Kim Clark

Trials and Tribulations of a College Education in the 21st Century | iHaveNet.com

Some salaries increased by 15 percent before the economic crunch hit

In the year before the economy collapsed, the paychecks of private college presidents continued to climb, according to a new analysis by the Chronicle of Higher Education. The typical president of a private college got a raise of more than $26,000, or 6.5 percent, to bring the total pay package up to $358,746. Pay was higher and rose even faster at major private research universities: The median pay of $627,750 at those institutions represented a one-year jump of 15.5 percent. In addition, the Chronicle found that 85 of the 419 private colleges surveyed were paying at least one former employee more than $200,000.

Chronicle researchers noted that the numbers were for the fiscal year ending June 30, 2008--the most recent data available--and the salary inflation might have been reined in since the recession began. For example, many university presidents have accepted pay cuts or reduced bonuses in the past year.

News of the rising costs of administrators comes as colleges continue to raise their tuition faster than inflation. The College Board reported last month that the average private university has raised tuition by almost $4,000 since 2006 to $26,273, 10 percentage points faster than inflation.

Republican Sen. Charles Grassley of Iowa said the survey made him "wonder if these colleges are giving away the store when they sign contracts with employees." He said raises for administrators seem "out of sync with the reality for most parents and students who are trying to pay for college in the midst of high unemployment and after savings for education were either wiped out or greatly diminished last year due to the stock market falling."

A spokesman for an association of private colleges pointed out that while "sticker prices" of private colleges had been rising, the schools had been giving out so many more scholarships that the average net price students actually paid for tuition had dropped by more than $1,000 since 2005 to slightly less than $12,000.

In addition, said Tony Pals, director of public information for the National Association of Independent Colleges and Universities, "presidential compensation packages make up an incredibly small percentage of overall college budgets--in most cases, less than 1 percent. No serious study of college cost drivers has ever listed presidential compensation as a reason for rising college costs and prices. "

But the report indicated that at some colleges, presidential pay appears to add several hundred dollars to each student's bill. The typical college president's salary costs about $136 per student. U.S. News calculations show that students at some private colleges have been paying hundreds of dollars more apiece for their presidents while those at some of the highest-ranked universities with large enrollments end up paying only a few dollars each for their president. Colleges say the size of the university is only one of many factors that decide a president's pay.

For example, Steadman Upham, president of the University of Tulsa, was ranked as the third-highest-paid president of a private college in the country, with a total compensation package of almost $1.5 million. But Tulsa has only about two-thirds the number of students of Rensselaer Polytechnic Institute, which paid its president, Shirley Ann Jackson, the highest salary earned by a private college president that year--$1.6 million. So while Jackson's salary divides out to about $250 per RPI student, Upham cost his students more than $350 apiece.

A Tulsa spokesman said that Upham's pay for academic year 2007-2008 included 11 years of deferred compensation that the school agreed to pay to hire him away from the Claremont Graduate University. In addition, Upham has overseen fundraising drives of more than $300 million, lots of new construction, and a rise in the average test scores of incoming freshmen, said school spokesman David Hamby.

A few smaller colleges had even higher per-student presidential costs. Westminster College in New Wilmington, Pa., paid its president, R. Thomas Williamson, more than $625,000. The school has only about 1,500 students, so the cost per student exceeded $400.

School spokesman Mark Meighen noted that Westminster's graduation rate of 86 percent is 13 points higher than the predicted graduation rate U.S. News uses in its college rankings. In addition, he said the 2007-08 package was "artificially inflated because it included deferred compensation and retirement benefits" for Williamson, who has since retired. "Westminster College presidents are paid at a level comparable to our peer colleges," Meighen said.

In fact, many colleges with unusually high per-student presidential costs tended to be comparatively small. Franklin & Marshall in Lancaster, Pa., paid $1.07 million to John A. Fry last year. That cost each of the school's approximately 2,100 students about $500 apiece. Harvey Mudd, one of the Claremont colleges in Southern California, paid its president, Maria Klawe, about $409,000. Because her school has fewer than 800 students, that averaged out to more than $550 per student.

There were, however, many bargain presidents, too. More than two dozen presidents of Catholic-affiliated colleges, such as the Rev. Michael McFarland at Holy Cross in Worcester, Mass., received no salary whatsoever. And some of the most prestigious schools also had some of the lower per-student presidential costs. Stanford's $732,000 salary for John L. Hennessy averages out to slightly more than $40 for the university's approximately 18,000 students. Harvard and Cornell, two other large and highly ranked universities, also had similarly low per-student costs. And many smaller elite colleges, including the rest of the Ivies, had presidential pay packages that were below the national per-student average.

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College President Salaries Continued to Climb

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