Currents

From Fundraising to Free Tuition

By offering full scholarships to every medical school student, New York University has earned big headlines and big dollars

By Ken Budd

From Fundraising to Free Tuition

NYU Medical School: NYU School of Medicine students at its 2018 white coat ceremony, moments after the announcement that NYU would offer full-tuition scholarships to every medical student.
PHOTO CREDIT: NYU SCHOOL OF MEDICINE

The audience was stunned when Robert Grossman made the announcement. Grossman, dean and CEO of NYU Langone Health, was addressing students and their families at the New York University School of Medicine's white coat ceremony, which launches students on their medical studies. After students received their coats, Grossman delivered a bombshell. Starting immediately, he told the audience at the August 2018 event, NYU would offer full-tuition scholarships to every medical student, regardless of merit or need.

Students gasped. And cheered. Later some cried as they hugged their families. Rafael Rivera, associate dean for admissions and financial aid, understood the emotions. Throughout his career, Rivera had struggled with medical school debt, which led to forbearance during his residency.

"I was dirt poor growing up," says Rivera, who worked three jobs while earning his medical degree from Cornell University. "There's no way I would've gotten to medical school without the kindness of others who contributed to the scholarships I received."

NYU is the first U.S. university to offer free medical school for every student, but it's not the only institution embracing the free-tuition movement. At his inauguration in October, University of Virginia President James Ryan announced a tuition-free program for Virginia families that earn less than $80,000 a year. For those earning less than $30,000, the program will also cover room, board, and other fees. In September 2018, Rice University in Houston announced full scholarships for families with incomes between $65,000 and $130,000.

Medical schools have also taken steps to help students. New York's Columbia University launched a program in July 2018 to replace student loans with scholarships for students who qualify for financial aid. About 20 percent of medical students will receive full-tuition scholarships. At UCLA, the David Geffen Memorial Scholarships cover the cost of education for up to 20 percent of medical students annually.

U.S. states are boosting the free-tuition movement as well. Tennessee launched the Tennessee Reconnect Program in February 2018, which allows adults to enroll tuition free at a community or technical college. The state of New York debuted the Excelsior Scholarship program in 2017, claiming it would make "college tuition-free for middle-class New Yorkers."

The moves are an ambitious response to growing concerns about student debt. Outstanding student loans surpassed the $1.5 trillion mark in the United States for the first time in 2018, up from around $600 billion in 2008, the Federal Reserve recently reported. The average U.S. student debt was more than $37,000 in 2017, according to Debt.org, and the figures are significantly higher for medical students: The median debt for the class of 2017 was $192,000, the Association of American Medical Colleges reports. And the cost of college is rising. For the 2018-2019 school year, tuition at a U.S. public four-year institution will average about $10,230 (the average is $35,830 at a private four-year college), according to The College Board. Four years of medical school at a U.S. public institution costs nearly $244,000 on average, and costs are increasing at a greater rate than inflation, says Julie Fresne, AAMC's senior director of student financial services and debt management.

As costs and debt rise, support for free tuition programs has grown. According to a November 2018 survey by the Campaign for Free College Tuition, 81 percent of respondents support free college tuition for academically qualified students, up from 73 percent in 2016. So, could free tuition actually become common in the United States? Here are the opportunities, challenges, and lessons.

The Rise of Promise Programs

Before NYU there was Kalamazoo. Since 2005, the Kalamazoo Promise in Michigan has provided scholarships to more than 2,000 students. Funded by a small group of anonymous donors, it was the nation's first promise program. Promise programs offer scholarships to recent high school graduates and cover up to 100 percent of tuition and fees, usually at local colleges. About 65 percent of promise programs restrict students to community colleges, the Brookings Institution reports, and the programs can take many forms and feature a variety of eligibility requirements.

The United States has 241 promise programs in 43 states, with 49 in California alone, according to the University of Pennsylvania Graduate School of Education. The programs have improved high school grade point averages, raised attendance at public schools, increased enrollment in college, and boosted the chances that students will attain a post-secondary credential. Promise programs can even help revitalize distressed communities by attracting new businesses and residents, recent research from the Upjohn Institute shows.

Success stories include Santa Barbara City College in California, where more than 55 percent of promise program students have a GPA of 3.0 or higher. Before launching the program in 2016, the Santa Barbara City College Foundation gauged support by interviewing more than 100 philanthropic and community leaders. "[The results] gave us the confidence to proceed quickly," says Geoff Green, CEO of the SBCC Foundation. Another important strategic step: Analyze the costs.

"Start with a deep dive into your data to understand what a promise program is really going to cost you," says Pyeper Wilkins, chief advancement officer for the Dallas County Community College District. "Most every community college can implement some type of promise program, but there is not a one-size-fits-all model." Dallas enrolled its first cohort of promise program students in the fall 2018 semester and experienced a 40 percent increase from the previous year. "Students who never thought college was an option now see that it's possible," says Wilkins.

Unclear perceptions about promise programs can sometimes complicate fundraising, as the Tulsa Community College in Oklahoma has learned. The college offers a promise program called Tulsa Achieves. Roughly 3,000-4,000 of the college's 25,000 students are enrolled in the program, but donors often think that all students receive free tuition grants.

"The misperception can create a barrier when raising scholarship funds from private donors," says Lauren F. Brookey, former vice president of external affairs and president of the TCC Foundation. "We have to explain the proportion of our students who are actually on Tulsa Achieves versus the balance of our students and their financial needs and challenges." The program's pros, however, outweigh the cons. "The positive feelings about Tulsa Achieves and the storytelling it provides us is a huge advantage once donors have data on the need," she says.

University of virginia: Jim Ryan gives his inaugural address on the historic Lawn at the University of Virginia, in which he announced a tuition-free program for Virginia families who earn less than $80,000 a year.

University of Virginia: Jim Ryan gives his inaugural address on the historic Lawn at the University of Virginia, in which he announced a tuition-free program for Virginia families who earn less than $80,000 a year.
PHOTO CREDIT: UNIVERSITY OF VIRGINIA
More Money or Better Marketing?

Free tuition sounds great, but there's a catch. Free tuition isn't really free. Someone has to pay for it—and undertaking an NYU-style effort can require massive fundraising. Although NYU was "not blessed with a very large endowment," according to Rivera, the university raised nearly $650 million in roughly 10 years, including $242 million in a nine-month push before the announcement. The effort included a $100 million gift from Kenneth Langone, the cofounder of the home improvement chain, Home Depot, and chair of NYU Langone's board of trustees, and his wife Elaine in 2008.

Columbia University's program to replace student loans with scholarships resulted from a $300 million commitment from P. Roy Vagelos, the former CEO of Merck & Co., and his wife Diana, with $150 million directed to the scholarship endowment. Thanks to other donations, Columbia launched the program just seven months after the Vagelos' announcement. UCLA's scholarship program was the result of a $200 million gift from entertainment executive David Geffen.

But obtaining nine-figure gifts isn't the only way to launch a free-tuition program. In a study published by the National Bureau of Economic Research in December 2018, a group of high-performing, lower-income students received a package promising a full scholarship, including tuition, room, and board, if they applied to the University of Michigan. The results were eye-popping: Sixty-seven percent of the students who received the package applied, compared to 26 percent in a control group. Here's the surprising part: The package wasn't offering anything new. It was just communicating existing scholarships and financial programs in a simple way.

"I've said for a while that if we communicated to ninth graders, ‘you'll get a full scholarship,' we'd see applications and college-going rise," says William G. Tierney, the Wilbur Kieffer Professor of Higher Education and co-director of the Pullias Center for Higher Education at the University of Southern California.

Clearly, messaging matters. In 2007, when the Tulsa Community College unveiled its Tulsa Achieves program, the number of first-time freshmen nearly doubled the first year, which Brookey attributes to TCC's simple communications plan. "Our messaging was always that high school seniors who live in Tulsa County go to college free," she says. "If you make it complicated, you lose the emotion, the understanding, and the engagement."

Communications and marketing departments can play a bigger role in informing students of financial aid opportunities, says Kristen A. Renn, associate dean of undergraduate studies for student success research at Michigan State University. "When much of one's admissions work is figuring out whom not to admit, the idea of marketing the institution isn't always at front of mind," says Renn. "It sounds overly simplistic, but I think it just hasn't occurred to them to prioritize the marketing of existing opportunities to low-income students."

Clarity is at the core of the University of Virginia's program, which will award grants to roughly 1,900 incoming and current undergraduate students starting in 2019. When Ryan announced the program at his inauguration ceremony, it received the loudest cheer of the day from the crowd on the university's historic Lawn. But the funding (which will come from federal and state sources), the endowment, and tuition, aren't new. What is new is the commitment to middle- and low-income students and the way it's packaged.

"I suspect that positive attention and outcomes to existing programs will prompt elite institutions to think about how to repackage existing programs," says Renn. "The intention behind these programs seems genuinely to be about equity and inclusion, and the positive PR aspect can't be discounted." But she adds a caveat: "Until they also address their overall enrollment strategy to rebalance opportunities across the economic spectrum, the impact of these programs will be limited."

Elite private and public institutions face a paradox, she says. Although they typically have more resources than non-elite institutions, they often struggle to attract lower-income students. That's because students assume they can't afford it, or they don't know anyone who has gone there, or they knew a student who felt uncomfortable surrounded by higher-income students.

"Together with reports about student debt, there are lots of reasons why lower-income students, regardless of academic performance, might not even look at elite institutions," says Renn. But the Michigan experiment, she says, validates a different approach: "There's a chance to make a big impact even if the financial packages aren't that different from what they were offering before."

Understanding the Challenges

Just because an institution offers a free tuition program doesn't mean it's helping students. Critics, for example, have targeted New York's Excelsior program, which pays for tuition at in-state public colleges for students from families earning $125,000 or less. To do that, the state covers the gap between tuition and existing financial aid. But the number of students benefiting from the program has been disappointing: Sixty-eight percent of applicants have been rejected, an analysis by the Center for an Urban Future found, typically for having insufficient credits. (Students are required to earn at least 30 credits in every year of enrollment.) 

In 2017, economists from Harvard University and the University of California at Berkeley released a study suggesting that lower college costs have not only had little impact on degree attainment but have also increased the percentage of part-time students and dropout rates. "Our ļ¬ndings suggest that government programs aimed at reducing college costs will not increase degree attainment if cost reduction is achieved by reducing per-student spending," the authors wrote.

Countries like Germany show the upsides and downsides of free tuition. In 2014, when free tuition was eliminated at public universities (eight years after universities had regained the right to charge students), enrollment increased by 22 percent, according to The Hechinger Report, which focuses on inequality and innovation in education. But it also led to a 37 percent tax increase. Students receive little money for living expenses—forcing many to work or seek loans—and universities complain about overcrowded lecture halls, lost income, and reduced per-student spending. Public opinion about free tuition is now split, surveys show. One upside: International students also receive free tuition, and 69 percent say they'd like to stay in the country once they graduate, a 2018 survey by Studying-in-Germany.org found. That's important in a country where a large percentage of the population is over 60.
Support for free tuition is growing in the United States, but other options are more likely. To reduce education costs and student debt, many medical schools are launching virtual learning opportunities and offering condensed curriculums, says AAMC's Fresne. Clearer communications about tuition are also important, adds USC's Tierney.

"I think we will see more innovative ways of packaging tuition since it's so darn confusing," he says. "I know that for-profit colleges have legitimately earned a horrible reputation, but they do have a model that must be considered: They do most of the work for the ‘customer,' the student. It should not be as confusing to go to college as it is to take out a mortgage."

Santa Barbara City College: SBCC Promise students in the Running Start summer bridge program before starting their first semester in college.

Santa Barbara City College: SBCC Promise students in the Running Start summer bridge program before starting their first semester in college.
PHOTO CREDIT: NEIL CAMPBELL/SANTA BARBAR CITY COLLEGE
Unlikely Donations and Inspired Alumni

NYU's goal is noble: To eliminate debt as an issue for students, allow them to pursue their passions, and increase the number of students considering a medical career (AAMC projects a shortage of up to 120,000 physicians by 2030). But the university benefitted as well. NYU's free-tuition move ignited an enormous media response which led to a second wave of donations, many from smaller-scale donors such as students and family members. Some donations came from surprising sources.

"We received gifts from alumni of other academic medical schools who said, ‘I'm embarrassed that my school hasn't done this with the endowments it has,'" says Grace Y. Ko, senior vice president for development and alumni affairs at NYU Langone Health.

The admissions staff struggled to keep up with the emails and calls. "If you follow student blogs, you see posts with people saying, ‘I hadn't thought about applying before, but I am now,'" says Rivera. He projected NYU would see a roughly 30 percent increase in applications over the previous year. That's an impressive number since most applications are submitted in early summer.

"I can't explain how uplifting it has been for all of us at the institution," says Ko. "[Donors] were moved beyond belief."
And if you're wondering whether students who received free tuition will become more-involved alumni, consider Mattie Renn, a second-year student at Columbia University's medical school who is benefitting from its new financial aid program.

"When I made the decision to go to medical school, I said, ‘I'm going to take on these loans and I'm going to have to pay them back.' That was a deal I made to myself," she says.

"Now that those loans are no longer a part of that story, it's just a huge amount of relief."

The Vagelos program has strengthened her relationship with the university. She's appeared in a thank you video, participated in a gratitude ceremony, and helped write thank you notes to donors. "I wanted to vocalize how grateful I was to the university for making this an option and hopefully to expand the gift in the future to look more like NYU's," she says. "I have stronger feelings of loyalty. This has absolutely changed how I interact with the university and how I will interact in the future."

And that includes, yes, possibly being a donor.

"If I end up making any money as a primary care physician," she says, "I think I would be more willing to give."

What NYU Learned

To make free medical school tuition a reality, the development team at NYU Langone Health raised $242 million in nine months. Grace Y. Ko, senior vice president for development and alumni affairs at NYU Langone Health, shares three lessons:

  1. Obtain institutional support. The more that leadership supports your vision, the stronger your case to donors, Ko believes. "Your case is that much more compelling when you can say, ‘the board chair of the medical center,' ‘the board chair of NYU,' ‘the co-chairs of our institution,'" she says. "Having a critical mass helps propel your case to another level."

  2. Share student stories. "Don't keep the students hidden," Ko advises. "Witnessing their journey motivated many of our donors." Ko and her team shared stories in a variety of ways, including one-on-one meetings, letters, presentations, and events. "The recipients of scholarships were the biggest proponents for a tuition-free medical school because they knew the impact," says Ko.

  3. Take advantage of a daring idea. About half of the gifts came from alumni, who wholeheartedly supported the tuition-free concept. "It was a big and bold idea," says Ko. "Even some people who have been involved in other parts of the institution said, ‘You know what? I'm going to support this, because this is a historic, huge initiative.' I think that influences your solicitation. Supporting the first tuition-free medical school, thinking about the impact that would have on society, it was compelling."

About the Authors

Ken Budd has written for Currents, The New York Times, The Washington Post, and others.