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In Response: The FASP Letter of Sept. 19, 2013

September 20, 2013


Yesterday FASP sent out another note to the community containing many of their familiar attacks on NYU’s direction. It ended with this comment:

“We conclude by adding that we represent the faculty, not only as opponents of the Sexton Plan per se, but----far more important----as professors, bound always by our ethical duty, and our intellectual responsibility, to distinguish fact from error, truth from lie.”

--FASP Letter of Sept 19, 2013

030-nyc A worthy mission, to be sure.

So, it seems only fitting to point out that many of their core assertions contain errors of fact and conflation of issues.

On Loans

FASP claims that the University loan program favors the University administrators and drains the budget. Here’s a key problem with what they imply: the loan program does not cost the University. In fact it earns NYU a small return.

That said, earning a return is not the point of the loan program; the point of NYU’s loan program is to recruit and retain faculty -- and to a far smaller degree, senior administrators – as part of an overall package of compensation and benefits, just as other major research universities offer loans. And if one is to judge by NYU’s direction in major rankings, it has been very successful.

Yes, some of the loans are forgivable and some loans are no-interest loans (in each case, these loans are used for recruitment or retention), but the majority are interest-bearing loans, and because of that, each year the University earns a return. To state the case simply:

  • About $15 million of the loan portfolio is forgivable.
  • However, the remainder of the portfolio generates in excess of $38 million of interest earnings over the next thirty years – more than enough to cover the forgiven loan amounts and still generate a positive return.
  • And this calculation does not even take account of the “shared appreciation” feature built in to many of the loans, which may yield even more of a return.

Regardless of what FASP wishes to imply, the loan portfolio represents no drain on the University’s resources and in fact generates a return.

And how do the loans break out faculty and administration? Out of 181 borrowers between Jan. 1, 2000 and Jan. 1, 2013:

  • 175 faculty borrowers, with loans totaling $88.7 million (including 14 loans to faculty who at some point have held administrative appointments)
  • Six admin borrowers, with loans totaling $2.6 million

Oh, and the discrepancy between the number the FASP letter cites and the number Martin Dorph cites in the letter he sent to the NYU community during spring 2013? It’s an apples-and-oranges comparison: the difference between a snapshot in time and a 12-year period of time, and the difference between the number of borrowers and the cumulative number of loans over a 12-year period.

And let’s be clear: giving loans to recruit and retain faculty is not only not illegal, it is commonly practiced in higher education.

On Salaries

The FASP letter makes use of the data in NYU’s annual public tax filings -- called 990 Forms – to cast administrative overhead as exorbitant.

Yet here again, there’s a serious problem in FASP’s approach: of the approximately $24 million in salaries they cite, over $16 million – or 2/3 – are paid by the medical center, which operates separately from the University and faces markets in which the salary structure is higher. These are funds that have nothing to do with Washington Square’s financial aid or faculty salaries at Washington Square; they are lumped together for the point of exaggeration.

Also, it’s worth taking a look at the big picture, because the FASP letter gives a distorted picture: between 2002 and 2012, the portion of NYU’s budget spent on administrative, auxiliary, and institutional services went down – from 30% of the budget to 23% -- while the portion spent on instruction, research, and libraries increased from 56% to 58%.

And, as to the suggestion that NYU is improperly failing to disclose names and salaries: it is the IRS that instructs NYU whose salary should be listed on its 990 Form based on their rank as officers of the University. It is not meant to be a list of all those in whose salaries FASP is interested.

On Space

Again, I have to address the sweeping claims, in this case relating to the faculty opposition to the University Space Plan:

  • Over 40% of the departmental resolutions expressed concern, not opposition
  • 39 departments or schools voted out of 170+ departments University-wide
  • 922 faculty voted on the resolutions; there are over 4,000 full-time faculty at NYU.

Still, there is no doubt that the space plan was, at the least, a source of concern for a significant number of faculty. That is why the University Space Priorities Working Group was established: to respond to faculty concerns, to provide an opportunity for the decision-making that went into the plan to be examined by a group of faculty thoroughly, at length, and transparently, and to provide guidance on how to proceed.

The FASP letter is silent on the work and preliminary findings of this committee. I wonder why…?

On Mr. Lipton

A very large portion of the FASP letter is devoted, essentially, to the gleeful attack on Martin Lipton, the chair of NYU’s Board of Trustees.

Let’s see – he’s remained involved with NYU for about 60 years as student, alumnus, adjunct faculty member, and trustee; he’s devoted countless hours to the University; during his chairmanship of the Board, NYU has raised over $5 billion; in spring 2013, he and a special committee of the Board met directly with many groups of NYU stakeholders, including several groups which independently were opposed to the space plan, John Sexton’s leadership, or both; and the special committee has offered new mechanisms for faculty participation in University decision-making.

FASP bitterly rejects the efforts of the special committee of the Board that Mr. Lipton set up to offer new mechanisms for faculty participation in University decision-making. It’s worth noting those changes and asking oneself if Mr. Lipton and the others on the Board are really as dismissive as FASP suggests:

  • The creation of a new Joint Committee to provide for direct communication, collaboration, and discussion between Trustees, faculty selected from within their schools, and student and Administrative Management Council leadership
  • A commitment to include faculty and student representation in upcoming searches for president
  • A Commitment that faculty will democratically choose at least half the membership of University-wide committees.
  • A commitment to work with the University Senate to create a way for non-tenure track faculty can have a voice in university governance.

A University needs people of Mr. Lipton’s commitment to grow and function. We can be certain that NYU will not be able to continue on its current trajectory if people who are willing to donate their time and money, and who believe in the University and its mission, can routinely expect the extreme, vitriolic, and dismissive treatment that FASP directs as those with whom it disagrees, imputing to them the basest of motives.

There are clearly faculty who disagree with the direction of the University; some feel very strongly indeed. An exchange of opinions and ideas on that topic is healthy and constructive. But there is a point at which rhetoric just scorches the earth. This past summer, in an earlier missive from FASP, they belittled NYU’s academics, its students, and its progress. There were claims in that missive that were verifiably untrue, and refuted by Provost David McLaughlin in a letter of response to faculty.

NYU thrives on the energy of its community, and that often includes disagreements. But I would suggest that, particularly in a university, we must all stick to the facts and hold to basic norms of civility.

--John Beckman

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