TIME Education

College Presidents Rake in Big Perks on Top of High Salaries

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A scandal in Illinois prompts criticism of deals for houses, cars and country clubs

Firing a leader is supposed to end a crisis, not make it worse. But when the board of trustees at an Illinois college voted to get rid of the institution’s president after word began to get out about extravagant spending and secret insider contracts, it quietly gave him three-quarters of a million dollars’ worth of severance pay.

The deal to ease the departure President Robert Breuder’s exit from of the scandal-ridden College of DuPage, which is now also under federal and state investigation for alleged misdeeds including falsifying enrollment figures, has focused attention on a range of lavish perks given to university and college administrators around the country.

“Many of these agreements are done in secret, denying the public the right to weigh in on the appropriateness of such generous packages, while students suffocate under non-dischargeable debt,” said a report from the Illinois Senate Democratic Caucus. The full Senate voted to cap such buyouts to no more than 30% of final earnings for any president making $200,000 or more, but the measure was defeated in the House after lobbying from the Illinois Council of Community College Presidents.

Breuder, who had been earning nearly half a million dollars a year before he went on medical leave in April, didn’t get just a massive buyout. His benefits as head of the community college included a $21,000-a-year housing allowance and a $10,000-a-year car allowance, among other things, the legislative report said. The Chicago Tribune also disclosed that Breuder and other administrators spent more than $190,000 on food, Champagne, wine, and expensive vodka in the three years before he abruptly went on medical leave, which allowed him to continue to collect severance.

Other Illinois university and college presidents, the Senate report noted, also enjoy housing allowances, cars, drivers, and paid-for dues at country clubs. “At the same time tuition and student debt are rising at a breakneck pace, the administrative systems of public institutions have expanded into sprawling behemoths, with some of those at the very top enjoying lavish perks, including expense accounts, club memberships, vehicles, and golden parachute severance payments,” the report said.

It’s not just Illinois where this is happening.

While their high salaries are given much scrutiny — presidents at research universities make an average of $450,000 a year, according to the College and University Professional Association for Human Resources, or CUPA-HR—more than 60% of university and college presidents nationwide, at both private and public universities, also get all or part of their housing provided, CUPA-HR said. More than 70% get a car or a car allowance, and more than a third get free club memberships.

But it is severance pay provisions–which more than half of the nation’s college presidents have in their contracts, according to the consulting firm Yaffe & Company– that have created awkward and expensive dilemmas for several universities and colleges.

When Graham Spanier was fired as president of Pennsylvania State University after the child-sex-abuse scandal there, for example, the university paid him $1.2 million in severance pay, plus $700,000 for a sabbatical he hadn’t had a chance to take.

Harold Raveché got $320,000 in severance pay when he resigned in 2010 as president of the Stevens Institute of Technology in New Jersey after charges of financial mismanagement were brought by that state’s attorney general, who alleged that he had gotten $1.8 million in low-interest loans from the university to buy two vacation homes. The case was settled on condition that, among other things, Raveché repay the loans.

And in 2013, Yale President Richard Levin received an $8.5 million “retirement bonus,” which the university said had been promised years before to encourage him to stay as long as possible.

These perks aren’t limited to school presidents, CUPA-HR says.

Six percent of provosts, 4% of chief development officers, and 3% of executive vice presidents and chief business officers have houses provided or receive housing allowances. More than a quarter of chief development officers, 13% of chief business officers, 12% of provosts and executive vice presidents, and 17% of athletic directors get cars. And 16% of development officers, 7% of executive vice presidents and provosts, 6% of chief business officers, and 11% of athletic directors have club dues paid for.

Universities and colleges have little choice but to compete on such measures, said Raymond Cotton, a partner at the law firm Mintz Levin in Boston, who represents higher-education executives and boards of trustees and often negotiates contracts.

“They’re all responsive to supply and demand in the marketplace,” Cotton said. He noted, for example, that providing housing can help lure top administrators. “The cost of housing itself can be an impediment to recruiting. If the university can take that off the table as an impediment, it can benefit the university.”

Not everyone agrees with this.

“It’s become kind of a self-perpetuating thing,” said Richard Vedder, an Ohio University economist and director of the Center for College Affordability and Productivity, which opposes the rising cost of college. “One school will start doing these and other schools will say, ‘We have to do this.’ It’s an academic arms race.”

Saranna Thornton, an economics and business professor at Hampden-Sydney College and chair of American Association of University Professors’ Committee on the Economic Status of the Profession, said there isn’t evidence that universities need to shower prospects with such benefits to attract them.

“Increasingly you hear spokespeople or chairs of boards of regents saying, ‘This is what we need to pay to get good people,’” Thornton said. “Nobody’s backing that up with any data.”

Even if they did, she said, universities and colleges are nonprofit institutions with high-minded missions.

“There’s a public service argument,” said Thornton. “I see people going into all sorts of jobs not motivated by the money.”

Such growing criticism is among the reasons experts said the growth of benefits for top administrators has flattened out since the economic downturn, though they have not gone away.

“Ever since the great recession, there’s been very little change with benefits and other compensation,” said Matt Hamill, senior vice president at the National Association of College and University Business Officers.

That’s because “There are appearance issues,” with such benefits as pay for presidential spouses, Cotton said.

There are also conflicting rules about whether university executives can be taxed on these perks. Bonuses and severance pay are taxed as income, but some deferred compensation, free tuition and business use of a provided car are not. Federal tax law does not consider free housing to be income, as long as it’s a condition of employment and on the business premises.

Most universities interpret this to mean that housing provided to executives on their campuses is exempt from being taxed. But in at least one case, the IRS has disagreed. It said the president of Ohio University did have to pay taxes on the 7,000-square-foot home the university provides for him for free.

So the board of trustees agreed to pay the $19,000-a-year cost of federal, state, and local taxes for him, plus another $11,000 in taxes the IRS said he owed on the term life insurance that’s taken out on his behalf.

“Whether higher education likes it or not, public scrutiny has increased,” said CUPA-HR President Andy Brantley. “I know a lot of institutions are questioning things like club memberships.”

Belonging to a country club can pay off by helping presidents and development officers bond with potential contributors, said Rich Ekman, president of Council of Independent Colleges. But, “For some people, those are outrageous benefits,” he said.

“The public reaction to highly compensated people in any sector can be critical,” Ekman said. “There’s more sensitivity to that by colleges in the past few years.”

Yet few of the perks have so far gone away, Vedder pointed out.

In fact, there’s a new one: financial bonuses for top executives, meant to encourage them to improve such things as graduation rates. Nearly four in 10 presidents now are eligible for bonuses, Yaffe & Company says, and 66% received them in 2013-2014, the last year for which the figure is available, with an average payout of $30,400. So did three-quarters of provosts and 68%of chief financial officers.

“I was anticipating that there might be some moderation. But I don’t sense there’s been much retrenchment in contracts,” Vedder said. “I’ve been waiting for sanity to set in.”

 

This story was produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education. Read more about higher education.

TIME Education

You Can Now Get College Credit Without Ever Taking a Class

Students being evaluated for competency-based credit at Lipscomb University in Tennessee
Lipscomb University Students being evaluated for competency-based credit at Lipscomb University in Tennessee

At 56, Linda McCampbell discovered she could get the college degree she always wanted.

A Nashville paralegal for 30 years, McCampbell last year attended an eight-hour workshop to judge how her life experience might be cashed in for academic credits at Lipscomb University. The promise was alluring: the possibility of knocking months off a college education McCampbell had long abandoned as out of reach.

It turns out she qualified for an entire academic year’s worth of credits, and at a fraction of what two semesters of tuition would have cost.

“It wiped out my freshman year,” says McCampbell, who earned those credits by proving she could deal with a full inbox of tasks and solve problems with a group. The boost was enough to cure her of the longtime belief a degree was out of reach.

This sort of result that has led hundreds of colleges and universities to develop similar so-called competency-based programs, which let older students get academic credit by demonstrating proficiency in such things as leadership and organization.

That means those students can earn degrees more quickly and at a lower cost — even lower now that the U.S. Department of Education has begun a pilot program under which students at 40 institutions will be able to use federal financial aid to pay for it, which was not previously allowed.

But critics fear that in the rush to compete for students by promising them credits for experience, some colleges and universities will make getting competency-based credits too easy. Accreditors are still scrambling to set up standards for the practice. And a new study by the American Enterprise Institute raises other questions that remain unresolved, including how students will earn credit in this way, how much they will be charged for it and whether they will really save money over the long term.

Competency-based programs “could very easily devolve into diploma mills,” says Amy Laitinen, a former White House and Department of Education advisor who is now deputy director for higher education at the New America Foundation and an advocate of the concept. “It could go south very quickly.”

Designers of competency-based programs say they measure whether what people have already learned in life is enough for them to forgo academic courses typically required as prerequisites toward a degree.

Nineteen early adopters of the competency model — including Lipscomb, Southern New Hampshire University, Capella University and the University of Wisconsin — are working together to design standards for such programs in a collaboration called the Competency-Based Education Network, or C-BEN. (C-BEN is supported by the Lumina Foundation, a funder of the Hechinger Report, which produced this story.)

But many of the institutions being allowed to use financial aid for competency-based education are not associated with the effort to establish standards.

“My worry is that you’re going to see schools that don’t do the hard work,” says Michael Offerman, an Arizona-based consultant who helps universities and colleges develop competency-based programs. “If you don’t do it right, you could threaten not only your own institution, but also the movement as a whole.”

The nation’s six regional accreditors, whose job it is to ensure the quality of colleges and universities, have also joined together to figure out how to judge competency programs. It hasn’t been easy, says Kevin Sightler, a member of the task force who represents the Georgia-based Southern Association of Colleges and Schools Commission on Colleges.

“There’s a lot of confusion, even among the accreditors,” he says. “Everyone’s just trying to get their hands around it right now. It’s completely different from historical approaches.”

There’s little question accreditors will have their hands full soon. Competency-based programs are cropping up rapidly nationwide, from community colleges and small liberal arts colleges to the largest universities. Nine of the most active institutions alone collectively enroll more than 140,000 undergraduate and 57,000 graduate students in competency programs, according to the American Enterprise Institute report.

At least 200 schools are developing or considering competency-based programs, says Brian Fleming, an analyst with the higher-education consulting firm Eduventures.

“We think it’s only going to get bigger,” he said. “It is quite a Wild West.”

Lipscomb’s program has assessed more than 120 students, including McCampbell, since it started last year. In October, California’s Brandman University launched a fully online, competency-based bachelor’s degree with 44 students.

As colleges and universities see competitors bringing in new students with such programs, they’ll be tempted to cut corners, says Laurie Dodge, a Brandman vice chancellor and vice provost.

“Competency-based education is popular, and everybody wants a piece of it,” Dodge says. “There may be shortcuts or window-dressing.”

At its best, the competency model could help colleges turn out graduates who are prepared for the working world rather than just adept at cramming for tests. It could also bring in students at a time when enrollment is flat or declining, and when higher education is trying to tap into the growing market of students who are older than traditional college age. In the American Enterprise Institute study, 90% of the people who cashed in life experience for credit were 25 and older.

“I think it’s being seen as something that can help institutions sustain themselves,” says Charla Long, Lipscomb’s dean of professional studies. “This might eventually be seen as the new face of higher education.”

Lipscomb’s eight-hour assessment — the one that let McCampbell skip her freshman year — starts by giving students various tasks to complete within 90 minutes. Later, the students participate in leaderless workplace discussions about, for example, hiring policies.

Evaluators want to see students prove their critical thinking and problem-solving skills, Long says — something employers want, and complain that too few traditional college graduates have.

About 1 million people in Tennessee have earned some college credits but no degree, Long says, and competency-based programs could make it easier for them to get one.

For McCampbell, who started looking at schools once her two children graduated from college themselves, the Lipscomb program opened doors that were closed when she was younger.

“I didn’t grow up in money. They even laughed at you if you brought up college,” says McCampbell, who is pursuing a bachelor’s degree in integrated studies. “Something was always missing.”

This story was produced by The Hechinger Report, a nonprofit, independent news organization focused on inequality and innovation in education

TIME Education

Colleges Pit Music Against Math as Funding Dries Up

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Limited money is causing state schools to choose among subjects with the most demand

Bob Marley once sang that when music hits you, you feel no pain. But the music department at the University of Alaska at Anchorage could soon end up bruised, bloodied and down for the count.

That’s because music is being pitted against other subjects with stronger demand, such as business and engineering, as the public university cuts its budget in response to lower oil prices that have resulted in a drop in state tax revenue.

This is not happening only in Alaska. Colleges and universities across the country are going through the same painful process of winnowing their offerings to show students, lawmakers, and taxpayers they are serious about saving money. And what was once a theoretical conversation about the value of the humanities versus the sciences or business is now a very real debate over which academic programs will survive and what jobs will be lost.

Advocates welcome the chance to weed out costly programs with hardly any students, or force them to attract more and do a better job of graduating them. Critics say the budget-minded process threatens to preserve more popular departments that churn out employable graduates, such as biotechnology and nursing, at the expense of less pre-professional degrees like philosophy and history.

“That could be a very dangerous, unintended outcome,” says Sandra Elman, president of the Northwest Commission on Colleges and Universities, the accreditor for Alaska and other northwestern states. “If this is going to be looked at in terms of a financial bottom line, you don’t have to be the head of Microsoft or Nike to know that the programs that graduate the most students might end up on top,” she says. “Faculty have the right to be concerned.”

Indiana State University was among the first schools to undertake a comprehensive review of its offerings, from 2006 to 2008, which resulted in the elimination or suspension of 48 academic programs, including art history, German, and journalism as it sought to trim a bloat of offerings that had led to 8,000 empty seats in classes.

The process was painful, says Robert Guell, an Indiana State economics professor and chairman of the campus academic senate, but it was a way of “culling the walking dead. Your perspective on this depends on whether you’re the organ donor or the organ recipient,” Guell says. “The body may be healthier overall, but it still doesn’t feel good for the donor.”

To save $6 million, the University of Southern Maine is cutting French, geosciences and applied medical sciences, and consolidating six other majors: English, philosophy, and history will be combined into one department, and music, art and theater will be grouped into another. Though French is still widely spoken in Maine, the French Department had graduated an average of 4.8 majors per year for the last five years.

Other institutions have adopted a model that ranks departments according to productivity and divides them into five groups, with the bottom 20% eliminated or reorganized.

Boise State University, for instance, over the summer instructed programs in the bottom one-fifth to plan for “significant change,” says Provost Martin Schimpf. Among those slated to be cut are bachelor’s degrees in bilingual education and geophysics and a master’s degree in physical education pedagogy.

Schrimp says the process, ordered by Idaho Gov. Butch Otter, will help the public university consolidate programs that were teaching the same subjects and save $2 million a year.

“We create and eliminate programs all the time,” he says. “There’s a lot of overlap and interdependence. By having a universitywide conversation, these things pop out. That’s the value of the process itself.”

But prioritization can create its share of problems, especially at schools where faculty members have been cut out of the process. Critics point to the University of Northern Iowa, which in 2012 announced it would eliminate one-fifth of its academic departments.

A December 2012 report by the American Association of University Professors derided Northern Iowa’s eliminations as “created solely as a device for laying off members of the faculty whom the administration no longer wished to retain.”

In addition to music instruction, the proposals in Alaska could doom several other programs, including the respected Alaska Quarterly Review, a literary journal.

“It’s very difficult,” says Bill Spindle, a University of Alaska Anchorage vice chancellor who has helped lead the process, which aims to save about $7 million per year. “We want to prune, we don’t want to break off branches.”

The university has ranked its programs into categories including one that calls for “further review” of departments about which questions remain and that may not have long to live. A final decision is expected to be released this week, and Spindle says cuts will be even deeper than originally expected because of a state budget shortfall.

Among those most at risk include Chinese (“[T]his program should stop creating new courses and contemplating new programs when it has only part of one faculty position,” according to the university prioritization report) and two music programs (“This is a very expensive and relatively non-productive program, and there are serious opportunity costs with putting so many resources into something that produces only four graduates in three years”).

Music Department chairman Christopher Sweeney says the actual number of graduates over those three years was closer to seven for each of the two at-risk music degrees, but he acknowledged that even this number was lower than he’d prefer.

“As much of a nightmare as it was,” said Sweeney, “it was a good wake-up call on how to serve our population better.” But he added: “We are not going down without a very, very severe fight.”

The at-risk list also includes some surprises. Chemistry is on it (“The number of graduates is very troubling”) and a graduate certificate in nursing (“This program has weak student demand”).

Also surprising are the subjects that were rated as successful—art, for instance (“an impressive level of student-centric discussion”), and medical laboratory science (“Alumni survey data indicates grads are finding employment, mostly in Alaska”).

The university urged departments to explain their value by demonstrating proof of learning, but some didn’t take the hint, says Diane Hirshberg, a professor of education policy who helped lead the prioritization study. “We had programs provide evidence,” she says. “Then we had others that said, ‘Our students know this and this,’ without providing any evidence. It’s frustrating.”

Even professors who hate the thought of universities cutting programs acknowledge it needs to happen occasionally. Schools tend to grow more than they shrink, and some departments outlive their usefulness as employment trends change.

The key to avoiding problems is transparency and communication, says Jack Maynard, the Indiana State provost who led his campus’s prioritization.

“By doing that, you take away a lot of the weapons people would use: speculation and rumor,” says Maynard, who came out of retirement recently to return as the school’s interim provost. He says Indiana State used the process to transform its identity into a stronger campus focusing on rural health care.

At other schools, however, some fret that a change in identity would be the wrong outcome. New York City’s Lehman College, for example, is undergoing a prioritization process some professors worry could shift the school away from the humanities and toward science and engineering.

“A college needs to have a philosophy department,” says Duane Tananbaum, a Lehman history professor, “even if it’s not overflowing with students.”

This story was produced by The Hechinger Report, a nonprofit, independent news website focused on inequality and innovation in education.

TIME Education

UC Berkeley Fires Administrator for Stealing Thousands to Pay for Kids’ Tuition

Sonia Chante Waters was put in a charge of grant money at the public university despite a history of embezzlement

A woman with a previous felony embezzlement conviction was given control of public and donated money at the University of California at Berkeley, where she is accused of stealing tens of thousands of dollars to pay for her childrens’ private-school tuition and other expenses.

Sonia Chante Waters, 36, was charged May 19 by Alameda County prosecutors with nine felony counts of grand theft and embezzlement. She was free in lieu of $75,000 bail and faces up to five years in prison, according to the Alameda County District Attorney’s Office.

Waters, the daughter of a former UC Berkeley employee and prominent Black Panthers leader, allegedly forged a former dean’s signature on university checks several times beginning in early 2013. The checks were used to pay tuition at Berkeley’s École Bilingue, a French-language school her two sons, 11 and 6, attended.

In an interview, Waters’ attorney, Mark Vermeulen, says his client admitted she had stolen university money. A university spokeswoman said UC Berkeley was still determining the amount stolen, but Vermeulen says the school told him it could be as much as $90,000.

Financial and family problems led to the theft, Vermeulen says. Waters and her husband had been raising her young cousin, he says, in addition to their own children.

“There were a number of things going on in her life that led to poor judgment on her part,” Vermeulen says. “It certainly doesn’t excuse it or explain it. But she didn’t lead an extravagant lifestyle, by any means.”

Waters was hired by UC Berkeley as an assistant in 2003. She left in 2004 for a job at The Hartford financial and insurance company, but returned to UC Berkeley in 2007 after being fired from The Hartford after she was discovered stealing company funds. Waters pleaded guilty to embezzlement in 2009, while employed at UC Berkeley. She was sentenced to three years of probation and agreed to pay Hartford more than $32,000, according to the San Francisco District Attorney’s Office. Prosecutors dropped the grand theft charge as part of a plea agreement.

Soon after the conviction, Waters was promoted to administer millions of dollars in grants and private donations as a research administrator at UC Berkeley’s School of Public Health. The university was apparently unaware of her criminal record. UC Berkeley failed to perform mandatory background checks before promoting Waters and she never mentioned the crime to her superiors, a university spokeswoman tells TIME.

UC Berkeley officials declined to comment on the specifics of the case, but spokeswoman Janet Gilmore admits that “a hole in our practices” had allowed some employees to move into “sensitive” jobs without undergoing the background checks required for those positions.

Gilmore says the school was looking into how that had happened and whether other employees also avoided the background checks. She declined to say whether other employees would be disciplined as a result of Waters’ actions, but the administrator in charge of Waters’ department, Denise Harter, announced her retirement on May 23 as TIME investigated the embezzlement.

UC Berkeley rules make it clear Waters should have been excluded from her position. According to a university FAQ on criminal background checks, “Individuals with criminal convictions for theft, embezzlement, identity theft or fraud cannot be hired into positions with fiduciary responsibilities.”

Integrity has been an issue for UC Berkeley administrators in recent years. In 2012, an assistant vice chancellor was demoted from her $188,000-a-year job, then fired, after reports she had helped triple her lover’s salary to $120,000. The administrator, Diane Leite, never admitted the affair publicly, but the relationship was confirmed by university investigators.

Waters was fired in April from her nearly $73,000-a-year position after the university put her on paid leave in March. An April 9 letter from the university informing her of the decision cited “dishonesty, theft and misappropriation of university property” and noted Waters had admitted writing university checks to pay about $8,500 toward each child’s approximately $25,000-per-year tuition at École Bilingue.

The letter said Waters led École Bilingue to believe the money was a loan from her UC pension fund, while Waters told investigators she had disguised the payments by pretending to rent classrooms at the French school for university purposes. The university apparently discovered the embezzlement when École Bilingue contacted UC Berkeley to ask about a third tuition payment for $8,700.

According to a probable-cause declaration justifying the charges against her, Waters told UC police “she did not think she made good money” and that she had planned on returning the stolen funds. She also is accused of stealing university money to pay for more than $8,800 in catering, $28,000 in computers and phones, nearly $39,000 worth of gift cards and $8,000 in other expenses.

Although the signature of Stephen Shortell, the School of Public Health’s former dean, was on the invoices used by Waters, he said in an interview he had not signed the documents. Investigators said they found photocopies of Shortell’s signature in Waters’ desk.

According to a 2010 obituary in the Daily Californian, UC Berkeley’s student newspaper, Waters’ father, Ronald Stevenson, was an early member of the Black Panthers and was heavily involved in the Berkeley community. He received a bachelor’s degree from UC Berkeley, where he led the effort to rename the student union after Martin Luther King Jr.

Stevenson later founded and directed a UC Berkeley-led tutoring program for at-risk children.

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