Lautenberg Calls for Investigation Into Rutgers-Rowan Merger

Colleen O'Dea | March 27, 2012 | Education
U.S. senator 'greatly concerned' about financial impact of restructuring on students

U.S. Sen. Frank Lautenberg on Monday sent a letter to the federal education secretary asking him to review the proposed merger of Rutgers’ Camden campus with Rowan University because it could wind up costing students more.

The letter prompted outrage from Gov. Chris Christie and John Sheridan Jr., president and chief executive officer of the Cooper Health System, both of whom support the reorganization plan.

The UMDNJ Advisory Committee created by Christie recommended two months ago folding Rutgers-Camden into Rowan. It also urged shrinking the University of Medicine and Dentistry of New Jersey and giving three of its central Jersey units to Rutgers-New Brunswick.

In his letter to Arne Duncan, Lautenberg said he is seeking a federal review on behalf of thousands of students who get federal financial aid, including grants and loans, and he is “greatly concerned” about the financial impact of the merger on students. Using the USDOE’s own net price calculator, Lautenberg said Rowan costs between $5,000 and $8,000 more a year than Rutgers-Camden.

“Higher ‘net price’ for students may lead to increased rates of student borrowing through federal student loan programs and larger expenditures in student financial aid overall,” he wrote. “Furthermore, students who cannot afford the higher price tag of Rowan may have to reconsider their education choices.”

Rutgers-Camden Chancellor Wendell Pritchitt said he fears the Rowan takeover could hurt Camden, with students given the choice deciding to attend classes in Glassboro, where Rowan is located.

Joe Cardona, Rowan’s associate vice president for university relations, did not respond to a request for comment on Monday. However, he previously stated that the net price data is flawed because it includes state, federal, and institutional support to students, which varies widely between the two schools because they have different student profiles. He said Rowan and Rutgers-Camden charge comparable tuition.

According to their websites, the typical tuition and fees are currently $12,755 at Rutgers and $12,018 at Rowan for New Jersey undergraduates.
This was Lautenberg’s second foray into the controversial proposal: Earlier this month he wrote a letter to Christie expressing his concern over the net price discrepancy and asking questions about the costs of implementing the change.

In his letter to Duncan, which he copied to both U.S. Attorney General Eric Holder and U.S. Attorney for New Jersey, Lautenberg said Christie has not provided information about how the merger will affect students’ costs, and he questioned the motives behind it.

“Suspicions have been raised that this decision has been crafted to benefit powerful political interests without regard for the impact on students, the academic institutions themselves and the community,” wrote Lautenberg, referring to speculation that South Jersey political powerhouse George Norcross is behind the plan.

“One especially disturbing allegation is that this merger is being pushed forward to salvage Rowan University’s partnership with Cooper Health System to create a medical school at Rowan. Concerns have been raised that this initiative may be at risk due to Cooper’s poor creditworthiness, which an acquisition of Rutgers-Camden’s assets could help alleviate. Of great concern is that a credit agency has suggested that increases in tuition revenue would be needed to service this debt.”

Sheridan said Lautenberg’s letter is off base. Cooper Medical School is financially solvent thanks to a combination of funds from the state, Rowan and Cooper Health System, and its new medical school building will be ready for classes in August, on time and under budget.

“The outrageous letter by Senator Lautenberg can only be described as uninformed and bizarre,” Sheridan said. “The reasons for the proposed merger of Rutgers-Camden and Rowan have nothing to do with the funding of the medical school but have everything to do with correcting an imbalance that exists in higher education in South Jersey and creating adequate undergraduate and graduate educational opportunities.”

Supporters say a larger Rowan University with a medical school and a law school would become a major research university, able to compete for federal grants. It would help South Jersey get a greater share of higher education dollars from the state. And it would keep more students from going out of state to college.

“The intention of the merger plan is to create medical and research centers of excellence in north, central and south Jersey that can compete with, even eclipse, other education institutions competing for research dollars, prestige, top educators, and top students,” said Christie spokesman Michael Drewniak. “Senator Lautenberg has apparently chosen not to be a positive participant in strengthening New Jersey’s higher education institutions and instead is engaging in over-the-top correspondence like this full of unsupported innuendo and political vindictiveness.”

Opponents argue that the two schools are very different types of institutions — Rutgers a research university and Rowan a teaching school. A merger would prevent South Jersey residents from attending Rutgers locally. It would leave the state university without a presence in the southern half of the state. And it would leave South Jersey residents with a choice of only two public colleges to attend.

Christie vowed as recently as last week that the merger is going to happen, but it is still unclear whether he will seek to implement it through an executive order or legislation. Either way, Rutgers officials have said that the university’s boards of governors and trustees would have to approve any changes — either accepting Robert Wood Johnson Medical School or giving the Camden campus to Rowan.

Rutgers President Richard McCormick initially stated that the university was eager to take RWJ, the School of Public Health, and the Cancer Institute of New Jersey from UMDNJ but did not want to cede the Camden schools to Rowan. At a meeting last week, several Rutgers trustees reportedly were less positive about taking the three UMDNJ units because of uncertainties over how much of that university’s debt Rutgers would have to assume.

The UMDNJ Advisory Committee report made the recommendations but did not deal with any of the financial issues, and no additional details on the costs of any aspects of the plan have been released, except for Rutgers’ estimate that it would cost $40 million to transfer all of the UMDNJ employees from the three units to the Rutgers payroll.

Christie has said he wants the merger accomplished by July 1. Pritchitt and Rutgers students and staff are vigorously fighting that part of the proposal and a majority of New Jerseyans – and South Jersey residents — oppose it.