Is NYU Squeezing Everyone But Its Neediest Students?

moneyAn extensive analysis of tuition data provides compelling evidence that NYU is giving more aid to its financially neediest students at the expense of its other students with significant need Scream 2 download. Additionally, a comparison of NYU and uptown rival Columbia’s financial aid data shows in stark terms how little NYU has done (until very recently) to make attending college more affordable.

It is easy to bash on NYU for its stingy financial aid department. Everyone has heard about the University topping the list of schools with “Students Dissatisfied with Financial Aid.” You may also recall that, last semester, the school began calling students with a large gap between their need and their financial aid award to make sure they really, truly could afford to come to NYU.

But something has been missing in all the yelling about how expensive it is: actual evidence (particularly since administrators have some good arguments on their side).

NYU has a huge student population and therefore a small endowment per capita, which makes meeting full financial need impossible. University Spokesman John Beckman writes me, “NYU is not among the relatively small set of institutions that ‘meet full need’ – meaning that our financial aid resources are not sufficient to fill the ‘gap’ between the expected family contribution (as determined by FAFSA) and the cost of tuition. That’s largely a reflection of our per student endowment,” which was 148th 184th in the country in 2008.

Beckman also frequently points out that we have one of the highest percentages of Pell Grant-eligible students among major research universities. (Since Pell Grants are generally awarded to low-income, very needy families, the previous statistic is often used as a proxy for economic diversity on campus).

But that last point raises a big question: why does NYU attract so many needy, low-income students if its financial aid is so bad?

It is useful to compare NYU to another school for this analysis. I chose Columbia because it has a nearly identical percentage of students receiving federal grant money (mostly Pell Grants). Take a look at these charts of the most recent and available public data:any aidinst aid

The first shows the percentage of first-time, four-year freshman receiving either federal, state, or “institutional” (college) grant money. The second shows what percentage of those students is receiving money from the school.

Pretty striking trends, no? A smaller percentage of NYU students are receiving financial aid and a lot fewer are getting any help from the school itself (compared to NYU in the past). Columbia’s trends are both upwards.

So what can we infer from this? It’s hard to say, really, without knowing a lot more about the internals of the financial aid department. At first glance, it would be easy to conclude that the student body is getting richer, since fewer students receive aid.

Beckman disputes that idea. He writes, “…we have been reducing the percentage of aid that is ‘merit’ – or non-need – based; we reduced it by 26% between 2005-06 and 2009-10. This was entirely intentional: given that students’ need is greater than our resources, we concluded this is the right thing to do.”

He concludes that the decline in students receiving aid is due to fewer students receiving merit aid.

However, if you look back at the charts, you’ll see significant percentage drops well before 2005, when Beckman cites the beginning of the reduction in merit aid. (Don’t get me wrong: it’s a good idea to move more money into need-based aid and I applaud NYU for its decision). (Ed. note: See Beckman’s response for an update on this point).

Here’s the rub: the percentage of students receiving federal aid hardly budged during the same time frame displayed on the charts. It dropped only 2 percent from 2001 to 2006, from 17 to 15 percent. This suggests NYU’s “economic diversity” is staying relatively constant.

Now look at this:

Picture 4

You can see how much less money we receive in comparison to Columbia, but that can be chalked up to small endowment per capita. However, this cannot: from 2002-2006 (adjusted for inflation), NYU tuition rose 12.7%. Yet, across the same time period, average institutional aid for first-time, four-year freshmen only increased 7.0%. At Columbia, tuition went up 10.5% and average institutional aid went up 15.3%.*

Beckman again takes issue. He notes that the Department of Education data I used for these charts does not include all undergraduates, only first-time, four-year freshman (the typical out of high school student joining NYU). He writes (emphasis added), “Indeed, when we look at financial aid spending and cost of attendance for all undergrads over the period you examined – 2002-03 to 2006-07 – we find that cost of attendance increased by 21.7% and institutional aid increased by 28.6%.”

Unfortunately, Beckman doesn’t provide the average institutional aid increase, which I used. Nor are the numbers adjusted for inflation, rendering them meaningless. Indeed, if you don’t account for inflation, it appears as if average institutional aid increased nearly 19.9% while tuition increased 26.4%. Still not a good story for NYU, but not nearly as telling as the inflation-adjusted numbers above.

So, where are we? We can see that NYU has become quantifiably more unaffordable and yet it still attracts the same percentage of highly needy students. I think Occam’s Razor suggests that a higher percentage of financial aid dollars are flowing to the school’s neediest students, making it harder for “middle-class,” but needy students to attend and driving down the number of students receiving aid.

If indeed this is the case, it could be because NYU knows that highly qualified but highly needy students will be offered great financial aid from other top universities, so they seek to match their offers. It could be because they have found they can maximize enrollment by asking less needy students to take on more debt than the neediest. It may just be that they think it’s the fairest allocation of the funds available.

What makes this more interesting is parsing John Sexton’s emails. He wrote back in May that one of the University’s major goals is to:

Enhance financial aid for our neediest undergraduate students and improve the quality of student life and wellness.

Not all of our students, just our neediest.

Now I should give credit where it’s due: NYU increased financial aid 7.8% this year – twice the tuition increase. And Beckman notes, “Using FAFSA’s criteria,…need-based aid at NYU has increased 64 percent over the last five years (2005-06 through 2009-10), while (as noted above) undergraduate tuition and fees increased by 22.3%.” This is encouraging (though I would like to see these numbers adjusted for inflation).

But then we read that this is NYU’s biggest enrollment ever – how can they expect to offer decent financial aid if they keep increasing the pool of students who need money?

John Beckman is quoted heavily in a piece in WSN that was published today that attempts to rebut this question (see correction) that addresses this question. There are some good defenses, read the piece, but think critically about Beckman’s arguments there, particularly that average aid packages increased this year by almost $1500. (That is not institutional aid, that is overall aid, which includes student loans. I imagine the large bulk of that increase is in loans, particularly considering this year’s recession). Beckman writes that this is wrong – the average grant increased $1500 this year. The WSN article says “financial aid package,” which refers to grants, work study, recommended student loans, etc. I should have fact-checked this myself – sorry for the confusion.

He wrote to me on the topic as well, saying, “Additional [enrolled] students do mean additional students who need aid; however, it also means additional tuition from those who do not require aid, some of which is used for financial aid for needier students.” Good point, but Beckman is missing the big picture.

If we continue to expand the student body, NYU will never significantly grow its per capita endowment, which is what really makes meeting need possible, according to Beckman himself.

The real issue is that financial aid is a zero-sum game. If you give more money to the neediest students, it comes directly out of the awards to needy students who still have to take out loans. So if NYU is serious about affordability for all of its students, they will limit enrollment and continue to increase financial aid more than tuition.

Beckman writes that the University wants “to make NYU as affordable as possible to as many as possible, and to make the education as excellent as possible.” Yet the average indebtedness of an NYU student at graduation is $34,850, over 33% higher than the national average. Does that statistic reflect NYU making NYU as “affordable as possible to as many as possible?”

New research found that it doesn’t matter where you go to college – you make the same amount of money regardless. That knowledge is bound to hurt good universities like NYU that just aren’t offering good value.

And now we’re back to what I wrote about last month: NYU’s exploding tuition costs and rising student debt levels. It just can’t last. If you continue to leave students with insufficient financial aid, they’re going to stop enrolling. And it will be ugly when that happens.

John Beckman responds, and I respond to him, here.


Data from the Department of Education, Columbia’s Institutional Research website, NYU’s Institutional Research website, and the NYU Archive. Photo courtesy of Flickr user AMagill (CC).

4:15 – Updated for clarity.

4:25 – Updated to reflect that the WSN article wasn’t written to “rebut” the question I raised. The article does, however, contain arguments that address that question, as I note above. The two articles are not related, other than that they cover similar material.

4:50 – Facts corrected regarding grant money increase from last year to this year.

10:50 – Chart titles corrected. Minor edits for clarity.

* 10/22 6:45 – Basic math error fixed. To calculate percentage, I was dividing (b-a)/b when I should have done (b-a)/a. The mistake does not change the point, only the numbers. The original sentence sentence read: “from 2002-2006 (adjusted for inflation), NYU tuition rose 12.3%. Yet, across the same time period, average institutional aid for first-time, four-year freshmen only increased 6.6%. At Columbia, tuition went up 9.5% and average institutional aid went up 13.3%.”


    Share Your Thoughts


  1. Kristina Lustig says

    As a lower-middle-class student, I can attest to that. NYU offers me nothing in the way of need-based aid (I do have a substantial merit-based scholarship). I’m forced to take out almost 10k in loans each semester, and repeated appeals to NYU to understand that my family needs a bit of help are blatantly ignored.

  2. says

    I’m in the same boat as Kristina; I get a small Gallatin scholarship for “merit” and everything else is either loans or federal government aid. My parents qualify as distinctly middle class and we’ll all be in some serious debt come graduation.

    This was seriously informative, Charlie. How you write such thoughtful, helpful pieces from abroad is beyond me. Thank you.

  3. Jordan Budd says

    “But that last point raises a big question: why does NYU attract so many needy, low-income students if its financial aid is so bad?”

    Or: why does NYU attract so many needy, middle-income students?

    Or: why does NYU attract so many high-income students?

    Maybe I’m reading too much into this, but this article seems classist to me. What I’m interpreting you to be saying is that “if only the really poor people went away, NYU would have more money for the middle class students who really need it.” Why shouldn’t it be the middle class students who are encouraged to go somewhere else? Or better yet, why not attempt to find a solution that works for everyone?

  4. says

    Jordan: I see what you’re saying, but I don’t think Charlie was trying to be classist.

    Like the commenters above, I too suffer the “middle class dilemma.” Right after I came to NYU, my dad lost his job. I’d gotten a (relatively) nice merit-based scholarship, but I’d had to take out loans before arriving–and while my dad was still employed.

    After a few months of being unemployed, my family’s financial situation took a turn for the worse. This gave me an identity problem (and I don’t mean emotionally or psychologically, though those issues developed too): my family wasn’t making any money, and we suddenly had a lot less of it than we’d had only a year before. Approaching bankruptcy, was my family really lower class? Or was I still middle class, but not as much as before? How “poor” could I really claim to be, going to school and living in lower Manhattan? I wasn’t so naive as to call myself impoverished, but as I said: approaching bankruptcy. That means zero.

    NYU didn’t think so. Since I’d applied as a staunchly middle-class student with a working parent, I had received next to no aid (not scholarships, but aid) from the school itself. As each semester passed, my family had to take out more student loans to cover the high cost of learning here.

    It took two years of my dad not having a job–and many hours fighting with the Bursar’s office and the financial aid people–before the school realized my predicament and gave me some help. Thankfully, my dad has since gotten a new job, but the fact remains that thanks to loans, I have so much debt that it even makes my wallet start to sweat. And just because my dad has found employment doesn’t mean my family is back to its former financial privilege.

    My point being: before you assume that every middle-class student that wants to come here is aiming just a little bit out of reach, realize that this economic recession threw a lot of middle-class kids like me into this situation, of having applied as one “class” but emerged from school as another.

  5. Charlie Eisenhood says

    @ Jordan:

    I’m not making a value judgment on NYU’s distribution of aid. It may be that the fairest thing to do is to give a lot of money to the neediest students.

    My point is more that NYU claims to be making the school more affordable but is actually making the “tough decision” that the “middle class” (or whatever term you want to use to mean above the neediest) should take on more debt if they want to come here. Or at least that’s how I read the evidence.

    I think NYU should try to make the school more affordable in general rather than for just the neediest.

  6. says

    While I know little about Campusgrotto, this list that just appeared on HuffPo kinda puts a nice bow around this entire article: NYU is the second most expensive school in the country.

    And Charlie, in comparison to the WSN article, I find it reprehensible that you refused to quote at least three other students to record their own anecdotal evidence of the situation and instead decided to produce the kind of article Nate Silver would admire. How DARE you.

  7. says

    love the article. and i think this idea applies to organizations and institutions beyond NYU. this is exactly how i’ve been thinking about outreach NPOs in NYC versus the suburbs: people want to help the inner-city students, the students in the “bad parts” of counties and districts. unfortunately, few are reaching out to the schools that seem good enough to get by, but still continue to struggle.

    thank you for finally making an effort to provide some facts and a tempered argument. i enjoyed the article.

  8. Henry Chan says

    All this talk of class bothers me. If it makes anyone feel any better, even the kids with a substantial financial aid package (I’m talking around $20-$25k) still have to take out $10k+ loans a semester.

  9. says


    Could your own comments not also be interpreted as classist?

    To say that Charlie is not pursuing a solution that is productive for everyone is to ignore that fact that, at this point in American history, being “middle class” and being “needy” are really quite similar. Fewer jobs, fewer opportunities, and skyrocketing costs for just about everything means that the chance for a student from the middle class to attend college is drifting farther away than it has for a long time.

    And in reality, these middle-class people, who you write of with some sort of derision, make up a majority of the population of most top-50 schools in this country. To suggest that these people should receive no assistance, and that this solution is somehow preferable to another, is counterproductive.

    Charlie clearly points out that the most-achieved students of the working class are often fought over by large universities, and that NYU moves its financial aid packages in the direction of these students. This, in a world in which the middle class could easily afford attending this school, would be no problem whatsoever.

    But the fact is that, as tuition prices increase, scholarships dry up, and the economy continues to endanger America’s middle class, non-needy-non-rich students, thrown a bone by admissions, will continue to see their lot worsen.

    The result? The kind of mass exodus, that Charlie described, of those students who, again, contribute the most to this school’s operating budget and, yes, financial aid budget.

  10. John Beckman says

    I appreciate that Charlie wanted to open a conversation on this topic; however, there are a number of factual errors – some serious, some disappointing — that really need to be corrected.

    I’d like to start with the big picture, if I may. Between 2002-03 and 2009-10, cost of attendance rose 40.0%; institutional aid (gift, scholarship, and grant aid provided by NYU) increased by 94.8%. We gave Charlie information for two five-year periods – the one he was using (2002-03 to 2006-07) and the most recent (2005-06 to 2009-10) – and, in each, it showed that the percentage increase in institutional aid exceeded the percentage increase in tuition.

    I would have thought this might have been highlighted as the key issue. Or the fact that NYU is providing some $160 million in institutional aid – far more than most other universities.

    As I mentioned, there were some important errors in Charlie’s post that need to be addressed. Let me outline them.

    With regard to paragraph four – on a per student basis, NYU’s endowment is not 148th out of the 522 private universities with the largest endowments, we are 184th. Let me illustrate the importance of being that far down the list: the total cost of attendance at Princeton is about $50,000; the total cost of attendance at NYU is about $54,000. According to the 2008 NACUBO endowment student, NYU’s endowment per student was about $70,398; Princeton’s was approximately $2.26 million per student. The rule of thumb is that – on average – endowments will yield about five percent per year. In Princeton’s case, that’s about $113,000/year; in NYU’s case, that’s about $3,500/year. Although we don’t know exactly how much of the Princeton endowment supports financial aid, this conveys a fairly clear sense that they – and similarly situated schools – have substantially more resources in hand for that purpose.

    With regard to the two charts – there is a fundamental flaw and a labeling error. The fundamental flaw with the two charts (which Charlie notes): they use only data for full-time, first-time degree/certificate-seeking freshmen. Our financial aid program serves ALL undergraduates, not just freshmen, so looking at the charts does not really tell the whole story. And there’s another important error: the chart titles do not match up to the data Charlie describes — these charts incorrectly claim to represent aid to “4-year undergraduates.”

    With regard to paragraph 13 – Charlie is wrong in stating that the increase in institutional aid to those with need began in 2005; I wish he had thought to ask us. During the years on which he is focused – 2002-03 to 2006-07 – the percentage of total institutional aid that went to students with need increased from 84.1% to 87.7%

    With regard to paragraph 17 – two errors in this one. 1) Adjusting for inflation would change the percentage figures, but it wouldn’t change the fact that institutional financial aid increased at a faster rate than cost of attendance. However, in response, here are inflation adjusted figures: between 2002-03 and 2006-07: the total cost of attendance increased by 12.6%; total institutional aid increased by 19.0%; institutional aid to students with need increased by 24.1%. 2) Charlie didn’t ask us for the “average institutional aid increase” (by which I assume he means the average institutional aid grant). Had he asked, I would have told him that average institutional aid grant increased from $7,780 in 2002-03 to $9,811 in 2006-07 (for students with need, it increased from $8,338 to $10,416 over that period) (NB: the figures in part 2 are not inflation adjusted)

    With regard to paragraph 23 – Charlie says “average aid packages increased this year by almost $1500. (That is not institutional aid, that is overall aid, which includes student loans. I imagine the large bulk of that increase is in loans, particularly considering this year’s recession.)” That’s incorrect — that increase was in institutional aid. I pointed this out to Charlie already, and he indicated he would be correcting that, but I wanted to make sure that this was clear.

    Having highlighted Charlie’s key specific errors (some of which he will probably correct, but it is important to get them on the record), I’d like to speak generally again for a moment.

    NYU is not among the relatively small set of institutions that “meet full need” – meaning that our financial aid resources are not sufficient to fill the gap between the expected family contribution (as determined by FAFSA) and the cost of tuition for all our students. We know that because of this, many students take on debt to attend NYU because they really want to be here. That places a real responsibility on NYU — one we feel keenly and constantly strive to meet – to strike a balance within the resources we have: to make NYU as affordable as possible to as many as possible and at the same time to give our students an education that is manifestly and recognizably excellent, to give them a chance to learn from faculty who are at the forefront of adding knowledge to their disciplines, to create supports that help them succeed academically, to provide them with opportunities that are truly distinctive (such as through our connections to NYC and our extensive international network), and to prepare them well for their lives after they receive an NYU degree, whether that be grad school, professional school, or the workforce.

    That’s what we work at every day. That’s why we added extra funds to financial aid this year, that’s why we slowed the rate of increase in cost of attendance to its lowest level in 20 years this year, that’s why non-union employees received no salary increase this year (saving $23 million), that’s why we have been cutting administrative costs (a savings of $53 million annually by the end of this year), that’s why we didn’t look to cuts in academics (even when other major universities did), and that’s why we do fundraising.

    — John Beckman, NYU Public Affairs

  11. says

    Sound like a pretty pickayune (I know I misspelled that) and arduous job there, Mr. Beckman, especially with regard to paragraphs 2, 5, 7, 8, and 9.

    Lotsa numbers.

  12. says

    Thank you for the detailed clarifications, Mr. Beckman, but I think this exchange exhibits the problem in understanding how our school divvies up study aid.

    If your office were to provide some kind of two-hour session on the policy of financial aid at NYU, and how it compares to the workings of other schools, these numbers and factoids would make more sense. The numbers being thrown around in this article and comment section lend themselves towards talking points, but without understanding the full context, do little to clear the fog from this complicated issue.

    And I expect that the majority of the NYULocal staff would be there to listen and learn.

  13. Kristina Lustig says

    @Josh Fow’d you manage to convince NYU that they needed to help you? I’ve also got recently unemployed parents, and NYU just doesn’t seem to care that our income has halved.

  14. says

    @Kristina: I got tired of dealing with the financial aid people myself, so my dad gave them a few calls and kept bugging them about it and was kind of a little crazy over the phone. But that got the job done. Sometimes they need to hear a parent’s voice to like “believe you” more.

  15. Jordan Budd says


    I don’t think pointing out possible classism and referring to such remarks in a sarcastic way would qualify as “reverse-classism.” I agree that being middle class and being needy aren’t mutually exclusive, but if you look at your own language, it sounds a little silly to be saying that the needIEST students shouldn’t necessarily be receiving money over students who are needIER than the upper class students.

    I wasn’t suggesting that any group should receive no assistance, just that the conversation should be framed not as “why can’t a certain group leave,” but “why can’t NYU deal with this more equitably?”

  16. says

    As I said in the correction post, I am a member of the “Neediest Students” and the aid I receive is horrible, and my mother and I are taking on tons of loans for me to go to NYU. So, the financial aid really doesn’t help out the neediest students either.