The economics seem complex

An optimistic outlook is that it allows MDs to pursue careers without debt to influence their decision. Will more lives be saved because fewer grads will think they need to chase money? Maybe that's naive? I'm not a doctor nor familiar with the landscape.

Maybe there will just be widening income/opportunity inequality. From a poster on Hacker News:
"...the most successful universities using their funds to subsidize those who would be fine without it. I was actually made aware of this by a wealthy Stanford alumni which has a fairly broad program for undergraduate tuition assistance. Graduates of mid/low tier universities seem more and more likely to have to compete with better credentialed people with lower debt."

Overall, NYU certainly gains from this move. More competition for med school slots, and the entire university gets great PR. Maybe that encourages more donations near term, and richer doctors in 10-20 years more likely to donate more. All benefits NYU.

So, should we expect other schools to follow suit? They may feel they have to if the trend gains some momentum.

As you say, undergrads could be especially well served in this regard. Maybe there'd be less pressure to pick a major based on ROI. Maybe more What Would You Fight For and fewer Wall Street careers - no offense to all you hedgies.

ND seems well positioned financially and ethically (at least in historical identity) to conduct such an experiment.

Do we want all the rich schools giving out free educations and leaving the poorer schools to struggle more than they already are?

It will be interesting to see how the economics play out.