The University of California at Berkeley is struggling to pay the bills on its newly renovated $321 million football stadium, The San Francisco Chronicle reported. A major part of the plan was to sell premium seats, at $40,000 to $250,000 each for use for 40 to 50 years. The university's plan for paying off the debt on the stadium assumed that, by this month, the university would have sold 2,902 of the seats. In fact, the university has sold only 1,857 seats, and 16 purchasers have stopped payments and are giving up their seats.
Lincoln Educational Services this week announced that it will close five campuses in Ohio and Kentucky. The for-profit institution, which offers automotive technology and other academic programs, said legislation Congress passed last year to eliminate federal aid for "ability to benefit" students had resulted in dramatic enrollment declines at the five locations. That legislation prohibits students who lack a high school diploma or its equivalent from participating in federal aid programs. Shaun McAlmont, Lincoln's CEO, said in a written statement that the company was saddened that those students "continue to be marginalized by legislation that treats them differently than so-called 'traditional' students."
To try to increase enrollment during the summer -- to boost graduation rates and revenue -- some colleges are discounting tuition and offering other perks. In most cases, the strategy has shown little payoff.
A New York State judge has dismissed a lawsuit against Columbia University, finding that the plaintiffs did not have standing to sue over Columbia's management of a 1927 gift by Italian-American families, Bloomberg reported. The gift was used to create La Casa Italiana as a center for Italian scholarship and culture at the university. But the suit charged that the university permitted numerous programs at the center that weren't connected to the donors' intended mission. The suit was brought by the Italic Institute of America, and the judge ruled that the institute didn't have standing to sue, despite its shared interest with the donors in Italian culture.
New York University is breaking new ground in compensation for higher ed executives and star faculty members by providing loans for vacation homes, The New York Times reported. President John Sexton received $1 million in loans for a home on Fire Island, while others have received assistance to buy second homes in other prime vacation areas. The article notes that many colleges provide homes for presidents, and some institutions in places like New York City -- where housing is expensive -- provide housing assistance for many others. But the article says that help for second homes is "all but unheard-of in higher education."
John Beckman, a university spokesman, told the Times: "The purpose of our loan programs goes right to the heart of several decades of sustained and successful effort at NYU: to transform NYU from a regional university into a world-class research residential university." The loans help attract and retain talent, he said.
Among the critics of the practice quoted in the article was Stephen Joel Trachtenberg, a former president of George Washington University who has been a defender of high salaries and benefits for higher education leaders. "That’s getting to be a little too sexy even for me, and I have a good sense of humor about these things," he said. "I don’t think that’s prudent. I don’t mind paying someone a robust salary, but I think you have to be able to pass a red-face test."
In a letter to the Consumer Financial Protection Bureau on Monday, consumer advocacy groups, higher education associations and others asked the bureau to require that colleges give prior approval before students borrow private loans, saying that the bureau has the power to require full certification by institutions. Right now, students "self-certify," meaning they sign off on a form that includes information about federal student loans and other forms of financial aid. Requiring colleges to certify that they are aware of the loans, the groups argued, would help ensure that students have already maxed out their federal loan options (many private loan borrowers have not), because federal loans usually offer lower interest rates and more flexible repayment options than private loans.
Since 2006, the athletics department at the University of Colorado at Boulder has paid nearly $9.8 million in severance payments to former coaches and other employees,The Boulder Daily Camerareported. The payments are generating scrutiny because the department currently has a $7.5 million deficit. Jerry Peterson, a physics professor and chair of the Boulder Faculty Assembly, said that "we all recognize that the Boulder campus is facing tight financial times, and that [nearly] $10 million -- even if it's over several years -- is a loss to academics."
Goddard College is cutting faculty and staff pay to deal with a $550,000 deficit in a budget of less than $13 million, The Rutland Herald reported. Goddard is a nontraditional college where students have relatively short residency periods at the Vermont campus and work remotely with faculty members on individualized academic programs. Officials blamed the deficit on enrollment declines. The pay cuts will be tiered, with no reductions for those earning up to $30,000. The college will also be suspending retirement contributions, and eliminating severance pay, but no layoffs are planned.