Why you're paying so much for college
Tuition keeps rising as administrators and top faculty members get juicy pay and severance packages and sweet housing deals.
The rising cost of a college education is a major stress for many families, and many wonder why tuition keeps going up.
While students are paying for new technology and other elements of a modern higher education, another factor is at play: hefty pay deals and huge severance payments given to administrators and faculty members. Among the beneficiaries is Jacob Lew, the current U.S. Secretary of the Treasury, who received a $685,000 bonus when he left New York University in 2006.
On top of that, Lew also had a real estate deal New Yorkers can only dream of: NYU had given him $1.5 million in housing loans, Bloomberg reports.
It's enough to make the parents of an NYU student wonder how much of their roughly $20,500 tuition (that's per semester) is going to support pricey Manhattan real estate for the school's staff.
"It certainly gives the public a clear example of how out of touch some universities are," Jonathan Robe, a research fellow at the Center for College Affordability and Productivity, told Bloomberg. "Parents will think: 'Here I am scraping by, raiding my retirement plan to pay for college. Why are they making me do this just to enrich these executives?'"
Exit payments sometimes amount to one to three times an administrator's annual salary and bonus, Bloomberg notes. And those salaries aren't exactly peanuts to begin with. The highest-paid university presidents raked in as much as $4.9 million per year in 2009, according to the Chronicle of Higher Education.
New York University defended Lew's payments and benefits, with a spokesman saying that in his case "the benefit to the university can range in the tens of millions of dollars."
Other universities say they're pressured because of the need to hire top talent. Academic institutions must "attract and retain the best leaders we can," a University of Chicago spokesman told Bloomberg. (That school paid $2.5 million to former medical dean and hospital chief James Madara when he stepped down in 2009.)
Top institutions such as Harvard and NYU offer low-interest home loans to help their tenured faculty and staff members purchase homes. Harvard faculty members can also receive no-interest education loans.
Among those who took advantage of Harvard's offers were Lawrence Summers, who served as the school's president from 2001 to 2006. According to Bloomberg, he owed $1 million for buying a home and $177,000 for a dependent's education, according to the university's 2009 tax return.
Many of those benefiting are top administrators rather than rank-and-file professors. Academic presidential pay jumped by 35% from 1997 to 2007, while professors saw only a 5% income gain during the same period, according to the Chronicle of Education.
"There always seems to be more money for the executive suite even as colleges raise tuition year after year," Sen. Charles Grassley, R-Iowa, who has been critical of college compensation, told Bloomberg. "Universities have to answer for their executive perks in exchange for their tax exemption."
Another article that leaves out the US Federal Govts Role in this mess...the #1 reason why college coast have soared is the US Federal Govt has gotten involved in student lending. When a college knows the Feds will "loan" you $$ they charge more..plain and simple.
No wonder America is not the country it once was, and is failing.
Funny thing: The guys who make the decisions about who earns what, see their pay go up more than their underlings'.
If these people weren't so smug about their "social justice" credentials, I'd choke on this a bit less.
college tuition has risen. college school year has shortened over the last 40 years. and the time spent in the classroom has likewise shortened. example...my freshman college son's last day before spring break had two classes cancelled. prof used the pretext 'y'all been workin' so hard.' BS! parents are paying for an education not cancellations!
I'll bet no one here can name the highest paid employee at a University/College.
Do you know who it is???????
Guess, I dare ya!!
It's the FOOTBALL COACH!!!!
Copyright © 2013 Microsoft. All rights reserved.
Quotes are real-time for NASDAQ, NYSE and AMEX. See delay times for other exchanges.
Fundamental company data and historical chart data provided by Thomson Reuters (click for restrictions). Real-time quotes provided by BATS Exchange. Real-time index quotes and delayed quotes supplied by Interactive Data Real-Time Services. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by SIX Financial Information.
Tired of constantly dying batteries, she came up with a device that could revolutionize energy storage -- and won $50,000 from Intel.
- Detroit in hot water over proposal to sell art
- Sears spirals toward oblivion
- Why aren't heads rolling at the IRS?
- Do we pay attention to roads and bridges now?
- Yahoo may be going after Hulu
- Apple's first computer could fetch $450,000
- AT&T adds sneaky fee onto its wireless bills
- Soaring ER use adds more pain to health costs
- Netflix gets 'Arrested Development' stars cheap
[BRIEFING.COM] Stocks entered the weekend on a mixed note as the S&P 500 shed 0.1% while the Dow ended with a gain of 0.1%.
The major averages began the day on a lower note as nine of ten sectors saw losses of more than 0.5%.
The consumer staples sector was the lone exception as the group spent the entire day in positive territory thanks to the relative strength of Dow component Procter & Gamble (PG 81.89, +3.19). The second-largest staple stock advanced ... More
More Market News
Try as the bears might, they couldn't break US stocks. But investors still face frothy prices and considerable headwinds.