The Eye of the Needle: NYU Loans Money to Fat Cats to Buy Second Homes

Remember when college and university leaders bragged that American higher education is the envy of the world? I think Derek Bok, president emeritus of Harvard, said that.

John Sexton, President of NYU
Photo credit: nymag.com

You don't hear that boast much any more. People would laugh in your face now if you said American higher education is the best in the world. Americans know that a college education costs too much and that it becoming more and more questionable regarding whether anyone learns anything from sitting in 30 or 40 college classes.

Part of our disillusionment with American higher education stems from the way its leaders behave. The Times published a story yesterday about New York University's loans to its president, John Sexton, and other so called university "stars." NYU pays Sexton a salary of nearly $1.5 million, it guaranteed him retirement benefits of $800,000 per year, and he is due to receive a "length of service" bonus in 2015 of $2.5 million. That's not enough to keep Sexton happy?

Apparently not. According to the Times, NYU loaned Sexton $1million for the purchase of a summer home on Fire Island. This is one of about 100 loans NYU has made to faculty and administrators, including a loan to the former law school dean for a 65-acre estate in Connecticut. Some of these loans are forgiven, essentially making them cash gifts.

Sexton, exhibiting the brazenness one might expect from someone with his compensation package, said home loans to NYU faculty help keep tuition down. "Faculty housing loans on which interest is paid and appreciation is enjoyed by the university actually produce additional revenue," he said. "They're probably the best-performing part of our portfolio, so as to reduce the amount of tuition that we require."

What a load of bull. According to a Huffington Post story, NYU's 2010 graduates had amassed a
student-debt load of nearly two thirds of a billion dollars, the highest in the nation with the exception of students graduating from a few for-profit institutions. And the cost of obtaining a degree, including tuition, housing and other expenses is about $280,000.

University trustees all over the United States claim that obscene compensation packages are necessary to attract top talent. But when they say this, they are basically admitting that our top university executives are motivated by greed.



St.Francis
I need $800 K and a car allowance

I don't buy it. I don't believe colleges, universities, banks, and corporations have to pay their people ridiculous amounts of money in order to obtain good executive leaders. Can you imagine the Catholic Church being run that way? Picture St. Francis saying this to the Pope: "Yes, I can organize a world-wide religious order for you full of pious monks who have sworn a vow of poverty, but I will need 800 K, a summer home in Tuscany, and a car allowance."

What was it Jesus said? "[I] it is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God." But of course John Sexton isn't thinking about the Kingdom of God. He's going to Fire Island, not Heaven.

In our postmodern society, a meaningful life is now measured by wealth, power, and recognition. Even President Obama is probably plotting his next gig. He's been editor of the Harvard Law Review and President of the United States; he's even won the Nobel Peace Price. But that's in the past. To have a well rounded life, Obama will have to become president of a prestigious university--Harvard, Yale, or the University of Chicago.

It is time for Americans--Catholic Americans, at least--to say no to this model of a successful life. It is time to say we will not live our lives in search of wealth and power. We won't send our children to college and universities led by buffoons like John Sexton, and we won't take out student loans to finance the extravagant lifestyles of a bunch of clowns.

It is time to look at different models for living--models provided by people like Dorothy Day, who dedicated her life to the poor, and St. Katharine Drexel, who gave all her wealth away in service to Native Americans and African Americans.

It will be hard to turn our backs on postmodernism. Our colleges and universities preach it, the New York Times and the New Yorker preach it, and our politicians preach it. The Times and the New Yorker murmur liberal platitudes but their pages are crammed with advertisements for luxury goods. They know what their readers really want--a Rolex watch.

In my view, only the Catholic Church--that battered, sin-riddled and seriously flawed institution--can restore our nation to sanity. We were not meant to live in the materialistic and power-mad world we created. God meant for us to care for our families, to ease the suffering of the disadvantaged, and to lead modest and wholesome lives. Unless we turn away from postmodern insanity and return to our Mother Church, I believe our society is lost.

References

Ben Hallman, NYU's 'Toxic' Expansion Prioritizes Marketing Over Debt-Saddled Students, Professors Day, Huff Post Business, June 17, 2013. Accessible at: http://www.huffingtonpost.com/2013/06/17/nyu-expansion-student-debt_n_3437097.html

Ariel Kaminer & Alain Delaqueriere, N.Y.U. Gives Stars Loans for Summer Homes, New York Times, June 18, 2013, p. A1.