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July 3, 2014

University admin salaries, student debt on rise

Study shows student debt higher among schools with top-paid leaders

By Emily Scharf

According to a recent study from the Institute of Policy Studies, “The One Percent at State U,” co-authors Marjorie Wood and Andrew Erwin found that administrative spending outstripped scholarship spending by more than 2:1 at the universities with the highest-paid presidents.

The same study also showed the student debt crisis is worse at the state schools with the highest-paid presidents.

As executive compensation increased, so did student loan debt — particularly among the top 25 schools with the highest compensated leaders.

This, along with many similar studies have fostered a debate nationally over the growth in administrative costs at universities.

College tuition, along with student loan debt has been on the rise for the past 25 years.
While tuition has been growing, so have the salaries of higher education administration personnel.

According to Nicolaus Mills in a 2012 article in Dissent magazine, two colleges charged more than $40,000 a year including tuition and room and board in 2003 in private colleges. By 2009, more than 200 colleges charged that amount or more.

The situation has equally worsened in public schools due to the declining state support for these universities.

This forces students to have to pay more money for tuition, while administrative salaries continue to rise.

A recent article in the New York Times reviewed a study which found that the average student debt is growing faster at universities with the highest paid leaders.
Furthermore, the amount of university administration has more than doubled in that same time span.

According to an article by Jon Marcus in the Huffington Post, the number of higher administration employees has been consistently growing while the number of students has been relatively steady.

“The disproportionate increase in the number of university staffers who neither teach nor conduct research has continued unabated in more recent years, and slowed only slightly since the start of the economic downturn, during which time colleges and universities have contended that a dearth of resources forced them to sharply raise tuition,” Marcus says.

University presidents and upper administration salaries are increasing — at the expense of its students’ tuition.

Although there is no way to determine how much tuition money is used to cover higher education administrators salaries, it can be speculated that a good portion of tuition and foundation money contribute to their compensation since state support has decreased.

An annual survey done by The Chronicle of Higher Education shows the salaries of chief executive’s at public universities is on the rise, with nine chief executives earning more than $1 million during the 2012-13 fiscal year.

According to the Chronicle’s report, the highest-paid university president in 2013 was former Ohio State University President E. Gordon Gee, who has since moved on to become president of West Virginia University — Gee earned $6,057,615 last year, according to the recent survey.

His base salary, which ended in June of last year was $851,303, however, when combined with deferred compensation and severance pay, Gee brought home more than $6 million.

Kent State University President Lester Lefton earned a base salary of $417,800 and University of Akron President Luis Proenza had a base salary of $425,250.
Both universities are expecting incoming presidents Scott Scarbrough (UA) and Beverly Warren (KSU) to both have a base salary of $450,000.

Cleveland State University President Ronald Berkman earned a base salary of $430,000 and a total salary of $667,500 — ranking 36th among The Chronicle’s list of more than 200 colleges and universities, including many Research 1 universities.

However, compensation for university presidents such as Berkman coincide with leading the university during times of tough transformation and declining state support.

Additionally, since his inauguration at Cleveland State in 2009, Berkman has helped raise more than $60 million in total donations, while restructuring campus and keeping up with his various responsibilities as the leader of a public institution.

Whether upper administrative salaries are justified for the work they do is debatable, some believing the high compensation is necessary, while others are calling it a scam.
Raymond D. Cotton, a partner in the Mintz Levin law firm, wrote into the New York Times opinion section to represent higher education executives.

Cotton believes that because university presidents act as chief executive officers, their pay is justified in relation to their responsibilities.

“College presidents are not overpaid in relationship to their responsibilities and the compensation market place,” Cotton wrote in the June 23 article.

Additionally, while president salaries at public universities and private nonprofits appear larger than life, CEO’s of private, for-profit universities are much higher.

“I have never found a board interested in wasting the assets of its institution by overpaying its president,” Cotton concluded.

On the contrary, associate professor of English at Dalhousie University in Canada, Kathleen Cawsey, addressed the issue of increasing costs of university administrators across North America, attributing the high salaries to the “corporatization of academia.”

In another article published in the New York Times, “End the Era of the C.E.O. College President,” Cawsey said that if the universities are the “marketplace,” consumers should be able to decide the cost.

Cawsey goes on to point out that these universities are cutting costs on other programs and hiring more adjunct faculty, at the same time they are creating new executive positions with six-figure salaries.

While students are soaring further into student loan debts, upper administration at these universities are collecting higher and higher take home compensations.