“The Art of the Gouge”: Shocking New Report by NYU Faculty Details How NYU Bilks Millions from Its Students to Finance Real Estate and Pay for Top Executives; Renew Call for Full Financial Transparency
Members of New York University’s faculty have issued a blistering 14,000 word report on how NYU has been gouging its own students (and their families) to raise billions for gratuitous real estate transactions and lavish compensation packages for NYU’s own top executives.
Concerned about their students’ ever worsening financial plight and wild spending by NYU’s Board of Trustees, the professors, many of them members of NYU Faculty Against the Sexton Plan (NYUFASP), spent this past academic year researching NYU’s financial practices. Interviewing scores of students, both undergraduate and graduate, and studying the fine print in NYU’s own documents, the professors “followed the money” to reveal:
Students Going Hungry Regularly, Becoming Homeless, Signing Up for “Dating Services” to Pay Tuition, Fees, Insurance
NYU students pay the highest tuition in the United States, currently $71,000 per year. They are also socked with thousands more in phantom fees, health care, insurance and other costs. Most of the students interviewed preferred anonymity, for obvious reasons, but were happy to have their tales finally told in public. “It was frightening to hear these stories, and to know that our students are suffering in ways and numbers that even we didn’t imagine,” said Jeff Goodwin, NYU Professor of Sociology.
- For the last three months I have been homeless, sleeping wherever I find shelter. Sometimes that comes after studying at the apartments of my colleagues, some of whom suspect this situation is happening. Other times I have slept in parks or on trains. — from a PhD student, College of Arts and Science (CAS)
- I live on $2-5 dollars a day. That means two meals a day, and incredibly unhealthy food. I’m hungry all the time. Being so hungry while you’re trying to work two jobs to pay your rent and still keep up with your coursework is practically impossible—and more common than you would ever think at a university like this. —from a junior, Gallatin School of Individualized Studies
- I had a full scholarship, but then they raised the tuition, so I was short about $2000. And when I asked the people in financial aid for help, they laughed. The guy actually laughed. He couldn’t believe that anyone would have trouble raising such a small amount. So I was desperate. It’s why I turned to [Seeking Arrangement], which is really just a form of prostitution. But I had no choice. It was either that or drop out. It was a hard choice; and I wasn’t the only one who had to make it. When I finally got the nerve to tell my roommates I was doing it, they both told me they’d been doing it, too. — from a member of Faculty of Arts & Science (FAS), Class of 2014
But while students suffer:
- NYU milks its poorest students, charging Pell Grant recipients, whose families make $30,000, $25,462, or 84% of their entire household income. (Yale, Harvard and Columbia charge $6,000/$7,000.)
- NYU charges full tuition for semesters students spend abroad throughout the “Global Network University,” even though the courses in those programs are all taught by part-time instructors (who get no benefits). “They’re making a fortune on tuition in London,” the former director of NYU/London told the professors. “No matter how high you pay, you pay part-time.”
- NYU’s students aren’t allowed to rent rooms or apartments in those cities, but are required to live in NYU-owned buildings, forcing them to spend up to 60% more than it would cost them to rent locally. “Clearly, we are being ripped off,” a senior told the professors, writing from her cramped NYU apartment in Berlin.
- NYU profits hugely off its giant cohort of international students—11,164, more than any other U.S. University. They pay a higher tuition, and their other costs appear to be over $5,000 more than those imposed on the US students here. While the latter are required to buy, for health insurance, only NYU’s “Mandatory Plan” ($2,424), the international students must buy that as well as the more expensive ($3,236) of the plans that NYU calls “optional.”
- NYU students and their families also pay further thousands, every year, in unexpected “fees” and “nonrefundable deposits.” “I had to take out loans just to cover my fees and health insurance,” a sophomore said. (“I can’t believe NYU charged so much extra crap,” another said.)
- While NY schools like CUNY, Columbia and Cooper Union publish their fees openly and clearly, the many extra costs at NYU are mostly buried in the fine print; and they also vastly higher than at other schools. (For students applying to live in campus housing, Columbia charges a housing fee of $100. NYU’s housing fee is $1,000.)
Out of Control Real Estate Acquisition
- Despite proclamations made to the City Council that the proposed Sexton expansion plan in the Village – with an estimated price tag of well over $1 billion (which includes the Zipper Building, whose cost is projected to be $1 billion alone, and will be the largest and most expensive building to ever be built in the Village) – would take care of all of the school’s physical needs there, NYU is still blowing millions on Village real estate including 404 Lafayette/708 Broadway ($157 million, not including renovations), 383 Lafayette ($74 million, not including new construction). (The report also details the millions and millions that NYU’s out of control expansion in other parts of the City and the world have cost.)
- NYU’s real estate portfolio includes an embarrassing number of residential “mansions” as well, including, for example, three for “Law School Faculty:” a $3.6 million luxury 4 bedroom condo at 845 West End Ave., “…with Calacatta gold marble, as well as radiant heat floors” (according to International Business Times); a $3.5 million luxury condo at 166 Perry St., “The 1,875 s/f corner apartment … has a glass curtain wall and views of the Hudson River. It has two bedrooms, two bathrooms, a powder room and home office, along with 10-foot ceilings and a five-fixture master bath” (according to Real Estate Weekly); and a $5.2 million condo at 455 Central Park West (“a 26-story tower attached to the French Renaissance chateau at W. 206th St.”) “The duplex apartment has a round living and dining room with 37-foot-high ceilings and Central Park views, along with three more conventional bedrooms” (according to Above the Law).
Millions of Dollars in Compensation and Personal Loans for Top NYU Execs, Tiny Raises for Faculty
- 25 of NYU’s top execs got a whopping 26% average pay raise from 2010-20120, from $816,876. to $1,026,059. while, during the same time, professors’ average raise was 2.5% One administrator alone, Tina Suhr, NYU’s Chief Investment Officer, saw her salary skyrocket from $857,086 to $1,673,598: an awesome boost of 95.5%, or $816,512—enough to pay one year’s tuition and fees for 17 students.
- NYU’s Board approved millions in “loans” to scores of top administrators (the total number is unknown) for mortgages on sumptuous vacation homes—including, as the New York Times reported, $1 million to Pres. Sexton for “an elegant modern beach house [on Fire Island] that extends across three lots,” and $5.2 million (now over $6.4 million) to Richard Revesz, former Dean of the Law School, for “a home on more than 65 acres near the Housatonic River in Litchfield County.”
“It must be noted that NYU’s Board of Trustees is one of the largest such Boards in the US, with 95 members, but includes not one professor. It’s uniquely dominated by Wall Street bankers, hedge fund managers and real estate tycoons and we think that helps explain the direction the university has taken, which is decidedly not about educating our students,” said Mark Crispin Miller, NYU Professor of Media, Culture and Communication, and President of NYUFASP. “With leadership like that, it isn’t hard to understand why NYU has the highest tuition in the country, and the worst financial aid; and, therefore, students graduating with the heaviest load of student debt in the United States—40% above the national average,” said Miller.
The professors have repeatedly asked for a full accounting of NYU’s real estate holdings, and budget for the huge Village expansion, but this information has never been provided to them, to elected officials, or to the public. “Since the university is non-profit, its fiscal affairs should be more transparent than they are,” observed Andrew Ross, President of the NYU chapter of the American Association of University Professors. “If they continue to resist this transparency, perhaps some of our elected officials should take a closer look,” he added.