Update on Affordability and Diversity at NYU

Date: Thursday, February 18, 2016
To: THE NYU COMMUNITY
From: NYU President Andrew Hamilton

 

I was very pleased to attend my first University Senate as President today. The presence of the representatives of so many campus groups – tenured faculty, non-tenure-track contract faculty, students, administrators, and deans – makes the Senate a particularly important venue for me as I continue to learn about NYU and listen to my fellow members of the community.

From time to time, there will be matters of importance from the Senate that I want to share more widely with the University community. I write to you in that spirit today.

First is the issue of diversity. Anyone who attended – or watched, as I did – last semester’s Town Hall cannot help but be struck by the power of the speakers’ voices, the seriousness and urgency of the problem, and the need for us to remain committed to achieving improvements. This is a topic of deep concern for me.

My very first meeting as President was with the Chairs of the Task Force constituted to examine this issue, and last week I met with the full membership. I was impressed by their dedication and the seriousness with which they are approaching their duties. I look forward to continuing to be in communication with the committee and to receiving their interim recommendations for action later this semester.

In addition, at today’s Senate meeting, we discussed the important topic of affordability, and the University’s intention to reduce the planned increase in undergraduate cost of attendance for next year. Before going into the specifics, I want to address the issues of college costs more generally.

As I have made my way across campus since being named President and particularly since arriving in January, one of the themes that has emerged most regularly and insistently is the issue of affordability and cost-of-attendance.

College cost is a national issue, not one confined to NYU. And it is the case that NYU has markedly improved its financial aid program: over the last 10 years, the budget for undergraduate financial aid – which is need-based – has trebled, as has the average grant we give entering freshman. For our most recent freshman class, the average grant covers nearly 2/3 of tuition and fees, and the average grant for Pell-eligible freshmen covers over 80% of tuition and fees. In addition, average student debt at NYU has declined by 30% over the last five years; it is below the national average on a per student basis. And NYU’s $1 billion campaign to raise funds for scholarship aid recently passed the halfway point – we’ve raised over $500 million.

This is considerable progress.

And even in the short time I have been here, I have come to believe firmly in the value of the education NYU provides: the quality of our faculty, the rigor of our coursework, the unrivalled opportunities for global education, the extraordinary scope of internships in New York, the support provided to students for everything from health to career development.

Nonetheless, NYU, like most other top private research universities in the U.S., is expensive. Our tuition and fees are in the top 50 nationally. And because New York is one of the costliest cities in the world, particularly for housing, our room and board fees are among the very highest nationally, a fact that propels us to the top of the cost-of-attendance lists.

Although NYU’s cost of attendance may not differ greatly from other major private research universities, there is a key structural difference: NYU has among the smallest endowment per student of any major private research university – 178th among all private, non-profit, four-year universities. This means that we depend on tuition dollars more than many of our peer schools, and have greater limits on our financial aid (the last decade’s improvements notwithstanding).

These fundamental realities will not change soon. There is no magic wand to be waved, and there is no single measure that solves the problem. Instead, improvements in the trajectory of NYU’s cost will have to come from a series of steps over the long term: controlling costs, improving fundraising, making tough choices about spending, and looking for new approaches to save families money, to name a few. And we should acknowledge that even then, it will very likely not put us in the same position as peer schools that have endowments that are, on a per student basis, many times larger than NYU’s.

But neither can we be content with the status quo.

And so, while it is relatively early in the annual budget cycle, I made some of my priorities known to my Senate colleagues today and have proposed the following changes for the 2016-17 academic year:

  • NYU will reduce its planned increase in tuition and fees from a typical range of 3.5 - 3.9% annually to 2.9% for most of its undergraduate programs for the coming year, the lowest increase in 20 years.
  • NYU will freeze housing and meal plan costs on our New York campuses* for 2016-17 at the current year’s rates.
  • NYU will freeze the University registration and services fee.
  • NYU will convert an additional 600–700 student rooms to lower-cost housing, increasing the pool of lower-cost housing by almost 50%.

The combined result of these actions will be the smallest increase in cost-of-attendance in over 20 years for most of our undergraduate programs at 2.0%. We believe this is a good first step in addressing concerns that may be principally felt by students and their families but that many in our University share.

Because NYU is largely funded through annual tuition and fees, any reduction to planned revenues such as those we are proposing must be offset with corresponding cuts in spending. Therefore, both next year’s budget and the 2017-18 will include de minimis increases in the other-than-personal-services (OTPS) portion of the budget (this is the non-personnel part of the budget, used to pay for the goods and services the University purchases) – less than 0.5% each year.

I wish we could do more right now, but the facts of our financial situation – our relatively small endowment for our size, our corresponding reliance on tuition and fees – do not allow it. I understand this step does not “solve the problem,” neither now nor especially in the long run. But we felt it was important to make a start now on holding down cost of attendance and to send a signal, albeit a modest one, about our priorities, and that we understand how pressing an issue this is for our community.

Making a difference in the trajectory of college costs at NYU must be and will be one of our priorities over the coming years; however, it will be a long-term, not a short-term, project. It will require thinking through some of the structural issues of cost – whether that be in the form of spending reductions or exploring possible alternatives to traditional models of earning a degree – to see how we can reduce expense for students and families. And it must be accomplished while maintaining the excellence in research and teaching and learning the University has worked so hard to build.

For this reason, I am setting up a Steering Committee that will consult widely, examine all possibilities and work with me to identify options that can be practically implemented while preserving the academic excellence of the University. I will expect an interim report by the fall, after which I will report back to the Senate and more broadly to the University community on this topic.

Both of these issues – diversity and affordability – are emblematic of the serious challenges now confronting higher education: complex, deeply embedded, not easily solved, yet calling out for solutions. Knowing, as I believe I now do, the commitment and energy and perseverance that has brought NYU so far in such a short time, I am convinced that together we shall make progress and find thoughtful solutions to these and the other challenges that present themselves. I look forward to working with all of you on them.

*This phrase was added to the email originally sent on on February 18 to clarify that the freezing of housing and meal plan costs apply to New York based facilities.