Should a financial institution have direct say into what is taught at a university? For that matter, should any company have a role in what students are (or are not) taught?
That’s become the teachable issue at the University of Delaware, where JPMorganChase & Co (JPMorgan Chase) has proposed a deal to provide more funding to the university’s graduate finance program. In return for the investment firm’s $17 million funding, says The Atlantic magazine, JPMorgan Chase could get a direct pipeline into how UD’s graduate program in financial services analytics would be run: what content would be taught, which faculty would supervise the program, how Ph.D. dissertations would be handled. In short, the finance company would have a hand in the final crafting – and approval – of newly minted business graduates.
So what’s wrong with that?
To be fair, the U.S. upper-level education system blends corporate sponsorship into its structure all the time. Companies fund athletic programs, science fellowships and funding, and provide major endowments that in turn, ensure that there are enough job candidates in their fields. The university gets to keep its signature program, students can graduate in the field and specialty of their choice, and the donor gets good publicity for its investment. A win-win-win scenario.
JPMorgan Chase’s proposal to fund – and supervise – a specific graduate program however, is a little different. As Law and Political Science Professor Sheldon Pollack pointed out, “money carries weight” in universities, and all the more so when the donor is part of the committee that ultimately decides the success of its product.
Impartiality is a significant issue in academics. Universities need to show that their programs are balanced and fair. Faculty members want to be able to show that they support an impartial, independent and well-vetted program, and that their credentials are based on years of sound research and expert knowledge. Students want to be able to say they graduated from a signature program that was respected for its well-rounded instruction.
And unfortunately, nothing speaks louder in financial circles than current events. JPMorgan Chase’s recent settlement with the Justice Department to pay $13 billion as part of the fed’s probe into the corporation’s mortgage bond sales leaves a lot to discuss when it comes to the evolving reputation of one of the country’s top financial firms.
So does last Friday’s revelation that as part of that $13 billion, $5.1 billion will go to repaying the Fannie and Freddie Mac programs that lost money on the quality of the mortgage bonds that were sold to them by JPMorgan Chase (and two other companies it bought, Bear Stearns and Washington Mutual) prior to the real estate crash of 2008.
And so does the string of other legal actions that are expected to be lodged against the corporation, some of which will go to pay back private residents that lost their homes during that same real estate crisis.
According to JPMorgan Chase’s CEO Jamie Dimon, October 2013 marks the company’s first quarterly loss since he took the helm in 2006. The loss is a reflection of the corporation’s preparation for the mounting fines, repayments and legal expenses it will be shelling out as a result of allegations that it played a substantial part in the country’s worst financial crisis since the Great Depression.
Corporate sponsorship can be great for a company’s image. As the firm’s long-term support of UD’s academic programs in Finance have shown over the years, corporate partnership often ensures that students can access good educational resources. But the latest scandal affecting its parent corporation may highlight just why academic Ph.D. programs have historically been structured and run by academics, rather than by corporations with an interest in besting its competition. Unexpected media reports have an uncomfortable way of calling a donor’s reputation into question, even when its leadership appears to be striving to make financial amends.
Image of JPMorgan Chase & Co. building courtesy of Justin A Wilcox
Image of University of Delaware courtesy of Ottawa80