It turns out your college might be in debt too.
America’s students are not the only ones borrowing millions to finance higher education.
According to a new report from the University of California–Berkeley’s Debt & Society Project, public and private four-year institutions are now taking out loans as well. In fact, “the largest share of their borrowing costs [are] for investments in amenities like recreations centers, dining halls, and athletics.” These “investments” are for the purpose of enhancing school marketing allure, largely in hope that students will pay higher tuition as a result of impressive facilities. But in reality, financial returns are not being realized. In fact, public college and university debt has nearly tripled from $54 billion to $151 billion over the last decade.
Your college might be facing high interest rates too:
“Since 2002, public and private nonprofit colleges and universities have taken on increasing amounts of debt, particularly in the form of municipal bonds. In the past decade, interest payments on these debts have nearly doubled from $6 billion in 2002 to $11 billion in 2012.”
Some examples of profligate spending?
– The George Washington University just built a new $130 million “super dorm” and $33 million textile museum.
– The University of Pennsylvania’s gym recently underwent a $10 million renovation to include an Olympic-sized swimming pool, co-ed sauna, juice bar, golf simulator, and climbing wall.
– Kenyon College, a liberal arts school, has a $70 million athletic center with a sushi chef and similar country club features.
One easy solution? Care less about ranking lists as well as amenities and more about your college’s core function of learning and instruction.
Maybe even protest the next frivolous facility being built on your campus or alma mater… otherwise, we can expect more of the same.