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Press Release

Lowering college presidents’ salaries would do little to contain per-student costs: Cleveland Fed

The high cost of a college education has been a growing concern in the United States. What accounts for the high cost of college? One potential factor is employee salaries, including those of administrators and support staff. Federal Reserve Bank of Cleveland researchers Peter Hinrichs and Anne Chen examine the salaries of the presidents of 692 private, not-for-profit colleges in the US. They find that while most private college presidents are paid in the $100,000-$500,000 range, a fairly large number make between $500,000 and $1,000,000 and some are paid more.

“The median pay is $301,153, and the mean is $377,261, both of which are well into the 99th percentile of compensation for wage earners in the United States,” say the researchers, who also note that chief executives earned a median annual wage of $168,140 and a mean of $176,840 in 2012.

However, since the cost of covering these salaries can be spread across hundreds or thousands of tuition-paying students and other sources of revenue, Hinrichs and Chen say that lowering the salaries of college presidents would not do much to contain per-student costs. “However, to the extent that colleges employ other administrators or support staff and to the extent that salaries and compensation for such employees are high, reducing salaries or the number of employees more broadly might help contain college costs,” say the researchers.

Read Salaries of Private College Presidents

Federal Reserve Bank of Cleveland

The Federal Reserve Bank of Cleveland is one of 12 regional Reserve Banks that along with the Board of Governors in Washington DC comprise the Federal Reserve System. Part of the US central bank, the Cleveland Fed participates in the formulation of our nation’s monetary policy, supervises banking organizations, provides payment and other services to financial institutions and to the US Treasury, and performs many activities that support Federal Reserve operations System-wide. In addition, the Bank supports the well-being of communities across the Fourth Federal Reserve District through a wide array of research, outreach, and educational activities.

The Cleveland Fed, with branches in Cincinnati and Pittsburgh, serves an area that comprises Ohio, western Pennsylvania, eastern Kentucky, and the northern panhandle of West Virginia.

Media contact

Doug Campbell,, 513.455.4479