There have always been plenty of outsiders willing to tell universities and colleges how they should run themselves. In recent years, some of this unsolicited advice has been based on legitimate grounds - rising debt levels among students, lower-than-expected graduation rates, questionable practices (especially in the for-profit sector), and scandals of various sorts have all contributed to the notion that something is wrong in higher education. And there is no shortage of suggested diagnoses for what that is.
Unfortunately, into that field have wandered various folks who don't really know what they're talking about, and whose advice isn't worth much. Today's Chronicle brings a story of just such an example: a report put out by two "financial consulting" firms about how a great many universities are on a "financially unsustainable" path.
As a side note - to make things interesting, one of these "consulting" firms is Mitt Romney's former haunt, Bain & Company. That doesn't really have any bearing on this particular report, but it's likely to heighten awareness of the story - and skew how people tend to see it. My dislike of the report has nothing to do with Romney, and everything to do with their approach itself.
The fundamental problem with the "analysis" done by these firms is their timeframe. They look at some 1700 public and private institutions specifically in the arena from 2005 to 2010 - in which fall some of the wildest fluctuations in endowment value, enrollment, state support, and revenue in living memory. Only a great idiot - or somebody with an axe to grind - would take this rather narrow time-frame of years (five years is the blink of an eye to a university) and attempt to make a trend-line argument about an "unsustainable path".
Then there is the broader global reality about outcomes and who has credibility to give advice to whom. University bankruptcies and closures are stunningly rare, even in recent years, and most universities have been around for decades - many for a century or more. What's the average lifespan of companies that Bain "advises"? Historically speaking, universities have been the model of "financial sustainability", as measured by how long they actually stick around as solvent institutions. Find me another industry with this many players (1700+), most of which last for decades or centuries.
Finally, they toss into their argument the old bugaboo about rising administrative costs. Yes, admin costs at universities have gone up. Bain blames boards and presidents, who need to "put their foot down" on rising administrative costs. As I've written before (here, here, and here), the forces that drive increasing administrative costs are complex and varied - and many of them are outside the control of universities. To argue that all a president or board need do is "put their foot down" is to display stunning ignorance about the industry - the kind of ignorance that should disqualify your "advice" from being seriously considered.
Higher education does indeed need some serious reform. There are significant problems, and past success (as the financial sector likes to say) may not indicate future results. But "advice" from consulting firms with questionable track records, and little discernible knowledge about how universities really work, is not going to help. Here's hoping that this "report" goes on the shelf quickly, there to be ignored in favor of serious conversation.