Short-Changing Universities

By Steven Roy Goodman

July 13, 2007

At the beginning of the 2006-07 academic year, it looked like Vanderbilt University was poised to benefit from Duke University’s lacrosse scandal.

Both schools compete for the attention of students who seek to combine a quality education with a picturesque campus and relatively warm weather. In the early-admissions sweepstakes, in which each student is worth almost $200,000 to the recipient university, this would have been big news indeed.

I am a college admissions consultant. A few of my students did, in fact, take a pass on applying to Duke, but they also passed over Vanderbilt for places like Cornell and Northwestern.

What happened on the road to Tennessee — and drove my students to cold-weather schools? Families of my students became more concerned about their pocketbooks than about lacrosse. Reports that Vanderbilt’s chancellor spent $6 million of university funds to renovate his house caught the attention of the prospective tuition payers. Their attention was further roused by the chancellor’s $1.3 million pay package and by accusations that his wife used marijuana in the very same house.

Now that almost all recently graduated high school students have mulled over their college options and decided where they will begin school in the fall, I can see that among my students Duke has rebounded while Vanderbilt hasn’t. The parents of my students are not alone in their displeasure about the state of university governance. Thousands of middle-class families save carefully to afford sending their children to college, only to be confronted with the pervasiveness of university leaders seeming to care more about presidential perks than class size, faculty research, or meaningful outreach to the middle class.

The questionable spending by American University’s former president, Ben Ladner, was so excessive that U.S. senators personally became involved last year in monitoring the university after the board of directors awarded Ladner a $3.7 million severance package. In the 1990s, Stanford University’s president took U.S. government research funds and allocated them to refurbishing his house. There are no accusations that the president of Florida’s Lynn University ever smoked marijuana on his campus or misallocated specific government funds, but his 2003-04 compensation package managed to total $5 million.

Close to unchecked presidential spending can also cross the line to become pure corruption — like the university financial aid officials implicated in the growing student loan scandal. Earlier this year, the former president of Morris Brown College was sentenced to 12 months of home confinement for embezzling federal financial aid funds.

It is time to insist that universities that accept government funding must open up their books to the public. This could be done relatively easily by mandating the posting of university budgets on a public Web site, similar to the way many universities currently post their course offerings online. Universities’ unwillingness to release relevant financial information to the public begs for the kind of abuse that we have seen at Vanderbilt and elsewhere. Moreover, the reluctance on the part of universities to provide accurate financial information to the outside community delivers a powerful message to America’s families: We’ll take your tuition money (and the government’s money), but please don’t insist on any budget oversight.

As an educational adviser, I know that my middle-class families resent spending almost $50,000 per year in tuition, fees and housing. For the right university, they are willing to bite the proverbial bullet and do what they can to finance their children’s education. But many of my families have reached the breaking point. They are refusing to spend their hard-earned money to subsidize university presidents’ extravagant lifestyles.

Americans have come to expect questionable behavior from CEOs of many Fortune 500 companies. Unfortunately, it looks like this behavior has permeated university presidencies as well. Perhaps universities forced to make public their budget expenditures will be shamed into spending more money on academic resources and lowering student costs than on perks for their presidents. It is certainly time to encourage universities to do so.

Steven Roy Goodman is a Washington-based college admissions consultant.

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