If you’ve ever wondered where the extra cash from heightened tuition costs are going, we can now speculate that some of it goes towards the college presidents’ extravagant salary. Meanwhile students are taking out exorbitant loans just to keep up with the rising pricetag of higher education.
A growing number of college presidents are raking in more than $1 million a year; 42 presidents saw their yearly pay spike in 2011. This is a new record for America, according to U.S. News & World Report. Back in 2010, only 36 university presidents received a salary surpassing $1 million. Let’s take Robert Zimmer, for example, the president of the University of Chicago — he reeled in a salary of $3.4 million!
Based on data from the country’s top 500 colleges with the most funding, the average salary for private university leaders is $410,523; this is a 3.2 percent jump from 2010.
Among public schools, the median pay package is actually higher with an average of $441,392. Pennsylvania State University’s president topped the list among public school presidents with a $2.9 million annual compensation.
As presidential pay packages bloat, students are being shackled by student loan debt. The cost to attend some of America’s colleges can exceed $60,000. And it is lower middle-income students, NBC News reports, who are hurt the most by soaring tuition expenses. According to a study led by Dartmouth’s Jason Houle, students from a $40,000-to-$59,000 household racked up $11,000 more in debt than families who earn less. Compared to students who come from wealthier households, middle-income students raked in $9,200 more in debt. In 2012, 70 percent of college students were indebted with $29,400 in student loans.
While Houle explains that he wasn’t surprised that wealthy households incur less debt, he at least expected a gradual decrease in student loan debt as median household income increases — but that wasn’t the case. This might be because, Houle theorizes, “many federal and private financial aid initiatives use family income of $40,000 as a cutoff for grants.”
Unsurprisingly, the debt disparity was highest between middle income students and other cohorts when the former attended a private, high-cost university. Houle’s suggestion to ease the burden of student loan debt is simple: “When we look at these findings[…], reducing costs would make sense.”
To avoid towering debt, U.S. News suggests these three colleges: Princeton University, Alice Lloyd College, and Berea College. All three institutions have students who have incurred the least amount of debt in America with an average debt load of $5,096, $5,164, and $7,224, respectively.