New York University has loaned millions of dollars to select faculty and administrators for them to buy vacation homes, an unprecedented compensation deal critics say is excessive.
Elite colleges and universities have been known to offer their chief executives all sorts of bonuses, including high pay, cars and second residences. But NYU may be the first university to help pay for luxurious vacation homes in the Hamptons for not just its president, but also high profile faculty and administrators.
NYU loaned its president, John Sexton, $1 million to buy a three-lot beach house on Fire Island. The university helped Law School Dean Richard Revesz pay for two homes: one in West Village and the other on a 65-acre property alongside the Housatonic River, according to The New York Times.
The university defended the loans as necessary to recruit and retain elite faculty members.
“The purpose of our loan programs goes right to the heart of several decades of sustained and successful effort at N.Y.U.: to transform N.Y.U. from a regional university into a world-class research residential university,” said John Beckman, a university spokesperson, in a statement.
The university would not disclose the interest rates on any of the loans.
Stephen Joel Trachtenberg, a former president of George Washington University who has defended perks for college leaders in the past, said NYU was going too far.
“That’s getting to be a little too sexy even for me, and I have a good sense of humor about these things,” said Trachtenberg in a statement. “I don’t think that’s prudent.”
Iowa Republican Sen. Sen. Charles Grassley said the loan program is at odds with the core mission of the university.
“Universities are tax-exempt to educate students, not help their executives purchase vacation homes,” he said in a statement. “It’s hard to see how the student with a lifetime of debt benefits from his university leaders’ weekend homes in the Hamptons.”
High pay for university leaders has become a thorny public policy issue. Total compensation packages for college presidents increases each year, even as the cost of attending college continues to climb, plunging students and graduates into a trillion dollars of collective debt.
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