Speaker 1: This is Bloomberg Business Week with Carol Masser and Tim
Speaker 1: Stenebeck on Bloomberg Radio.
Speaker 2: Well, Molly, as the high school class of twenty twenty
Speaker 2: four begins to start applying for colleges this fall. Believe
Speaker 2: it or not, but tuition continues to keep climbing so
Speaker 2: Earlier this year, Bloomberg News reported that the increase and
Speaker 2: US college cost is pushed the annual price for this
Speaker 2: academic year at Ivy League schools toward ninety thousand dollars.
Speaker 2: So is a college degree worth the cost right even
Speaker 2: at today's high At rising prices, a bachelor's degree does
Speaker 2: tend to pay off in earnings power, though that can
Speaker 2: obviously vary widely depending on the major, and at the
Speaker 2: most elite US schools, there's no sign of a slowdown
Speaker 2: in demand for those covetive spots, as you know, Mollie.
Speaker 2: So joining us is Janet Lauren, higher education finance reporter
Speaker 2: at Bloomberg News, and Christopher Eiscruber, President at Princeton University,
Speaker 2: both in the Bloomberg Interactive Broker Studio. I want to
Speaker 2: first start off before we get into that too. When
Speaker 2: you joined a Christopher, you did actually put a statement
Speaker 2: out this week on how the terroist attacks in the
Speaker 2: war in the Middle East. Can you kind of walk
Speaker 2: us through that, because you talked about how even in
Speaker 2: a world torn by violence and hatred, this Hamas murder
Speaker 2: and kidnapping a hundred of Israelis over this past week
Speaker 2: and is among atrocious of tarists asks, and there's been
Speaker 2: so much pressure on a lot of people to come
Speaker 2: out and make statements. What's your view on this.
Speaker 3: And why did you decide to put this out?
Speaker 4: Well, first of all, thank you for the opportunity to
Speaker 4: be on the program. With regard to the statement, you
Speaker 4: quoted the first line for it, as I made the statement,
Speaker 4: and I made it in my own voice, I thought
Speaker 4: it was really important to call out the terroristic character
Speaker 4: of this attack by Hamas and also to recognize that
Speaker 4: lives were going to be lost, both Israeli and Palestinian
Speaker 4: lives as a result of a war that had been
Speaker 4: provoked by these extraordinarily cruel and inhumane attacks. That was
Speaker 4: important for us because we want to make sure that
Speaker 4: our students, faculty, and staff on the campus as they
Speaker 4: deal with anguish and anger around these attacks, feel seen,
Speaker 4: heard and supported, and we live right now. As I
Speaker 4: said in the message, in a world torn not only
Speaker 4: by violence but by hatred, one might hope that those
Speaker 4: things could be taken for granted. But I think it's
Speaker 4: often important for university presidents to speak out and make
Speaker 4: sure that their community knows that that level of care
Speaker 4: and support is there.
Speaker 3: And you talked about how your university did reach out
Speaker 3: to those students and then other community members from Israel
Speaker 3: and the Palestinian territories. Have you heard, sort of anecdotally,
Speaker 3: anything that you think is important to note as far
Speaker 3: as maybe people that are impacted that we're going to
Speaker 3: your university.
Speaker 4: We've heard lots of different things, obviously, lots of us,
Speaker 4: and I include myself in that category. I have relatives
Speaker 4: in Israel and are concerned about the safety. There are
Speaker 4: people whose families have been affected. There are our students
Speaker 4: and even faculty members who are making decisions about whether
Speaker 4: or not to go back and serve to support Israel.
Speaker 4: I think there are all kinds of personal stories right now,
Speaker 4: and I'm sure we will hear more of them over time.
Speaker 5: Yeah, we thank you for giving us your perspective on that.
Speaker 5: Christopher wanted to shift a little bit in terms of Yeah,
Speaker 5: the value of a college education right now. So you
Speaker 5: actually went to Princeton. I won't say what year you
Speaker 5: graduated to thank you there, So.
Speaker 1: You've been in the area for a while on the
Speaker 1: campus there, I mean tell us you know obviously you
Speaker 1: know you've got where where's enrollment at right now?
Speaker 4: We are in the process of expanding our undergraduate student
Speaker 4: body right now. So we were at five thousand, two
Speaker 4: hundred students, which would have been one thousand, three hundred
Speaker 4: per per class. We're doing a ten percent expansion up
Speaker 4: to five thousand, seven hundred students, which is fourteen twenty
Speaker 4: five per entering class.
Speaker 1: And how does that rank in terms of where you've
Speaker 1: been historically, Well.
Speaker 4: That'll be the largest that our undergraduate class has been.
Speaker 4: In fact, last year we had an over yield. We
Speaker 4: had one thousand, five hundred students, which would be the
Speaker 4: largest class that Princeton ever admitted. We also have a
Speaker 4: new transfer program. It's very small, but something that we're
Speaker 4: very excited about.
Speaker 2: Jinna, I wanted to bring you into this conversation. How
Speaker 2: do you view sort of the debate when people are
Speaker 2: talking about whether the cost of education obviously getting price
Speaker 2: or in price here is still worth it when you
Speaker 2: look at sort of the dynamic and the competitiveness in
Speaker 2: the markets trying to get jobs right now.
Speaker 6: Well, as we were talking about earlier with President as Grouper,
Speaker 6: the cost of college is certainly going to depend on
Speaker 6: where you're going. In some cases at Princeton, if you're
Speaker 6: making I believe it less than one hundred thousand dollars,
Speaker 6: it's going to be completely free, which seems counterintuitive. However,
Speaker 6: in terms of the cost, we were also talking earlier
Speaker 6: about when you don't graduate, and that's in some ways
Speaker 6: a bigger travesty, especially if you're taking on student loans.
Speaker 6: You have taken debt, you've taken time, and you don't
Speaker 6: have the degree to help you with your earnings. That
Speaker 6: is an issue that you know, again, as we were
Speaker 6: talking about earlier, doesn't seem to get the amount of
Speaker 6: attention right.
Speaker 3: And we have these student loan repayments that have especially
Speaker 3: for these federal loans that began again this month that
Speaker 3: obviously we're on pause because of what happened with the
Speaker 3: pandemic and the spring of twenty twenty. But when it
Speaker 3: comes to the cost and trying to finance that through
Speaker 3: particularly federal loans. How much more expensive is that for
Speaker 3: students right now, whether you're going to a school in
Speaker 3: state or if you're going to more price or Ivy
Speaker 3: League school.
Speaker 6: I had a story last week that looked at the
Speaker 6: annual disbursements for loans, and we're about to see that
Speaker 6: graduate school borrowing is about to eclipse undergraduate borrowing. Wow.
Speaker 6: And graduate school borrowing is often students are using what's
Speaker 6: called the grad plus loan, which is at the highest
Speaker 6: interest rate of eight just over eight percent, the highest
Speaker 6: it's been in a dozen years. And that also deserves
Speaker 6: to get more attention. Is that risk to get a
Speaker 6: graduate degree and be able to pay off your loans?
Speaker 6: That's probably a lot riskier in some ways than borrow
Speaker 6: growing the small amount you're allowed every year federally to
Speaker 6: get a college education.
Speaker 1: So we're looking then at applicants for graduate programs at Princeton.
Speaker 1: Obviously that's got to be a bit of a factor now,
Speaker 1: right or how are you seeing that applicant pool shaping up?
Speaker 4: Well, that applicant pool is also very strong. So when
Speaker 4: we talked earlier about the size of the undergraduate student
Speaker 4: body and growing it up to five seven hundred students.
Speaker 4: That's the undergraduate student body. We've got about two thousand,
Speaker 4: six hundred or so graduate students as well, in both
Speaker 4: the undergraduate and graduate programs. Our endowment provides extraordinary support
Speaker 4: for our students. So they're graduating with very low debt
Speaker 4: in both the undergraduate and the graduate programs, and the
Speaker 4: demand for those programs remains very strong. Just to give
Speaker 4: you a little bit more detail on that. In our
Speaker 4: undergraduate program sixty seven percent right now of our students
Speaker 4: are on financial aid. And if you're on financial aid,
Speaker 4: the average scholarship is sixty thousand dollars. That's six zero
Speaker 4: thousand dollars, which is the higher that's the average, and
Speaker 4: that's above the tuition price. And this is why, as
Speaker 4: Janet said, if you just look at a sticker price,
Speaker 4: particularly for a selective institution, you're not looking at the
Speaker 4: real price much less the return on that education.
Speaker 3: Right, And so how do you end up squaring that
Speaker 3: way when you do have students who might be able
Speaker 3: to get accepted but maybe they don't have the scholarship
Speaker 3: opportunities in particular reasons there as far as what they
Speaker 3: could do as like other resources to go there. If
Speaker 3: they are looking at, say particular types of grants or
Speaker 3: like the pel grant.
Speaker 4: Well, we have at this point over twenty two percent
Speaker 4: in our incoming class who are pell students, so we
Speaker 4: have a very significant representation of students. But Princeton University
Speaker 4: will guarantee this financial aid for any student who's able
Speaker 4: to get in. So we are working aggressively and my
Speaker 4: instruction to our mission Dean right now is find more
Speaker 4: low income students, find more middle income students. And because
Speaker 4: of what we can do through the partnership with our
Speaker 4: alumni and the endowment, we will support that financial aid.
Speaker 4: It's not on the student to go out and find
Speaker 4: other sources of scholarship aid. The university will do it.
Speaker 3: Something I'm curious about and for both of you. We
Speaker 3: only have about a minute left. But the haves and
Speaker 3: the have nots because of the pandemic being the disparity there,
Speaker 3: how much are you seeing that now? So as we're
Speaker 3: coming out of COVID.
Speaker 6: In terms of colleges, the federal pandemic aid is schools
Speaker 6: are no longer receiving it. So you're starting to see
Speaker 6: some of the smaller colleges and areas where there's fewer
Speaker 6: eighteen year olds, for example, the Midwest and the Northeast,
Speaker 6: there just aren't as many kids to go to those schools.
Speaker 6: So you're seeing that sector constrained. But on the other end,
Speaker 6: you're able to see a place like Princeton grow and
Speaker 6: add to its student population, and that certainly costs a
Speaker 6: lot of money.
Speaker 1: Yeah, let's just go into then really quickly, Janet. I
Speaker 1: mean we started this out with like, why, you know,
Speaker 1: go into what is the payoff of a college education here?
Speaker 1: So what are the attitudes on it right now? How
Speaker 1: does the current students feel?
Speaker 5: Well?
Speaker 6: I mean I think students are you see this big
Speaker 6: student loan number and there's a question am I going
Speaker 6: to ever going to be able to service your debt?
Speaker 6: And I think people are thinking a lot about price,
Speaker 6: and uh, you know, as students are looking at their application.
Speaker 6: The FAFSA form is different this year. It's it's it's
Speaker 6: it's supposed to be easier, but nothing in financial aid
Speaker 6: is ever easy.
Speaker 5: I imagine that.
Speaker 6: Well, we'll have to leave it there.
Speaker 2: So Janet Lauri and higher education finance reporter here at
Speaker 2: Bloomberg News, and Christopher ice Gruber, President at Princeton University,