"Financial pressures" were one of the reasons cited for the forced resignation of the University of Virginia's first female president. The decision "stunned the campus" and even those "attuned to university politics" were caught off guard.
University Rector and CEO of a Real Estate Development firm, Ms. Helen E. Dragas noted that there was a "philosophical difference of opinion" that led to a "mutual agreement" for President Teresa Sullivan to step down on Aug. 15. Dragas continued to claim vaguely that the university faces "hard decisions on resource allocation and a higher education environment," as reported by insidenova. The actual reasons have not been disclosed.
U. Va has an endowment fund with a current market value of $5.43 billion. "Asked why Dragas cited financial pressure as a factor in the resignation given the size of the endowment, Wood said the university does not use those funds for daily operations and that the use of about 70 percent of the endowment is restricted by donors." To put it in perspective, 30 percent of the endowment fund is still well over a billion dollars. A billion dollars equals a thousand millions, but apparently that is not enough for U. Va.
Sullivan had a sweet deal; she was hired under a five-year contract with annual compensation of $680,000, including a salary of $485,000, deferred compensation of $180,000, and a car allowance of $15,000. Additionally, tuition rates have drastically surpassed the rate of inflation, as seen by this chart:
Bloated endowment funds are nothing new, with Harvard having the largest endowment fund at over 31 billion dollars, but many universities also have well over one billion dollars in their endowment funds. It is amazing that despite all of the money being hoarded by some universities, they still claim financial difficulties while paying their staff exorbitant wages.
Interestingly, over 2,000 college professors signed an Occupy Wall Street petition specifically targeting the so-called 1%. The petition read, in part, "We stand united with the 99% to take back our economy and government from the 1%." The average annual salary college professor earns an ironic $99,000.
Dragas continued, "We see no bright lights on the financial horizon as we face limits on tuition increases, an environment of declining federal support, state support that will be flat at best, and pressures on health care payors." The claim of financial pressures of the university ring hollow.
As one article stated in reference to universities,
"The business model is broken. Administrations are bloated, faculty are protected by tenure, innovation is lagging, costs are out of control and tuitions are soaring. Students and graduates have accumulated $1 trillion in student-loan debt. For the first time forever, parents, students and outside observers are questioning whether a college education is worth what you have to pay to get it."
Ms. Sullivan stated in a letter, "Although the board and I have a philosophical difference of opinion, I will always treasure having had the opportunity to work with so many gifted faculty and staff, talented students, and loyal alumni." Ms. Sullivan's severance package is being developed. Clearly, there is a disconnect from reality with many of these universities, who are doing quite well, in comparison with other industries, and yet seemingly escape the "soak the rich" rhetoric and are in fact, often actively perpetuating it themselves.