UC’s Gardner OKs Expansion of Mortgage Program

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.

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.

The action was disclosed in the Oakland Tribune on Wednesday.

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.

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.

But Christopher Cabaldon, chief analyst for the Assembly’s Higher Education System, said he is not sure legislators will see it favorably. The UC system 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,” he said.