We need to change financial planning forever.
When I began my career, most financial planning advice swirled around tax avoidance. Planned then shifted in estate planning work. It quickly evolved into retirement planning. A great deal of work these days centers around paying for education.
This should not come as shock or surprise to anyone: pre- and post-graduate education is expensive. Massively expensive. However, new NYU medical students found out Thursday their tuition would be covered by a new scholarship.
We need to begin thinking creatively of ways to reduce (and one day, eliminate) the cost of tuition for higher education. What the NYU Langone School of Medicine has done is leveled the playing field, eliminating a giant hurdle for many: the abhorrent tax of attending medical school known as tuition.
We need to think how the topic of tuition can change financial planning forever.
As CNN shared, “The debt can scare people away. One of those individuals could be the one to find a cure for cancer. For us, it’s important to have the best applicant pool possible and society deserves nothing less,” Rafael Rivera, Associate Dean for Financial aid at NYU said.
A Small Business Collection Agency exposits that debt can also affect what specialty students choose to pursue, deterring some from the lower-paying positions in pediatrics and primary care. “We want people to pursue those fields because it’s their passion,” Rivera said.
It takes a lot of time. It takes vision. It takes planning. School officials at NYU Langone have been working towards making the scholarship a reality for 11 years. To date, they have raised $450 million of the $600 million needed to create an endowment that will allow NYU to offer full-tuition scholarships in perpetuity, said Robert Grossman, dean and CEO of NYU Langone Health.
“Our goal was to raise enough money to enable students to graduate with as little debt as possible,” Grossman said.
Full tuition scholarships in perpetuity.
This is a glorious thing.
How did they do this?
They asked for money.
They asked a LOT of people for money.
And they asked a lot of people for a lot of money continuously.
These students will still need to pay for room and board and other (usual) out-of-pocket expenses. But think about a competitive program like the NYU Langone Medical program. Now that the (financial) bar has been removed, only the best of the best will be accepted, nothing less.
Personally, I was very lucky to attend Chaminade High School on Long Island. I received a first class education, in all the subjects. But I also received a first class education in life and in faith. One of the best benefits from my education at Chaminade was in how to study, how to be prepared.
One anecdote I share with folks when discussing Chaminade is “you graduate on the first Sunday in June. And then, the first week in August you receive your first alumni newsletter, followed soon after by a letter with a request to donate to the school, in an effort to help others.” And that process, that “asking machine” has continued every three months for thirty eight years since I graduated. And the machine was in place long before I ever began attending there in the fall of 1976.
In the years since I’ve graduated, they have been able to hold the tuition and get the out-of-pocket cost DOWN by nearly $1800 per year for each and every student. And that tuition reduction gets bigger every year. Why? They crank out a great product, have a good reputation and they ASK relentlessly.
It can be done.
The cost of higher education is out of reach today for most families in America. This has already changed financial planning forever. Paying for education is a topic discussed in nearly every single meeting. It’s not something nearly all families can pay out of pocket. Both parents and students mortgage their dreams to insure students get an education and a shot at the American dream. Retirement plans get put on hold, starting families get delayed, buying homes becomes a dicey proposition because of the huge cost of attaining a good education.
And we’re not talking about state-sponsored “free thirteenth grade” that may come with strings attached.
My father was in the Navy in World War II. He was able to go through college on the GI bill. And I vividly remember the day he flipped out when I told him I was accepted into Chaminade. He flipped out (and not in a good way) because, it was unthinkable for a family with nine kids, to pay $1200 per year for one child to attend a private high school.
Fostering a tuition-free education creates an environment where the only ticket for entry is merit. This IS the definition of equal opportunity. All you have to do to get in, is earn it. All you have to create a universe where people can get an excellent education is ask for it.
It can be done.
What happened yesterday at NYU Langone should not be a one-time event. It can (and should) be the beginning of a new direction.
And that new direction could someday change financial planning forever.