Student Loan Blog : SUNY Binghamton

New York AG Examines Colleges’ Relationships With Health Insurers

Student Loan Girl — Tue, 18 Nov 2008 23:30:00 GMT

New York Attorney General Andrew Cuomo is investigating the relationships between colleges and the health insurance companies they do business with just two years after he launched a similar investigation that uncovered conflicts of interest between some colleges and student loan companies, The New York Times reports (“Cuomo Investigating Colleges’ Deals With Health Insurers,” Nov. 17, 2008).

Investigators will focus on determining if schools adequately disclose the policy terms and costs of their school-sponsored health insurance plans to their students, as well as whether or not insurers offer schools a monetary incentive to require that their students buy health insurance through a particular provider.

In an e-mail message, Benjamin Lawsky, special assistant to the attorney general, wrote “We are primarily focused on whether insurance companies are paying schools to push students into health coverage they don’t really need and shouldn’t really want.”

“With students and their families being financially squeezed at every turn,” he added, “colleges must ensure that they are looking out for students’ best interest first and foremost as opposed to their own financial bottom line.”

Cuomo has requested health insurance–related documents from six State University of New York schools — Binghamton, Buffalo State, Oswego, Purchase, Stony Brook, and the University at Buffalo. Investigators have asked to see copies of the schools’ requests for proposals from insurers, insurance contracts, and the information given to students about the health plans available to them, as well as statistics on the health insurance premiums paid by students.

Four institutions, Georgetown University, Columbia University, Cornell University, and Sarah Lawrence College, said they had received subpoenas.

Parents have complained that some schools require students to purchase school-sponsored health insurance, even though the student is already insured under a family health insurance policy, said James Boyle, president of College Parents of America, an association of parents of college students.

Although “the vast majority of college students” are covered under their parent’s health insurance, most campus health centers don’t accept insurance plans that aren’t affiliated with the school, Boyle added.

“Instead,” he said, “some schools force the student, as a condition of enrollment, to purchase health insurance policies offered by the school.”

Share this post: email this | del.icio.us | reddit

Online Ordering Causing Mailroom Mayhem on College Campuses

Student Loan Girl — Thu, 27 Dec 2007 23:46:00 GMT

The internet has completely changed the way college campuses operate, from class offerings and registration to college admissions and financial aid services. Now the technology is changing the way campuses deliver and receive mail. As more college students gravitate to online shopping, college and university mailrooms are overhauling their mail processing operations to accommodate the influx of packages.

Some pretty bizarre ones at that.

Car tires, barbecues, dishwashers, ant farms and air conditioners are just some of the orders college students are having mailed to their dorm rooms, according to a New York Times article by Jonathan D. Glater (“Majoring in Mailroom Management,” Nov. 21, 2007).

When students make their online purchases they often give little thought to the cost let alone the effect their shipping volume or types of packages they’re ordering will have on the mail processing centers at their schools. But for some schools, the adjustment has not been simple or cheap.

Revolutionizing the Mailroom At a Cost

The University of Southern California, for example, has experienced double the amount of their typical package volume in the last four years, expecting to process more than 67,000 packages by the end of this year. It has spent thousands of dollars adjusting their mail processing systems by building a new highly-complex mailroom almost as large as half a volleyball court for just one of their residence halls, Glater reports.

“Some folks don’t realize the logistical implications,” said Jeff Urdahl, the recently retired director of housing at USC, told the Times. “It’s a different world.”

Although online shopping statistics don’t exist for the college age demographic, according to shop.org, a division of the National Retail Foundation, internet buying increased nearly $220 billion last year and this year it is expected to top $259 billion.

And how are students paying for these purchases? Most interviewed for the Times article said their online shopping splurges are financed by college jobs, savings and parental allowances, but many students are also resorting to their good friends Visa, Master Card and American Express.

But students’ online ordering habits are not only affecting theirs and their parents’ bank accounts, they are also proving costly for the schools themselves. SUNY Binghamton spent $25,000 to implement a new bar code scanning system to track the increase of incoming packages, which rose from 33,000 in 2002 to 57,000 this year. Purchase College, also in New York, spent $37,000 on a similar system.

For Arizona State University, the second largest university in the country, the process became so cumbersome, the school chose to wash its hands clean of the mail distribution process and turned over all mail responsibilities to UPS.

Mindless Internet Shopping Hurts Students and Schools

The effect of students’ online spending is not isolated to schools; students’ bank accounts are taking huge hits as well. Credit and debit card use, necessary for online shopping, makes it much more difficult for students to keep track of their spending and their account balances.

Some students told the Times that they may buy something off the internet three times a week. This has led college students, according to Young Money, a student financial magazine, to have credit balances averaging $2,700, and as the popularity of internet shopping continues to rise, these numbers may only go up.

Students like Sarah Staton, a first year student at USC, don’t mask their online shopping activities; however they don’t quite seem to understand the effects it has on their finances.

“I do buy a lot of things, but it’s O.K. because I buy things that are cheap,” she told the Times. She admits to shopping on the internet more than two hours a day, especially for shoes. “How can I make a fashion statement if I don’t have the right shoes that match what I’m wearing?”

With this type of attitude, it looks like college mail centers and students will have to keep expanding their wallets.

Share this post: email this | del.icio.us | reddit

College Presidents’ Salaries Not-So-Slowly Sliding Up the Pay Scale

Student Loan Girl — Wed, 21 Nov 2007 04:09:00 GMT

It costs a lot of money to go to college. It costs even more money to run a college. And it’s costing increasingly more money to pay college and university presidents’ salaries and compensation packages, with many reaching the million-dollar mark.

According to The Chronicle of Higher Education’s most recent survey of executive compensation, salaries for presidents of private institutions has increased 200 percent over the last five years, with 81 presidents making more than $500,000 a year. Eight out of the 182 public institutions surveyed now pay salaries of at least $700,000, a jump from the two who reached that benchmark last year (“Presidential Pay is Increasing Fastest at the Largest Institutions,” Nov. 16, 2007).

In some ways, the life of a growing number of college presidents can be compared to that of a U.S. senator. In addition to their high salaries, these presidents might receive free housing, cars, travel, meals and “gifts” from friends of the institutions.

But with yearly college tuition hikes outstripping both the rate of inflation and increases in financial aid, one of the questions becomes whether rising presidents’ salaries are contributing to rising tuition costs (see our Nov. 4 blog, “Student Loan Debt Is on the Rise”).

A New York Times article by Jonathan D. Glater reports that families and lawmakers are concerned about these unfettered increases, questioning college and university presidents making millions even as students graduate with soaring levels of student loan debt (“Increased Compensation Puts More College Presidents in the Million-Dollar Club,” Nov. 12, 2007).

“The public has lost confidence in the altruistic mission of higher education,” says Patrick M. Callan, president of the National Center for Public Policy and Higher Education, in Glater’s article. “They see higher education as just another institution that’s in it for its own bottom line.”

Salaries on the Rise at Both Private and Public Schools

At private institutions, 81 college presidents earned $500,000 or more in the 2006 fiscal year, an increase of 15.7 percent from the previous year.

NOTE: Because some institutions changed Carnegie classifications, the number of institutions from which these data were collected changed from 670 last year to 654 this year. The statistics do not include special-focus institutions or the compensation of presidents who worked only part of the year.

Data and text courtesy of The Chronicle of Higher Education.

At public universities, the median total annual compensation in 2006–07 for the sample of 182 leaders was $397,349. The following chart shows how many presidents were in each of the $100,000 pay classifications.

Data and text courtesy of The Chronicle of Higher Education.

Schools and Presidents Defend Their Pay

Officials at schools with some of the highest paid presidents argue that “running a large university is increasingly similar to running a corporation,” writes Glater. In fact, the Chronicle points out, more college presidents are coming from corporate environments.

School officials, Glater explains, maintain that generous salaries are necessary both to draw presidents that can operate under the corporate mindset needed “to help build institutional wealth and prestige” and to keep them from defecting to a higher bidding school once they’ve been hired—one-third of public college presidents have no formal written employment contract, according to the Chronicle.

For fear of being ousted as the next Benjamin Lander—the former president of American University who was fired for allegedly requesting more than half a million dollars business compensation for personal expenses—some presidents themselves want to make it clear that not all college heads abuse their compensation packages and expense reimbursements. For some presidents, their greatest yearly expense comes in the form of donations given back to their schools.

In another Chronicle article, reporter Piper Fogg interviewed five college and university presidents about how they spend their money. Although all of them admitted to some personal splurging, they also pointed out the thousands of dollars they give back to the schools they work for (“With All Those Perks, How Do College Presidents Spend Their Money?,” Nov. 16, 2007).

David Hodge, president of Miami University (Ohio), earns $399,005 per year, but has donated more than $100,000 in the last year to create need-based scholarships for his students.

Lois B. DeFleur, president of the State University of New York at Binghamton, might own a Piper Comanche 260C single-engine airplane that she bought over 30 years ago, but the school only reimburses her for mileage at the automobile mileage rate—she pays for the gas, $5 a gallon, out of her own pocket. And out of her $344,500 pay package, DeFleur has donated about $100,000 over the last five years to her school, as well as the $25,000 she received for winning the McGraw Prize in Education.

If college presidents are increasingly expected to operate as CEOs, Hodge and DeFleur certainly differ from typical corporate executives in what they voluntarily give back to their employers out of their own salaries. And while college presidents’ pay is rising rapidly, the Chronicle notes that compared with the salaries of corporate CEOs, college executive salaries still lag far behind.

As long as colleges and universities stay on their current path toward functioning as corporations, presidents’ salaries will most likely continue to climb—it will be for the schools, the students, and the public at large to see if they get the corporate-level college management that corresponds to the corporate-level pay.

Share this post: email this | del.icio.us | reddit