A ProPublica analysis of newly available federal data shows that some of the nation’s wealthiest colleges are leaving their poorest students with plenty of debt
New York University is among the country’s wealthiest schools. Backed by its $3.5 billion endowment
as well as its considerable fundraising prowess, the school has built campuses in Abu Dhabi and Shanghai, invested billions
in SoHo real estate, and given its star faculty loans to buy summer homes
But the university does less than many other schools when it comes to one thing: helping its poor students.
A ProPublica analysis based on new data
from the U.S. Department of Education shows that students from low-income families graduate from NYU saddled with huge federal loans. The school’s Pell Grant recipients – students from families that make less than $30,000 a year – owe an average of $23,250
in federal loans after graduation.
NYU is not the only university with a billion-dollar endowment to leave its poorest students with heavy debt loads. More than a quarter of the nation’s 60 wealthiest universities leave their low-income students owing an average of more than $20,000 in federal loans.
At the University of Southern California, which has a $4.6 billion endowment
, low-income students graduate with slightly more debt than NYU’s graduates: $23,375.
At Boston University ($1.5 billion endowment
), it’s $27,000
, and at Wake Forest University ($1.1 billion endowment
) low-income students graduate with $29,150
This new data on student debt is drawn from numbers that the Obama administration assembled as part of a planned effort to create grades for every college. In the face of fierce lobbying
from universities, the administration backed away, but has made much of the data public on a new website called College Scorecard
. ProPublica has used that material to create Debt By Degrees
, an interactive database that allows you to search information for almost 7,000 schools. The data provides an unprecedented level of detail on the financial burden that the poorest college students face, showing for the first time how much federal debt poor students take on compared to their wealthier peers, and how well these students are able to repay their loans. The database also shows how much graduates earn on average after leaving school.
The implications of these numbers can be far-reaching. Studies have shown
that even small debts can increase a student’s chances of dropping out, particularly for minorities and low-income students. Also, federal loans, which are typically capped at $27,000 over four years,
often don’t cover the full expense of college. Many students also take on private bank loans or work jobs outside school.
“Student debt is not the same to every borrower,” said Mark Huelsman, a senior analyst at Demos, a public policy nonprofit. “It can look a lot different to a first generation student from a very modest economic background than to someone going to graduate school getting a law degree.”
Indeed, undergraduates take a fraction of the loans of graduate students but default at much higher rates
. Debt can put low-income young adults at a disadvantage for years to come, limiting a graduate’s ability to save, get a mortgage, or get the job they aspire to.
“At the end of the day, you’re talking about households that don’t have nearly as much wealth to fall back on,” said Huelsman.
Rebecca Arthur wanted nothing more than to study photography at Tisch, NYU’s arts school. Her mother, however, made less than $25,000 a year working at a nursing home, so Arthur knew the school’s four-year price tag of over $250,000 would be a stretch. When Arthur was accepted, she was shocked – not only because she had gotten into her dream school, but also because the school only offered modest financial aid.