“On April 28, 2023, Justin Fox’s Analysis, titled “MIT is a College Bargain. NYU, not so Much,” makes waves as it moves from Bloomberg to the Washington Post.
MIT graduates earn the highest incomes among top US universities, with federal aid recipients earning a median income of $124,213 annually after 10 years. Surprisingly, MIT is also one of the least expensive universities for federal aid recipients, with an average cost of just $5,084 per year, including living expenses and supplies.
According to Bloomberg’s college endowment tracker, NYU ranks 35th with $3.5 billion. However, endowment rankings don’t solely determine costs. Comparatively, the University of Pennsylvania and the University of Notre Dame have similar endowments ($20.5 billion vs. $20.3 billion), but significantly different costs for students receiving federal aid ($14,851 vs. $32,369). Prioritizing affordable education for lower- and middle-income students appears to be a higher focus at Penn than at Notre Dame.
The majority of US college students now rely on federal aid. Data from the Department of Education’s National Center for Education Statistics in the 2017-2018 academic year showed that 59.1% of undergraduates received federal grants, loans, or both. The percentage increased to 59.6% at four-year public institutions and 64.2% at four-year private nonprofit institutions. Recent administrative data also indicate a rise in the percentage of students receiving federal grants across all colleges, from 42.6% in 2017-2018 to 51.8% in 2019-2020.
Big-endowment private universities, such as MIT, Stanford, Princeton, Columbia, and Harvard, offer incredible value for low- and middle-income students who gain admission. However, these universities have a relatively small number of students. Together, they account for just 0.3% of US four-year college undergraduate enrollment and have only 15% as many undergraduates as the University of California system. Public institutions still play a major role in providing postsecondary education, but it is concerning that many top public universities now cost close to $20,000 per year, even for in-state students receiving federal aid.
One not-so-surprising fact that the author pointed out was “the most expensive four-year schools for students who receive federal aid include a lot of specialized art, design, music and theater schools whose graduates don’t make much money. Some of these are excellent schools, but for students who don’t have rich parents, they can be debt traps.”
Landmark College in Putney, Vermont, caters to students with learning disabilities, so it’s unfair to judge its former students’ low median earnings. Another noteworthy institution is Gnomon, a Hollywood-based school specializing in visual FX, games, and animation. Despite being founded in 1997, Gnomon’s graduates earn salaries comparable to those of Harvard. Graduates of Santa Clara and Fairfield Universities earn even more, benefitting from their location in prosperous areas like Silicon Valley and Fairfield County, Connecticut. Additionally, Worcester Polytechnic Institute, a Massachusetts STEM school established four years after MIT, and the Los Angeles campus of West Coast University, a specialized health-care school, surpass Harvard graduates in terms of earnings.
Furthermore, the author’s research revealed that STEM and specialized health-care schools dominate the list of four-year institutions with the highest-earning undergraduates. While this may not come as a surprise, it is interesting to note that three lesser-known health sciences schools, along with Harvey Mudd College, a science and engineering-focused institution within California’s Claremont Colleges, surpass MIT in this regard.