After Six Years of Thinking About Money, Schmidt Quits

At Yale University, presidents serve terms averaging 14 years. Benno C. Schmidt Jr. was in office for only six.

Schmidt says he left because of the exciting opportunity he was offered as the head of the Edison Project, which would be the first national, for-profit system of private schools in the United States.

"I would not leave Yale were it not for the unique challenge of setting this vitally important and desperately needed change in motion," Schmidt says.

The 20th president of Yale will be in charge of developing the school system, which will provide education at costs equivalent to those of public schools. The project, a partnership of Whittle Communications, Time Warner Inc., Phillips Electronics, N.V. and Associated Newspapers Holding Limited, will change the way Americans are educated, Edison officials say.

Still, Schmidt's resignation, which he announced to the governing Yale Corporation the morning of commencement, came as a great surprise to nearly everyone. And while the move has inspired some to look ahead at the future of primary and secondary education, it has also driven many to look back at Schmidt's accomplishments as president of Yale.

His greatest accomplishments, as well as his greatest failings, centered on money.

Schmidt, age 50, launched a $1.5 billion fund drive in May, and has raised $600 million of that goal already. He is the most successful fundraiser in Yale history.

But most of Schmidt's toughest times in office have also had to do with money. He devoted most of his six years as president to painful efforts to guide Yale through trying economic times for higher education.

Frank M. Turner's five years as Yale provost overlapped with Schmidt's provost overlapped with Schmidt's tenure as president.

"They've been interesting years when Yale has begun to confront issues in higher education," Turner says.

High among those issues are financial constraints, Turner says.

"We must in the long run bring our academic programs to mesh with our income base," Turner says of the larger private institutions.

Turner, who will return to the history department at Yale on June 30, says he was especially concerned with the path Yale was taking toward "fiscal responsibility and academic distinction, as the institution responds to the changing financial climate affecting all American higher education."

Especially this past year, administrators recommended cutting faculty and trimming departments at the university to ease a fiscal crisis, according to Rose O. Stone, executive assistant to the dean of Yale College.

The faculty rejected these initial recommendations, and formed a second committee to reassess the proposed cuts.

The process of making ends meet at Yale has been painful, and widely publicized. But administrators there say they aren't alone in facing the tough times.

"Harvard has already begun to confront those issues," Turner says. "Harvard has recognized its problems, major difficulties generic to great research institutions."

Turner adds that institutions such as Harvard and Yale could not afford to keep spending the way they did in the past. "The institution that is able to address these problems forthrightly will by the latter part of this decade be genuinely competitive," he says.

The outgoing Yale provost makes a distinction between private institutions, which he believes are suffering from a need for change, and public institutions, which he says "face the problem of a decrease in tax revenues."

Both kinds of institutions have had to face labor relations difficulties. Negotiations with unions and with unions attempting to form occupied much of Schmidt's time, and organized labor also caused problems at the University of Massachusetts last year.

At Yale, Schmidt is not the first administrator to go this year. Dean of the College Donald Kagan and Provost Frank M. Turner are both stepping down at the end of June.

But wild fears of a power vacuum are probably unwarranted. Judith S. Rodin, dean of Yale's Graduate School of Arts and Sciences, will assume the post of provost and will be responsible for the ensuing stages of Yale's restructuring process. And the Yale Corporation is expected to appoint an acting president within the month.

"I think it's a very great university, and I think people will rally round," says Harvard President Neil L. Rudenstine.

Yale will survive Schmidt's absence, but questions will remain about his departure. No one besides Schmidt will know the real reason the administrator quit Yale. But in coming to the decision, the difficult economics of higher education in the 1990s likely crossed his mind.