Questioning President Roth on Wesleyan’s Rising Tuition, His Half-Million Dollar Salary, and Excessive Public Praise

Though 57K/year is certainly astronomical, I don't think that any one individual, not even the mighty MRoth, has the power to fight institutional trends. Almost every single secondary school in the country, and certainly EVERY school in this "elite" cohort- has experienced rising tuition. This is not due to Roth's greed, salary, or any before mentioned issue, but because of mass economic and institutional trends.

I'm no econ major, but I know how to research and read: http://www.palgrave-journals.com/ijea/journal/v9/n1/full/ijea200920a.html This article essentially says that if elite schools are to maintain the exclusivity factor that so distinguish them, the school has to keep up with all of the Joneses. I'm not even going to bother to research the tuition rates of Williams, Amherst, Tufts, etc. They're similarly preposterous and increasing.

Consider this highly related quote from the article: "...basic operations at a college or university are not the only factors that cause costs to rise. Public demands for selectivity also contribute to rising tuition rates. In his concluding chapter, Ehrenberg writes, ‘In our increasingly winner-take-all society, each institution understands the importance of remaining among the set of institutions considered truly selective. Hence, each strives to maintain or improve its position, rather than reduce its costs’ (p. 265). Referring mainly to the private, highly selective institutions, here Ehrenberg points out the inheritable nature of both the institutions and the American public who will sacrifice literally thousands of dollars in order to be among an elite and selective set of the population."

From this perspective, Roth is defending Wesleyan's seat at the elite table in America. Do I think 60K is insane? Yes. Is it currently necessary to remain competitive in this current economic model? Yes. Should Roth reduce his salary? Perhaps; however I don't think it's necessary to reduce a University President's occupation to a bunch of "leisure activities," as it takes a highly select individual to adequately fulfill such a role.

I would propone a governmental or economic restructuring instead of a heated attack on Roth, who appears to be completing his job in the manner he sees as most beneficial for the institution (and, as you claim, his paycheck). I think this needs to be top-down change, though it could have a bottom-up impetus.

Roth's salary is $360,000, not $564,000. That number, which you probably lifted from an Argus article awhile back, included compensation related to his hiring, aka "one-time" payments. His salary is lower than the presidents of Amherst, Williams, Middlebury, Bowdoin, and Vassar. Wesleyan has to pay him in the range of those schools in order the keep the job offering competitive. Guess you didn't take an economics class.

Same thing with tuition - professor salaries have to rise 2-3% every year, so tuition has to rise. Want to live in the wood frame houses? Those cost a shit ton of money, as they are very expensive and inefficient to maintain. Energy expenses go up, that has to be paid for as well. Want Wesleyan to be one of the best schools in the country? Guess what, that costs a ton of money. If you want tuition to stop going up, something needs to give, and lowering Roth's salary by even $200,000 is going to do NOTHING. Higher education at Wesleyan's level is expensive.

Roth has been doing quite a good job - Wesleyan has raised a ton of money, has created the College of the Environment, applications are over 10,000 every year... I could keep going. Roth is doing a great job, and deserves the praise he gets.

Also, if alumni don't give to Wesleyan, tuition will have to be increased at an even higher rate. FYI.

Contrary to what the other two commenters argue, I don't think that in order to "remain competitive," the administration's only choice is to ask students and families to pay the backbreaking amount that it does. While every selective college will no doubt be expensive--I think we all knew that when we applied to these schools--Wesleyan's prices are astronomical even when compared to other elite institutions. According to the College Board, Wesleyan is the fifth most expensive school in the country when tuition is added to the other expenses of attending school, like room and board.

Some of these costs could be ameliorated if the administration were to willing to give students more flexibility in areas other than tuition. In addition to asking why President Roth's salary is so high, then, we should also be asking why Wesleyan requires all students to continue to pay egregiously high prices for food and housing throughout their four years when they could be cutting costs by going off campus for these services. For families who are already struggling with the high tuition costs but are willing to pay them because they recognize the benefits of small liberal arts schools (small class size, highly qualified professors, personal attention, etc.), isn't it only fair to give them the opportunity to cut costs elsewhere?

Alex,
I find the reasoning of the article you quoted--that tuitions must be kept high for the sake of maintaining or improving prestige and elite status--to be, quite frankly, nonsense. 7/8 Ivies cost less than Wesleyan (Columbia is $300 more), as do Williams, Amherst, and Tufts (the three schools you mentioned that, yes, have high tuitions, but not at high as Wesleyan's).

I agree with you that the issue of rising tuitions--even for state schools--is a countrywide problem. In order to effectively address the problem, you're completely right that large-scale governmental and economic restructuring needs to take place (both at the federal and state levels). But unfortunately such important restructuring is NOT taking place, and Wesleyan continues to be one of the top 10 most expensive colleges in the country (of all colleges and universities) while not achieving a top 10 ranking under the liberal arts category alone on USNWR. Given this, I do believe that aggressive questioning, what you call a "heated attack," should be directed toward our President. He is sitting on a half-million dollar annual salary *plus* benefits during economic hard times when many families are struggling to keep pace with the increases, which leads me to question how in-touch he is with an average middle-to-upper middle class tuition paying family's struggles. Also, President Roth and the Board of Trustees are the ones calling the shots on tuition raises. No matter how large in scope the issue of rising tuition is across the country, at the end of the day we're Wesleyan students, and it is our own administration we should be holding accountable and demanding straight answers from. I hope this piece contributed in a small way to that goal.

Alum '10,
Thanks for the condescension at the beginning of your comment, very wesleyan of you. I have taken a few economics, enough to know the fundamental point I raise in the article that you completely ignore: inflation is a natural tendency, and as such tuition and other living expenses should rise accordingly. The Higher Education Price Index (HEPI) specifically accounts for “faculty salaries, administrative salaries, clerical salaries, service employee salaries, fringe benefits, miscellaneous services, supplies and materials, and utilities," and Wesleyan's increases have been higher than the HEPI. You offer no legitimate answer, but more importantly Roth and the Board of Trustees don't either.

Student '13 (thanks for the support) thoroughly debunks you on the wood frame house point. Wesleyan's demand for on-campus housing is not an asset of this university but one of its biggest financial gaping holes.

Finally, President Roth's "successes," as you see it ("Wesleyan has raised a ton of money, has created the College of the Environment, applications are over 10,000 every year... I could keep going."), while impressive on paper, have not prevented any increasing in tuition. Period. That is what this piece is about. I wish the College of the Environment and high application rates would save my parents money to send my two younger sisters to college (one will be starting next year, the other is a junior in high school), but they're not. Maybe go take a philosophy class on logic?

Joseph - I will admit that my tone was not constructive, but then again, neither was your Wespeak's. I applaud you for raising an issue, and you make some good points, and I will try to address them again, perhaps with more thought.

First, Roth's salary is indeed $360,000, though it approaches $400,000 with benefits. This data is from Wesleyan's 2010 Form 990, which I think is the most recent available (the higher number you cite was from Roth's first year that included extra benefits). I stand by my earlier point that his salary is non-negotiable in all of this - it's the market rate for small liberal arts college presidents, and Roth's salary is indeed lower than most of the other NESCAC schools. Also, it misses the bigger issue of endowment (more on that later).

I pointed out the woodframe houses because I agree, they are indeed a huge financial liability. I meant to say that students clamor over keeping them whenever the administration suggests replacing them with more dorms, and I implied that the administration should follow through on this and build more cost-effective dorms.

Here is my main point, and I would love to hear your response - Wesleyan has, for the past 20 years, trying to play catch-up with its endowment. As of 1980, Wesleyan had an endowment equal to its "peer schools." However, overspending and a lack of new gifts put the Wesleyan of today with less than a third endowment per student as its peers. Wesleyan had been spending 7.5% of its endowment yearly, which is unsustainable. Wesleyan is, over the next few years, bringing that number down to 5%. As such, less of the budget is supported by endowment, meaning that more of the budget is supported by tuition every year. Therefore, even if the HEPI is 2-3% lower than the tuition increase, the tuition dollars as a whole have to grow at a faster rate than that because of decreasing endowment support of the budget. Does this make sense?

If the tuition increase continue at the current rate once Wesleyan catches up, then I would be suspicious, but right now, Wesleyan wants to spend as little endowment money as it can.

The reason President Roth makes so much money is pretty clear: he pays for himself. Indeed, after he was hired but before he took office (a term of about 3 months) he raised $4 million. Since then, he has continued to be an aggressive fundraiser, more than paying for his own salary.

Of course, the other reason Wesleyan shouldn't decrease his salary is that the higher education market has settled on high salaries for University Presidents of his calibre. While I really do think that Wesleyan is a special place for him, we shouldn't delude ourselves into thinking that he wouldn't take a similar job making more money somewhere else.

Alum '10, from where are you getting this information, because I'm not finding it anywhere online? I've searched "Wesleyan (University) 2010 Form 990" and found nothing, except for Illinois Wesleyan's and Ohio Wesleyan's nonprofit reports. Same goes for the information that Wesleyan has been spending 7.5% of its endowment yearly, and is aiming to reduce that number to 5%, which is why they're increasing tuition (to close the gap). Were you a student employee in the endowment office? You seem to have a lot more (non-searchable) access to information I, and even the Argus, don't have. It would be helpful to see links to Roth's $360,000 salary and this elaborate endowment-drawing reduction plan you mention

To address the 7.5%-to-5% endowment-drawing reduction plan on its merits (assuming this is the actual plan), I think that idea is completely economically unsound, as, at a certain point in the future, the threshold of tuition-paying families no longer being able to cover the tuition increases will be crossed. I've spoken to many friends who say their parents, if not at that point, are nearing it. Furthermore, with every tuition increase, two additional issues arise for those receiving financial aid and/or taking out student loans: 1) the University will have to provide the student with more financial aid (ideally), or 2) the student will have to take out further student loans (i.e. screwing students in this position over for the sake of keeping the endowment high). Until I see more numbers and a clearer and well-justified rationale--which is really all I'm asking for in this Wespeak--I don't really have much more to discuss (and I have some papers to write my family's paying $57,000 per year for me to do well...).

Hopefully a new open and transparent financial decision-making precedent will be set as a result of discussions like this taking place. But, in order for informed discussions to take place, those paying the tuition should have full access to the facts.

the Form 990 is available on guidestar.org (register for free). a quick check revealed Roth's salary to be below Colby, Trinity, and Hamilton's presidents as well, so Roth really is at the bottom of the NESCAC pecking order for president salaries. His salary is also lower than the president of Vassar, and equal to that of Bates.

As for endowment, yes, increasing tuition is unsustainable, but spending the endowment at 7.5% is what got us into trouble in the first place. It's simply too high. No college or university spends at that rate for more than a year or two unless forced to by dire economic circumstances, and Wes did just that. If you spend at that rate, the real value of the endowment declines unless you experience 90's dotcom-esque stock booms. Wesleyan's financial discussion of the endowment spending policy is on Wesleyan reaccreditation report draft, about which you should have gotten an email from Rob Rosenthal, no? http://www.wesleyan.edu/accreditation/

Also, this tuition increase for next year is accompanied by an 11% increase in financial aid (more than double the tuition increase). What are your thoughts on that?

More food for thought: schools like Amherst are able to provide loan-free financial aid packages for all of its students, even internationals. This is because Amherst has an enormous endowment. Wesleyan has its sights set on that goal, and endowment is the only way to get there (and therefore reduce reliance on student charges eventually). Wesleyan is buckling down to get conservative with spending so it can eventually have the endowment to be even more generous with aid. But this process takes time, so Wes does as much as it thinks it can to help current students while growing the endowment as fast as possible for the students of the future. The idea is to grow the endowment faster than tuition has to increase, so that endowment can eventually overtake the tuition charges to supply the operating income. Wesleyan relies on endowment for only 16% of its budget while Amherst has endowment take 40% of the budget hit, and yet still spends a smaller % of its endowment. Wes cannot increase that 16% any higher without seriously damaging the economic future of the school, at least if it wants to retain its current place in the world of higher education.

One thing I'd like to add about endowment spending is that the 7.5% and 5% figures for endowment spending being thrown around are a bit misleading. Wesleyan spends 5.5% of the 12-quarter moving average of its endowment, a policy is has followed for many years. When Wesleyan's endowment went into freefall in 2008 and 2009, it was spending well over 5.5% of the endowment's present value. However, in periods of growth, it spends less than 5.5%. Among other things, this allows the University to plan for change

While it's true that Wesleyan blew through much of its endowment in the 1970's on Capitol projects, taking it from being the most well-endowed University in the nation in the 1960's (on the strength of investments in Reader's Digest) to having to double enrollment just to pay the bills, Wesleyan has been drawing down at 5.5% for at least a decade. I'll also add that this level of spending is fairly typical amongst well-endowed universities.

Mr. Spahn is correct, though the 5.5% draw has only come very recently. I believe spending for next year is 5.3% of the 12-quarter moving average. 5.5% is the high end of acceptable, with 4.5% or so being the low end of that range. Wesleyan, understandably, wants to get that number down as low as possible without compromising anything. Of note is that Wesleyan is in the quiet phase of its next capital campaign, and quite a bit of that money is being directed to the endowment to support financial aid. The cavalry is coming, but it's going to take time.

I hate to disagree with a friend, but we all know that opinions can exist without being personal.

My first reaction when I saw this article title was confusion: is Wesleyan really paying its president only $500,000? I thought you must have been referring to bonuses only. (I'm not joking.) After some quick Googling, I came across this summary article:
http://www.businessweek.com/bwdaily/dnflash/content/feb2009/db20090216_614557.htm
which is interesting, but only informative in that it estimates the median private university president income as over what yours makes.

This link was more informative:
http://chronicle.com/article/President-Profile/129983/#id=21447
which ranks Roth at 181st of 519 institutions and shows him bringing home under your half-million mark in total compensation. Ranking 181st is not high at all for a school that prides itself on its academic prestige. Besides, his total salary actually decreased by 11% from last year apparently. If you see his salary as being unreasonably high (and his ranking would indicate otherwise), then there must be an acknowledgement that his salary is moving in the "right" direction--down. That assumes, of course, that his salary is too high.

this is fucking garbage

Unsurprisingly, Brad Spahn is the most intelligent voice in this discussion.

http://thechoice.blogs.nytimes.com/2012/03/01/mount-holyoke-college-announces-tuition-freeze/

how do ya'll feel about this?

Joseph, the vitriolic tone of your article and comments isn't doing you any favors. Perhaps Michael Roth's salary is too high; perhaps it's appropriate. I don't know all of his responsibilities and so cannot make that judgment. Wesleyan is slightly more expensive than other schools of this sort, yes. I'm inclined to think that it's due to the pathetic state of our endowment, rather than to Roth's salary.

What I want to emphasize, though: President Roth is not "laughing all the way to the bank." He is not some evil tycoon, making his fortune on the backs of poor defenseless students. His passion and love for Wesleyan is palpable. He seems to be incredibly accessible, as college presidents go; my friends at other schools cannot conceive of the fact that I can do things like sit next to my president at a football game or have a conversation with him about Wesleyan's price tag, as I did during orientation. This is especially striking since, as alum '10 pointed out, he might well be making more money elsewhere!

And as a student who could not attend Wesleyan without financial aid, I would not describe Roth's and Kari Weil's contribution of $100,000 as a "token" donation. That money will make it possible for someone to come here that could not have otherwise. The price of a liberal arts education has been rising for years; we students knew what we were getting into when we chose Wesleyan, and no one is forcing you to pay $57,000 a year--if you really think so highly of the state institutions you mention, you can always transfer.

I agree that Wesleyan's tuition is exorbitant and that we should pressure the University to bring it down, but this problem cannot be fixed by any one person, including Michael Roth.

At the very least, I think students should demand that their tuition be grandfathered so that they know what they are signing up for when they decide to come to Wes. I can only speak for my family when I say that we knew we could just barely afford my first year of tuition. Now that my 529 has been depleted, I don't think we will be able to afford rising tuition each year unless we receive the appropriate amount of financial aid. I know nothing about economics or the school's finances, so is this even possible? Has the administration ever addressed the possibility of keeping tuition at a set rate for all four years?

Williams College attempted a guaranteed tuition policy and program about ten years ago. The fact that it no longer has such a policy speaks for itself.

[...] hard work,” as many conservatives ignorantly spew.  Before long, no matter how much revered (i.e. unthinkingly praised and unquestioningly followed) President Michael Roth, or any other smooth-talking University President, professes to be “protecting financial aid [...]

[...] is soon to cross $60,000/year, with no end in sight.  Last month, some of you may have read my Wespeak about rising tuition, President Roth’s unjustifiably high half million dollar/year salary, and all the praise Roth [...]