UC’s Gardner Extends Mortgage Program for Teachers, Executives

University of California President David Gardner has approved a $100-million extension of a program that offers low-interest mortgages for faculty members and executives, a decision that comes in the face of possible student fee increases and staff pay cuts.

Gardner approved the allocation June 19, the Oakland Tribune reported Wednesday.

The Mortgage Origination Program has dispersed $185 million in 873 loans since 1984, with the average loan being for $185,000, officials said. The funds come from a short-term investment pool under control of the UC president’s office that is valued at about $1 billion.

Mike Alva, spokesman for the nine-campus system, defended the loans despite criticism that the program is a bad idea in a tight budget year. “The most important thing to make clear about this program is that it was established primarily for faculty, and it’s important to have this program to not only recruit but retain faculty as well,” he said.

Alva said he does not believe news of the loan program adds to the university’s image problems. He said the loans actually generate money through interest charged, currently at 7.4%, and are not a drain on university finances.

UC officials said the program should not be perceived as another example of executive perks because 95% of the loans have gone to faculty members, who are nominated for the aid by their academic departments and campuses. The goal is to help the school attract and retain scholars, particularly those being wooed by out-of-state campuses in areas with low housing costs, he said.

But Christopher Cabaldon, chief analyst for the Assembly’s Higher Education System, said he isn’t sure legislators will see it favorably. UC came under fire recently when it was revealed that officials approved a $1-million retirement package for Gardner without fully informing the public.

“There’s just been a litany of these (disclosures) coming out. It’s hard to keep track of them,” he said.

Other recent embarrassments for the university included the disclosure that regents four years ago approved a deferred compensation package that will give the top 22 executives $2.9 million in raises beginning next January.

Stung by the criticism of those actions, regents in May voted to reform the way executive pay packages are crafted and to improve public disclosure of their decisions.