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The Hidden College Problem: When Universities, Not Just Students, Take On Debt
Forbes ^ | 03/23/2014 | Josh Freedman

Posted on 03/23/2014 4:31:41 PM PDT by SeekAndFind

Last week, the University of California got downgraded. Not in the U.S. News or other college rankings, where six of its campuses rank in the top 15 public colleges in the United States; nor in College Prowler’s list of schools with the most attractive men on campus (where flagship UC-Berkeley clocks in at a measly number 1185). Rather, the UC system has been downgraded in the credit markets: ratings agency Moody’s lowered the UC system’s general revenue bonds from Aa1 to Aa2.

People like to talk about student debt – read, for example, my five part series on the topic. (Ok, I know you’re busy. How about at least one part of it? Do it for me.) But university debt, although rarely discussed, is arguably more important. Schools across the country are borrowing more money, and the increasing reliance on debt-financing at universities is adding logs covered in lighter fluid to an already flammable higher education system. The University of California system, for example, has $14.5 billion in outstanding debt, more than double its level in 2005. The total volume of debt across colleges of all kinds has increased so much that interest payments per student have increased 86% since a decade ago despite low interest rates.

The trend of taking on more debt puts schools’ educational and social mission at odds with their financial needs, making it less likely that colleges will be able to do what they’re supposed to do – which is to provide a high quality education for students of all backgrounds.

As I’ve written previously, the financial model of many colleges and universities — based on high tuition and high financial aid — has put the educational and financial goals of universities at cross purposes.

(Excerpt) Read more at forbes.com ...


TOPICS: Business/Economy; Education; Society
KEYWORDS: college; debt

1 posted on 03/23/2014 4:31:41 PM PDT by SeekAndFind
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To: SeekAndFind

I’d like to congratulate Iowa State for their two point victory over North Carolina.


2 posted on 03/23/2014 4:41:20 PM PDT by no-to-illegals (Scrutinize our government and Secure the Blessing of Freedom and Justice)
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I love Good News on Sunday.


3 posted on 03/23/2014 5:00:34 PM PDT by no-to-illegals (Scrutinize our government and Secure the Blessing of Freedom and Justice)
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To: SeekAndFind
Welfare state advocacy from Forbes.

Surprise, surprise!

4 posted on 03/23/2014 5:15:21 PM PDT by who_would_fardels_bear
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To: SeekAndFind

Instate tuition for illegal aliens, ‘nuf said.


5 posted on 03/23/2014 5:41:05 PM PDT by VTenigma (The Democratic party is the party of the mathimatically challenged)
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