Sen. Chuck Grassley of Iowa has conducted oversight of tax-exempt organizations including universities for years. Most recently, he has focused on New York University (NYU), which gave perks to then-administrator Jack Lew including a home loan and a $685,000 severance payment. NYU also has generated controversy by giving loans for second homes to select administrators and faculty, a practice it announced it would end amid public scrutiny. Grassley made the following comment today on President Obama's outline of ideas to reduce college costs and student debt.
"I agree with President Obama on reducing college costs and student debt. One area for consideration is college spending on high executive salaries and perks that drive up tuition without providing additional value for students. For example, just before his promised resignation in 2016, New York University's president will receive a gold-plated severance package including a $2.5 million parting bonus and $800,000 a year. This is on top of the beach house he bought with university help. President Obama should use his bully pulpit to encourage more independent leadership from the boards that oversee tax-exempt universities. NYU's president wouldn't have had help with his beach house if the board refused. And I encourage President Obama to look at a bipartisan Senate bill that would help students and families understand the true cost of college and the different types of student aid. The more students and parents become savvy shoppers, the more colleges would be forced to rein in rising costs to compete for students."
More information on the Understanding the True Cost of College Act, of which Grassley is the lead Republican sponsor, is available here.
