Disappearing Raises and Vice Presidents at Lambuth

Growing discount rate and rising costs create financial crunch -- and worries -- at a private university.
August 18, 2008

Professors at Lambuth University received unwelcome news Friday at a faculty meeting: The 4 percent raises they had been pledged for this academic year were being eliminated, the university's contributions to retirement funds were being cut in half, and a program to boost senior faculty pay levels was now on hold.

Officials at the private Tennessee liberal arts university characterize the cuts as typical of those that must take place in a tight economy, but some on the campus fear there are larger problems as well. This month, three vice presidents and the chief operating officer have all left the university. The president has confirmed that two of them were asked to leave. None of the senior officials who left would comment, but others say that trustees of the university are donating funds to make up for budget deficits -- while also micromanaging the institution.

R. Fred Zuker, president of the university, said that he didn't view the situation at Lambuth as "anything unusual." He said that some turnover among administrators is to be expected and said he couldn't comment on why he asked two vice presidents to leave.

The raises and benefits needed to be cut, he said, to "be prudent" in light of rising energy costs and the difficulty of attracting enough full-paying students. While this fall's enrollment is expected to be on target, at around 750, Zuker said that the discount rate (the percentage taken off tuition revenue for various kinds of aid) is about 55 percent and has been growing. Over the next three to four years, he said, the college needs to both grow enrollment to around 1,000 and cut the discount rate to around 45 percent.

The changes, he said, "are about fiscal responsibility."

Zuker said that Lambuth's annual budget is around $16 million. Several people familiar with the institution's finances said that it has been running multi-million dollar deficits. Zuker said that wasn't correct because donors have filled the gap each year. This year, he said, contributions are down.

On the charges of board micromanagement, he said that while "some of the faculty would say that there is too much board involvement, we're lucky to have a board that cares so much." Zuker said most of the board involvement was strictly financial.

Some faculty members said that they didn't want to talk publicly about the problems, saying that they were concerned about speaking out at a time of such uncertainty. Some professors are organizing another faculty meeting today to talk about their concerns.

Paul Mego, a professor of political science, said he believed the challenge facing the college was the difficulty of attracting students committed to the liberal arts. "We've been hit pretty hard," he said, "with the trend of 'I want to go to college where I can learn how to make money' rather than 'I want to go to college to learn how to think.' "


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