This is Bloomberg Business Week with Carol Masser and Tim Stenebeck on Bloomberg Radio.
Well, Molly, as the high school class of twenty twenty four begins to start applying for colleges this fall. Believe it or not, but tuition continues to keep climbing so Earlier this year, Bloomberg News reported that the increase and US college cost is pushed the annual price for this academic year at Ivy League schools toward ninety thousand dollars.
So is a college degree worth the cost right even at today's high At rising prices, a bachelor's degree does tend to pay off in earnings power, though that can obviously vary widely depending on the major, and at the most elite US schools, there's no sign of a slowdown in demand for those covetive spots, as you know, Mollie. So joining us is Janet Lauren, higher education finance reporter at Bloomberg News, and Christopher Eiscruber, President at Princeton University,
both in the Bloomberg Interactive Broker Studio. I want to first start off before we get into that too. When you joined a Christopher, you did actually put a statement out this week on how the terroist attacks in the
war in the Middle East. Can you kind of walk us through that, because you talked about how even in a world torn by violence and hatred, this Hamas murder and kidnapping a hundred of Israelis over this past week and is among atrocious of tarists asks, and there's been so much pressure on a lot of people to come out and make statements. What's your view on this.
And why did you decide to put this out?
Well, first of all, thank you for the opportunity to be on the program. With regard to the statement, you quoted the first line for it, as I made the statement, and I made it in my own voice, I thought it was really important to call out the terroristic character of this attack by Hamas and also to recognize that lives were going to be lost, both Israeli and Palestinian lives as a result of a war that had been
provoked by these extraordinarily cruel and inhumane attacks. That was important for us because we want to make sure that our students, faculty, and staff on the campus as they deal with anguish and anger around these attacks, feel seen, heard and supported, and we live right now. As I said in the message, in a world torn not only by violence but by hatred, one might hope that those
things could be taken for granted. But I think it's often important for university presidents to speak out and make sure that their community knows that that level of care and support is there.
And you talked about how your university did reach out to those students and then other community members from Israel and the Palestinian territories. Have you heard, sort of anecdotally, anything that you think is important to note as far as maybe people that are impacted that we're going to your university.
We've heard lots of different things, obviously, lots of us, and I include myself in that category. I have relatives in Israel and are concerned about the safety. There are people whose families have been affected. There are our students and even faculty members who are making decisions about whether or not to go back and serve to support Israel. I think there are all kinds of personal stories right now, and I'm sure we will hear more of them over time.
Yeah, we thank you for giving us your perspective on that. Christopher wanted to shift a little bit in terms of Yeah, the value of a college education right now. So you actually went to Princeton. I won't say what year you graduated to thank you there, So.
You've been in the area for a while on the campus there, I mean tell us you know obviously you know you've got where where's enrollment at right now?
We are in the process of expanding our undergraduate student body right now. So we were at five thousand, two hundred students, which would have been one thousand, three hundred per per class. We're doing a ten percent expansion up to five thousand, seven hundred students, which is fourteen twenty five per entering class.
And how does that rank in terms of where you've been historically, Well.
That'll be the largest that our undergraduate class has been. In fact, last year we had an over yield. We had one thousand, five hundred students, which would be the largest class that Princeton ever admitted. We also have a new transfer program. It's very small, but something that we're very excited about.
Jinna, I wanted to bring you into this conversation. How do you view sort of the debate when people are talking about whether the cost of education obviously getting price or in price here is still worth it when you look at sort of the dynamic and the competitiveness in the markets trying to get jobs right now.
Well, as we were talking about earlier with President as Grouper, the cost of college is certainly going to depend on where you're going. In some cases at Princeton, if you're making I believe it less than one hundred thousand dollars, it's going to be completely free, which seems counterintuitive. However, in terms of the cost, we were also talking earlier about when you don't graduate, and that's in some ways a bigger travesty, especially if you're taking on student loans.
You have taken debt, you've taken time, and you don't have the degree to help you with your earnings. That is an issue that you know, again, as we were talking about earlier, doesn't seem to get the amount of attention right.
And we have these student loan repayments that have especially for these federal loans that began again this month that obviously we're on pause because of what happened with the pandemic and the spring of twenty twenty. But when it comes to the cost and trying to finance that through particularly federal loans. How much more expensive is that for students right now, whether you're going to a school in state or if you're going to more price or Ivy League school.
I had a story last week that looked at the annual disbursements for loans, and we're about to see that graduate school borrowing is about to eclipse undergraduate borrowing. Wow. And graduate school borrowing is often students are using what's called the grad plus loan, which is at the highest interest rate of eight just over eight percent, the highest it's been in a dozen years. And that also deserves
to get more attention. Is that risk to get a graduate degree and be able to pay off your loans? That's probably a lot riskier in some ways than borrow growing the small amount you're allowed every year federally to get a college education.
So we're looking then at applicants for graduate programs at Princeton. Obviously that's got to be a bit of a factor now, right or how are you seeing that applicant pool shaping up?
Well, that applicant pool is also very strong. So when we talked earlier about the size of the undergraduate student body and growing it up to five seven hundred students. That's the undergraduate student body. We've got about two thousand, six hundred or so graduate students as well, in both the undergraduate and graduate programs. Our endowment provides extraordinary support for our students. So they're graduating with very low debt in both the undergraduate and the graduate programs, and the
demand for those programs remains very strong. Just to give you a little bit more detail on that. In our undergraduate program sixty seven percent right now of our students are on financial aid. And if you're on financial aid, the average scholarship is sixty thousand dollars. That's six zero thousand dollars, which is the higher that's the average, and
that's above the tuition price. And this is why, as Janet said, if you just look at a sticker price, particularly for a selective institution, you're not looking at the real price much less the return on that education.
Right, And so how do you end up squaring that way when you do have students who might be able to get accepted but maybe they don't have the scholarship opportunities in particular reasons there as far as what they could do as like other resources to go there. If they are looking at, say particular types of grants or like the pel grant.
Well, we have at this point over twenty two percent in our incoming class who are pell students, so we have a very significant representation of students. But Princeton University will guarantee this financial aid for any student who's able to get in. So we are working aggressively and my instruction to our mission Dean right now is find more
low income students, find more middle income students. And because of what we can do through the partnership with our alumni and the endowment, we will support that financial aid. It's not on the student to go out and find other sources of scholarship aid. The university will do it.
Something I'm curious about and for both of you. We only have about a minute left. But the haves and the have nots because of the pandemic being the disparity there, how much are you seeing that now? So as we're coming out of COVID.
In terms of colleges, the federal pandemic aid is schools are no longer receiving it. So you're starting to see some of the smaller colleges and areas where there's fewer eighteen year olds, for example, the Midwest and the Northeast, there just aren't as many kids to go to those schools. So you're seeing that sector constrained. But on the other end, you're able to see a place like Princeton grow and add to its student population, and that certainly costs a lot of money.
Yeah, let's just go into then really quickly, Janet. I mean we started this out with like, why, you know, go into what is the payoff of a college education here? So what are the attitudes on it right now? How does the current students feel?
Well?
I mean I think students are you see this big student loan number and there's a question am I going to ever going to be able to service your debt? And I think people are thinking a lot about price, and uh, you know, as students are looking at their application. The FAFSA form is different this year. It's it's it's it's supposed to be easier, but nothing in financial aid is ever easy.
I imagine that.
Well, we'll have to leave it there.
So Janet Lauri and higher education finance reporter here at Bloomberg News, and Christopher ice Gruber, President at Princeton University,