Fake Press Release Absolves Cooper Union of $175 Million Debt

Individuals unhappy with Cooper Union's recent decision to end its 111-year practice of providing a full-tuition scholarship to all students issued a fake press release Tuesday as MetLife, which lent the university $175 million in 2006 to finance construction of a new academic building, promising to forgive the loan on the condition that the university remain free. 





NEW YORK - May 14, 2013 - MetLife, Inc. (NYSE: MET) announced today that it will conditionally forgive a $175 million loan made in 2006 to the Cooper Union, a treasured New York institution currently consumed by a financial crisis. 

Cooper’s interest-only payments to date, which amount to approximately 72 million dollars, will be applied to the total, netting a total forgiveness of $103 million dollars. MetLife’s decision will allow the Cooper Union to preserve its 154 year meritocratic tradition of tuition free education. “Cooper occupies a special place in the soul of New York City, the city which MetLife calls home.” said MetLife CEO Steven Kandarian, “We had to do something.”

“The actions of the Free Cooper Union students who have occupied President Jamshed Bharucha’s office have inspired us to reject the inevitability of this situation. MetLife believes in the transformational power of capital to catalyze growth and increase opportunity. And we take that responsibility seriously; we see ourselves as stewards, in a sense, of our investments. So, though we don’t take lightly the moral hazard which today’s action represents, we didn’t feel we had any choice but to protect the legacy of empowerment Cooper Union embodies.”

“The institution is simply too big to fail,” Kandarian continued, “metaphorically speaking, of course.”

The Cooper Union for the Advancement of Science and Art was founded by industrialist Peter Cooper in 1859. It’s mission reflects it’s founder’s fundamental belief that an education “equal to the best” should be accessible to those who qualify, independent of their race, religion, sex, wealth or social status, and should be “open and free to all”.

In recent years the board of trustees has pursued an expansionist agenda of which the ill-advised 2006 loan is a part. The loan, taken in part to fund an exorbitant new, $111.6 million “landmark” building by Thom Mayne of Morphosis Architecture which a capital campaign had failed to adequately fund, requires annual interest-only payments of approximately $10.3 million, the majority of Cooper’s operating budget shortfall. In addition, a majority of Cooper’s managed endowment assets were recklessly invested in hedge funds which have diminished the endowment substantially since 2006. In light of these facts, in April 2013 Board of Trustees Chairman Mark Epstein announced that the Board had approved a plan to reduce the full tuition scholarship by half, ending a 154 year tradition and effectively abandoning the Cooper Union’s founding principles.

“In retrospect,” said Kandarian, “when we were offered Cooper’s ‘golden goose’ as collateral for a risky loan, we should have passed.”

MetLife’s actions are intended to stabilize the institution and allow it to continue offering a top quality education which is “as free as water and air,” however they should not be mistaken for a panacea. “These are drastic measures,” said Kandarian, “and as such they are conditional on Cooper’s continued status as a top quality tuition free college. The tuition free model is an essential part of the character of the institution and it’s stakeholders understand that without it the school will be unable to count on the high quality student body to which it is accustomed. The Free Cooper Union students and their faculty and alumni supporters are fighting for this unique, and uniquely American, institution.”

“My concern,” continued Kandarian, “ is that the current President [Jamshed Bharucha] and Board of Trustees do not appear to share in this vision. If Cooper is truly to emerge from this mess, they will need some new faces.”

MetLife continues to be the largest portfolio lender in the insurance industry with $43.1 billion in commercial mortgages outstanding at year end 2012.

“MetLife was a very active lender domestically and internationally in 2012, as we continued to focus on top quality properties in major markets,” said Robert Merck, global head of MetLife Real Estate Investors. “Our strategy for growth is based on prudent risk management and a long-term approach that enables us to execute quickly, process large transactions and provide our customers with world-class service.”

St. Mary's Faces Budget Shortfall as Freshman Commitments Drop

St. Mary's College of Maryland, a public liberal arts college, is likely to face a budget shortfall of about $3.5 million after commitments from incoming freshmen came in short of what the college expected, The Washington Post reported. Aiming for a class of about 470, the university has received commitments from only about 360 students so far. Administrators said the college is trying to attract more applicants and enroll students off the waitlist, as well as figure out how to cope with the lost tuition revenue. Administrators said they are not yet sure why the college saw a decrease in commitments after receiving a 14 percent increase in applications, but are looking into it.

Saint Augustine's Drops Plan to Acquire Saint Paul's

Saint Augustine's College, in North Carolina,  announced Friday that its leaders do not believe that it should proceed with the idea of acquiring Saint Paul's College, in Virginia. Both are historically black colleges founded by the Episcopal Church and Saint Augustine's agreed to explore taking over Saint Paul's after the latter lost its accreditation, effectively endangering its survival. A statement issued Friday by Saint Augustine's said, "After careful due diligence and much deliberation, Saint Augustine’s University has decided that to pursue the acquisition is not a fiscally responsible option." The statement added, however: "At the request of Saint Paul’s College officials, the Saint Augustine’s University Board of Trustees will allow Saint Paul’s to present a plan to the Saint Augustine’s University Board by May 31, 2013 in hopes of reversing this decision."

Students Take Over President's Office at Cooper Union

Students at Cooper Union took over the office of President Jamshed Bharucha on Wednesday, while he was not there. Students say that they are angry not only at the move to start charging tuition, but their sense that they have been left out of decision-making at the university. A spokeswoman for Cooper Union said that the protest was "a peaceful non-violent action and we continue discussions with students."

Here is a video made by students in the protest outlining their views:



The students are also documenting the protest on Twitter.


House Holds Hearing on College Tax Issues

WASHINGTON -- At a hearing Wednesday afternoon on the Internal Revenue Service's recently issued wide-ranging report on tax compliance at colleges and universities, lawmakers said they were disturbed that the report found a high degree of noncompliance on unrelated business income, revenue earned by nonprofit organizations in ways that are not directly related to their missions. The IRS told lawmakers on the House of Representatives Ways and Means committee's oversight subcommittee that the 34 colleges -- half public, half nonprofit private -- examined most closely during the audit shouldn't be considered a representative sample, and that there are plans to continue looking into how unrelated business income is handled across the sector.

Wealthy Universities Move Away From Investing in U.S. Debt

Wealthy American universities are cutting way back on their endowments' holdings in U.S. debt, Financial Times reported. In some cases, Treasury securities represented as much as 30 percent of endowment holdings in 2008-9 and that figure is now down to zero in some cases, or very small percentages in others.


Coaching salaries rising up to 10 times faster than instructional salaries

Smart Title: 

Before, during and after the economic recession, salaries for football coaches increased anywhere from 3 to 10 times as fast as instructional salaries, new study finds.

Syracuse Students, Profs Don't Want to Pay Athletics Bill

Syracuse University has decided to leave the Big East Conference for the Atlantic Coast Conference, which has large payout for members. But Syracuse is bound by its contract with the Big East to pay a $7.5 million exit fee. The university is planning to allocate that bill across the institution, arguing that all parts will benefit from the eventual greater revenues from the ACC. But The Syracuse Post-Standard reported that both student and faculty groups are asking why the athletics department shouldn't pay the $7.5 million, and spare other departments cuts. A petition says: "In light of the fact that the Athletic Department is expected to receive an annual increase from the ACC in excess of $10 million per year, we endorse the resolution of the University Senate and Senate Budget Committee recommending that the $7.5 million Big East exit fee be paid fully by the Athletic Department and not out of student tuition."

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Essay on state of budget cuts to academe in Australia and the U.S.

At Wannabe U, a research university that I have been observing for years, the provost and president have announced that it is time to create a new academic plan. (That's a business plan garbed in academic regalia, gold tassel and all.) "We have exceeded many of [the] goals" set in the last plan, the announcement said. It also revealed that this newest plan is to guide restructuring: It will set the criteria for eradicating academic departments and eliminating jobs.

When I spoke at several Australian universities in March, I heard professors utter the same words again and again: "We are undergoing restructuring." (Some universities had already experienced restructuring several times.) That process apparently means to combine departments into larger units so as to achieve the "three Es" of the new managerialism -- economy, efficiency, and effectiveness. Together, those three Es also constitute the framework being used to "modernize" American higher education. As Wannabe U contemplates a new business plan, I find some aspects of Australian restructuring much too familiar, as though we and our colleagues down under are living the same nightmare. Other practices seemed strange indeed.

Several processes are occurring simultaneously. Departments are being lumped together to form new constellations of schools and faculties. (In Australian academic parlance, schools are a bureaucratic unit composed of disciplines or programs. A faculty consists of a collection of schools.) But, my newly met colleagues insisted, restructuring is not about encouraging interdisciplinarity or intellectual cross-fertilization by increasing the administrative proximity of related fields of inquiry.

Rather, I was told, central administrators have been combining units as universities pare down the number of schools and faculties they harbor to extirpate unnecessary courses, eliminate "redundant" workers, and increase what the Aussies, like the British, call "casualization" and Americans term "contingent labor." As in the United States, such practices are more likely to be applied to the arts, humanities and social sciences rather than to the STEM fields -- science, technology, engineering, mathematics -- which supposedly promise to raise needed income through contracts, grants, and inventions and to goose the region's and the nation's ability to succeed in international economic competition.

An Australian middle manager at a university explained to me: "The restructuring can be of academic units (initially melting departments into schools, now, [after several iterations] melting bits of schools into other schools but it can also be of degrees (in which case the usual path is to reduce dramatically the number of majors in a B.A.). This is important, because it is a way to reverse engineer academic redundancies." Mostly restructuring pares the staff which supports academics. In both countries, restructuring redirects funds from academic to administrative support. But at Melbourne's La Trobe University, 40 professors took the hit, as Katherine Bode and Leigh Dale explained in The Australian Humanities Review.

In essence, a young man at an Australian university, given to analogies, told me, "Think of it as a kind of colonialism." Eventually the imperial power (or central administration) augments itself at the expense of the faculties. It hires staff to satisfy new federal mandates, such as monitoring teaching and research productivity, expands efforts at marketing, building alumni loyalty (and donations), and managing its reputation, and founds and expands what Americans call Institutes for Teaching and Learning, which have burgeoned in both countries. This fellow added that the imperial powers set the terms by which their subjects live. At best, there is a pretense of consultation.

I have encountered other components of this sort of restructuring before. In Wannabe U, I discussed some ways that a particular long-gone provost appointed committees. One was to select members whom he knew desired the same outcome that he did. Another was to so meticulously map the tools and processes which the provost charged the committee to use that its members were essentially filling in the numbers of a formula that the provost had devised. The committee members were his functionaries. That same provost used to explain how many meetings he had taken to reach a decision. He never summarized others’ opinions or even said whether people disagreed with him – only that it was his responsibility to make decisions, whether those others liked his decisions or not.

I have also heard the president of a distinguished private university discuss redundancies. He boasted about his method of eliminating superfluous courses to save money; he appointed a committee to study the course catalog and syllabuses. Was statistics for sociologists so similar to statistics for political scientists that one department had to retire its course? Did a chemistry course cover some of the same material as a biology course? And, of course, one can always save money by increasing the number of students who must enroll for a course. (So much for the "boutique" courses for exceptional students and the faculty hungry to teach them.) At Wannabe U, a course with too few students cannot be offered. At one Australian university, a unit must pay the central administration if it carries a course whose enrollment is deemed too low. (Needless to say, units eliminate those courses to avoid the penalty.)

And then there’s the matter of adjuncts. Explaining a two day-strike of the staff of Australia’s University of Sydney, the distinguished sociologist Raewyn Connell wrote: "Over time, university managers have responded to funding pressures by making job insecurity grow – through outsourcing of general staff work, erosion of tenure, and above all, casualization. To management, this looks like flexibility. To many of my younger colleagues, it looks like a life of precarious labor, scrabbling for short-term, part-time and totally insecure appointments." She adds, "These are poor conditions for building an intellectual workforce. From an educational point of view, it means a mass of teaching done by staff who can’t build up the experience, depth of knowledge, or confident relationship with students that are needed for the very best teaching."

Connell is describing the conditions of our own work, one of my American colleagues informed me.

Equally noxious is the practice of setting publication quotas. These quotas really do involve publish or perish. One administrator at an Australian university requires researchers in the humanities and social sciences to publish four refereed articles a year and teaching faculty to publish two. Yup: He counts instead of monitoring quality and so virtually guarantees that his faculty will not undertake the challenging projects that require deep thought and take years to bring to fruition. His practice reminded me of Wannabe University’s Professional Responsibilities Doctrine, particularly its emphasis on assessing acceptable academic performance by counting how many articles, grants and whatever a professor has accumulated each year. Wannabe U's new business plan is sure to increase the standards used to gauge a professor's productivity, Many professors still feel that the metrics in the last business plan were a speed-up of the academic assembly line.

Ultimately, though, I have trouble understanding one key aspect of restructuring in Australia. The combinations of departments lumped into schools are so different from those that prevail in the United States and there is so much variation from one university to another that I have a hard time following the logic of permutation and recombination. Are schools and colleges supposed to combine related fields? Why is philosophy classified in the humanities in one university and in the social sciences at another? Why does social science include sociology, anthropology, and criminology but not demography? Why does one university’s School of Cultural Inquiry include Victorian English literature, classics and ancient history, while Victorian history is housed in a School of History that specializes in early modern and modern Australia, North America, and Europe?

When classificatory systems seem nonsensical, there must be another principle at work. One of the three Es – economy -- provides an answer. In Australia, a colleague claimed, central administrators have been combining financially productive and fragile departments into new units, letting those units steep in their juices, and then rearranging them, as well as their bits and pieces, again. Structured and restructured, combined and recombined, these ever-larger units may not have intellectual integrity, but they help central administrators to eliminate sluggardly departments, to build their own managerial capacity to initiate and respond to accountability measures, and to react to the diminishing public funding that is increasingly characteristic of higher education in most countries.

In the United States at most research universities, including Wannabe U, central administrators appoint committees to identify departments that are weak and so do not deserve to retain their graduate programs. At liberal arts colleges, the committees are to fold whole departments, not merely graduate programs. At most institutions, the administrators set the criteria used to define weakness, much as done at Wannabe several years ago. The carefully selected committee has the unenviable task of filling in the boxes of the rubric that a central administrator has constructed. Today, members of Wannabe’s chapter of the American Association of University Professors hope that the faculty will be able to decide the criteria used to measure strength and weakness. However, with their Australian colleagues, the faculty at Wannabe shares the realization that the central administrations' perceived need for academic extirpation is not open to negotiation.

In Australia, economy, efficiency and effectiveness are federal mandates. In America, those mandates come from the states with the federal government consistently pushing them to spend less and achieve more. In Australia, central administrations announce new combinations of departments that are to comprise new schools. In America, central administrators strongly advise -- virtually insist -- which combination of disciplines should work together to meet the financial and workforce needs of their state.

Perhaps because I am an American academic, I find the Australian combinations of disciplines to be quite strange. I betcha that Australian academics would find the rationalized and interchangeable American combinations of fields to be so rationalized as to be McDonaldized, akin to the ubiquitous McBurger or a luxurious McMansion.

Strange as some aspects of our work lives may seem to one another, too much seems the same. We are threatened by the academic version of McJobs. Before I left the U.S., I had read such classic American treatments of Australian tertiary education as Sheila Slaughter and Larry Leslie's Academic Capitalism as well as refereed articles by Australian researchers. I was familiar with the argument that European nations were reverse engineering American practices Then I went to Australia and learned that academic worlds are becoming more similar and more besieged than I had thought.

Gaye Tuchman, professor emerita of sociology at University of Connecticut, is author of Wannabe U: Inside the Corporate University and Making News.

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Questions About Ex-Chancellor's $212,000 Salary

When Richard Herman resigned as chancellor of the University of Illinois at Urbana-Champaign (amid a scandal over admissions procedures that favored politically connected applicants), he was awarded a salary of $212,000 a year as he took on a faculty position. But an article in The Chicago Tribune raises questions about whether he is performing the full duties of a faculty member. Herman is required to teach only two classes a year in the College of Education, not the standard four a year. And his class this semester was called off due to low enrollment -- the second time that has happened since 2011, the Tribune said. Herman lives in Chicago and said through a university spokesman that he travels to campus once a week. Herman has switched to online courses when his classes have been canceled. He declined to comment on the questions raised by the article.



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