New York University (NYU) has been playing “banker” loaning millions of dollars to faculty for vacation home purchases. The New York Times reported that NYU president, John Sexton, purchased a house on Fire Island, an almost nine-mile strip of oceanfront south of Long Island, with a $600,000 loan from the university. Meanwhile, students have to deal with skyrocketing tuitions and increasing student loans.
While providing benefits and perks to employees is all well and good, the practice of university home loans underscores the struggle through which students and recent graduates must go. Even financially supporting faculty and staff with living necessities is a righteous thing to do, especially if the recipients are prolific contributors to the university and the academic community as a whole. Funding decadence and luxury for university employees undermines the indifference to money that higher education is supposed to have at its essence.
It’s also a backhanded slap in the face to students being that the last reported interest rate on these loans was only 0.19 percent. Students currently pay 3.4 percent on their loans, which is set to double next month.
Granted, the employee loans come from the university and the student loans primarily come from the federal government, but the fact still doesn’t excuse school-funded excess. All the money that the university fronts to faculty and staff for lavish vacation houses could have stayed on retainer to fund scholarships, grants, and other expenditures.
Since 1987, NYU’s tuition has grown considerably and steadily, from about $9,000 then to over $38,000 in 2010 with most of the degree programs costing close to $250,000 over four years.
The American Council on Education released a report indicating that universities across the country are obligated and required to remain on track with technological advancements. The report states that “colleges and universities have to adopt new practices and new technology even if doing so results in higher costs.” These costs are tied in with tuition.
Universities with large endowments, like NYU, could easily allocate the funds loaned to help pay for new, required technologies thus helping offset tuition hikes. But instead, NYU frivolously uses the money to support swanky houses on Fire Island, which is surprising for a university as prestigious and reputable as NYU.
Joshua de Leon is a writer and researcher with Ring of Fire.