Sen. Charles E. Grassley is using President Barack Obama's bus tour as an opportunity to renew his criticism of how university executives are compensated.
The Iowa Republican has had New York University under his investigative microscope for months now. That probe has included a review of compensation such as home loans for university leaders, noting the institution's nonprofit tax status.
"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," Grassley said. "President Obama should use his bully pulpit to encourage more independent leadership from the boards that oversee tax-exempt universities."
NYU drew particular scrutiny from Grassley during the confirmation process for current Treasury Secretary Jacob J. Lew.
"The more students and parents become savvy shoppers, the more colleges would be forced to rein in rising costs to compete for students," Grassley said Thursday.
"At a time when a higher education has never been more important or more expensive, too many students are facing a choice that they should never have to make: Either they say no to college and pay the price for not getting a degree — and that's a price that lasts a lifetime — or you do what it takes to go to college, but then you run the risk that you won't be able to pay it off because you've got so much debt," Obama said Thursday at an event in Buffalo, N.Y.
The White House announced a series of proposals designed to address the rising cost of college education, including tasking Education Secretary Arne Duncan with developing ratings for colleges and universities based on value.
"We're going to start rating colleges not just by which college is the most selective, not just by which college is the most expensive, not just by which college has the nicest facilities — you can get all of that on the existing rating systems," Obama said. "What we want to do is rate them on who's offering the best value so students and taxpayers get a bigger bang for their buck."
During his remarks at SUNY Buffalo, Obama criticized college ratings by U.S. News and World Report that have become something of a must-read for high-school students and their parents looking at colleges (and are a mark of distinction for many top-tier schools).
Obama said the current ranking system "encourages a lot of colleges to focus on ways to — how do we game the numbers, and it actually rewards them, in some cases, for raising costs. I think we should rate colleges based on opportunity."
Several schools, including George Washington University, have admitted to misreporting data to U.S. News and World Report, a move that led the publication to remove the school from the 2013 rankings.