Recently, the New York University (NYU) School of Medicine announced that all current and future medical school students will receive full tuition scholarships, “regardless of their need or merit.” This is great news, not only for medical students, but for higher education and society as a whole, because according to the American Association of Medical Colleges, doctors are graduating with approximately $300,000 of student loan debt. Hopefully the move by NYU will motivate other universities, including non-medical, to pursue similar programs to lessen the burden on young adults just starting out their careers.
Financial and academic scholarships have been around for decades, but this is the first time a major university is offering it to everyone. Still, some critics argue that offering the full tuition scholarships to everyone will benefit the wealthy more and further broaden the income gap.
The NYU free medical school program covers only the tuition, which is currently at $55,018 per year. However, the price of university is more than just tuition; it also includes room and board, books, meals, etc. According to the NYU School of Medicine website, the total cost of a 4-year medical degree is $331,725 (for the 2018-2019 school year), but with the full tuition scholarship, that cost drops to only $111,653 – that is a savings of over 66 percent!
We know how to navigate the student loan maze, whether it is private, public, subsidized, unsubsidized, consolidated, or not. As a wealth management and CPA firm focused on working exclusively with healthcare professionals, we regularly see young doctors graduating with six figure student loan debts and spend a lot of time developing the best strategy to tackle that debt.
Kudos to NYU for taking a giant steps towards making higher education affordable. While it is great that universities and nonprofits are offering scholarships to help alleviate the rising cost of education, personally, I would like to know what is driving these escalating costs. If general inflation is 3 percent, why are tuition rates rising more than twice that? What is behind the rising cost?
Ara Oghoorian, CFA, CFP®, CPA is the President & Founder of ACap Asset Management.
ACap Asset Management, Inc. is a “Fee-Only” investment management firm headquartered in Los Angeles, CA specializing in helping doctors and healthcare professionals make sound financial decisions.
Contact ACap at info@acapam.com or 818-272-8511.
