October 3, 2013
Dear Fellow Members of the NYU Community,
At today’s University Senate meeting, Trustee Evan Chesler and I briefed the Senate about the Momentum Campaign, a six-year effort to raise $1 billion to improve financial aid at NYU. I want to share our plans with you, both the full extent of our aspirations as well as the immediate effects on financial aid at NYU.
When I am asked to cite the one challenge NYU faces that I think about most, it is providing enough financial aid for our students. Each week, I hear directly from students who love NYU and are doing well here, but who are worried about the burden their education places on their families.
A major limitation of our financial aid is NYU’s relatively low per-student endowment compared to our peer schools. Additionally, we have a high percentage of Pell-eligible students (i.e., the neediest) – this is a point of pride for us in terms of economic diversity, but it deepens the need we must address. And, in the past, donors have been less forthcoming with philanthropic gifts for financial aid than for other needs.
Despite these hurdles, we have made significant efforts to increase institutional aid (i.e., NYU-funded scholarship grants, which don’t have to be paid back). Over the last decade, we have increased the financial aid budget by 138% and now spend $195 million annually in undergraduate scholarship aid, resulting in an increase in the average scholarship grant from 34% of tuition to 55% of tuition.
But we know we are not yet where we want to be in terms of supporting our students and their families.
As I enter the last years of my time as president of NYU, I and our Board of Trustees have committed ourselves to directing our energies to raising money to increase financial aid. Evan Chesler – who as a young man received a scholarship that enabled him to attend NYU as an undergraduate, graduate from our Law School, and go on to be the chairman of the law firm Cravath, Swaine & Moore – will be the chair of the campaign, and he attended the Senate meeting today as a sign of the Trustees’ commitment to this effort.
In fact, I can proudly report that in its “quiet phase,” the campaign has already raised over $200 million, anchored by multi-million dollar gifts from several of our Trustees.
A major fundraising campaign of this magnitude can help us build an endowment that can generate scholarship funds in perpetuity. But, as transformative as it will be over the long run, endowments take time to build, and thus for their impact to be felt.
So, with new donations, we are launching two student aid initiatives that can start helping our students, particularly our undergraduates, right away, each designed to meet a pressing and distinct need.
The first – the Finish Line Grant program – is designed to ensure that as those undergraduates receiving financial aid approach their final semester, they receive scholarship assistance that will contribute to lowering their debt upon graduation. After determining each student’s cumulative need-based federal loan debt (subsidized Stafford loans and Perkins loans), NYU will provide grant aid equal to 10% of his or her need-based loan amount, thereby reducing the total amount owed. Finish Line grants could be as high as $5,000, though most will be less; these grants represent a permanent reduction in a student’s debt of not only the grant amount, but the compound interest the student would have paid on that amount over the repayment period.
We expect to begin the Finish Line Grant program next semester (spring 2014). And if the Finish Line Grant program proves as successful as we hope – and we believe it will be very attractive to donors, who know their philanthropy is helping students who have done well and are poised to graduate – we may well look to increase the percentage over time.
The second program we want to start sooner rather than later is one we call Global Pathways Scholarship program, or GPS.
NYU’s global presence is unrivaled among universities, and our network of campuses and sites is important in attracting talented students and faculty. According to the Institute of International Education (IIE), NYU sends more students to study abroad than any other US university: nearly 40% of our undergraduates now spend at least a semester abroad – a significantly larger number than just a few years ago – and we expect that number to keep rising.
This distinctive and integral NYU experience should be available to all who wish to participate; yet, we have heard from students – and from members of the faculty who have expressed deep concerns as well – that some of our students are precluded from study away because of financial constraints, such as lost wages or the added expenses of travel.
Starting next fall, through the GPS program, the University will look at each student who has expressed an interest in studying away and – depending on his or her financial need – add to their financial aid package a grant – up to a maximum of $4,000 – to cover the additional costs of studying away.
Not all of our financial aid challenges will be solved by the Momentum Campaign, but it will enable us to make meaningful progress. And that’s why we named this campaign “Momentum” – NYU’s great story of momentum, its academic trajectory, has been accomplished over many years through perseverance, a focus on excellence, and an entrepreneurial spirit. Over the past 30 years, we have made great strides in transforming NYU academically. I hope that by calling our community together – students, faculty, administrators, alumni, Trustees – and re-sharpening our focus on financial aid and student debt, we will make even more progress toward ensuring that NYU is affordable and accessible to students and their families.
Errata: in the original version of this memo, the word "Swain" was used in the name of the law firm "Cravath, Swaine & Moore."? The Office of Public Affairs deeply regrets the error.