The president of the United States is paid $400,000 a year for his services, but that’s not as much as most presidents of American universities are making, according to a new study.
What’s more, data show how expensive college has become, which could be a reason why college loan debt has soared to more than the gross domestic product of many of the world’s countries.
According to the study by the Chronicle of Higher Education, an industry publication, salaries of U.S. public university presidents rose nearly 5 percent in the last fiscal year, even as tuition climbed and student debt ballooned, to a median pay level topping $400,000.
The study noted that Penn State‘s Graham Spanier was the nation’s top university official in terms of pay in 2012 before he was let go by the school over the Jerry Sandusky scandal, but his compensation was artificially inflated because he was paid $2.4 million in severance pay and other deferred compensation.
Millions a year to run a university
The median total compensation for the public university presidents in fiscal year 2011-2012 was $441,392, the study found. Four of the presidents earned more than $1 million, and the median base pay jumped 2 percent to $373,800.
Spanier, meanwhile, got a total compensation package worth $2.9 million during the same fiscal year he was dismissed over his poor handling of the Sandusky child sex abuse scandal.
E. Gordon Gee of Ohio State University, Jay Gogue of Auburn University in Alabama, and Alan Merten of George Mason University in Ohio (he has since left his position), received more than $1 million during the 2011-2012 fiscal year. Of those three, Gee’s base pay of $830,439 – 44 percent of his total compensation – was highest.
Spanier’s base pay was $359,959.
Charged with two other former Penn State officials in the Sandusky case, he is currently awaiting trial for perjury, obstruction of justice and what a grand jury has labeled a “conspiracy of silence,” in order to help cover up Sandusky’s crimes. All three have pleaded not guilty.
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Deferred compensation plans give executives a lump sum after they serve for a certain length of time and are common in presidential contracts because they serve as retention incentives, according to the Chronicle.
But such hefty bonuses come with a price – for students. The Chronicle did a survey of compensation at private institutions of learning in 2010 and found 36 college presidents who earned more than $1 million annually; then, the median pay of the 494 presidents surveyed was $397,860 – so pay has gone up substantially in just three years’ time.
The most recent survey only included 212 presidents at 191 public research institutions, but the trend is clear: Pay and compensation for top university officials, already substantial, is rising.
Costs – and debt – are rising
So, too, are costs. Here are some sobering statistics and figures:
— Nearly 20 million Americans attend college each year.
— Of those, close to 12 million – or roughly 60 percent – borrow money annually to go to school or help cover costs while they are in school.
— There are approximately 37 million student loan borrowers with outstanding student loans today, according to the Federal Reserve Bank of New York.
— In all, there is between $900 billion and $1 trillion in outstanding student loans currently on the books. Roughly $864 billion is outstanding federal student loan debt while the remaining $150 billion is in private student loans, according to the federal Consumer Finance Protection Bureau.
— “Of the 37 million borrowers who have outstanding student loan balances, 14%, or about 5.4 million borrowers, have at least one past due student loan account,” says the group, American Student Assistance.
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