The Maleficent Gordon Gee and His Malfunctioning Money Machine
Not just me being a bit of a homer for a moment, the hot mess at West Virginia University is getting national attention now, and there are plenty of lessons for the coming downturn in higher education for those willing to listen. But this isn’t an enrollment story, or even really a funding story. It is the story of Gordon Gee, and there are many like Gordon Gee, who have seen higher education as an unlimited and mostly unaccountable ATM for personal wealth and lifestyle padding instead of a business and leadership position.
Lenne Ray, who is also a WVU graduate, for West Virginia Watch:
WVU currently has a $45 million budget shortfall. The administration’s response is to cut 32 majors and 169 faculty jobs at the Morgantown campus.
Now, hold onto your bowties for a minute.
How did WVU get into this mess? No one seems to be sure, but let’s take a look at University President E. Gordon Gee’s career history.
From 1998 to 2000, Gee was the president of Brown University, and was the second highest paid university chief executive in the country with a purported total compensation package of more than $1.3 million, according to a 2003 article by The Chronicle of Higher Education.
Students at Brown were distrustful of Gee after he cut the popular residential string quartet at the arts friendly university. Around the same time, he announced plans to sell $80 million in bonds to construct a biomedical sciences building.
After Brown, Gee served as chancellor of Vanderbilt University, where he had a problem with lavish spending. In 2004, Gee was again the second highest paid university head in the U.S. with a salary of more than $1.3 million, and during his tenure more than $6 million — which was never approved by a full board — went into renovating the university-owned mansion where he lived. The university also paid for his frequent parties and a personal chef, which exceeded $700,000 annually.
I may be crazy, but if you’re being paid $1.3 million a year, you should be able to afford your own chef and parties.
Vanderbilt had a $2.2 billion annual budget, but the full Board of Trust never approved it. The board also didn’t approve most big-ticket spending projects or debt financing between 2000 and 2005. The university was so concerned that the trustees created a special board committee to monitor Gee’s spending.
In 2007, the bow-tie wearing Gee became the president of Ohio State University. Now, this one here is the one that really got me. It was reported that between 2007 and 2012, “Ohio State has spent more than $64,000 on bow ties, bow tie cookies and O-H and bow tie pins for Gee and others to distribute.”
Sixty. Four. Thousand. Dollars.
Gee announced his retirement on June 4, 2013.
So imagine my surprise when Gee was named interim president of WVU on Dec. 5, 2013. And I was absolutely shocked when he was named president months later on Feb. 28, 2014.
You might be thinking by now that he had learned to be better with money. But you’d be wrong.
In 2018, the Gazette-Mail reported that Gee spent more than $2.2 million between May 2014 and June 2017 in private air travel that was paid with tuition money. At the time, Gee said using tuition was “perfectly legitimate,” but he told the Gazette-Mail that the university probably will pay future costs out of an account that uses only private donations.
Since 2015, WVU has had a 10% decrease in student enrollment. WVU’s debt has risen more than 50% since 2014, the year Gee was hired, according to a Chronicle of Higher Education analysis. It also found that state appropriations for the university fell nearly 36% from 2013 to 2022.
In May, Rob Alsop, the university’s vice president for strategic initiatives, said WVU needs to adjust its margin by at least $75 million over the next five to seven years because of a potential enrollment decline of 5,000 students over the next 10 years.
Gee’s main focus as president is to bring money to the university, yet he is refusing to ask the state to help with the $45 million budget shortfall.
Gee told the Washington Post, “If I had gone down and asked for $45 million from the state legislature, they would have thrown me out.” His plan is to make cuts first, then ask the legislature for support. Never mind that the legislature just approved bills to give Marshall University $45 million for a new cyber security program and and $25 million to Pierpont Community and Technical College to build an aviation hangar.
Despite all of this, WVU offered Gee an extension until 2025. He has said he will step down when that extension ends, but he wants a job at the law school. It takes a lot of nerve to make faculty cuts then to say you want a lecturer position.
Everything rises and falls on leadership. Too many in education have discovered that in the malignant administrative part of education in the United States of America, one can get top grade leadership pay without any of the usual leadership accountability or pesky need to actually perform well at the job. For a university head like Gee, keeping a small cabal of influential people properly enriched along with you is more than enough to get a high salary, immunity, and a golden parachute.
The problem for higher education is the Gravy Train Unlimited is not what it once was. While some of WVU’s issues are unique, and hiring the despicable and proven waste of spending that is Gordon Gee is a problem of the university’s own making, the college and university system in America is about to find out the oldest of investment adages: Trees don’t grow to the sky. After decades of constant increases in tuition to keep the money flowing, there isn’t enough students, tuition, and funding to go around in the near future to keep it all going. Add in the COVID-19 era where an entire generation of students discovered online learning coupled with constant blaring headlines about the student loan debt mess, and you have the greatest threat to the higher ed pipeline in recent memory. Maleficent personal enrichers like Gordon Gee are going to get exposed first. Then the more general-purpose incompetent leaders will follow suit. Following that will be the leaders that just refuse to change, adapt, or scale back to the coming realities of what is going on, and what is to come, in higher ed.
Money covers a multitude of sins. A crisis of money and funding is going to reveal those sins in ways the mostly sheltered professional education class is really not going to like, or take well to.
And under all that is the students who will be hit with even more tuition increases for more cut programs, and all complaints will be answered by too many high-level administrators with a snide comment about how dare you not care about education by funding my office renovation and permanent position. Meanwhile, the actual teaching faculty, staff, and students will wind up paying the real world cost.
When more and more young people start not only looking but finding other options than throwing money at institutions run as social standing job programs first and institutions of learning second, don’t blame “the system,” or the economy, or changing times. Blame the Gordon Gees of the world, who were not satisfied until the golden goose choked to death on that last egg of administrative entitlement to enrich themselves, students and faculty be damned.
The question “What is the point of a University?” is likely to get different answers from different groups of folks out there.
I imagine that most people will probably answer something like “education, degrees” and that sort of thing. “Take a high school graduate and turn him or her into a college graduate.”
The people in charge of the Universities seem to think that the answer is something else. Something else entirely. “Maintain an endowment.” “Get donations to the university.” “New prestigious buildings.”
Maybe those can coexist when the students walk away from university saying “My degree was worth what I paid for it.”
We’re going to start having a problem when enough people start saying “My degree was *NOT* worth what I paid for it.”
When that happens, Gordon Gee and his ilk will have a reckoning when they answer the question “What have you guys been doing these last few years?” and the answer has *NOTHING* to do with degrees or turning high school students into college grads.Report
Strangely, I don’t think the ‘value’ of a degree is the driver or fulcrum of the issue.
It’s much more simple… Universities hit a bubble period of financial growth and it became very clear that spending those $$ was worth the effort of gaining control of those $$ so you could direct where the $$ would be spent.
The cause of the financial bubble is one discussion, the spending and control of the financial bubble is another one that is only tangentially (usually) related.
Honestly, the proper word for the Education bubble is Grift… we throw it around alot for the other side, but Grift is what Grift does.
The ‘popping’ of the bubble may or may not happen — from the folks I know in Higher Ed Administration, there’s no particular fear the Harvard, all the well endowed (tee hee) privates with fancy names, or even WVU will go under… but the demographic and financial turns could nuke quite a few small to mid-sized colleges and universities. Which is just to say that the grift will continue and that the consolidation will perhaps make it even worse.
I’ve seen and discussed the economics of Higher Ed at the simple Tuition = Faculty scenario… and let me tell you, it’s a terrible business model. An almost unsustainable model. Fantastical financial fiascos that we’re seeing with the endowed Universities? Purely an example of too much money available for use outside of the core mission. Or, put another way, a grift of changing the core mission because you have the $$ to do so.Report
So the consolidation of the universities following the implosion of the dinky ones that suck will keep the game going for a while? Even as more and more say “my degree wasn’t worth what I paid for it?”
Ugh. I could see that happening.
Might kick the “I know what *I* thought the core mission was… what did *YOU* think it was?” conversation down the road a ways.
Maybe even sustainably. If the Chinese and Indian full-tuition folks still keep showing up.Report
It’s not that the dinky ones suck, it’s that the Baumol Cost Disease of Teaching is real at the bottom of the scale.
At the top of the Scale the grand irony is that the faculty didn’t capture the full Baumol effect, but were instead bought off and/or threatened by the Adjunctification and others ate their lunch.Report
+1 for Baumol Cost Disease.Report
Well now it’s +3.74, due to the increasing opportunities to spend these points elsewhere.Report
Fantastical financial fiascos that we’re seeing with the endowed Universities?
My undergraduate school (a state R-1) has the unusual arrangement that the endowment is held by a separate non-profit. Call it the Foundation. The Foundation was established early on by an alumni who wanted to leave money for the benefit of the school’s mission, but didn’t trust the elected Regents or the hired administrators. The Foundation and the Regents/administrators regularly butt heads over how money should be spent. I almost always find myself on the side of Foundation when that happens. They seem much more concerned about the students and faculty.Report
Wisdom.Report
We’re moving in the opposite direction. Once again, I refer you all to the College Board’s Trends in College Pricing and Student Aid report. Note Figure CP-9. Inflation-adjusted net (i.e. what students actually pay) tuition and fees for 4-year public universities peaked a decade ago at $4,060 (in 2022 dollars), was down to $3,130 in 2019, and was projected to be down to $2,250 last year. With room and board, it’s $14,560, but housing is expensive, and you need to pay for that whether you got to college or not.
Figure CP-13: Public universities get $15,150 in revenue per undergrad student, only 40% of which comes from tuition. SA-1: Loans trending sharply down for the past decade, grants going up, up, up for two decades. That chart specifically says federal loans, but SA-2 shows that undergraduate educations are increasingly funded by grants rather than loans. SA-6: Aggregate loans issued have been declining for over a decade. SA-9B: Average annual loan per undergrad is $6,440 per year, and down from 10 years ago.
SA-14A: Only 54% of 4-year graduates from public and private non-profit universities take out any loans at all, and for those 54% only, the average debt is $29,100. Note that both the percentage and the average are down from 2010-11, after adjusting for inflation. It does say that Parent PLUS loans are not included, but those are a small share of all loans, and they are also trending down over the past decade (SA-1).
You know what else is about $30,000? The college wage premium. The median full-time worker with a bachelor’s degree made $1,334 per week in 2021, $525 more than the median high school graduate. 52 * $525 is $27,300.
And with income-driven repayment, a lot of those loans are never paid back in full. It’s commonly claimed that student loans are “predatory,” and for undergrad loans that’s actually true, but the prey are taxpayers, not borrowers.
This whole narrative we’re being fed about skyrocketing college costs and how you need to take out six-figure loans to have a chance at being in the middle class has no basis in fact. It’s lies, lies, lies. The vast majority of student loans are manageable, with servicing costs being a small and shrinking fraction of the college wage premium. This is a totally reasonable sum to require college students to contribute to the cost of their educations. This just isn’t a real issue. People want their loans cancelled because people like getting free money, not because they legitimately got a raw deal.
An important caveat here is that a lot of Master’s programs actually are kind of scammy and not subsidized like undergrad degrees are, and as a result they sometimes are not worth the much larger loans you have to take out to get them. But the takeaway here is that you shouldn’t get a master’s degree unless you have a realistic plan to make it pay off, not that college is a bad deal or that a huge giveaway to student loan borrowers is warranted.
Also, this is not to say that universities aren’t spending too much money, just that undergrad students aren’t the ones funding it.Report
The big problem is that the A+ #1 group of folks who happen to have degrees that cost more than their current lifestyle affords *AND* who happen to have the biggest megaphones are, tah-dah, THE JOURNALIST PROFESSION!!!
And, on top of that, they’re probably more likely than most to rub elbows with postgrad folks who have a mortgage payment for their degree instead of just a car payment for it.
So we get stories like the one about the guy who got a Masters in Marionette Arts and can’t pay it off or those perpetual stories about power couples in Manhattan who make $450,000 but can only barely make ends meet after rent, two electric vehicles, student loans, 401K, Roth, vacations, going out to eat, and entertainment.
So the dominant narrative is “college costs more than what it is worth”.
But college costs a *LOT* more than it did even back when I went to a commuter college here in town.
And that seems like there are serious shenanigans going on despite the fact that a Philosophy Degree is likely to have you earn millions more over your lifetime than the poor schlub who only has a GED.Report
I think any discussion needs to account for the truth of the baseline reality Brandon is referencing: graduating from at minimum an ok public college correlates strongly with what could broadly be called ‘good economic outcomes.’ We ignore that at our peril. So we can probably dismiss the more ridiculous media narratives on the subject. However I would very much caution that it doesn’t mean we can conclude that all is well with the way we’re funding this and in particular how the subsidies and risks are being allocated.Report
Part of the fundamental issue that we don’t want to talk about is that we’re also doing a good job of mixing up our inputs and our outputs.
Again.Report
I spent my growing up around university professors and university administrators. They literally put food on my table.
While some are indeed as you describe, nearly all (I’d wager north of 90%) actually do care deeply about student outcomes. They seem the endowments and research portfolios as a means to supporting that end. Especially at state run R-1’s.
And he’s actually got a point about cuts before funds – legislators in red states have along, and infamous, history of not only refusing to keep up with things like routine building repairs, fully funding faculty lines, refusing to increase pay and benefits for admin staff – the list goes on. Those legislators (nearly all graduates of state universities in those states) don’t believe in taxpayer funded education. So even if he didn’t have the history he has (which makes you wonder what the WVU search committee was thinking), cutting first is probably the path he has to take to get more funding.
It’s ugly for sure, but he’s a bit of an outlier best I can tell. If West Virginia wants world class universities, they will have to pay for them, and he’s then going to be the least of their problems.Report
Two points to the funding issue that is relevant to the specific situation here: WVU’s state funding is less that 10% of its budget, and the WV legislature just last week outlayed $45M – not coincidentally the exact amount of WVU’s “shortfall” out to Marshall University, another in state albeit private school but one with effective, competent leadership. The legislature would write a check, they aren’t going to write a check for Gee blaming them for a mess he himself made. And understand, I can’t stand this version of the WV legislature on most things.Report
Gee does seem to be in a class by himself. Over the many years now, I don’t recall ever reading a piece saying the students and faculty at any of the schools he ran were better off when he left than they were when he arrived. But he always seems to find another gig.Report
I suppose I can see how Ohio State might have been impressed by how he was in charge of Brown.
And I suppose that I can see how WVU was impressed by a resume that had Brown and OSU on it.
At this point, I think that we might be out of suckers.Report
I guess there’s a knack to it.
I knew a man at Bell Labs who raced up the management chain. He was a genius at fiber optics. He knew nothing about software and was uninterested in learning. He finished his Labs tenure heading the organization building a very large project that absolutely depended on software. Rumors when he departed were he was offered the choice, “Resign and we’ll write a glowing recommendation; stay and you’re demoted two levels.” The first thing his replacement did was announce a complete software overhaul and a one-year schedule slip. The fiber guy ended up at another giant telecom, running another very large project, that failed after three years because of the software. Then I ran into him again at a piece of the broken up Bell System, where he was in charge of a very large project that… yep, failed catastrophically because the software didn’t work.Report
Asymmetrical information can be used to great advantage.
I don’t know that there is enough information out there to keep Gee from getting a gig at Compass Direction State.
But it seems like there is enough to be able to ask the board “How did you not know this?” afterwards.Report
The Peter Principle at work.Report
He’s just doing the same grift that a large amount of extremely-well-connected Ivy-League-graduate white men do, where they constantly fail at being the CEO of places, constantly slashing costs and destroying the companies in the name of profit while getting extremely well paid and using the company as a personal ATM on top of that. And somehow this is a good thing and we should keep paying them to do it. and they get to keep failing upward.
He’s just doing it in education instead of the business world. Which on one hand, has resulted at the scale of the grift reduced to a tenth (This sort of thing would be making him $20 million easy in the business world.), but, OTOH, he doesn’t even have shareholders who might complain. (Just students and faculty.)Report
focusing on “white” is problematic, especially if you’re deliberately avoiding Native Americans grifting colleges like this.Report
Gee’s Brown University package seems quaint now. A lot of University Presidents at the bigger universities seem to be compensated almost as well as CEOs for Fortune 500 companies. Also remember that the highest paid state employee in many states is often a football or basketball coach: https://www.reddit.com/r/MapPorn/comments/lnir2v/oc_the_highestpaid_public_employee_in_every_state/
Imagine what would happen if you called for the end of D1 college sports, you would probably get run out of town and that is if you are lucky.
Universities used to be run by the professors. Professors decided they hated admin and were not good at it and outsourced it to professional administrators and now we have administrative capture. Though I do think you probably need some professional administrators because of Federal programs and regulations, a good number of universities seem to take it to an extreme degree.
That being said, I will agree with Jaybird for once. The United States does not have any sort of agreement on what the purpose of education is and therefore does not have a discreet educational policy. To the extent that any side has “won” the debate, the practicalists seem to have the upper-hand. Rising tuition and other factors cause many parents and students to focus on allegedly practical degrees which will give them a hands-up in the job market. This is mainly business, technology, and engineering degrees.* So in tough and not so tough times, the arts and humanities will always be seen as targets and have been for a while except at the top of the top universities.
*Let’s be honest, politicians do not really want more pure mathematicians unless they become quants on Wall Street after graduation or somehow can use it to find petrochemicals for exploitation. When politicians discuss STEM, they mean technology and engineering in the name of Mammon.Report
This is also the main challenge for educational funding and student debt problem issues in a nutshell. University administration has ballooned enormously over the decades. I grant Philips’ comment upstream that the people who work in university administration mostly mean well- I am willing to believe they have no ill intent- but that doesn’t change that a lot of them are likely mostly deadweight on their institutions regardless of whether they mean well or not.
As long as higher ed is a black hole of inefficiency and money diversion on one side bracketed by corporatism, elitism and endowment servicing on the other there’ll never be a strong constituency in favor of throwing more money at it or in favor of paying off student debts (which is simply throwing money at higher ed in a more convoluted manner). That’d remain the case even if higher ed wasn’t also strongly partisanly sorted, but it is strongly partisanly sorted, so it’ll be even worse.
I suspect/fear it’s going to take a proverbial forest fire to clear the deadwood out of higher ed though. The current demographic shift could do it.Report
Elitism and endowment servicing are problem at anywhere between 20-100 universities depending on who you ask but this is another reminder that the majority of American college students attend colleges and universities that admit way more than half of their applicants. https://www.pewresearch.org/short-reads/2019/04/09/a-majority-of-u-s-colleges-admit-most-students-who-apply/Report
Oh you’re preaching to the choir there, but those 20-100 universities include all the elite selective ones so their cultural and political cachet is enormously magnified. To say nothing of the fact that the rights’ dedicated media apparatus is extremely eager to signal boost their, shall we say, more indulgent ivory tower-isms. So my core point stands.Report
People on the broad left in the United States have this fantasy that you can totally get rid of the Oxbridge characteristics of American higher education and turn everything into a Spartan U totally dedicated to learning. They also believe that gutting the practical majors would be popular and everything could be the fine arts, humanities, and sciences with no more business or communications. Like my brother wrote above, good luck with that. What really needs to happen is that the administration needs to receive big pay cuts and have their money spigots turned off.Report
I notice you’ve left out the quite large number of students covered under “engineering” here. It’s not the same as “science”. I can live with all of those disciplines being classed as a four/five-year trade school. It’s not my preference; I enjoyed being at a university that included fine arts, humanities, and social sciences.Report
It was not an omission of intent. I also don’t agree with the above as desirable or plausible.Report