Back in March, I wrote a long piece about the effects of institutional debt on the current, destructive trends in U.S. Higher Education. In the same vein, there's a new article by Michelle Chen up at The Nation discussing a new report by the Debt and Society group called Borrowing Against the Future: The Hidden Costs of Financing U.S. Higher Education.
The report concerns the ways in which debt manifests itself throughout the system, and how these various forms are tied to one another—thus the titlte of Chen's piece "Colleges Are Buying Stuff They Can’t Afford and Making Students Pay For It." But Chen is right to highlight the institutional debt side of the equation, which has been overlooked despite the fact that it appears to be a structural driver for other forms of debt and institutional disinvestment in education, etc. She also emphasizes the degree to which one of the most pernicious consequenes of rising debt: the degree to which it makes even public institutions essentially subservient bond ratings agencies.
In the long run, however, these amenities often don’t pay off in terms of revenue for the schools, which grow increasingly beholden to bond investors. Those financiers, in turn, often favor not the highest-quality schools but rather “the safest prospects for investment.” Because of market pressures, the researchers warn, “bond markets can reward behaviors that generate greater revenue but are at odds with the goals of public higher education.” In other words, do you want your university’s future budget projections dictated by a Moody’s rating?
Or, as I've been arguing for awhile, rising institutional debt is what is making 'revenue at any cost' into a management imperative that trumps all others and essentially stripping institutional leaders of the freedom to make management decisions on the basis considerations like their institutions' primary missions, the best interests of their faculty, staff and students, etc. I urge folks to read the whole piece.
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