New York University has just announced a $1 billion capital campaign specifically for financial aid. Despite an endowment of $3 billion, officials at the university say that “Each year NYU falls $200-million to $250-million short of meeting the full financial need of its students.”
Has this university no shame? Earlier this year, it was revealed that Treasury Secretary Jack Lew received an almost $700,000 severance payment when he left his role as executive vice president of NYU in 2006 to take a job at Citigroup. For the five years or so he worked at NYU, he was making a salary of $800,000 a year or so. Oh, and then there’s this. According to the New York Times, “He also received mortgages of roughly $1.5 million through the school as a perquisite — $440,000 of which was forgiven by the university over time.”
Of course, Jack Lew was not the only one getting nice housing deals from the university. In June, the Times reported on the university’s policy of offering loans for second homes to its top administrators.
Since the late 1990s, at least five medical or law school faculty members at N.Y.U. have received loans on properties in the Hamptons or Fire Island, in addition to [university president John] Sexton. Martin Dorph, an executive vice president of N.Y.U., got a $200,000 loan on a home in Bucks County, Pa., that he already owned; the university said the loan, which is forgiven over time as long as he stays with N.Y.U., was in lieu of a raise.
The point here is not that NYU spends money so much more lavishly than other schools—though they might—it is rather that universities always like to say they are raising money for financial aid because they know it will tug at the heartstrings of donors. But money is fungible and it will often simply mean that they spend more money on other things.
So here is a modest proposal for NYU as it goes hat in hand to potential donors. Right now, tuition, room and board is $62,000. Tell us this, NYU: If you reach the goal of $1 billion, will the school be able to hold its tuition steady or even reduce it? If not, tell us what a poor or a middle class student will pay to attend in 5 years. If your parents make a combined income of $50,000 or $100,000 what will you pay in tuition? How about $150,000? If we are to believe NYU’s fundraising pleas, we should at least have some real guarantee that this capital campaign will actually impact the bottom line for students and their families.