Six months ago or so, Ry Rivard and I (separately) wrote in IHE about the implications of increased control of campus decisions by creditors, and specifically financial institutions. Yesterday IHE followed with a piece on lenders trying to keep struggling colleges alive long enough to bleed out repayments and avoid the loan forgiveness that happens when a college shuts down.
I really don't think most of us who pay attention to shared governance in higher ed have connected the dots yet. We should.
The term "shared governance" implies an "us" among whom governance is shared. Historically, colleges have tended to define the "us" as faculty, staff, and administrators, with trustees hovering outside. The boundaries have long been contested -- adjuncts, for example, are often excluded either de jure or de facto -- but they've been understood mostly to encompass people who work on campus and who see each other on a regular basis.
But to the extent that colleges become increasingly beholden to lenders, lenders are starting to demand power. And their agendas are entirely different.
Colleges have had donors who have wielded (or tried to wield) power in the past; the recent blowup at UBC is simply the latest in a long line of those. But those tend to be isolated individuals with either ego-driven or ideological hobbyhorses; most of the time, they can be either diverted or rendered largely irrelevant. And with a few notable exceptions, most colleges that rely heavily on donor revenue have enough donors that no single donor can really dominate the discussion. When donors' agendas cancel each other out, the college can operate largely according to its own goals.
Creditors are different. Legally, they're entitled to repayment. ("entitled" is a relative term, but still...) They tend to be far fewer, meaning that their influence isn't diluted by numbers. And unlike both donors and employees, they're almost entirely indifferent to the long-term health, or even survival, of the college. As long as they get paid, they're happy. If that means firing half of the employees or selling off entire campuses, then so be it.
For-profit colleges probably elicit less notice within the rest of higher ed, because they've never really adopted shared governance in the same sense. And there's some sense that if you live by private investment capital, you die by private investment capital.
But it isn't only for-profits. As Rivard's February piece noted, creditors have started wielding decision-making authority at both private and public non-profits. Given the building boom of the last ten years, mostly financed by bonds, I wouldn't be surprised to see the power of creditors continue to grow, especially in regions with declining numbers of college students. Borrow to overbuild, watch enrollments fall, struggle to repay, and before long, you have to start using phrases like "in exchange for concessions from management..."
The trend is a much bigger deal than the current conversation assumes. It will make faculty-administration conflicts look quaint by comparison. If we care at all about preserving some level of academic autonomy, we need to connect the dots. If we don't, some very well-dressed people will be more than happy to connect them for us.