Student debt and the hiring of relatively low-paid adjunct faculty rather than full-time professors have grown fastest at public universities with the highest-paid presidents, a new report found.
University president pay has risen dramatically in the aftermath of the 2008 financial crisis, according to the report, which focuses on 25 state universities that pay their presidents almost double the national average. Released Sunday by the Institute for Policy Studies (IPS), a progressive Washington D.C.-based think tank, the study is called The One Percent at State U — referring to the financial gains made by executives after the 2008 recession.
Nationwide, between the fall of 2009 and the summer of 2012, average executive compensation at public research universities increased 14 percent to $544,544, according to the study.
But presidents at the 25 universities examined saw their salaries increase almost twice as fast as the national average, to $974,006. Early indications since 2012 suggest this trend will continue to accelerate.
And though student debt is rising across the country, at these 25 universities the report said the level of student debt increased 13 percent faster than the national average from 2006-2012.
Opinion: The great corporate cash hoarding crisis
Companies are sitting on mountains of liquidity, thanks to government policies; the losers are the economy and all of us
In 2012, student loan debt reached over $1 trillion — surpassing American credit card debt for the first time. About 71 percent of students leave with some debt, with the average being $29,400 per borrower, according to the Institute for College Access and Success.
According to the study, the students' debt was inextricably tied to rising salaries for university presidents.
“Student debt rose faster in the ‘Top 25’ whenever executive compensation increased and slowed when compensation fell briefly after the 2008 financial crisis,” the report found.
And as students found themselves deeper in debt, universities began hiring more faculty on a contingent basis — instead of offering permanent positions.
The report said two-thirds of all faculty in U.S. higher education now work on a contingent basis with relatively low pay and with little or no benefits.
From fall 2009-2011, the hiring of adjunct positions increased by 17 percent at the 25 universities with top presidential pay, more than twice the national average, according to the study.
“The decline of university professors in favor of part-time and contingent faculty labor mirrors the shift in the broader economy from a secure, permanent workforce to a part-time, low-wage, and contingent one,” the report said.
Like “1 percent” executives in corporate and banking sectors, public university presidents weathered the recession, coming out of it with minimal or no reduction in their pay.
According to the report, the top five most “unequal” public universities in the United States are The Ohio State University, Pennsylvania State University, the University of Minnesota, the University of Michigan and the University of Washington.
Pennsylvania State University’s Board of Trustees hired Eric J. Barron as president with a starting salary over $1 million per year in February, calling the salary “competitive and reasonable.”
By comparison, presidents at some of the country’s respected public institutions — including the University of California, Berkeley, the University of Wisconsin, Madison; the University of North Carolina, Chapel Hill; and the University of Massachusetts, Amherst — each made less than $500,000 in total compensation per year. The national average for presidents at public colleges from went from $370,939 in 2006 to $554,554 in 2012.
The report suggested that university boards, whose members often make extraordinary private sector salaries themselves, are “increasingly out of touch with notions of reasonable compensation.”