Public universities will take on more debt as states decrease spending on capital projects
By Kevin Kiley
Christine Wilda’s story sounds like that of most state university students these days. In the past few years, her state has significantly cut appropriations to its colleges and universities, passing greater costs on to the individual. Now she’s facing the prospect of increased debt.
Wilda isn’t a college student, though. She’s the interim vice president for administration and finance, treasurer and controller for the University of Massachusetts System. And the problem she’s facing is higher education’s other debt crisis.
“Less able than their private university competitors to fund capital improvements with philanthropic gifts, public universities have and will continue to turn to the debt market to fund capital projects, driving debt for public universities higher for the foreseeable future, and prolonging a long-term trend established over the past decade,” Edith Behr, vice president and senior credit officer for Moody’s Investors Service’s public finance group, wrote in a report in March calling attention to potential growth in debt for public colleges and universities.
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