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Today In Elite Academic Graft

[ 90 ] May 16, 2014 |

Paul has written before about John Sexton, the president of NYU and master of looting student/taxpayer money for the benefit of himself, other administrators, and a tiny cadre of scholars.  In a particularly special example, Henry Louis Gates Jr. is being given a housing benefit worth roughly $80 grand a year…for not working for NYU at all.

Relevant background:

The university frequently deploys metrics on rising application numbers and university rankings to argue that Sexton’s strategy has been working. But other numbers have been rising, too. NYU’s tuition, for example, was $26,646 in 2002; by 2012, it was $44,848, a staggering increase of 68 percent in a decade. The cost of attending NYU is among the highest in the country, and its financial aid remains woefully inadequate. NYU has the highest total student debt in the country, and a typical student in one of the classes I teach is likely to graduate with 40 percent more student debt than the national average.

And while salaries for top executives have increased dramatically — with Sexton’s salary doubling over his tenure to $1.5 million, plus a $2.5 million length-of-service bonus and an $800,000 pension upon retirement — the vast majority of faculty salaries have stagnated, barely keeping up with inflation.

 

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  1. Twopoint Five says:

    NYU – IT’S A TRAP!

  2. Mudge says:

    Sounds like any recent discussion of income inequality; the top percentages thrive, the middle class (here the faculty) stagnates. Universities also have the propensity to fund raise and increase the endowment (worship of money)but not use the acquired wealth to either pay the workers or lessen the burden on the students. An endowment is invested. As is typical, finance trumps workers.

  3. Lee Rudolph says:

    Gates is acting despicably.

    • Warren Terra says:

      Per the linked article, he is apparently getting a housing subsidy from NYU on the order of $80,000 a year, and has been getting this housing subsidy from them for years, possibly a decade – likely a half-million or more.

      Is he supposed to declare that as income?

    • Aimai says:

      He’s a revolting person. This truly stinks.

      • It’s like Atrios said:

        A problem with corruption at the top is that eventually we all get the signal and become grifters, too. Can’t make it any other way. I have no expert opinion on what combination of cultural norms, criminal laws, tort system, etc… maintain an equilibrium in which we aren’t all trying to con each other all the time, but I think that equilibrium is not necessarily a permanent one. And I don’t really want to live in a society where everything is a hustle. Not every interaction should be a nightmare used care salesman scenario.

        • Barry Freed says:

          That’s a great quote, thanks for posting it.

        • NewishLawyer says:

          I’ve long wondered whether the American economy is basically snake oil.

        • LeeEsq says:

          The problem is that the hustle as been a part of American society for a long time. In many ways, its a feature and not a bug of American society. At least we are getting some push back against it now but large swathes of American society, and not necessarily in Red States alone, still idolize the hustler and see them as admirable rather than as thieves.

          • EH says:

            You’re right, the miller who puts his thumb on the scale has been venerated as a hero for centuries.

            • Thumb on the scale dates back to the 19th Century and American butchers. Earlier weighing methods couldn’t be gamed that way.

              • Lee Rudolph says:

                The OED begs, perhaps, to disagree. From the entry thumb:

                5. Phrases.

                a. thumb of gold, a golden thumb , miller’s thumb: in reference either to the alleged dishonesty of millers or to the lucrative character of their trade.
                [c1405 (▸c1387–95) Chaucer Canterbury Tales Prol. (Hengwrt) (2003) l. 565 Wel koude he [sc. the miller] stelen corn and tollen thryes And yet he hadde a thombe of gold perdee.]
                1576 G. Gascoigne Steele Glas (1868) 79 When smithes shoe horses, as they would be shod, When millers toll not with a golden thumbe.
                1678 J. Ray Coll. Eng. Prov. (ed. 2) 176 An honest miller hath a golden thumb.

                • The first weighing scale with a direct display was invented almost a century after the last citation in the OED definition you quoted from.

                  But hey, this is LGM, where real scholars practice real scholarship, and sheep are nervous.

      • Dana Houle says:

        His housing allowance for a place he doesn’t use is probably more than the yearly salary of that Cambridge cop with whom he had a beer.

        • Warren Terra says:

          Salary, possibly. Pay, probably not. The pay structure for cops in the Boston area is complicated and includes bonuses for further education and opportunities for overtime and for moonlighting, these last accruing especially to those with seniority (or connections). A typical Boston-area cop with significant seniority can expect to greatly boost their legal income beyond their base salary.

          • Dana Houle says:

            That Cambridge cop would have to work a second job to make more money than Gates’ housing allowance for a place he didn’t use.

            • Warren Terra says:

              If I recall, a Sergeant who tried could easily triple their base pay – the bonuses for getting a Masters degree or taking specific training and the available overtime and moonlighting (assignment to which was on the basis of seniority, and included opportunities such as being the mandatory cops at construction sites) were just that good. There were efforts at reform (because the system was massively inefficient, was skewed against younger cops, and wasn’t rewarding what it should), but that was the circumstance.

  4. Alan in SF says:

    Not coincidentally, NYU gave an honororary doctorate to David Brooks. My two NYU grad daughters are doing well in the dog-walking field, however, so there’s that.

    • Aimai says:

      We have friends whose daughter is going to NYU next year. I have no idea what they were thinking but I would bet that none of this information really gets to parents of the students, or the students themselves.

      • NewishLawyer says:

        I imagine that a lot of people attend NYU because they can’t get into Columbia but want to attend undergrad in New York. It is a pretty exciting place to be without parental supervision and hopefully very few responsibilities beyond classes and homework.

        • Andrew says:

          Brooklyn/Hunter/City College would be a better choice for a lot of people (or Baruch if you want business). An eighth (!) of the price for a similar education.

          • Linnaeus says:

            A caveat I would add is that the additional value one receives going to a place like NYU over the other choices you mentioned is increased social capital though the social connections one makes there and the prestige value of the institution.

            • Zumholt says:

              I don’t really think the social connections at NYU are anything to write home about; it’s certainly no Yale or Harvard that way. A lot of upper middle class suburban kids whose parents can pay the tuition but who themselves don’t really have significant social connections themselves or multi-generational wealth.

              They’re just a lot of doctors, lawyers, and corporate executives with high-paying jobs in companies and practices where nepotism isn’t really an option. Frankly, I know a bunch of kids from similar backgrounds who grew up in relative affluence but who are themselves struggling; their parents can support their living expenses from now but fast forward 30 years and they certainly would not be able to do the same for their children.

          • Brad Nailer says:

            Leave us not forget the esteemed Hudson U.

    • NewishLawyer says:

      Note: I have never owned a dog.

      A year or so ago, I heard about a dog-walking company that promised all their dog-walkers had college degrees. I placed a little rant about this on facebook. A few friends countered (they are dog owners) that they liked the idea because college grads are more likely to be responsible with their pets.

  5. Warren Terra says:

    Paul has written before about John Sexton, the president of NYU and master of looting student/taxpayer money for the benefit of himself, other administrators, and a tiny cadre of scholars.

    Also for the benefit of his son:

    In 2002, the then-33-year-old Jed Sexton moved with his wife into a duplex at 240 Mercer St. in New York’s Greenwich Village. Per the Post, Sexton had two single-unit apartments combined into a larger space for his son, who was not attending or teaching at the school. The rooms were initially earmarked for law faculty, the department where Sexton was dean for a decade.

    At the same time, NYU was dealing with what it called a “severe housing shortage.” NYU spokesman John Beckman told the Post that the younger Sexton and his wife paid rent for the unit, but declined to specify the amount. In 2007, they left the apartment for a $1 million home in Connecticut.

    • Brett says:

      It sounds like the Board of Trustees for NYU is either lazy, toothless, or completely corrupted by the President of the College. Shouldn’t they be reigning this stuff in?

  6. Denverite says:

    In a particularly special example, Henry Louis Gates Jr. is being given a housing benefit worth roughly $80 grand a year…

    There you go again, Scott. The article very clearly says that it’s an “apartment,” not a house. And yet you call it a “housing” benefit? Inaccuracies abound. Do they teach reading in Canada, eh? It’s aboot time you learned how.

    (Kidding!)

  7. BoredJD says:

    Somehow it always comes back to the law professors.

    Cap the GRADPLUS lending limits and we’ll see how important they are.

  8. Srsly Dad Y says:

    “You can’t get the best people unless you pay real money. After all, look at us, we’re the best people and we wouldn’t be here if it weren’t for the money.”

  9. Unemployed Northeastern says:

    It could be worse: wannabe-NYU Northeastern University, where I was once unwise enough to obtain a law degree,* went from $17,380 in 2002 http://www.collegesimply.com/colleges/massachusetts/northeastern-university/price/#.U3ZB5MtOUdU to $41,686 in 2013-14 http://colleges.usnews.rankingsandreviews.com/best-colleges/northeastern-university-2199. Moreover, Northeastern president Joseph Aoun (Auon? I can never remember) received the higher ed’s second-highest presidential salary last year, $3.1 million. If you check the school’s Form 990, you can see that $2 million of that was a bonus for hitting undisclosed rankings criteria. Oh, and when he became the president about a decade ago, he got the university to purchase a nearly $10 million mansion in Beacon Hill to serve as a presidential residence. Beacon Hill is clear on the other side of the city of Boston from Northeastern’s Fenway/Roxbury campus. Per the Boston Globe, the school claims (for his tax purposes) that the value of this is only $8k/month, though real estate agents believe it is more like $20k/month or more.

    Meanwhile, the adjuncts get paid so little that they just voted in favor of unionizing…

    *Less than 50% of their classes found FT, LT-, license-required employment for at least the last three years.

    • Manny Kant says:

      I thought BU was Boston’s wannabe NYU.

      • Linnaeus says:

        There’s so many colleges and universities in the greater Boston area that I imagine there’s more than one wannbe-NYU.

        • Unemployed Northeastern says:

          Somewhat amazingly, only eight places separate BU from Northeastern in US News at present, #41st vs. #49th. Just tells you how shallow the methodology is. And I have yet to hear of the employee who favored Northeastern grads over BU grads.

        • Manny Kant says:

          Tufts, too. And Fordham is the wannabe BC of New York.

          But BU and NYU are the most similar, though – large, urban, comprehensive,private universities, founded in the early nineteenth century, eventually non-denominational (although BU used to be Methodist, it was, like NYU, founded in opposition to the socially dominant religion of its city).

          Northeastern is much younger and emphasizes vocational training through co-ops rather than the liberal arts, and it doesn’t have a medical school. I don’t know that there’s any school in New York that’s really comparable.

          • Unemployed Northeastern says:

            Northeastern and Drexel are eggs in a basket. Both were considered commuter colleges as recently as the late 1990’s, both have/had a heavy emphasis on co-op education, and both now cost as much or more as their local Ivy. I think Drexel actually stickers higher than Penn.

            Northeastern used to be substantially larger than BU in student count, back in its open enrollment days, and as far as I know, the medical school is the only major graduate program that it lacks. Fact of the matter is Northeastern and BU compete head to head for the same cohort of applicants these days. Incoming GPAs and SAT/ACT scores might actually be higher at Northeastern than BU, although with all such academic stats, it is hard to know what level of truthiness they hold.

      • Lee Rudolph says:

        John Silver only dreamed of John Sexton’s achievements.

      • Unemployed Northeastern says:

        We have room for more than one, sadly.

  10. Andrew says:

    NYU has bizarrely effective marketing and branding. By most professional and social metrics NYU is a more expensive than average but academically decent private school.

    However, it has somehow managed to convince generations of high school seniors that it’s actually an elite institution and I can’t figure out how they did that.

    There were a bunch of unemployed-liberal-artists-with-$200k-debt stories a few years ago and most of the people profiled were NYU graduates who STILL claimed that they were glad they went because of the “prestige” of an NYU degree. It’s like if USC managed to convince people it was Stanford; it’s puzzling.

    • Unemployed Northeastern says:

      “However, it has somehow managed to convince generations of high school seniors that it’s actually an elite institution and I can’t figure out how they did that.”

      It’s because they have gamed and manipulated their way up US News.* They know that elite colleges are a Veblen Good, so the more expensive you are, the more elite you look. They know that the enormously important peer rank/prestige-o-meter section of US News is incredibly dependent on your acceptance rate, so they (allegedly) send thousands of application fee waivers and encouraging letters to student they have no intention of accepting, so as to artificially lower their acceptance rate. They make sure they get in bullsh*t college masturbatory striving books like “33 New Ivies” and similar. Etc, et al.

      *The rankings, up to a point, are incredibly gameable. To bring it back to Northeastern, they went from essentially unranked to (I think) #46 in just over ten years. Did they organically and legitimately become *better* than the 100+ other universities they leapfrogged, most of whom are also trying to at least maintain their place in the rankings? Of course not. It’s all smoke and mirrors. At the same time, of course, US News is designed to reward the Ivies and similar for their Ivyness, so at the top, the rankings are very, very static.

      • Andrew says:

        I mean I definitely agree that happens, but even with the gaming NYU still only ranks in the middle of the pack; how have they convinced these kids that they’re Ivy-like when they don’t even crack the USNWR top 30? I was actually going to compare them to USC in terms of a peer institution but USNWR actually ranks USC significantly higher.

        • BoredJD says:

          There’s a cultural bias among the middle and upper-middle class towards “private” universities, and as UNE said, schools that look more expensive. Throw in all the dreams of working in one of those tall shiny buildings in finance, fashion, international policy, publishing, or marketing and you have a recipe for disaster.

          My favorite quote from another dean of an overpriced private university in a desirable urban center:

          “The way Trachtenberg saw it, selling George Washington over the other schools was like selling one brand of vodka over another. Vodka, he points out, is a colorless, odorless liquid that varies little by maker. He realized the same was true among national private universities: It was as simple as raising the price and upgrading the packaging to create the illusion of quality. Trachtenberg gambled that prospective students would see costly tuition as a sign of quality, and he was right. “People equate price with the value of their education,” he says”

          This is especially true in the law school context. Moody’s recently released a report where they criticized law schools for reducing sticker tuition price, not because they’d have less revenue, but because students would turn their noses up at a cheap institution especially when the federal government will give them unlimited money to bet on the more expensive one.

          • Manny Kant says:

            Again, though, the cultural bias towards private schools is already pretty well-represented in the US News rankings. Berkeley, the top-ranked public school, ranks behind Northwestern, Washington University, Vanderbilt, Rice, and Notre Dame. UCLA and USC are tied with each other.

            And yet, still, five public universities (Berkeley, UCLA, Virginia, Michigan, UNC) manage to rank ahead of NYU.

          • Unemployed Northeastern says:

            That’s ridiculous: some vodka is made from potatoes, some vodka is made from wheat, and some of it is flavored, usually to its detriment. I would say there’s a lot more variety in vodka than there is in *elite* higher education (particularly if we limit the discussion to law schools).

        • Dana Houle says:

          Thanks to the media being based there, NYC is the navel of US national narcissism. If it’s in NYC, it MUST be better than, say, Emory, or Vanderbuilt, or Carnegie Mellon, or Washington U in St Louis, or USC, or Haverford/Bryn Mawr/Swarthmore, or any other good private colleges not in NYC (or Boston or DC).

        • Unemployed Northeastern says:

          Remember, there are about 4,600 accredited colleges and universities in the United States. Being #30 or thereabouts does put you in the top 1% of that group.

          As to why so many students and parents are still fooled by NYU and Northeastern and others, well, look to all of the breathless marketing, guidebooks, websites, etc. Higher education has become one of America’s largest industries. Between student loans, other tuition payments (cash, 529’s, HELOCs, etc), federal R&D grants, state appropriations, and all the rest of it, we are talking about a sector that brings in hundreds of billions of dollars every single year. Believe me, they have a marketing/lobbying machine second to none to ensure that everyone keeps ponying up.

      • somethingblue says:

        However, it has somehow managed to convince generations of high school seniors that it’s actually an elite institution and I can’t figure out how they did that.

        Just a guess..

    • Srsly Dad Y says:

      The N and the Y and Washington Square have a lot to do with it.

      • Warren Terra says:

        Yeah, I think a lot of people are paying for the intersection of Good Enough School and New York City. I don’t know what other schools are in New York, but it seems to me likely that NYU has at least a snob appeal that CCNY lacks.

        • NewishLawyer says:

          How many people who grow up outside of the NYC-Metro area know about the CUNY system? For the most part (graduate schools as an exception), the CUNY system seems to be largely a commuter one still. NYC has a surprising number of schools that are largely commuter institutions.

          Out of towners who can’t get into Columbia but want NYC probably attend NYU or the New School with a handful at Yeshiva and Manhattan Marymount.

          • Andrew says:

            Going to CUNY was the best educational decision I ever made. The funny thing is now that the masters is becoming the new entry-level degree, it’s cheaper and professionally more advantageous in most cases to go to a cheap public U for undergrad, then do your masters at a more elite school.

            • NewishLawyer says:

              That doesn’t answer my question about how many people outside of the NYC-Metro area know about CUNY.

              In most of the US, City College seems to equal Community College. In NYC, it is different.

              • Linnaeus says:

                I knew about CUNY, though not much. It was a moot point anyway since going to New York City for school wasn’t an option, plus there were several very good universities all within about an hour and half’s drive from my house.

          • BoredJD says:

            CUNY has no big name sports programs, so essentially nobody.

            “Out of towners who can’t get into Columbia but want NYC probably attend NYU or the New School with a handful at Yeshiva and Manhattan Marymount.”

            Don’t forget Fordham.

          • sharculese says:

            I do but my mom is from Long Island and my grandmother is a City College alum.

        • N__B says:

          CUNY employs the Rude Pundit. How’s that for cachet?

    • Anonymous says:

      USC improved it image through a carefully constructed plan to upgrade its student body and faculty. It started by giving free rides to kids with great scores, then it began offering aid packages to high achieving mid/upper middle students from soCal so attending USC was often cheaper than UCLA. They also poached a fair number of faculty by offering better pay and more importantly new facilities. Academically, USC is a much better university than it was 25 years ago.

      Until about 1970, Stanford was the USC of northern California, a good but not great private university for rich kids.

  11. Denverite says:

    They know that the enormously important peer rank/prestige-o-meter section of US News is incredibly dependent on your acceptance rate, so they (allegedly) send thousands of application fee waivers and encouraging letters to student they have no intention of accepting, so as to artificially lower their acceptance rate.

    When I was applying to law school many years ago, there was a very well-regarded school (not YHS, but close) that took this even a step farther. They reputedly would send out fee waivers in January (i.e., everyone who was going to apply without the waivers would have already applied) to everyone who scored over 170 on the LSAT, then waitlist almost everyone who applied through those waivers. But here’s the thing — they kept a separate waitlist of waiver applicants, and in the early spring, they asked if the waitlisted applicant was still interested in attending. If the applicant was, there was a good shot he or she would come off the waitlist, adding a 170+ to the student body. If the applicant wasn’t, then he or she got to count as a rejection for acceptance rate purposes. It was genius, really.

    • Nobdy says:

      When I applied to law schools Georgetown had 3 waitlists. One was a super special select waitlist for applicants using Georgetown as a safety. They essentially told you directly that you could get off the waitlist and admitted if you would commit to going there, and might even get some money. This waitlist existed only for yield protection purposes, there is basically no other explanation, and they didn’t even really try to hide it.

    • Jasper E says:

      University of Chicago, right? They pulled this on a friend of mine who went there undergrad. He swore he would never give them another penny. Really shitty practices from a school that exists to tank economies and fill the wing nut welfare pipeline, not to mention pump up Easterbrook’s ego.

    • BoredJD says:

      Oooh, is it UVA?

    • Unemployed Northeastern says:

      I just did some fact-checking. Northeastern, which is not and has not ever been better in any qualitative measure than BU (and certainly has worse job prospects for its students at all levels), improbably has a much lower acceptance rate: 31% versus 45%. Just goes to show you how gameable such stats are. And let us not forget that, just like entering GPAs and SAT scores, these are self-reported, unaudited and uncorroborated numbers. I would not be surprised at all if a lot of these acceptance rates are completely fabricated.

      Oh, and the dean of admissions at Northeastern pulled in more than $400,000, according to the last Form 990. I’m just saying.

  12. LeeEsq says:

    So John Sexton is the Boss Tweed of the American educational racket?

    Incidentally, the educational racket involving student loans is a very good argument against giving vouchers to subsidize private education on the elementary and secondary level. Those schools are going to turn into rackets to.

    • Warren Terra says:

      “vouchers to subsidize” are pretty much automatically a bad idea. I could perhaps be intrigued by vouchers that completely covered education costs, given sufficient regulation and inspection, but vouchers that subsidize education costs are basically designed not to do much good.

      • LeeEsq says:

        A lot of private schools will just raise their tuition to be Tuition Plus Voucher to keep out the unwashed without price control. Since many politicians would oppose price control hook, line, and sinker that isn’t going to happen.

    • Andrew says:

      No, because Boss Tweed actually did in fact frequently help out the little guy (frequently to obtain his vote, but still).

      • LeeEsq says:

        Its an honest exchange. The Democratic political machines were the only source for relatively string free attached charity and aid during the 19th century. Private charities tended to be tight-fisted and government welfare non-existent. Voting for the Machine candidate could at least get you some help when you needed it.

  13. Tiny Tim says:

    There are IRS guidelines about just how below market a below market apartment can be before it’s a taxable benefit but that applies to actual employees. If Gates isn’t paying taxes on it he’d better call his accountant.

  14. […] Lemieux at Lawyers Guns and Money points to NYU as a fine example of academic […]

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