New York University said on Wednesday that it would no longer lend money to top employees to buy vacation homes and would grant faculty members more participation in school decisions, part of a slate of changes designed to lower tensions between the university's leaders and its rank-and-file professors. The university also announced that its president, John Sexton, who has been the subject of five no-confidence votes by the faculty this year, would step down once his term ends in 2016.
The changes, which emerged from a series of meetings that a group of trustees held with faculty and staff members, administrators and students, are the first concessions by the trustees since the faculty rebellion began in March with a no-confidence vote in the College of Arts and Science, N.Y.U.'s largest school. Until now, N.Y.U.'s board had defended its loans for second homes and insisted that they were, like loans for primary residences, an indispensable tool for retaining top talent.
"This is a matter of extreme importance to us," Martin Lipton, the chairman of the board of trustees, said. "No university can prosper if there's disruption, if there's unhappiness in the family."
N.Y.U.'s mortgages became a point of contention as details emerged about their sizes and terms, beginning with loans of several hundred thousand dollars that were forgiven for Jacob Lew, a former executive vice president who became President Obama's treasury secretary this year. The university also extended multimillion-dollar loans for luxury properties to some administrators and star professors, in some cases at rates nearing zero percent or partially forgiven. And in a practice that experts called unheard-of in higher education, some of those loans were for homes in resort destinations like the Hamptons, or in the case of Mr. Sexton himself, Fire Island.
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But according to a resolution released Wednesday and being adopted by the full board of trustees, all subsequent loans will "be used only for primary residences."
A university spokesman said Mr. Sexton, 70, was not immediately available for comment late Wednesday. He has become the personification of the unrest at the school, revered by some as a visionary who raised N.Y.U.'s stature while leading the way in opening foreign campuses, and reviled by others who argued that his desire for expansion, in Greenwich Village and around the world, would saddle the university with debt and weaken its academic mission.
In addition to the Fire Island loan, the university provides Mr. Sexton with an apartment in Washington Square and a salary of nearly $1.5 million and will pay him a length-of-service bonus of $2.5 million in 2015. He became president in 2001 after serving as dean of N.Y.U.'s law school.
"The board is extremely satisfied with the direction and leadership of the university," the resolution said, then revealed that Mr. Sexton "has made clear that he will not serve beyond" the end of this, his second term.
The trustees said that the faculty will play a role in the search for his successor. They also announced the formation of a committee on which representatives from the board, from the faculty, from the administration and from the student body would serve jointly, to facilitate communication.
Mr. Lipton said some professors "will not be satisfied by any changes." He added: "They want a completely different structure of the university."
But based on positive responses he has already received from some faculty leaders, he said, he was optimistic that the new policies could help restore N.Y.U.'s "very delicate" balance.
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Jeff Goodwin, a sociology professor who addressed members of the board with a presentation about campus discontent, called the new policies "a victory for faculty who have been pressing the administration." But he said the new policies on faculty involvement were vague and did not go as far as they could.
Marie E. Monaco, a former vice chairwoman of the faculty senators council who has been a vocal opponent of the administration, took a harsher view. The joint committee, she said, places faculty members on a par with other "stakeholders," including students. But faculty members deserve a special standing in how a university is run, she said. "We are not asking just to have our opinions considered in the same way they're going to consider the ideas of the students," she said. "We are not simply one of the stakeholders."
In addition to a distaste for the recent vitriol, some of which has been directed at him personally, Mr. Lipton also has a practical reason to seek harmony: faculty morale can sometimes influence a university's credit rating, and a drop in rating would make it more expensive for N.Y.U. to borrow for its planned 2 million-square-foot expansion in Greenwich Village. Though N.Y.U.'s credit rating has not suffered, he said, "I think if faculty unrest were to continue unabated it could have an effect."