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President Richard M. Freeland of Northeastern University

The new robber barons

Money | Study shows university presidents are getting rich quickly

Issue: "Giving thanks," Nov. 24, 2007

With college tuition prices rising at a much faster rate than that of inflation for decades, it stands to reason that somebody is getting rich. A report last week in the Chronicle of Higher Education indicates that university presidents are among the first in line at the gravy train.

The annual survey found that presidents of 12 private universities made more than $1 million for the 2005-06 academic year (the latest year for available data on private schools). Eighty-one private university presidents raked in more than $500,000, compared to 70 presidents who did so the previous year and three presidents 10 years earlier. The median compensation for private university presidents was about $528,000.

Presidents at public universities weren't far behind. The Chronicle found that eight received $700,000 or more during the 2006-07 year, up from two the year before. The median pay for public presidents was about $400,000.

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The top higher education dog was Richard M. Freeland of Northeastern University in Boston. Freeland reportedly received a $2.3 million bonus as he left the post in 2006, on top of his salary of about $514,000 and expenses of about $107,000. David P. Roselle of the University of Delaware took in $875,000 to become the highest paid public university president.

Like the original robber barons, today's university presidents make their living by charging exorbitant fees to those who pass through their domains. Fueled by government subsidies for students, tuition prices at public universities have more than tripled after inflation over the past three decades and have not fallen during a single year at least since 1980 (see "No way down," Aug. 27, 2005).

It's a record of price increases that would make oil executives blush but one that the captains of higher education get away with because the public mind has not associated their occupation with greed. Perception, however, may be catching up with reality.

"If your aspiration is to be a college president, that is a way to become a millionaire," Patrick M. Callan, president of the National Center for Public Policy and Higher Education, told The New York Times. "That was inconceivable 20 years ago."

Balance Sheet

HOUSING: RealtyTrac says Stockton, Calif., had the nation's highest foreclosure rate during the third quarter, with one foreclosure filing for every 31 households. Overall, California had seven cities in the top 25 for foreclosure rates, while Florida and Ohio had five each. The S&P/Case-Shiller home-price index, meanwhile, showed home prices falling in 20 metro areas for the eighth straight month in August.

BUSINESS: Gift cards are as popular as ever, but they're no longer setting the retail sector on fire. The National Retail Federation last week predicted that gift card sales would reach $26.3 billion during the holiday season, a healthy 6 percent jump over last year. But last year gift card sales increased 34 percent. The group expects the average consumer to spend $122.59 on gift cards.

TRAVEL: Twenty-seven million Americans will travel by airline during the Thanksgiving holiday season, a jump of 4 percent over last year, according to a report from the Air Transport Association. Airlines, which are expecting flights to be about 90 percent full, say they are adding more flights to accommodate the increase in passengers.

Timothy Lamer
Timothy Lamer

Tim is managing editor of WORLD magazine.

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