As if the career outlook for scientists and scholars hoping for faculty positions wasn't already grim enough: Financial experts warn that a substantial and growing number of the institutions that do the hiring are themselves increasingly shaky.
" 'A growing percentage of our colleges and universities are in real financial trouble,' the financial consulting firm Bain & Company concluded in a report—one-third of them, to be exact, according to Bain, which found that these institutions' operating costs are rising faster than revenues and investment returns can cover them." The quote is from the educational publication The Hechinger Report, 3 September.
"Approximately one-third of colleges and universities are spending more than they can afford," according to the Web site thesustainableuniversity.com, which hosts the 2012 Bain report. The report concludes that a combination of factors threatens the long-term survival of a number of institutions. In addition to cuts in state funding and federal research grants, applications and enrollments at many institutions are falling. "Private colleges and universities are particularly vulnerable. The bond-rating company Moody's reports that more than 40 percent of them are experiencing enrollment declines," writes Jon Marcus in The Hechinger Report.
"More than 150 colleges and universities got failing scores on an annual test of their financial stability by the U.S. Department of Education in results, released this year, that date from 2011," The Hechinger Report article adds. "Several have closed, including Saint Paul's College in Virginia, Lon Morris College in Texas, Atlantic Union College in Massachusetts, Chester College in New Hampshire, and for-profit Chancellor University in Ohio. A few are in bankruptcy."
The potential risk is greatest, the Bain report states, to schools that are "not a top-ranked institution," whose "financial statements don't look as good as they used to," and that "have had to take drastic measures" to improve the bottom line, such as raising tuition, reducing standards of admission, and cutting aid to students and numbers of faculty.
Financial precariousness at academic institutions may be bad news for aspiring professors; colleges and universities that are in financial trouble don't go on hiring sprees. On the other hand, this could just be another example of the rich getting richer, with better-resourced institutions winning more support from government and private sources; Harvard University just announced a $6.5 billion fundraising campaign.
Since, as Marcus notes, "some U.S. universities and colleges may be going the way of the music and journalism industries," scientists at early stages of their careers may wish to consider whether they ought to tie their futures to institutions that, failing drastic reform in the near future, will in many cases continue "facing skeptical customers, declining enrollment, an antiquated financial model that is hemorrhaging money, and new kinds of low-cost competition." An interactive graphic provided by Bain gives information on the financial status of categories of institutions—"elite liberal arts," "public research," "tuition-dependent private," and so on—as well as on specific colleges and universities.