N.Y.U. has already attracted attention for the multimillion-dollar loans it extends to some top executives and professors buying homes in New York City, a practice it has defended as necessary to attract talent to one of the most expensive cities on earth. Mortgage loans to Jacob Lew, a former N.Y.U. executive vice president, part of which was eventually forgiven, became an issue during Mr. Lew’s confirmation hearings as treasury secretary this year.Universities in similar circumstances, like Columbia and Stanford, also have helped professors and executives with home loans. Aid for vacation properties, however, is all but unheard-of in higher education, several experts in university pay packages say.
The NYT reports that, among other cases, a former dean of NYU Law School had both his 65-acre vacation home and his more quotidian West Village town house financed by NYU (he now owes the university $5.7 million), and an executive vice president got a $200,000 loan on a home he already owned.In a way, these loans make some sense. New York City is an impossibly expensive place to live. Even a family headed by two tenured parents would find it difficult if not impossible to become homeowners anywhere near the NYU campus. Many NYU professors live in university-owned housing as a result, thus missing out on the ability to build equity in a home. To keep the best and brightest talent from ditching the boroughs for a much cheaper city, NYU figures that loans for homeownership are reasonable.Fair enough, but this policy doesn’t exactly make for great PR, when students are drowning under a $60,000 per year price tag for their education. President Sexton himself received a $600,000 loan for a summer home on Fire Island in addition to his $1.5 million annual salary, $800,000 per year retirement package, and $2.5 million bonus due in 2015. As Senator Charles E. Grassley (R-IA) said, “Universities are tax-exempt to educate students, not help their executives purchase vacation homes. It’s hard to see how the student with a lifetime of debt benefits from his university leaders’ weekend homes in the Hamptons.” You can bet that students will come to the same conclusion.On the bright side, perhaps these vacation homes will entice tenured professors to get onboard the MOOC train. A yearlong staycation on a villa in the Bahamas might be the perfect HQ from which to teach that online Grand Strategy course.[Image of summer home courtesy of Shutterstock]