<p>At first read, I thought this isn't so bad, but a good portion of the loans are forgiven, and the interest rate is .19 percent. So parents and students at NYU are taking on lifetimes of debt to finance homes in the Hamptons? This is a new low.
<a href="http://www.nytimes.com/2013/06/18/nyregion/nyu-gives-stars-loans-for-summer-homes.html?pagewanted=all&_r=0%5B/url%5D">http://www.nytimes.com/2013/06/18/nyregion/nyu-gives-stars-loans-for-summer-homes.html?pagewanted=all&_r=0</a></p>
<p>nyu is a private school, it is free to do what it wants.</p>
<p>And we’re free to comment that the place appears to be run by junior varsity hedge fund managers. God bless America.</p>
<p>"nyu is a private school, it is free to do what it wants. "</p>
<p>. . . and the American people are free to deny NYU taxpayer backing of the student loans used to finance this decadence. Shameful.</p>
<p>some old guy, you are free to say what you want, not in question!</p>
<p>glido, you can also seek to cut taxpayer funding to them. (which I would support)</p>
<p>but, they are still free to do what they please. my point is missed I guess.</p>
<p>At least these are “loans”. UC president Mark Yudof received a $10,000 PER MONTH housing allowance during his reign.</p>
<p>NYU is an interesting place; when the city was in shambles, no one wanted to teach there and no one wanted to attend, when the city is top-notch, everyone wants to teach there and everyone wants to attend. When the city was in shambles, the University paid for professors apartments as enticement to get them there, now most professors couldn’t afford to live near campus so the University continues to pay for many professors housing. It’s a catch-22.</p>
<p>As far as weekend/country houses is concerned, it’s the next step to lure professors. Should taxpayers help fund it? There are many items we as taxpayers help fund that each one of us would find uncomfortable or unfortunate to support but you can’t fine tooth comb it. And in the scheme of things, the cost of funding is miniscule. You can pass the word and refuse to allow your child to apply but I suggest you not look too carefully at where you tax dollars are going to almost any university as you may find areas you are not in favor of. (ie - transgender bathrooms and clubs and support groups in the Bible belt, ROTC in some areas?)</p>
<p>NYU is a “non-profit” organization. They are not free to do what they want; they do have to follow specific rules about compensation. In this case, they may have done so, but in a manner that doesn’t pass the smell test (vacation homes in the Hamptons?).</p>
<p>As Senator Grassley is quoted in the article:</p>
<p>“Universities are tax-exempt to educate students, not help their executives purchase vacation homes.”</p>
<p>But there could be an argument that given the nature of living in a crowded hot city this is a necessary perk. I am certain that NYU has a team of lawyers who have cleared this practice. I am not a fan of NYU and neither are my kids (even though they would have been guaranteed admission), but I am certain an argument could be made for this practice!</p>
<p>I wonder if this ends up being a money-maker for the school. I also wonder if these loans actually end up in the hands of an outside lender/underwriter. Much like the loans that support faculty purchase of laptops- </p>
<p>What I find difficult, at least at first, is the easy assumption something really heinously dirty is going on and, by gummy, we see it, why doesn’t everyone else?</p>
<p>The U I work for had a policy that could support loans to faculty, for the purchase of a home. Short term, competitive rates (maybe some small discount, same as many group memberships allow.) I thought it was the primary home- and don’t know if it still exists.</p>
<p>
</p>
<p>Necessary? Somehow millions of others manage without it–including the adjuncts and most others who actually TEACH.</p>
<p>It is slightly difficult to tell from the article, but it would appear that these loans are forgiven over time. So that rather than “loans,” they can actually be “gifts” of something like $20K per year.</p>
<p>Given NYU’s location, offering some housing subsidy to faculty and staff moving to the area is perfectly reasonable. But cushy deals for vacation places is another matter. As the guy from GWU said, it has to pass the red face test.</p>
<p>When you combine this with NYU’s high cost and notoriously bad FA, it is truly distasteful, IMHO. Legal or not.</p>
<p>A little background, though older: [Colleges</a> Offer Low-Interest Loans to Star Professors - Faculty - The Chronicle of Higher Education](<a href=“Colleges Offer Low-Interest Loans to Star Professors”>Colleges Offer Low-Interest Loans to Star Professors)</p>
<p>You can google and find some other schools, though lower caps.</p>
<h1>From the link provided by lookingforward:</h1>
<h1>But many of those same experts question whether the practice is appropriate, arguing that nonprofit institutions such as colleges should not act like banks, nor draw on money that could be used for more explicitly educational purposes. “It’s not at all a best practice,” says Dean A. Zerbe, a lawyer with Alliantgroup and a former senior counsel to the Senate Finance Committee. “It’s a backdoor way to hide compensation.”</h1>
<p>Why give a loan and then forgive it? It was a way to hide compensation, in this case for the president of a non-profit organization.</p>
<p>I can get that the compensation goes in a different column on the ledger. But my point is this practice exists. You can google and find other schools that do it. I am not crazy about someone buying a 2nd home- but I don’t think this is a simple argument that all funds need go to explicitly educational purposes. That would bring into question many student-related activities. And, someone will argue that getting “that” prof is worth some perks- maybe he wants a different courseload or to be limited to grad students or the right to have conference trips funded.</p>
<p>We also don’t know the terms or the nature of the loan forgiveness (except that one is tied to years of service.)</p>
<p>I think NYU may spend money any way it likes, as long as it is legal. </p>
<p>I am more concerned with low-level colleges, that have high dropout rates, lots of taxpayer-based loans, lots of students who default on these loans. That’s a waste of money and resources.</p>
<p>lookingforward - you said it better than I but that is the truth Consolation. Certain professors are highly desired and if this is what it takes, then NYU is willing to offer it.</p>
<p>
</p>
<p>That’s the relevant inquiry. Charitable and educational organizations that pay excess compensation to officers or key employees are at risk of losing their tax-exempt status under regulations against “private inurement.” NYU may be able to show that this program results in market wages for the types of folks they wish to attract, but it wouldn’t surprise me if it were an audit issue.</p>
<p>This isn’t unique to NYU - schools in its category do things like this for top administrative officials and star faculty. My university has subsidized housing set aside for faculty within walking distance of the university; most of the professors in my department live in these apartments, which are pretty big by NYC standards. I wouldn’t say it’s a necessary perk for an NYU president; chances are he lives in a huge apartment in Greenwich Village and makes enough money that he could get a standard bank loan for a Hamptons house.</p>
<p>My D graduated from NYU and while I am proud of her, I did become I creasing discouraged about their 2035 expansion plans and leaving students which mountain high debt. Taking in top students and not meeting decent financial need.
<a href=“http://mobile.bloomberg.com/news/2013-08-15/nyu-president-sexton-to-resign-in-2016-after-no-confidence-votes.html[/url]”>http://mobile.bloomberg.com/news/2013-08-15/nyu-president-sexton-to-resign-in-2016-after-no-confidence-votes.html</a></p>