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The Cost of a President


This is the one of the stories published in Ball Bearings Magazine Spring 2016 edition. You can read the entire coverage here.

Months after former Ball State President Paul Ferguson’s resignation, students still feel the financial impact.

Jacob Gretencord was working at his on-campus landscaping job when he heard the news. After just 18 months, President Paul Ferguson resigned. As a senior at Ball State University, he had now seen two university presidents leave during his time at the school. After hearing that Ferguson was resigning, Jacob initially asked himself: why? But then, he spent more time thinking about the cost. For students, taxpayers, and everyone who had a stake in the university, he realized the impact would be a financial one.

As days passed, Jacob noticed everyone around him seemed to express concern and frustration about the university keeping Ferguson’s reasons for resigning a secret. But for Jacob, that was second in line of importance. Sure, the decision seemed secretive and sly to many, but what Jacob wished more of his peers would understand was the financial impact this resignation brought. It wasn’t just about secrets, it was about the millions of dollars this would cost Ball State. The thousands of dollars students contribute to the university and the hundreds of thousands of dollars it would cost for Ferguson to resign. He decided to write an editorial to get students, faculty, and community members thinking about what the loss of this president would cost.

Ten years of university branding would be almost completely gone. And a president that cost $150,000 to hire would cost even more to let go.

 

The Cost of Hiring

In late October 2013, Jacob was a sophomore and President Jo Ann Gora announced her plan to retire. Just days later, Ball State sent out a request to search firms, looking for a private agency to search for the new president, to which nine firms responded. A little over two months later, the university signed a contract with Baker and Associates for $150,000. This executive search firm has worked with more than 100 other universities including Yale, Harvard, Duke, and Indiana University.

Students across the nation not just at Ball State are frustrated with the cost of the hiring process for administration.

From 1987 until 2011, universities and colleges in the U.S. added 517,636 administrators and professional employees, according to American Institutes for Research and the New England Center for Investigative Reporting. During this same time period, Ball State added 108 administrators.

Hiring this many employees comes at a price. Yet the impact of these employees on students remains small in some areas.

Since 2002, the number of students to graduate in six years or less in the U.S. only went up from 55 percent to 58 percent, according to the National Center for Education Statistics. Even though thousands more employees are being hired, only three percent more students are graduating.

At Ball State, the process to hire the president following President Gora lasted seven months. President Gora went through a similar process, but was in office for ten years. Seven months, 22 applicants, and five finalists later, Paul W. Ferguson was selected.

In 2014, former professor of government and provost at American University, Milton Greenberg, wrote about private search firms in the Chronicle of Higher Education, noting that there is no evidence that using a search firm improves the quality or longevity of administrative leaders.

However, search firms are private entities. This means that candidate names remain anonymous. Colleges are state entities, so they are required to make candidate names public.

 

The Cost of Branding

Jacob said he believes former President Gora got Ball State on the map of colleges worth attending in Indiana. Anecdotal evidence from people in other states suggests more people recognize Ball State by name than they did before Gora took office, adding to the value of a Ball State degree. Much of the branding Gora developed has been erased, leaving students like Jacob feeling that the financial impact President Ferguson left lasts beyond his resignation.

Ball State stopped using the “Education Redefined” tagline in April 2015, and in September, university officials decided not to replace the slogan. President Ferguson also changed the phrase “immersive learning” to “entrepreneurial learning.” There was and still is no tagline. In these brand refresh meetings, color and fonts were tweaked.

According to a report in The Business Review, universities must look to branding as a way to attract students and fund their mission, especially as the cost of tuition continues to rise and state funding decreases. Branding experts say that branding is more than logos and taglines. Reputation plays a big role.

Rob Zinkan, the associate vice president for marketing and branding at Indiana University, said many people underestimate the importance of branding at universities.

Rob said higher education has become a more and more competitive marketplace, making it critical for institutions to be able to articulate who they are.

“A strong brand enables an institution to better compete for outstanding students, talented faculty and staff, and philanthropic support from individuals, foundations, and corporations,” he said.

Rob agreed that a brand is much more than a logo or tagline. “A brand exists in the minds of students, alumni, faculty, staff, and others,” he said. “It represents their thoughts and feelings about an institution based on the experiences that they have had.”

While Ball State does have a logo, the thoughts and feelings many students, staff, and alumni have about the university have shifted after President Ferguson’s resignation.

At the mention of Ball State, many students instinctively finish the sentence with “Education Redefined.” This was Ball State’s tagline since 2006. Previous taglines included “Everything You Need” and “Cutting Edge Cool.” Now, there is no tagline. Without a tagline, there is little brand recognition.

Without a strong brand, Ball State may fail to continue to recruit quality students and faculty. It will also affect the support it gets from outside foundations and corporations.

 

The Cost of Resignation

From 2000 to 2010, salaries of presidents at public universities increased by 75 percent, according to the American Association of University Professors. Ferguson was paid a salary of more than $450,000. That made him the second highest paid president at an Indiana public university, after Michael McRobbie at Indiana University, who was making $533,120.

President Gora was the fifth-highest-paid public college president in the United States from 2011-2012, according to a report by the Chronicle of Higher Education. In total, she made $984,647 that year.

During President Ferguson’s two month leave, he was paid around $75,000. He will also be paid for unused vacation days. His severance payment of more than $450,000 will only be lowered if he finds another position within twelves months of his sabbatical leave. If President Ferguson does not get another position, he will be paid a total of around $560,000.

The cost doesn’t stop at Ferguson’s resignation. The expensive process of hiring a new president starts anew, and if the same process to hire Gora and Ferguson is used, the cost will be around $150,000 again. The Board of Trustees met on March 14 to discuss the process they would use to find the next president. Rick Hall said there will be public forums so students and faculty can voice what they want to see in the next president.

After the resignation, many students and staff demanded to know where their money is going in the form of editorials, sit-ins, and conversation. When Jacob wrote his editorial on the topic, he received a few negative comments from people looking at the issue from the federal and state level of funding. He said that although the university receives federal and state funding, it is important to look at the issue from a smaller perspective and consider the amount each student pays, and whether or not it is going directly toward the cost of Ferguson. Even if the state were to cover a lot of the cost, that only means tuition would increase.

“The pennies that are coming from each household and from the federal government if you individually divide that up cannot compare to [each student] dumping [thousands of dollars] into this university. It just doesn’t compare,” Jacob said.

As the presidential election grows closer, politicians are talking about the cost of education. But Jacob says he wishes more people would talk about affordability, not just making education free. He thinks people should be paying attention to not only what employees at the university are being paid but how many people are employed as well.

Dennis Tyler, who has been mayor of Muncie since January 1, 2012, has also seen both Gora and Ferguson resign, but says the impact on him as mayor remains to be seen. He said he has been assured by university leadership and the Board of Trustees that there aren’t going to be any hiccups in the process of hiring a new president.

He also said that students knowing where their tuition money goes is extremely important, noting that transparency really does work and hiding things only makes others create a negative opinion.

“I think it’s important for the Board of Trustees to understand that these are adults that are here to get an education,” Mayor Tyler said. “ And I always think it’s important that the students recognize that the administration has got a job to do.”

As a student, Jacob says he hopes the next president is someone committed. He said he believes almost anything that President Ferguson did can easily be erased, which is frustrating to him because of the financial repercussions.

“It’s our money,” Jacob said, stressing that he isn’t talking about federal or state tax dollars, but the individual student money. “Everybody sitting in the library at some point is going to wind up dumping [thousands of dollars] into the university.”

Acting President Terry King does not intend to remain president, and after six months when the search for his replacement starts, Ball State will have had three presidents in three years. Considering the financial burden this places on the university, Jacob hopes more students will take a closer look at the cost of Ball State’s president the hiring process, the resignation process, and the cost of a new president’s initiatives. These decisions will impact students, their experience at Ball State, the value of their degree, and the reputation of their university.

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