Grassley blames university ‘perks’ for rising college costs

“One area for consideration is college spending on high executive salaries and perks that drive up tuition without providing additional value for students,” Grassley said Thursday. “President Obama should use his bully pulpit to encourage more independent leadership from the boards that oversee tax-exempt universities.”

Grassley used the example of New York University’s president, who was promised a “gold-plated severance package.” Obama announced his new plan in a speech in New York. NYU’s president will get $2.5 million when he resigns in 2016 and receives an $800,000 annual salary.

“This is on top of the beach house he bought with university help,” Grassley said. “NYU’s president wouldn’t have had help with his beach house if the board refused.”

Obama called on Congress to tie federal grants and financial aid to the rankings when it reauthorizes the Higher Education Act within the next year. But Grassley said Obama should consider a bipartisan Senate bill called the Understanding the True Cost of College Act.

Grassley’s bill would require universities to clarify what financial aid families will receive from a school and create standard terms for the aid offered so that students can compare offers from different schools.

“I encourage President Obama to look at a bipartisan Senate bill that would help students and families understand the true cost of college and the different types of student aid,” Grassley said. “The more students and parents become savvy shoppers, the more colleges would be forced to rein in rising costs to compete for students.”

Along with Grassley, Sens. Al Franken (D-Minn.), Tom Harkin (D-Iowa), Marco Rubio (R-Fla.), Kirsten Gillibrand (D-N.Y.), Patty Murray (D-Wash.), Ben Cardin (D-Md.), Charles Schumer (D-N.Y.), Tom Carper (D-Del.), Richard Blumenthal (D-Conn.), Ron Wyden (D-Ore.), Dick Durbin (D-Ill.), Sheldon Whitehouse (D-R.I.), Tim Johnson (D-S.D.), Chris Coons (D-Del.) and Barbara Mikulski (D-Md.) are sponsoring that bill.

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