Student debt is rising faster at state schools with higher-paid presidents, according to a new study by the Institute for Policy Studies.
In the study, “The One Percent at State U: How University Presidents Profit from Rising Student Debt and Low-Wage Faculty Labor,” co-authors Andrew Erwin and Marjorie Wood show that student debt rose by 10 percent between 2010 and 2011 at the top 25 universities with the highest executive pay, 43 percent faster than the national rate.
Public university presidents suffered fewer pay reductions shortly after the 2008 recession compared to other professions, the study concluded. Between 2009 to 2012, presidents at the top 25 universities saw their salaries increase by a third. Meanwhile, national student debt reached $1.2 trillion in 2012. Seventy-one percent of graduates in 2012 had student loan debt, averaging $29,400 per borrower, according to the Institute for College Access and Success.
“Top-heavy, ‘1% recovery’ occurred at major state universities across the country, largely at the expense of students and faculty,” the study concluded. “Soaring compensation for college presidents has come at a familiar price: worsening inequality.”
In the top 25 universities, non-academic administrative spending (including executive direction and public relations) outstripped scholarship spending by more than two to one. Low scholarship spending means fewer opportunities for lower-income students, who may already need more student loans already in the aftermath of the recession. Economic inequality, according to the study’s co-authors, has “adverse effects on the quality of higher education” which creates a poverty loop, thus creating further inequality for poor students.
The study also found that while presidents’ salaries accelerated, the number of permanent faculty members decreased while more lower-paid, part-time adjunct faculty were hired.
“Thirty years ago, America’s state universities were affordable and accessible, university presidents were more like educational leaders than CEOs, permanent faculty made up 70 percent of all instructional staffs, and students rarely went into debt at all,” the study states.
The study proposes some solutions: a 2 to 1 ratio for administration to scholarship spending set by state legislatures, pay requirements like having administrative salaries be no greater than 10 times the salary of the lowest paid faculty member, and more socioeconomic diversity on universities’ boards of trustees (who set presidents’ salaries).
Erwin and Wood also expressed support of Sen. Elizabeth Warren’s updated Bank on Students Loan Fairness Act, which she is reintroducing this spring. The legislation would nearly halve interest payments for students with loans at 6.8 percent, paid for by adopting the Buffett Rule.
Abigail Bessler is an intern with ThinkProgress.