Astory by Ariel Kaminer and Alain Delaquérière in the New York Times this week is enraging people all over the internet.
The headline: “NYU Gives Its Stars Loans for Summer Homes.” Stars in this case means administration bigwigs and highly regarded academics, a few of whom have received favorable-sounding loans in order to purchase second homes in popular vacation locales near New York City.
Given that NYU is among the most expensive universities to attend in the United States and its graduates are currently departing with startling levels of student loan debt, the story has understandably infuriated readers across the country.
There are defenders of NYU who claim that this sort of perk is no different from the many other benefits bestowed on top employees by NYU and other wealthy universities.
In fact, given that these are loans, some of the money, at least, will be paid back.
The school might even make a little money: While the interest rates are apparently favorable, the university is charging interest. On the other hand, according to one report, “in some cases, even the interest charged on the loans has been reimbursed.”
Considered in the full context of what top universities give to chief executives and superstar academics, these loans for summer homes are largely symbolic-they symbolize the revolting disparities in pay that exist in American higher education and which have worsened at a time when more and more students are drowning in debt that they took on to pay their college tuition.
At the Chronicle of Higher Education, Claire Potter, a professor at the New School, notes that she has in the past been “the recipient of two separate below-market-rate mortgages.” These were apparently for primary residences andfor much smaller sums than those quoted in the NYU story. Her point, though, is that the broader practice of cheap loans as a form of compensation is not unusual in academia. But that doesn’t make the NYU revelations any less of a “scandal,” in her words.
As Potter notes, the NYU revelations follow the recent nomination of a former executive vice president of the university, Jacob J. Lew, to head the Treasury Department. During his hearings lawmakers learned that NYU gave him a $685,000 bonus when he left NYU, voluntarily, for a job at Citigroup.
Another NYU former executive received more than $1.2 million upon his departure. And the current president, John Sexton, who got one of those favorable loans, will receive an annual pension of $800,000 when he retires-which, if he does so after 2015, will follow the $2.5 million “length of service” bonus he’s set to receive on top of his $1.5 million annual salary.
“It’s time,” Potter says, “to investigate the various shenanigans by which wealthy universities retain their non-profit status; rely on vast amounts of temporary, student and non-union labor; maintain vast wage disparities between faculty; spend millions on athletic programs that are disconnected from the academic mission all the while charging high tuitions and running shell games that allow them to shovel millions of dollars towards their executives and stars.”
Sounds about right.
Editorial, Pages 16 on 06/22/2013