NYU is Handing Out Loans for Professors' Beach Houses. Do Other Colleges Do That Too?
High-cost, low-interest loans from NYU are the hottest commodities on the market these days. On a city level, they've been used (and eventually forgiven by the school) across Manhattan to pay for profiled professors' lofts or condos. On a national level, they've made their way into the Senate, with Senator Chuck Grassley grilling Treasury Secretary Jack Lew for accepting one when he was an NYU professor. And, on a world level, they're the subject of serious backlash in relation to the school's expansion here and abroad. Now, it looks like the loans have gone coastal.
Yesterday, the New York Times published a piece detailing the beach houses of "star" NYU educators in the Hampton Bays and elsewhere. Needless to say, the extravagance isn't taken lightly.
President John Sexton's Fire Island digs? The result of a $1 million loan. NYU Law professor Richard Revesz's 65-acre crib on the Housatonic? Along with his NYU-financed West Village spot, a $5.7 million loan. And executive VP Martin Dorph's Pennsylvania pad? A $200,000 loan on a property he already owned.
In addition to the aforementioned names, the NYT reports that "at least five medical or law school faculty members at N.Y.U. have received loans on properties in the Hamptons or Fire Island," according to Suffolk County records. Usually, these loans are steam-fitted in the educators' interests (i.e. no collateral, below-market rates or none whatsoever, the works). So it's basically a win-win for everyone but the students. So we'll just leave this here: The "private school in the public sphere" now charges about $42,000 a semester, and that doesn't include room, board, or New York City.
Albeit controversial, the practice of an administration handing out loans for its professors is all too common in the collegiate world. The decision-makers at Boston University, Harvard, Pepperdine and other prestigious institutions are known to engage in it as well. For example, at Carnegie Mellon University, it was reported that one professor received upwards of $350,000 for a violin he wanted. Must've been a damn fine violin.
When the first reports of professors' loan-paid apartments here in the Big Apple came out, the NYU administration took to the defense, arguing that these high-rises were necessary to draw in the higher-education talent the school prides itself on, leading one to believe the school either has a way-too-needy applicant pool for its professors or the inability to say "no."
And still, that seems to be the case. In a statement to the Voice, NYU spokesperson John Beckman had this to say:
"Our loan programs are a vitally important element in recruiting and retaining top scholars to NYU, and a sound investment in NYU's future. And judging by the outstanding quality of the faculty we've attracted, it's been a success. ... The loan programs enable us to attract world-class faculty, to offer housing to more faculty, and--for most of our loans--to earn a return for the University, secured against real property."
The universal use of loan compensation was also addressed. "I know Columbia does," he told me. "I think a good number of major research universities have loan programs to address housing as part of recruitment."
Beckman then followed suit with a rundown of NYU's accomplishments over the past 10 years, including a 130 percent increase in financial aid, improved graduation rates, a 45 percent rise in applications and the hiring of more professors. (Unfortunately, the insane jump in tuition or the fact that NYU has the highest student debt in the nation--an amount now higher than 12 countries' GDP--did not make the list.)
The revelations over loans, tuition-versus-tangible disparities, and NYU 2031, the behemoth expansion plan abhorred by a thin majority of professors, have birthed substantial outrage towards the administration here in the Village ("a rebellion from within," as former Voice scribe Nick Pinto called it). Sexton did not comment on the accusations presented by Times' story but, on the same day of publication, he sent out an email to the student body, praising the merger of NYU with its engineering school in Downtown Brooklyn, NYU-Poly.
As of this date, the faculties from the College of Arts and Sciences, the Tisch School for the Performing Arts, the Gallatin School of Individualized Study, and the Steinhardt School of Culture, Education, and Human Development have all voted no confidence in President John Sexton's leadership--a non-enforcing gesture that implies distrust with the school's executive body as a whole.
It remains to be seen what will happen once the students return from their summer vacations in September. Or when Sexton returns from out east.
Send your story tips to email@example.com. Follow his tweets here.