NYU students pay at least $40,000 in tuition (and over $10,000 for on-campus housing-PDF) for the academic year—an insane amount. But it makes sense when you consider that NYU not only forgives mortgages for star professors but also helps buy vacation houses for star professors and other esteemed administrators.
The NY Times has the depressing details today. For instance, NYU President John Sexton has a place on Fire Island—"an elegant modern beach house that extends across three lots... bought with a $600,000 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.
....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.
“That’s getting to be a little too sexy even for me, and I have a good sense of humor about these things,” said Stephen Joel Trachtenberg, a former president of George Washington University who has publicly defended high salaries for professors and university executives. “That is entertaining, actually. I don’t think that’s prudent. I don’t mind paying someone a robust salary, but I think you have to be able to pass a red-face test.”
Let's talk about that red-face test: According to the Times, NYU Law School dean Richard Revesz lives "in a handsome West Village town house that was financed by N.Y.U. They also have a home on more than 65 acres near the Housatonic River in Litchfield County, also helped by an N.Y.U. loan, according to land records in both locales. According to the university’s most recently available tax return, they owe the university $5.7 million altogether."
Andrew Ross, President of the NYU chapter of the American Association of University Professors, told Wall Street On Parade earlier this month, "When our students are often working two jobs and piling up debt on their credit cards just to scratch together tuition, it’s highly questionable for the proceeds to be distributed as extravagant compensation packages and mulltimillion dollar loans to top administrators. In fact, for a non-profit educational institution, it’s quite offensive."
Sexton didn't comment to the Times, so the paper ran this quote he gave them in March (when news of Treasury Secretary Jacob Lew's crazy generous bonus were disclosed), "Faculty housing loans on which interest is paid and appreciation is enjoyed by the university actually produce additional revenue. They’re probably the best-performing parts of our portfolio, so as to reduce the amount of tuition that we require." Plus, it's awesome to kick back in your own vacation house.