June 1, 2017 Reading Time: 3 minutes

Recently on the blog, I discussed New York’s Excelsior Scholarship, which offers free tuition to New York residents to attend four-year public state universities. Today, I want to take a closer look at prices currently paid by students to see how the program might affect students from different economic backgrounds. I look at five colleges to get a sense of the different options available to New Yorkers inside and outside New York City. For public colleges where students may use the scholarship, I provide information for the City University of New York at Queens and the State University of New York at Albany. For private colleges, I look at St. John’s University and Siena College, somewhat-selective Catholic schools that are also in Queens and the Albany area and whose student bodies have academic preparation roughly similar to the public universities. The fifth is Columbia University, an Ivy League school in New York City.

For each school, I show the listed price of tuition from university websites, the estimated total costs—including fees, room and board, and other living expenses (from CollegeCalc.org)—and the actual average costs, after financial aid, paid by students whose families are in different income brackets as reported by the College Scorecard. I also take from the scorecard the percentage of students who take out federal loans, the average debt held at graduation by those who take out loans, and the six-year graduation rate of first-time matriculants at each college. These figures are all reported in the table below.




St. John’s



Tuition (in-state for public)






Pre-aid total costs






Post-aid cost by income:
































% with federal loans






Median federal debt if >0






Graduation rate (%)








Two facts that will not surprise anyone who has recently applied to college or sent a child are that costs of college are roughly $15,000-$20,000 higher than tuition, and that almost no one pays the sticker price. Higher-income families pay more at public and private schools alike, although the differential is not always the same. Highly selective private universities such as the Ivies tend to offer the largest need-based aid packages to low-income students and often charge the highest prices to wealthy students. Somewhat-selective private schools assign their aid in such a way as to maintain a premium relative to competing public schools that is similar across the income distribution. For example, note that Siena’s after-aid costs of attendance are about $5,000 higher than SUNY–Albany’s from family incomes from $0 to $110,000, despite over $25,000 in pre-aid costs.

The main beneficiaries of the Excelsior Scholarship are the students in the two income brackets centered around $75,000. Wealthier students are not eligible for the scholarship, and many low-income students receive need-based aid already. We can see this in the larger change in costs paid to the public universities between the $30,000-$48,000 and $48,000-$75,000 groups than between the $48,000-$75,000 group and the $75,000-$110,000 or $110,001+ groups. This subsidy benefit will squeeze private schools such as Siena that compete with such schools as SUNY and CUNY, that primarily serve these middle-class students, and whose behavior indicates they need to tie prices to a public-school benchmark to compete and hence will need to lower prices under the new program. It will also harm lower-income students who will face greater admissions competition from middle-class students who substitute from private schools to the CUNY and SUNY systems to take advantage of the subsidy.

This substitution can also be dangerous for the students taking advantage of the scholarship. One study of the Adams Scholarship program, a similar program in Massachusetts, found tuition waivers caused graduation rates to go down as students moved into newly cheaper but less-selective schools with lower graduation rates. New York and Massachusetts are not identical, but they are similar enough to warrant caution and to keep a close eye on the effects of the Excelsior Scholarship on public and private universities in the coming years. It will be interesting to return to these figures in a few years and see what has happened to graduation rates and college costs for students attending different types of universities.

Note: The table in this post has been updated for clarity since initial posting.

Patrick Coate, PhD

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