Tag: Margins

  • Rule 56: An Appeal for Justice from the Margins

    Rule 56: An Appeal for Justice from the Margins

    A Personal Victory, A Larger Signal

    Dr. Martin Luther King Jr. often reminded us that ‘the arc of the moral universe is long, but it bends toward justice.’ Yet arcs do not bend on their own; people must pull them. For Black women in higher education, that bending is not a metaphor but a lived, exhausting struggle. Justice is not just a concept but a long, arduous climb. We teach. We research. We lead. And sometimes, we must also stand against the very institutions that hired us.

    Dr. Leah P. Hollis By a unanimous 3-0 decision, I recently won a federal appeal in a complex unequal pay case, Hollis v. Morgan State University (No. 24-1476, 4th Cir. 2025), after close to a decade of retaliation and erasure from a prior employer. The Fourth Circuit ruled that the district court wrongly applied Title VII’s timing/exhaustion rules to the Title IX, § 1983 Equal Protection, and Maryland law claims and reversed that mistake.

    More importantly, the panel rejected the lower court’s cramped reliance on the McDonnell-Douglas burden-shifting framework. Since 1973, the Supreme Court’s McDonnell-Douglas case has forced discrimination plaintiffs through a rigid three-step burden-shifting test—one that too often shuts cases down before a jury can ever weigh the evidence.  However, the Fourth Circuit emphasized instead Rule 56’s simple question: could a reasonable jury find discrimination?

    As the court put it, the record contained “circumstantial evidence—including evidence of pretext—that would allow a jury to infer” bias. Judge Quattlebaum went further in a separate concurrence, praising the majority for skipping the rigid McDonnell Douglas steps and instead “pointing out the evidence that creates a genuine dispute of material fact.” He urged the Supreme Court to scrap McDonnell Douglas altogether, calling it “unnecessarily complex” and “more restrictive than Title VII itself.” This appeal and decision chips away at rigid judge-made hurdles that for decades have silenced plaintiffs before a jury could ever hear their stories.

    Why Procedure Matters in Civil Rights

    For discrimination litigants, this decision is more than technical. The old McDonnell-Douglas test forced plaintiffs to meet rigid “prima facie” boxes and disprove every employer excuse, often leading to dismissal at summary judgment. By centering Rule 56, the Fourth Circuit made clear that all the evidence, biased remarks, shifting justifications, policy deviations, comparators, and suspicious timing, belongs in one evidentiary bundle. In turn, this lowers the procedural bar, makes it harder for employers to paper over bias, and gives plaintiffs a fairer chance to be heard.

    My own scars tell the story. I was paid tens of thousands less than men doing the same job, called names behind closed doors, had dossiers suppressed, gaslighted for leadership errors, and was unjustly demoted to “at-will.” Like many women in my department, I scraped for resources while being told to stay quiet, told I was nothing. Silence, they said, was the price of survival. I refused. And when the Fourth Circuit reversed, it was more than a personal win—it was a civil rights intervention that affirmed the importance of truth, insisting that such truths be considered as a whole, the way we live them, not dissected into sterile sound bites.

    The 300,000 Who Couldn’t Stay

    Between April and June 2025 alone, nearly 300,000 Black women exited the U.S. labor force because they felt unsafe, not by choice but by structural neglect. As of September, unemployment for Black women hovers near 6 percent—twice that of their white counterparts. These departures are not accidents; they are ruptures in equity and dignity, the consequence of harassment, unequal pay, bullying, and institutional betrayal.

    Each exit letter echoes the same civil rights path: Harriet Tubman walking 4,500 miles to free enslaved people, Dr. Martin Luther King Jr. jailed 29 times, Colin Kaepernick forfeiting his NFL career. Several times on my journey, I was told, “you’re ruining your life” or “ be grateful to have a job.”  But what if Harriet turned back? What if Martin stopped dreaming? What if Colin stood up and stayed quiet? Their resistance was costly; so too is the exodus of Black women from today’s workplaces. Justice does not bloom in surrender.

    Intersectional Betrayal in the Academy

    In higher education, Black women are showcased on websites and brochures yet undermined in daily practice. Research confirms we are disproportionately bullied, mobbed, and harassed. We remain the only group that required the Crown Act to affirm that our natural hair is lawful. Too often, the hostility comes not only from men but also from women—including women of color—who proclaim solidarity in public but dismantle it in private. These wounds, born of silence and duplicity, are institutional betrayals as old as the academy itself. That is why social justice must be more than a logo or slogan. When institutions use taglines as a façade, people make life-changing decisions based on those promises—only to discover too late that the commitments were hollow, leaving their careers and families in jeopardy. Zora Neale Hurston said it plainly: “The Black woman is the mule of the world.” That weight remains. And yet, even when battered, we persist. Because if we do not disrupt silence, the record calcifies into precedent.

    Truth Telling as a Contact Sport

    Writing in my personal capacity and researcher in this area, I still serve as a professor, still honor my students, and still respect the office I hold. This appeal shows that justice doesn’t clock out, the fight for equality yawns on despite the fatigue of its warriors; yet we walk on, dream on of a day when  one should not have to fight for the dignity they were born with. Whistleblowers and resisters are often isolated, mischaracterized, and told to take the “high road.” Yet if we as educators do not teach justice by living it, the next generation inherits our silence as permission.

    I prevailed because the record mattered, and because the Georgetown Civil Rights and  Appellate Courts Immersion Clinic believed in my case and had the determination to fight for justice. What we do not correct becomes precedent. The appellate court saw what those in power at my prior institution chose to ignore—the pretext, the contradictions, the lies. With support from family, counsel, and ancestors, I stood. And now, with Hollis v. Morgan State joining Ames v. Ohio in questioning the stranglehold of McDonnell-Douglas, the judiciary too has taken a step toward clearing the road.

    The Unending Path Forward

    This is not the end. My case now returns to the district court where it will either go to trial or may yet be resolved through mediation. My forthcoming book, Disrupt the Not Telling, by Oxford University Press, will continue excavating the silences and erasures imposed on Black women scholars. As Audre Lorde reminds us: “Your silence will not protect you.” Some of us cannot speak loudly, constrained by family, caregiving, or survival—but presence, prayer, and quiet resistance are also forms of disruption.

    The fight for equity is cyclical, echoing Reconstruction, the Red Summer of 1920s, and the civil rights movement 1960s. Each time, the nation tries to turn us back. Yet like Harriet, Martin, and Colin, those of us who set out on the trail of justice cannot turn back.

    The exodus of 300,000 Black women from the workforce is not just a labor statistic—it is the latest reminder that civil rights remain unfinished, and that silence cannot be its price.

    _______

    Dr. Leah P. Hollis is Associate Dean and Professor at Penn State University. 

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  • Fitch: Private nonprofits see lowest operating margins in a decade

    Fitch: Private nonprofits see lowest operating margins in a decade

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    Dive Brief: 

    • Operating margins at private nonprofit colleges have plummeted to their lowest levels in over a decade due to growing financial challenges, especially for tuition-dependent institutions, according to a new Fitch Ratings analysis. 
    • The median adjusted operating margin, which includes endowment funds for operations, fell to -2.0% in fiscal 2024 for the 56 private nonprofit colleges in Fitch’s portfolio. Despite the median margin sitting squarely in negative territory, the highest-rated colleges still enjoyed positive operating margins. 
    • Fitch analysts expect the credit environment for the U.S. higher education sector to deteriorate in 2025 year over year, with federal policy shifts likely to increase pressure on operations and revenue. 

    Dive Insight: 

    The Fitch analysis reflects the challenging financial environment that private nonprofit colleges are navigating. The litany of problems includes continued inflation, threats to federal funding and an expected decline in the number of high school graduates starting next year. 

    Amid these challenges, adjusted operating margins shrank for all types of colleges. 

    That includes the three private nonprofits with AAA ratings from Fitch — the highest one given by the credit rating agency, signaling an institution at very low risk of default. Their median adjusted operating margins declined to 8.4% in fiscal 2024. While “still strong,” that’s down from double-digit highs seen during the coronavirus pandemic, according to Fitch. 

    Colleges with AA ratings showed a median adjusted operating margin of 2.3%, while those with ratings below AA had negative margins, a continuation of a yearslong trend. 

    Lower-rated colleges tend to rely on tuition as their primary revenue source, while higher-rated colleges are more likely to get large contributions from their healthcare operations or investment returns, according to analysts. 

    “This growing credit differentiation within the sector highlights mounting financial challenges for less selective, tuition-dependent institutions,” they wrote. 

    Despite numerous challenges, private nonprofits brought in more tuition and fee revenue in fiscal 2024 than the year before. On average, AA-rated colleges and below saw this revenue stream increase between 1.2 and 3.8%, while institutions with AAA ratings saw a 0.1% decline. 

    However, this year has brought even more financial turbulence. 

    “Operating margins and financial flexibility will remain narrow in 2025, as further increases in tuition, if any, will likely be offset by losses in other revenue streams and are unlikely to be sufficient to preserve margins,” analysts wrote. 

    Financial challenges are not new to much of the higher education sector. But many well-known private research universities are also starting to feel the pressure due to massive drops in federal research funding under the second Trump administration. 

    The National Science Foundation, for instance, approved only $989 million in new grant funding from Jan. 1 through May 21, according to a recent analysis from The New York Times. That’s a massive 51% decline from the 10-year average over the same time period. 

    On top of the slowdown in new grant approvals, NSF has so far terminated some 1,600 active grants, totaling $1.5 billion in research funding. 

    Major research universities across the nation — from the University of Southern California to Brown University, in Rhode Island — have signaled they will have to turn to layoffs to grapple with these declines. 

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  • University Finance and Managing the Margins of Error

    University Finance and Managing the Margins of Error

    • By Huw Morris, Honorary Professor of Tertiary Education at the Institute of Education, UCL’s Faculty of Education and Society, and Richard Watermeyer, Professor of Education at the School of Education, University of Bristol.
    • Over the weekend, HEPI blogged on the possible consequences for universities and students of a new UK / EU agreement – see here.

    The financial challenges currently facing UK universities, as revealed by last week’s report from the Office for Students, have focused attention among university leaders, government policy makers and media commentators, as well as higher education staff and students, on four things:

    What has received less attention are variations between universities in the number of students recruited in general and international students in particular, as influenced by perceptions of institutional quality, and the wider incomes and costs of this provision. It is these things which impact on institutional margins, their surpluses and losses, and determine their longer-term financial sustainability. Most importantly, there are very big differences between universities when assessed by these measures. With a HM Treasury Spending Review and a Department for Education Higher Education White Paper expected imminently, it is these wider institutional economics and financial management issues which are the focus of this article.

    Higher Education Statistics (HESA) data reveals a very mixed pattern of financial activity and performance among the 302 higher education institutions that filed accounts for 2022/23, the last year for which full records are available. Income from all sources, including tuition fees, research funds, government grants, endowments and other miscellaneous sources for these organisations, has ranged from £84,000 at the Caspian School of Academics to £2.5 billion at the University of Cambridge. Despite such wide variance, 88 institutions are responsible for over 80% of the income; within this group, the 24 members of the UK’s Russell Group of research-intensive universities account for the lion’s share (47.3% despite attracting only 25.8% of total student numbers). This mismatch between volume and income is explained by the financial margins of course provision.

    The costs universities incur are similar. Salaries for academic, professional services and support staff vary, but national pay bargaining and pension arrangements mean that the differences are not great. Meanwhile, the costs of campus buildings per square metre and the unit costs of equipment are similar. So, while there are significant differences in the number of staff, size of university estate and scale of expenditure on equipment, most institutional leaders are alert to the key metrics that help to marshal these aggregate costs. The big difference in costs is in supporting research activity, with the Transparent Approach to Costing (TRAC) data revealing £4.6 billion a year of unfunded activity. This is a measure of the research activity undertaken by university academic staff, which is not supported by research funds and appears to be undertaken within hours nominally allocated to other things, such as teaching and administration. It is this and related figures that the Minister of State for Skills is referring to when she challenges universities to be more transparent with the information they provide on their use of public money.

    At a UK level, information on this activity is not hard to find. Table C.1.2. of the OECD’s Education at a Glance reveals that the UK has a higher level of expenditure on research and development per HE student than the US, despite very much lower levels of Gross Domestic Product per capita. The proportion of unfunded research activity varies considerably between institutions and is lowest among Russell Group universities and highest among institutions that are seeking to increase activity from a lower base.

    What is understood by most university leaders, but less commonly by policymakers and the media, is the vital role of operating margins in determining whether a university is financially sustainable. The role of margins is best illustrated by comparing two fictional universities.

    University A is a large research-led institution that offers a wide range of courses to home and overseas students. In 2021/22, in keeping with the average Russell Group university, one third of its students were recruited from overseas and its position in the Chinese Academic World Ranking of Universities (AWRU) – and to a lesser extent the QS and THE World rankings – enabled the university to charge fees of £80,000 for its MBA programme, £60,000 per year for its Medicine degree to overseas students, and £20,000 per year for its doctoral programme. These high fees and the large volume of students applying for a limited number of places generated sufficient margins (gross surplus) to subsidise the costs of the less remunerative courses for home students in subject disciplines such as English Literature where the full-time undergraduate degree fee is £9,535 per year. This was important because the cost of these courses with the higher charging courses for international students was typically twice the £9,535 per full-time student income earned from UK students, not least because of the costs of the providing time and resources for staff research in these disciplines where there was no grant income to support this activity. These funds also provided the financial resources to underpin some of the research work of academic staff and their professional services colleagues.

    The picture is less rosy at University B, a large former polytechnic, with a much lower ranking in international league tables and which is consequently less competitive in attracting Chinese international students. Instead, University B is dependent on recruiting first-generation international students; students typically from less wealthy families, unable to afford the premium fees charged at University A. At University B, the fee for an MBA is £20,000, although this is often discounted and then diluted by recruitment agency fees. The high sticker price and subsequent use of discounting is used because the advertised fee is a marker of quality and the discount fee is used to draw the student in by adjusting the amount to what they can afford and flattering them into believing the university wants them for their talents. University B does not have a Medical school and so a comparator fee is not available, but the fee for an international student on a science and technology degree is £18,000. When diluted by agents’ fees and discounted prices, this fee may drop below the costs of provision. Finally, the PhD course fees of £5,000 per year only cover half the running costs in order to attract students who will help to boost external assessments of the research undertaken by this university.

    Figure 1. Course prices and costs compared

    The net effect of the combination of different course prices and costs at University A and University B is that the former is making significant gross surpluses and the latter is making significant gross losses. It is important to note that this pattern of surpluses and losses is also evident in the financial performance of other university services, including, for instance, franchise courses in the UK and overseas, student accommodation, conference facilities, catering and other services. This is because the prices charged by institutions with less auspicious reputations and league table positions are lower than those of their competitors, but the costs are similar.

    There are also issues associated with capital requirements (the need for funding to pay for the renewal and replacement of buildings and other assets) and risk exposure (the extent to which future activity is certain and predictable). The number of young British people wanting to study at UK universities has historically been predictable, and while there has been competition between universities, this competition has rarely led to institutional failure. Institutions may have got smaller, closed courses, and on occasion merged, but they have not been forced into insolvency. Such relative assurance may wane in future as risks rise and the need to renew and replace buildings and other capital assets grows.

    We might, for instance, reasonably anticipate increased risk associated with international student recruitment where geopolitical and concomitant financial volatility impact the inward migration of students into UK universities. While we have already witnessed the inhibitory effects of visa rule changes, we can reasonably expect exchange rate fluctuations and changes to the proclivity of overseas governments to fund students studying in the UK to further increase these risks. In the medium term, a requirement to maintain a high ranking in international university league tables, as corresponding justification for high fee charges, compels sizable financial investment in buildings, equipment, and staff to maintain the research performance.

    Assessment of university performance in the AWRU, QS and THE World University rankings is dependent on research performance measured by citations and, in the case of the QS and THE specifically, the reputation of the institution in the eyes of senior leaders in other universities and the opinions of employers. These ratings are influenced by past rankings and impressions of campus quality. In the long term, maintaining these league table positions is likely to become more demanding for three reasons.

    • First, the drive by governments in many other countries to create their own ‘world-class’ universities leads to an increase in the costs of competing and a consequent decline in margins.
    • Second, the growing prominence of philanthropy and alumni giving looks set to make up an increasing proportion of the funding of highly ranked institutions, though this is less of a feature in UK higher education. In the USA, for example, higher education endowment is around $800 billion and is growing by 150% per year. Endowments now account for 50% of the income of Harvard University and a very sizeable proportion of the income of other Ivy League and American research-led institutions. Of course, whether this remains the case in the face of challenges from President Trump’s new administration remains to be seen.
    • Finally, in the longer term (10 to 30 years), it seems reasonable to predict that developing countries in the Global South will develop their own higher education provision, and the number of young people travelling overseas to study will reduce, as is being encouraged by the China-Africa 100 University plan and similar initiatives.  

    The lessons of this analysis for institutional leaders and their governing bodies and councils are that they should broaden their focus to consider the operating margins on all their activities, (that is, teaching, research, accommodation, conferences, room and equipment hire) as well as the investment requirements to maintain this performance in the medium to long term. Without engaging in these types of analysis, the risks of cashflow problems will grow and the longer-term sustainability of these institutions will be jeopardised.

    The lesson for governments is that they should look at the real costs of different courses and focus the funding that is made available through student loans and grants on those activities which will provide the greatest sustainable private and public benefit in the long run. This means aligning the funding with future needs, as defined by assessments in the NHS Workforce plan and the analyses by Skills England, Local Skills Improvement Plans and the UK shortage occupation list and, where this is not the case, subject areas where it seems probable that the student loans will be repaid. If institutions wish to fund programmes that fall outside these lists, then they can subsidise these courses with surpluses made from other activities. The issues outlined above also mean that the pressures facing institutions are different, and it is probably beyond the capability of the Department for Education and the Office for Students to oversee the transitions that will be needed in many of the 452 higher education institutions in the UK. To handle these changes will require additional leadership, management and governance resource and ideally greater local and regional stewardship for most institutions.

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