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Friday, April 03, 2015

Final Thoughts on Fiduciary Duty in Higher Education

As my month of guest blogging comes to an end (how did it get to be April already?), I wanted to close with a final thought about fiduciary duty in higher education. Financial pressures bring these issues to the fore. At Appalachian School of Law, we see board members accused of having “breached the fiduciary duty to the law school, to the students and to the public” by refusing to consider a merger or move out of Grundy. At Sweet Briar, a county attorney in Virginia has filed suit to stop closure of the school, alleging that the board should have considered other options including “a new fund-raising campaign, admitting more international students, stepped-up recruiting at private girls' schools with equine programs (a strength of the college), restructuring the curriculum, or stepped-up recruiting of wealthy students.”

Changes in the educational marketplace mean that universities will continue to come under tremendous financial pressure.  Cost increases and changes in the way that universities are paid for similarly mean than students are asked to bear an ever-growing share of the educational costs. In some cases, the cost of debt-financing an education may well come close to—or even exceed—the financial premium gained from degree attainment.

In this environment, I think it is important that institutions—including board members, administrators, and faculty members—begin talking early and often about what obligations they have to serve current students, future students, and the public more broadly. Waiting until an institution is in danger of closing is really too late to decide what the institution’s goals, mission, and obligations are. By starting discussions much earlier, schools will be much more likely to be able to acclimate to a rapidly changing landscape. 

Posted by Cassandra Burke Robertson on April 3, 2015 at 02:38 PM in Culture, Life of Law Schools | Permalink

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