By Bob Braun/Star-Ledger Columnist
Gov. Chris Christie’s determined and sometimes angry push to remake New Jersey higher education has collided with financial realities that include Rutgers University’s reluctance to take over nearly a half-billion in debt incurred by the state’s medical school.
Bruce Fehn, Rutgers’ chief financial officer, said the University of Medicine and Dentistry of New Jersey owes $450 million to bond holders for loans used to build campus facilities. If, as Christie has demanded, Rutgers immediately takes over the medical school and other facilities in Central Jersey, the university could be on the hook for the money.
Worse, the university must deal with conditions, or “covenants,” in the loans that could trigger an acceleration repayment clause if UMDNJ loses 15 percent of its assets — assets it would lose by transferring them to Rutgers. The long-term loans could become due and payable immediately.
“There has been no analysis of this problem by the state,” Fehn said in a meeting of the university’s trustee board on Thursday. Many of the members angrily criticized the Christie plan — including one financial expert who compared dealing with the governor’s office to working with “fourth-graders.’’
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