Degrees of Debt

      Degree_of_Debt_BW (1).png


      On college and university campuses around the country, it’s a familiar complaint.

      Candace Brown: I think it's really sad that our country wants to charge like 18, 19, 20-year-olds a quarter of a million dollars to be educated better, good quality citizens. I think it's, I think that's ridiculous.

      Sharyl: Do you know how much debt you're going to have when you graduate?

      Jade Wootton: Yeah, my guess is somewhere $30,000 or $40,000.

      Sharyl: Are you concerned about paying it back?

      Jade: Um, yes. I'm very concerned, you know, got to get a good job out of school which is hard these days, with the market the way it is.

      Sharyl: The high cost of college is on the minds of a lot of students here at New York University, or NYU. It costs upwards of $60,000 a year to attend school here and live on campus.

      Professor Mark Crispin Miller: You could say that NYU represents the avant garde of everything that's wrong with U.S. higher education.

      Sharyl: In what respect?

      Miller: They engage in a staggering range of tricks and tactics to squeeze as much cash as possible out of a student body.

      Mark Crispin Miller is a professor of Media Culture and Communication at NYU who leads a faculty group and co-authored a faculty report called, “The Art of the Gouge, How NYU squeezes billions from our students and where that money goes.”

      Miller: There are 10 to 20,000 dollars’ worth of hidden fees at NYU, amounts of money that, that the students didn't realize they were going to have to come up with. This has happened time and time again, students telling us, ‘they just sent me a bill for $2,000, etcetera. If you factor in the considerable hidden fees that NYU ends up charging, I think it is unquestionably the most expensive school in the country.

      Critics call those hidden fees “backdoor tuition.” And it’s not just NYU. Colleges around the U.S. have quietly devised creative, complex systems of mandatory extra charges on top of ballooning tuition.

      Application fees, student orientation fees, credit card fees…you name it. Parking permits cost up to $858 at Ohio State University. California Polytechnic State charges an annual $814 “student success fee.” Harvard’s mandatory fees add up to nearly three thousand eight hundred dollars.

      At the University of California Los Angeles, there’s the Student Services fee, Instructional Enhancement Initiative Fee, Seismic fee, Document fee, Green Initiative Fee, over two-thousand dollars for mandatory health insurance and more.

      Together, it adds upwards of four thousand dollars on to tuition, room and board.

      Vincent Cinque: Lots of nickel and diming, so we’re giving so much as it is, and now you’re gonna take even more from us that’s like not technically included in the tuition.

      Vincent Cinque graduated from NYU with a degree in Drama and Producing and a gut-wrenching debt.

      Cinque: I'm personally 30 grand in debt and my dad's like 120 from the school.

      Seeking Arrangement web ad:

      Take out loans and eat ramen or get a sugar daddy and live the life you’ve always wanted.

      Some female students are turning to a shocking alternative. A website called Seeking Arrangement, which hooks up young “sugar babies” with “sugar daddies” to help pay the high cost of college.

      Seeking Arrangement web ad: Jumpstarting your future starts with choosing the right education.

      Sharyl: How long ago did you join?

      Student: This was like three years ago that I joined it.

      This Seeking Arrangement Sugar Baby agreed to speak with us if we would protect her identity and alter her voice. Her parents have no idea.

      Sharyl: Let's be clear. A lot of the men do get into this because they want sex.

      Student: Yeah, they do, but that doesn't mean you have to have sex with them, just like, if you meet someone with, off that site, and you met them in person, that doesn't mean you have to have sex with them, if you choose not to.

      Sharyl: So, what did you ask for and what were you able to get?

      Student: There was a time where I needed like $300 for the textbooks for class and I honestly didn't know how I was going to pay for them. Like I didn't really want to ask my parents. So he paid for all the textbooks, like he was like listen, I'm going to give you money so that you can take care of that, cause it's important.

      Seeking Arrangement Spokesperson Brook Urick: It's very popular among college students; people in college oftentimes don't have a lot of money, they're taking out a lot of loans, they're graduating with a ton of debt and walking into a job market they've oftentimes priced themselves out of, and meeting a sugar daddy is also a way to advance your career.

      Brook Urick is a spokesman for Seeking Arrangement. She says it’s not prostitution, which is strictly a transactional process for sex. Instead, she says, the dating website facilitates mutually beneficial relationships.

      Urick: Around 2010 we saw a really huge increase of students joining the site, so we decided to offer them a student discount when they sign up using their student email addresses.

      They call it “Sugar Baby University.”

      Web ad: You can gain the personal connections you need to go from entry level to corner office. Enroll with Sugar Baby University today and get your education paid for by a generous sponsor.

      Urick: NYU, in particular, has topped our list of top sugar baby schools for a few years now. And it's in part because of the cost of living is outrageous there, as well as the cost of attending NYU, and to reasonably get by on a minimum wage job while you're in school is not something that a lot of these women and men can do.

      NYU declined to be interviewed for this report. So did the College Board and American Council on Education, a coordinating body for colleges and universities.

      We do know that while students are going into deep debt… endowments and revenues at many schools are growing.

      A new report from the nonprofit Open the Books finds that 8 Ivy League schools have amassed nearly $120 billion in endowment funds. As nonprofits, they pay no taxes on investment gains-- $3.4 billion in 2014. They show a net profit of $21 billion from 2010 to 2014, but enjoy healthy taxpayer benefits collectively amounting to nearly $6 billion a year.

      Sharyl: What would you say if you had to pick one factor as the biggest single problem at colleges nationwide when it comes to cost?

      Miller: Administrative bloat is what's costing all these kids so much money, costing their families so much money. I mean, it’s really gilded age stuff and it has no place in any decent university.

      That includes lavish executive pay. Miller says top NYU executives averaged raises of 26% while professors got just 2.5%

      Recently-retired NYU president John Sexton scored the highest base pay in the country in 2013 at $1.24 million dollars. His 2014 compensation topped $1.5 million.

      NYU won’t say how much it pays its new president Andrew Hamilton. The university’s annual payroll nears $3 billion dollars working out to a cost of about $57-thousand dollars per student.

      Besides salaries, many colleges spend millions on the rapid fire buying, building and renovation of pricey real estate.

      Miller: They’re turning these campuses into showplaces to attract students of means, you know, and to provide a kind of health club, Club Med atmosphere for students, as if they were applying to attend resorts for four years as opposed to studying and learning how to think critically and so on.

      Brown: I think the money could definitely be going to help students more so than build another build in this city.

      NYU’s real estate portfolio includes several multi-million-dollar luxury condos for selected law school faculty housing, with extravagant features like “Calcutta gold marble,” “radiant heat floors” and “a dining room with 37-foot-high ceilings.”

      Miller: They see the university as on the one hand a corporate enterprise, a commercial enterprise. It's meant to get as much revenue as possible. A corporate enterprise that has to be branded relentlessly all over the world, nonstop.

      We wanted to hear NYU’s views, but they declined to answer our questions. A spokesman emailed us a long list of steps they’re taking to address affordability, including ensuring “the lowest…increase in cost-of-attendance, tuition and fees…in 20 years,” “lower than” “25 closest competitors” and “freezing room and board rates this year at last year’s rates.” NYU also says it’s tripled its financial aid budget and average grant amount.

      But many students here and around the nation are struggling.

      Seeking Arrangement web ad: Sugar Baby University where beautiful, ambitious people graduate debt free.

      Student: There are other resources besides just going to Seeking Arrangements and meeting them, so that they could pay for your college. You don't necessarily have to turn to that site, but is it a bad idea? No.

      Brown: It’s interesting because my dad paid for all of my schooling out of pocket until this year. He’s spent the majority of his savings. I don’t think my dad will retire ever.

      Cinque: I feel like I am always gonna be in debt and I’ve just kind of accepted that and it just changed the way I look at spending and everything. I think it’s ridiculous.