College Students Live Like Kings, College Grads Like Paupers
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  • wigwag

    If you think this is bad, you should check out the front page of today’s New York Times. It seems that New York University (NYU) is loaning senior administrators the money to by expensive summer homes in the Hamptons and other choice spots. Here’s a little blurb from the article:

    “Its most interesting feature, however, is not architectural, but financial. The house, which is owned by John Sexton, the president of New York University, was bought with a $600,00 loan from an N.Y.U. foundation that eventually grew to be $1 million, according to Suffolk County land records. It is one of a number of loans that N.Y.U. has made to executives and star professors for expensive vacation homes in areas like East Hampton, Fire Island and Litchfield County, Conn., in what educational experts call a bold new frontier for lavish university compensation.”

    The whole article can be seen here;

    http://www.nytimes.com/2013/06/18/nyregion/nyu-gives-stars-loans-for-summer-homes.html?hp

    Maybe that’s why NYU is sports one of the highest tuition rates of any university in the nation. I understand that Universities need to pay their Presidents high salaries to attract people who can lead development campaigns that generate tens or hundreds of millions of dollars and sometimes billions of dollars, but this practice is not needed and it is way over the top.

    • Kavanna

      Universities in expensive housing markets have been helping faculty with home loans since the 1970s. But the idea was to help faculty live in or near campus. In exchange for reduced interest costs, faculty would typically have to give up some of the equity in their house to the university.

      What we’re seeing here is something very different and deeply disturbing. It seems we really do live in an age of rampant cronyism.

      • wigwag

        One of the things that’s rarely talked about in the press is that in addition to tuition and fundraising appeals, a very major portion of a university’s income comes from indirect (overhead) costs from Federal grants. A research based university like NYU can receive up to $100 million or more in grants from agencies like NIH, NSF, DOA, DOD, DOE, etc. Because overhead rates at institution like NYU typically exceed 50 percent, these universities collect tens of millions of dollars which they use to defray operating costs.

        The idea that these operating costs include low interest loans for university administrators is way over the top. It’s not just tuition fees subsidizing this practice, its taxpayers.

        I’m not into faux-populist outrage, but NYU’s practice goes way too far.

  • ljgude

    Thanks WigWag. Evidently Prince Charming has a place in the Hamptons and in quite uninterested in the plight of the serfs. Speaking for myself as a retired academic, I always tip my barristas generously.

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