Tuesday, June 18, 2013
New York Times: NYU Gives Its Stars Loans for Summer Homes:
NYU has already attracted attention for the multimillion-dollar loans it extends to some top executives and professors buying homes in New York City, a practice it has defended as necessary to attract talent to one of the most expensive cities on earth. Mortgage loans to Jacob Lew, a former N.Y.U. executive vice president, part of which was eventually forgiven, became an issue during Mr. Lew’s confirmation hearings as treasury secretary this year.
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.” ...
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 Dr. Sexton. ... Dr. Sexton declined to comment for this article, but in a March interview he said: “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.” ...
[T]he compensation committee of NYU’s board of trustees approves such loans, with the exception of law school loans, which in the past were approved by the law dean and the board of the law school’s foundation. The law school’s current policy “is to participate fully in the university’s process for evaluation and approval of loans and loan programs.” ....
Senator Charles E. Grassley, Republican of Iowa, raised the issue of Mr. Lew’s loans during hearings over his confirmation, which was approved; since then, the senator, who is a member of the Finance Committee, has asked NYU for more records of compensation and loans to executives and employees. He noted NYU’s nonprofit status, which generally exempts it from income and property taxes.
“Universities are tax-exempt to educate students, not help their executives purchase vacation homes,” he said in a statement on Monday. “It’s hard to see how the student with a lifetime of debt benefits from his university leaders’ weekend homes in the Hamptons.”
- TaxProf Blog, Eye-Popping Housing Assistance for NYU Law Faculty
- ABA Journal, Law Faculty Perk at NYU Includes Loans for Pricey Vacation Homes
- Above the Law, NYU Law’s Secret Slush Funds
- The Atlantic: Why Is NYU Helping Faculty Buy Vacation Homes?
- Business Insider, NYU Loans Helped Its Millionaire President Buy His Fire Island Vacation House
- Gothamist, Congrats, NYU Students: You're Paying For Your Faculty's Million-Dollar Vacation Homes
- Inside Higher Ed, NYU Gives Loans for Executives Vacation Homes
- Naked Capitalism, NYU Administrators Creat Student Debt Slaves to Subsidize Summer Homes, Ginormous Pensions
- New York Magazine, NYU Offers Top Talent a Path to Beachfront Property
- Slate: NYU Neatly Embodies Everything Wrong With Higher Education in America