This entire story is just so heart warming and I don't know if the title/discussions right now are doing it justice.
1. The fact that this donation is 100% going towards tuition. My university has a few B's in endowment, but those money are most definitely not going towards making the tuition fees lower lol. Hopefully this will allow them to select some candidate that are struggling the most financially...
2. The donor being a 93 year old doctor/alumni of that school that studied "learning disabilities and developed screening protocols".
3. The money was from her late husband's "whole portfolio of Berkshire Hathaway stock". And before he passed, he told her to "do whatever you think is right with it" and the article ends with her saying "I hope he's smiling and not frowning". Makes me cry a little.
- 1B in donations at 5% APR conservatively invested will yield 50M every year.
- At yearly tuition rate of 59K the earned interest is enough to pay for 850 students without drawing down the invested principal.
- Albert Einstein college of medicine admits about 150 freshmen every year and medical school is 4 years long. So at any given time there are 600 students studying medicine at this school.
It seems to me that simply earned interest on this donation should be enough to allow students to attend this school free of tuition indefinitely.
There is no risk free 5% yearly return. The current interest rates may be temporary and there is inflation that erodes the 50M and the Principal amount.
It's enough not only for that, but to gradually expand the number of students they can afford to admit tuition-free into the future (strictly on interest), as well, should the desire to do so ever arise.
Or another way to look at it, you only need $50m a year to be the "equivalent" of a billion dollar endowment, and $50m a year is the budget of a smallish county.
Wow, the Albert Einstein College of Medicine is about to immediately be the most competitive medical school in the US. I wonder how this will affect the number of doctors graduating from the school and how many will go on to practice in NYC / the Bronx.
When UC Irvine launched its law school, they made tuition free for the first graduating class (and perhaps gave discounts to the next couple years — I can't remember). They are now ranked #35 in the USNWR, which is pretty good for a school that's about a dozen years old.
My guess is that having free tuition for all students forever will have a much bigger impact. I believe Princeton's policy school is similarly endowed, [1] and it's basically the top choice for anyone getting an MPP. Of course, it also has the prestige of Princeton associated with it; I could imagine some student choosing Harvard over this school, which doesn't currently have the same name recognition/prestige. But surely that will grow as a result of this announcement!
If interested, another medical school in NY that offers free tuition is NYU. They write, "1st medical school to offer Full-Tuition Scholarships for all students" [0].
Nobody likes leaving money on the table so they will start charging additional fees. Not tuition but some other things, obligatory insurance, mandatory auxilary premium fee, whatever, anything that plausibly falls outside of donation agteement.
I just hope they have enough decency to delay it till the donor dies so she doesn't have to witness it.
Kaiser Permanente has something similar for their med school in Pasadena. In 2019 they announced free med school tuition for the first 5 classes (through 2024). Unsurprisingly this attracts top talent, and there don’t appear to be any sort of strings attached (eg, stay employed with Kaiser for X years once you finish).
Their acceptance rate was 50/11,000 applicants last year (0.45%).
I'm not opposed to free tuition, but I kind of question the utility of a grant like this.
It's not like there's a requirement here that the doctors are going to work in the non-profit sector. It's not going to make the field less overworked and toxic. The students at this school have the same demographics as every other medical school.
Given that nearly all of the students who graduate from a medical program end up in the top 10% of wage earners, this seems like a temporary alleviation of financial problems for a very small cadre of well-to-do.
I am happy Dr. Gottesman felt such an affinity for her former employer, but it kind of strikes me as an ... uncreative(?) deployment of a billion dollars.
The wealth came from David “Sandy” Gottesman’s investments, the most prominent of which was an early investment in Berkshire Hathaway. Gottesman was a friend of Warren Buffett, served on the board of Berkshire Hathaway, and also founded his own firm First Manhattan.
It is a great gesture, but if someone gets to have a spare billion to donate, makes me think that it could be the case to increase taxes and make institutions as vital as school be funded publicly and consistently by governments rather than random act of philanthropy
It’s mad that someone accrued billions and students can’t get 60k for free to study
I consider this kind of events more as a proof of the inadequacy of the system rather than the contrary
Call me a dirty European, but my first reaction to this is "This is why you're meant to have a working tax system". I agree that tuition for doctors shouldn't be usurious, but is this really the best use of $1bn? Imagine how much better we could make things if all the people who got rich off Berkshire Hathaway put their money towards good causes and we actually focused that spending on the best outcomes for everyone rather than just helicopter money for random pet causes. It's just such a weird system.
Without any cynicism, I am curious what sort of negotiation and terms go into a donation of such size. As all the founders here can attest, taking money requires agreeing to a complex array of terms.
For example - what kind of protections are in place to preserve the donor's intent? Is there a board of directors for the donated funds that provides oversight? Could the med school 10X the salary of administrators and raise tuition equally? Could the med school hire 10X more staff? Could they relocate the med school to a 5 Star hotel?
People do funny things when vast sums of money appear.
"I wanted to fund students at Einstein so that they would receive free tuition," Dr Gottesman said she immediately realised. "There was enough money to do that in perpetuity."
I have never heard of a school getting this lucky from there alumni/faculty and even hearing there students getting something out of it so it touched my heart I have always had a toxic opinion about my teachers. Perhaps this could turn into an example for the rest of Americas medical schools in the coming decades.
Medical school debt and physician insurance. Some specialties have just wildly high insurance.
My wife is an OB and has to pay $140,000/yr per year for tail insurance in my state. So she literally needs to make, after all other costs of the practice, $140k just to break an even $0/yr.
And people wonder why it costs so much to have a baby.
Canada has managed to undertrain its own people domestically for med school for a while with many going to the US/caribbean/europe for training at full rates.
We’ve had to change our terminology from “international medical graduates” to “foreign medical graduates” because a lot of those trying to get foreign credentials recognized are locals.
Probably a tough slog upon return to pay back the debts but net-positive in the long-run (unless interest rates go up, uh oh).
Is it necessarily the case that median physician pay must go down for a single-payer system? I would hope that we could have savings if the total payments to actual care providers was similar, but billing, and insurance parts of the system were dropped out of the picture.
It's not just tuition. There are so many issues with the workforce and their education:
- We cap the number of residency students per year, creating an artificial limited supply.
- We don't allow immigrant doctors to transfer their credentials, creating an artificial limited supply.
- Med school is expensive, limiting the pool of applicants.
- Nurses and nurse practitioners are extremely close to the action on a daily basis. There should be a path for them to graduate into doctors, perhaps by attending night school and then some form of on-the-job residency.
Probably the donor specified that those funds MUST go towards tuition-free education.
No way school managers would come out with this idea from their own volition.
We actually already have many loan forgiveness programs for doctors - for example, they can choose to work at an understaffed clinic in a historically underserved area of the country and get huge amounts of their loans forgiven, on top of making a big salary. A lot of these clinics fully depend on this pipeline of doctors needing loan forgiveness. I'm not saying that this an ideal situation, but the loans can sorta encourage many doctors to practice where they are most needed.
Loan forgiveness like other tax incentives merely distort the market. Just pay the doctors what it costs to get them there, we are probably over paying by giving loan forgiveness.
For all those speculating about the impact, NYU Med School went tuition free in 2018. This isn't the first school to do it. It would be interesting to read what the actual impact has been to NYU.
How about expanding admissions to more students rather than making it free. With the earning power that clinicians command, they won't have trouble paying off the fees. But patients deserve more doctors and more talent deserves the chance to become doctors.
[+] [-] chenxi9649|2 years ago|reply
1. The fact that this donation is 100% going towards tuition. My university has a few B's in endowment, but those money are most definitely not going towards making the tuition fees lower lol. Hopefully this will allow them to select some candidate that are struggling the most financially...
2. The donor being a 93 year old doctor/alumni of that school that studied "learning disabilities and developed screening protocols".
3. The money was from her late husband's "whole portfolio of Berkshire Hathaway stock". And before he passed, he told her to "do whatever you think is right with it" and the article ends with her saying "I hope he's smiling and not frowning". Makes me cry a little.
[+] [-] VincentEvans|2 years ago|reply
- At yearly tuition rate of 59K the earned interest is enough to pay for 850 students without drawing down the invested principal.
- Albert Einstein college of medicine admits about 150 freshmen every year and medical school is 4 years long. So at any given time there are 600 students studying medicine at this school.
It seems to me that simply earned interest on this donation should be enough to allow students to attend this school free of tuition indefinitely.
[+] [-] laweijfmvo|2 years ago|reply
[+] [-] nshelly|2 years ago|reply
Compound interest is the eighth wonder of the world. He who understands it, earns it … he who doesn't … pays it.
[+] [-] farseer|2 years ago|reply
[+] [-] IG_Semmelweiss|2 years ago|reply
She should have made the gift contingent on keeping tuition costs indexed at 2023 level plus a tiny fraction of inflation say 0.5%
Then the real challenge would be very interesting - what they could cut every year to keep the program going.
[+] [-] anonym29|2 years ago|reply
[+] [-] fisherjeff|2 years ago|reply
[+] [-] happytiger|2 years ago|reply
It’s a reminder of what can be done when billionaires give back and pass it through to society instead of passing it along to their heirs.
This kindness is going to change the world and provide doctors that will treat and help hundreds of thousands.
[+] [-] amirhirsch|2 years ago|reply
[+] [-] bombcar|2 years ago|reply
[+] [-] sergiotapia|2 years ago|reply
[+] [-] Systemling0815|2 years ago|reply
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[+] [-] unknown|2 years ago|reply
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[+] [-] jameskraus|2 years ago|reply
[+] [-] gnicholas|2 years ago|reply
My guess is that having free tuition for all students forever will have a much bigger impact. I believe Princeton's policy school is similarly endowed, [1] and it's basically the top choice for anyone getting an MPP. Of course, it also has the prestige of Princeton associated with it; I could imagine some student choosing Harvard over this school, which doesn't currently have the same name recognition/prestige. But surely that will grow as a result of this announcement!
1: https://spia.princeton.edu/blogs/we-fully-fund-all-students-...
[+] [-] hhs|2 years ago|reply
[0]: https://med.nyu.edu/education/md-degree/md-admissions
[+] [-] scotty79|2 years ago|reply
I just hope they have enough decency to delay it till the donor dies so she doesn't have to witness it.
[+] [-] hentrep|2 years ago|reply
Their acceptance rate was 50/11,000 applicants last year (0.45%).
[0] https://www.nbclosangeles.com/news/health-wellness/kaiser-pe...
[+] [-] legitster|2 years ago|reply
It's not like there's a requirement here that the doctors are going to work in the non-profit sector. It's not going to make the field less overworked and toxic. The students at this school have the same demographics as every other medical school.
Given that nearly all of the students who graduate from a medical program end up in the top 10% of wage earners, this seems like a temporary alleviation of financial problems for a very small cadre of well-to-do.
I am happy Dr. Gottesman felt such an affinity for her former employer, but it kind of strikes me as an ... uncreative(?) deployment of a billion dollars.
[+] [-] divbzero|2 years ago|reply
[+] [-] lnxg33k1|2 years ago|reply
It’s mad that someone accrued billions and students can’t get 60k for free to study
I consider this kind of events more as a proof of the inadequacy of the system rather than the contrary
[+] [-] SilverBirch|2 years ago|reply
[+] [-] testfoobar|2 years ago|reply
Without any cynicism, I am curious what sort of negotiation and terms go into a donation of such size. As all the founders here can attest, taking money requires agreeing to a complex array of terms.
For example - what kind of protections are in place to preserve the donor's intent? Is there a board of directors for the donated funds that provides oversight? Could the med school 10X the salary of administrators and raise tuition equally? Could the med school hire 10X more staff? Could they relocate the med school to a 5 Star hotel?
People do funny things when vast sums of money appear.
[+] [-] DaleNeumann|2 years ago|reply
I have never heard of a school getting this lucky from there alumni/faculty and even hearing there students getting something out of it so it touched my heart I have always had a toxic opinion about my teachers. Perhaps this could turn into an example for the rest of Americas medical schools in the coming decades.
[+] [-] aantix|2 years ago|reply
$360K of debt would be a massive burden if the system had fixed costs.
[+] [-] HEmanZ|2 years ago|reply
My wife is an OB and has to pay $140,000/yr per year for tail insurance in my state. So she literally needs to make, after all other costs of the practice, $140k just to break an even $0/yr.
And people wonder why it costs so much to have a baby.
[+] [-] Scoundreller|2 years ago|reply
We’ve had to change our terminology from “international medical graduates” to “foreign medical graduates” because a lot of those trying to get foreign credentials recognized are locals.
Probably a tough slog upon return to pay back the debts but net-positive in the long-run (unless interest rates go up, uh oh).
[+] [-] abeppu|2 years ago|reply
[+] [-] echelon|2 years ago|reply
- We cap the number of residency students per year, creating an artificial limited supply.
- We don't allow immigrant doctors to transfer their credentials, creating an artificial limited supply.
- Med school is expensive, limiting the pool of applicants.
- Nurses and nurse practitioners are extremely close to the action on a daily basis. There should be a path for them to graduate into doctors, perhaps by attending night school and then some form of on-the-job residency.
[+] [-] mathattack|2 years ago|reply
Olin college was founded on free tuition paid outbid the endowment. Unfortunately this didn’t last. https://www.olin.edu/admission-financial-aid-afford/cost-att...
[+] [-] WalterBright|2 years ago|reply
Just some examples I see:
1. people don't turn off the lights when they leave a hotel room. I ask why, they say "who cares".
2. people abuse rental cars, because "it's just a rental".
3. students abuse free textbooks.
4. heck, the whole free public school system.
5. nobody values a "participation" award.
And so it goes. Students should have some sweat equity in their education.
[+] [-] Taikonerd|2 years ago|reply
[+] [-] woah|2 years ago|reply
[+] [-] elzbardico|2 years ago|reply
[+] [-] yieldcrv|2 years ago|reply
[+] [-] giogadi|2 years ago|reply
[+] [-] dantheman|2 years ago|reply
[+] [-] sillypuddy|2 years ago|reply
[+] [-] ldoughty|2 years ago|reply
The school has about 1250 students (Wikipedia). I'm guessing the difference comes from other sources.. or it slowly will drain downward.
Interesting to see nonetheless.
[+] [-] bradleyjg|2 years ago|reply
[+] [-] jostmey|2 years ago|reply
[+] [-] chrisjj|2 years ago|reply
Oops BBC. Eliminates tuition /fees/.