The American Interest
Analysis by Walter Russell Mead & Staff
Colleges Bleeding Students to Buy Golden Parachutes for Administrators

College administrators have found an interesting new way to strike it rich: quitting their jobs. Upon leaving his role as executive vice president of NYU for a job with Citigroup in 2006, Jacob J. Lew (the current Secretary of the Treasury) took a $685,000 bonus from the university. Harold S. Koplewicz, an executive at the NYU Medical Center, got a $1.2 million severance after choosing to leave voluntarily. Given that NYU’s tuition and fees are among the highest in the nation, we’re curious how students who took out hundreds of thousands of dollars in loans feel about their money going towards generous benefits and severance packages for administrators.

At least NYU is a private institution, so tax dollars are not spent to cover its inflated costs. As the New York Times notes, public universities are just as guilty of letting a bloated and inefficient administration drive up tuition costs. The University of Minnesota employs 19,000 administrative officials employees, and administrative personnel account for 24 percent of its total payroll, compared with only 20 percent in 2001. At Purdue, the number of administrative employees grew by 54 percent in the last decade.

Overall, the number of administrators hired by colleges and universities increased 50 percent faster than the number of instructors hired between 2001 and 2011, according to the U.S. Department of Education. And college’s wasteful spending doesn’t stop at human capital: Total debt at public four-year colleges stood at $88 billion in 2011, and most of that money was borrowed to finance expensive (and often unnecessary) construction projects.

Rather than raising tuition, universities need to begin looking for ways to tighten their belts. For NYU, cutting back on administrators’ golden parachutes would be a good place to start.

[Update: An earlier version of this post mistakenly claimed that the University of Minnesota employed 19,000 administrative officials, rather than employees. This mistake has been corrected.]

[Bow tie image courtesy of]

Published on March 8, 2013 3:13 pm