Academic Year 2006-07

It is one of NYU's great strengths that we always have looked forward, always incarnated the progressive yearning that tomorrow be better than today. We are guided less by a fixated reverence for the past than by an ambitious attention to building the best possible future. A continuous commitment to improvement has and will be a hallmark of NYU's character, and it has and will serve us well.

That said, we must recognize (and be guided by) the realization that critical initiatives that we now undertake would not be possible were it not for previous stewards of the University who invested in building the university we have today. Our actions today will set the stage for the next generation of stewards for NYU, and they rightly will expect us to maintain the foundation that has made our progress possible. Thus, even as we press forward with our ambitions, we must preserve and build the platform for our successors.

Our priorities, which we have discussed in many settings in the years since I became president, are clear: to bring together a diverse community of scholars and students from among the most talented people in the world; to expand our faculty and advance our research enterprise; to create facilities where outstanding research, teaching, and learning can take place; to enhance the undergraduate experience and make a sense of community an integral part of our students‚ lives here; to live our founders‚ desire to create a University that is n and of city; to expand global educational experiences; to exercise sound financial stewardship so that our work and our dreams are increasingly sustainable; and to act in ways that demonstrate our respect for our neighbors.

Our challenges, I am certain, are also well known. NYU's annual budget, excluding the medical center, is $1.8 billion. Some 63 percent of that budget comes from tuition charges, a far larger percentage than is the case at many of our peer institutions. The value of NYU's endowment is some $2.0 billion; a large sum, but on a per capita basis a modest amount -- only $52,000/student -- compared to $252,000/student at the University of Pennsylvania, $280,000/student at Columbia, $1.6 million/student at Yale, and $1.9 million/student at Princeton. This reality figures constantly in our plans, and challenges our creativity and dedication to the common weal.

The Faculty

The defining element of our university is its faculty. Nothing is more important to the quality of the research conducted and our institution's contribution to human knowledge, and nothing is more important to the value of the education we impart to the students who choose to come to us.

We have a dazzling faculty: intellectually diverse and fearless in exploring new fields of study, devoted to our students, stewards of our commitment to academic excellence, and the single most persuasive argument we can marshal to draw in new generations of academic talent (faculty and students) and to retain the talent already here. The faculty‚s devotion to NYU determines in so many ways the success of NYU, now and in the future.

Five years ago, the Presidential Transition Reports emphasized the need to increase the size of the full-time faculty (and bring down the faculty-student ratio). We have done so. We recruit our faculty nationally and internationally, seeking outstanding scholars for our departments. In recent years, we have been as successful as any university in recruiting and retaining top faculty, and we have done so in an academic marketplace that is increasingly competitive. Nothing is more critical for our future than the continued success of these efforts, and continued dedication to growing the size of our faculty.

In listening to faculty in my Saturday sessions, in Senate meetings, and in casual conversations with colleagues ˆ I have begun to worry about an emerging problem. While we have increased dramatically our overall investment in faculty, and while NYU's faculty salaries at various levels compare very well with those of other research universities, in recent years the increase in the individual compensation of some meritorious faculty has not always kept pace with those of their peers.

To some extent this is not a new phenomenon. We all know that markets are imperfect, and academic markets are no better than markets generally. The academic market rarely rewards as generously some of the activities that enhance a college or university community, such as advising, administering undergraduate and graduate programs, serving on university, school, and departmental committees and various governing bodies, designing new courses and new programs of study in response to student demand, and building institutional bridges.

This situation has been exacerbated recently as job mobility in the academic world, like that in most other professions, has risen dramatically in recent years. This has led to a new premium being placed on those attributes of faculty that are the most visible in the marketplace, which are not the only qualities that enrich overall community at a college or university. Thus, these attributes are, in a relative sense, being less rewarded than ever before. As a result, there are growing signs in higher education nationwide that the tradition of university service ˆ like that of public and community service in our broader society - is in danger of being eroded by a narrower sense of professionalism.

NYU does not possess the resources to reverse this trend by itself and it is not clear that even the wealthiest institutions can do so. Yet, we also believe that to stand aside and do nothing would be a mistake for universities generally and especially for NYU. It would jeopardize an essential part of what we have achieved and what we will be able to achieve in the future.

In recognition of this phenomenon, for the 2007-08 academic year, in addition to a 3 percent merit pool for faculty, we are providing the deans with a special "recognition adjustment" pool of 2 percent for those full-time faculty who have made outstanding, sustained contributions to NYU and whose base salaries do not now adequately reflect these contributions. This one-time adjustment pool has been made possible this year by the budgetary discipline the University has applied and lived by these last few years, so we are seizing the opportunity to offer it at this time.

Administrative Pool and Bonus

The research and teaching and learning that happen on this campus would not be possible without the devoted efforts of NYU‚s administrators, approximately half of whom work in our 14 schools and colleges. These men and women have been great partners in the success of the University. From the admission of each year‚s freshman class to providing students residential, recreational, and health services to managing the projects that upgrade laboratories or other academic space to arranging for flu shots, they contribute to our sense of community and sustain the infrastructure that permits our mission of research and education to be advanced. These dedicated administrators are valued colleagues and members of this community, and their efforts deserve to be recognized.

I am pleased to announce that this year we have created a 3.5 percent merit-based pool for administrators and staff not covered by contract, and, in addition, we have created a 1 percent bonus pool to reward exceptional efforts on behalf of NYU. It is our hope that the bonus pool, which is new for NYU, will be the first step in an on-going bonus program designed to recognize truly exceptional contributions, although its size and goals for future years have not yet been determined.

Tuition and Financial Aid

We know how much an education at NYU means to our students. I teach undergraduates, including freshmen, and I know that for many students, attending NYU was the major goal of their high school years. We also are keenly aware of how much every additional dollar of tuition can burden a family of modest means, and that our high tuition challenges our goal of maintaining an economically diverse student body. Our budget deliberations occur with these realities very much at the forefront of our thoughts, and we strive to keep tuition increases as low as possible.

For Academic Year 2007-2008, total undergraduate charges (tuition, fees, room and board) will increase by 5.0 percent; tuition alone will increase by 5.5 percent. We will once again expand financial aid at a rate greater than tuition: financial aid will grow by 6.0 percent.

Conclusion

Before closing, permit me a few words of a personal nature. As most of you know, this has been a difficult year for me and my family. NYU has been our home for over 25 years, and in this tough period I have been touched by the warmth and support this community extended to us; I have never felt more a part of NYU, nor more certain of the choice I made to devote my professional life to it. My family and I are very grateful to you.

More generally, wherever I go on the University's behalf, I hear nothing but praise for what all of you are accomplishing each and every day. It is a pleasure to be your colleague, and a privilege to represent such an extraordinarily accomplished community of faculty, students, administrators, and staff. I wish you all good luck with the remainder of the school year and offer hearty congratulations to those who will be receiving degrees at this, our 175th Commencement.