While public education cuts drive college tuition costs to new heights and students rack up debt to cope, it’s nice to see colleges still have room in the budget for faculty perks.Bloomberg’s John Hechinger & Michael McDonald have explored something of a bonus boom in the form of six-figure exit packages for departing faculty.
Here are just a few examples:
- NYU’s Jacob Lew raked in a $685,000 bonus when he left the university in 2006, on top of $1.5 million in low-interest housing loans. He is now the U.S. treasury secretary. At the time, NYU undergraduate tuition cost $33,420. Lew could have given 20 students a free ride for a year.
- James Madara earned $2.5 million in severance from the University of Chicago in 2009 when he left his position as medical dean and hospital chief. That same year, the college announced a 4.5 per cent tuition hike, from $36,891 to $38,550. Madara could have awarded 67 undergraduates each a year-long scholarship with that cash.
- Former New School president Bob Kerry landed a $1.2 million bonus before stepping down in 2010. That would have been enough to send 34 liberal arts students to the college for a year.
- Top-tier colleges, including Harvard, Stanford, and NYU, often allow faculty to take out low-interest home and education loans. Several administrators mentioned in the story owed upwards of $1 million in real estate loans and more than $100,000 for their student loans or their kids.
College leaders argue that these compensation and severance packages allow them to attract top talent, but they’ve faced increasing scrutiny amidst soaring tuition costs.
Low-income and middle-class families are finding it increasingly difficult to pay for tuition, and many students aren’t happy to see administrators making off like bandits while they live hand to mouth after graduation, said Jonathan Robe, a research fellow at the centre for College Affordability and Productivity.
“Why should I have to pay for these lavish perks/severance packages?” Robe said, voicing the concern of some parents on the issue. “[Parents say] ‘College is getting increasingly expensive and they’re apparently spending money that doesn’t have anything to do with my child’s education.'”
Robe said he does think it’s merited for college and university faculty to receive bonuses of some kind, but he believes they should be based more on their success in the classroom.
“I think parents and students are willing to pay a high price for college for excellent and high-quality instruction if that’s what they get,” Robe said. “When they see an indication that that’s not where the money is going, that’s disconcerting.”
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