New York University students carry some of the highest debt loads in the nation, a fact they are bound to remember through gritted teeth when they read the New York Times report about the school’s loans to top faculty for vacation homes in places like Fire Island and the Hamptons. The loans, which have gone to at least five faculty members in the medical and law schools as well as university president John Sexton, sometimes get forgiven over time as their recipients continue to work at the university. Mortgage loans apparently aren’t unheard of as compensation packages for professors and executives in tight real estate markets, but they’re usually for homes, not vacation properties.
The Times didn’t find anything technically illegal in NYU’s practice (though senators have asked the university to explain itself after a $1.4 million loan to Treasury Secretary Jack Lew came up during his confirmation hearing). But given that heavy student debt load, and the vast disparities in the salaries of faculty and executives, this whole beach-house bonus program has got to rankle. We’d predict some kind of backlash against Sexton, such as a no-confidence vote, but five of the school’s colleges have already done that.
