinks, it could.

A parallel can be found in elite colleges’ “no loan” policies. They come in two main flavors, said Kelly Rosinger, an assistant professor of education-policy studies at Pennsylvania State University, who has studied them.

Some colleges stopped packaging loans for all students, while others designed their programs for students with family incomes up to a certain cap. In neither case, Rosinger and her co-authors found, did the programs do much to increase the enrollment of low-income students.

The universal programs, however, did bring in more middle and upper-middle income students. “I sort of worry,” Rosinger said, “about the same thing happening at the graduate level.” Enrollment at graduate and professional schools is already less socioeconomically diverse than at the undergraduate level, Rosinger said. “The barriers to elite education,” she said, “aren’t just financial.”

Perhaps NYU’s program could chip away at some of those other barriers, Lapovsky said. The university is now in a position to be able to tell younger students who assumed that medical school was financially out of reach that it need not be.

Will the decision change the career choices of NYU’s medical graduates?

One thing NYU’s program does is send a signal that the medical school has an interest in its graduates’ paths beyond their prestige or earnings potential, Akers said. “Society can value things in a different way than the market values them.”

In its news release, NYU cited sobering statistics about medical students’ debt: 75 percent of them graduate in debt, with a median burden of more than $200,000. Such debt loads, some in the profession worry, push graduates into high-paid specializations at the expense of general practice.

NYU’s medical school is not the first entity to worry that starting out in that kind of hole might shape students’ career choices. “The federal government already has a program that’s supposed to help doctors go into general practice,” Kelchen said. “It’s called income-driven repayment.”

Indeed, Baum said, because of their high debt levels, many doctors will see a significant portion of their loans forgiven under the government’s income-driven repayment and public-service loan-forgiveness programs.

Besides, she said, while $200,000 sounds like a lot of money, it’s dwarfed by the earnings difference between, say, pediatricians and neurosurgeons. Money is probably a factor in doctors’ decisions of what to specialize in, but education loans are just a small piece of that financial equation.

Beckie Supiano writes about teaching, learning, and the human interactions that shape them. Follow her on Twitter @becksup, or drop her a line at beckie.supiano@chronicle.com.