The reason NYU gets such a bad rap is that they offer meaningful need-based aid to only a very small fraction of admitted students, and they frame their award letters in a way that tends to create more psychological pressure on parents to take loans.
That is the problem the OP has: her son received -0- scholarship money, but I’m guessing a financial aid notice that is written something like this:
NYU COA: $75,500
Direct student loan: - $ 5,500
Parent PLUS loan: - $70,000
Balance Owed: -0-
So the 17 year old kid looks at that an sees that -0- – and it look just fine and dandy. To the unsophisticated it looks like the college is meeting full need, just with loans rather than grants. The kid has his heart set on NYU and look, the college is generously offering to lend mom $70,000!
And some parents have a lot of difficulty with that: (“my S wants NYU more than anything.”)
Other colleges don’t do that – at least not in my experience. Instead, in a no-aid situation – the financial aid letter looks more like this:
Random College COA $65,500
Direct Student loan - $ 5,500
Balance Owed: $60,000
And then after that they might have provide some information about how that balance can be financed. So the kid understands from the outset that college is going to charge mom $$$$$ – and as disappointing as that is, there is less psychological pressure to borrow.
So basically NYU has positioned itself as a major purveyor of parent PLUS loans. Parent PLUS loans are federally funded and have have roughly a 7.5% lifetime default rate. So that’s a bill that goes back to US taxpayers. In other words - more PLUS loans means more money flowing from the US treasury to NYU.
Here are some recently compiled statistics as to how that works:
NYU appears to have the highest overall number of Parent PLUS loan recipients of any private US college, with 4,258 PLUS loans borrowers in the 2015-2016 school year, averaging $3,495 each; 14% of undergraduates have parents taking on these loans. There are 6 public colleges with a higher number of overall borrowers, but average loan amount is at those public schools is between 32-55% of what NYU parents borrow. The highest overall institutional beneficiary of federal loan dollars was Penn State, with $167.3 million dollars in PLUS loan debt; but after that NYU is in second place, with $138.4 million in PLUS loans.
The next highest number of borrowers at a private college is Temple University, with an 11% parent borrowing rate, average per-parent loans of roughly half of what NYU parents borrow, with total federal loan amount of around $58 million -or about 41% of the amount that flows to NYU.
NYU is also the 4th highest on the list as to average amount of parent PLUS loans taken – Dartmount parents borrow more, but only 3% of the parents there borrow, so the total influx of federal dollars is around $4.6 million - or around 3% of what NYU gets.
So you can call it “bashing” if you like – but I see this numbers as facts and data, and the reality is that NYU is drawing a disproportionate share of federal loan dollars – and basically one out of 7 parents of students is taking on considerable debt to send their kid to a “dream” college that pretty much structures its aid policies around the availability of these loans.