Agent of Academic Fortune

September 21, 2004

National U.'s chief turned school around, made it a top contender

By Bruce V. Bigelow, Staff Writer, San Diego Union-Tribune

When Jerry C. Lee was named president of San Diego's National University in 1989, the private institution was on the verge of imploding.

The nonprofit school for adult learning was nearly $10 million in debt, reeling from accreditation problems and riven by internal hostilities.

"I'm not sure they told him how bad it was when he first came out," Lee's wife, Joan, recalled recently. "It was really bad. He went unpaid for the first three months."

Today, the private institution for higher education generates revenue far beyond its $135 million annual operating budget.

The surplus cash enabled Lee to pay $20 million in cash a few years ago to buy the former Jenny Craig headquarters across from Torrey Pines Golf Course. Before that, National University built a $12 million education center in Kearny Mesa. Lee also paid $8 million in cash to buy an adjacent complex that once housed Allied Signal's corporate headquarters.

When a short-term loan is paid off in five years, Lee says, National University will be debt-free.

On top of this, National University has accumulated a $212 million reserve that Lee calls a quasi-endowment, which makes up most of the school's $217 million endowment.

Jerry C. Lee

Personal: Age 60. Born in Roanoke, Va. Married to the former Joan Marie Leo with a grown son, Zan. Resides in Fairbanks Ranch.

Education: Bachelor of arts degree in history and business from West Virginia Wesleyan College, 1963. Postgraduate studies in industrial relations and law. Master of arts degree in higher education administration from Virginia Polytechnic Institute, 1975. Doctorate in higher education administration from Virginia Polytechnic Institute, 1977.

Career: Chancellor of the National University System since 2001 and president of National University since 1989. President, Gallaudet University in Washington, D.C., 1984-88. Served previously in various positions at Gaullaudet, 1971-84. Vice president, Commercial Credit Industrial Corp. in suburban Washington, D.C., 1965-71. Management trainee at General Motors Corp., 1964-65.

The turnaround that Lee engineered at National University may rank as one of San Diego's greatest unsung business successes.

It also was far more than a financial comeback, said Gerald Czarnecki, who had an insider's view of the crisis as president of Honolulu Federal Bank.

The bank had provided a loan of $11 million at 17 percent interest to keep the university afloat before Lee was hired. Even so, Czarnecki said the biggest problem was that National University was at risk of losing its accreditation, which was crucial to its survival.

"What Dr. Lee brought to the table was a unique blend of knowledge and interest in academics, along with the ability to run an institution as a business," said Czarnecki, who is now on National's board of trustees.

Under Lee, National University became one of the first institutions to catch a wave in shifting demographics as more working adults sought higher-education degrees and specialized credentials.

The university was founded in 1971 by David Chigos, who saw a broader market in adult education as a director of employee training for General Dynamics in San Diego. Chigos frequently clashed with traditional educators, however, as he fought to win accreditation for a university that had no campus and offered classes in churches and strip malls.

Today, it ranks as the second-largest private university in the state, although it seems unlikely the University of Southern California can remain No. 1 as National's growth continues.

National still offers its classes at 27 sites throughout California, including 13 in San Diego County. It boasts a full-time enrollment of almost 18,000 students whose average age is 33. Lee said he personally selects the carpets and other furnishings for classrooms because he wants students to be impressed and feel proud.

"If you walked into one of our sites in Stockton or Fresno, you would know right away this is a Jerry building," Lee said.

With the appointment of John F. Cady as executive vice president for National University, Lee has shifted his energy to the National University System and its expansion in Hawaii and Nevada.

Most of those students work full-time while attending classes. That might have seemed unusual a generation ago. But the National Center for Education Statistics now shows that almost 79 percent of the nation's undergraduates work at least 30 hours per week while attending classes.

"The megatrend that National University started was in the transformation of helping adults get a degree while they're still working," said Tom Hinton of the California Council for Excellence. The council administers the annual California Awards for Performance Excellence, which National University has won twice.

"National University has the flexibility to shift direction and respond to market needs," Hinton said. "The more traditional universities have to form a committee and study it for three years and issue a report and then hope they can get funding to begin a program to serve a market that has already passed them by."

Apart from his business acumen and commitment to academics, the man who has guided National University for the past 15 years is known mostly for his affability and for his promotion of civility and values.

Most people say his emphasis on civility can be traced to his ancestry with the Lees of Virginia's Shenandoah Valley.

"His roots are unbelievably important to him, and the whole idea of honor and tradition," said Cheryl Kendrick, a longtime friend and university trustee.

Lee graduated from West Virginia Wesleyan College, where he was interested mostly in sports and business. His fascination with manufacturing led him after college to his first job at a General Motors plant in Baltimore, Md.

He later spent time in the Army and at a credit company before joining Gallaudet University, the national school for the deaf in Washington, D.C. While at Gallaudet, Lee also earned his own master's and doctorate in education degrees through a program the Virginia Polytechnic Institute offered at Washington Dulles International Airport.

The 16 years that Lee spent at Gallaudet, including his last four as president, also might explain his penchant for using his hands when he talks.

He sometimes signs as he delivers speeches. But even in a casual conversation about his accomplishments at National University, Lee's hands are moving like a football referee's.

"I think the Gallaudet piece was critical," said Mary Walshok, an associate vice chancellor for public programs at the University of California San Diego.

"Because he had worked with deaf and hearing-impaired students, he already understood that there were barriers that had to be overcome," Walshok said. "He knew that you have to focus on quality. That's the magic of Jerry Lee."

At National University, Walshok said the barriers that many students must overcome stem more from their age, and sometimes their socio-economic class.

National University's financial success has come largely from Lee's focus on providing high-quality educational programs at low cost, said Czarnecki, who compares the institution's business model to Wal-Mart's.

Unlike traditional colleges and universities, National University's overhead doesn't include dormitories, cafeterias and the many other services needed to support full-time residential students.

"Our business model eliminates a lot of the expense that we don't need for adult learners," Czarnecki said. At the same time, he acknowledged that National University officials still struggle to win respect from their peers at more traditional universities.

"But when you look at the accreditation process," he adds, "we've got nothing to be ashamed of here."