Report: Debts Surge for State Universities in OhioFebruary 3, 2013 |
COLUMBUS, Ohio — Outstanding debt among Ohio’s 13 four-year public universities has nearly tripled over the past decade amid a building spree on classroom buildings, dormitories and recreation centers.
At Ohio State University, which has built a recreation center and student union, debt has more than quadrupled.
Of the state’s 13 public universities, Ohio State has the largest total debt load at nearly $2.5 billion, more than four times what it was in 2002.
But according to The Columbus Dispatch (bit.ly/Tuxnd4), campuses must find new money sources, or leave it to future generations of students to pay for the construction spree.
Last month, Moody’s Investment Services downgraded the outlook for the higher-education sector to negative because of such concerns.
Jim Petro, who retired on Friday as Ohio’s higher-education chancellor, said he understands that state schools have been burdened by aging buildings in need of repair.
Many school officials said it would be crazy not to lock in record-low interest rates. Ohio State, for instance, issued an unprecedented $500 million in 100-year bonds in 2011.
The century bond allowed the university to lock in historically low interest rates, while giving it cash for its $1.1 billion medical center expansion and south campus dorm project, said Geoffrey Chatas, OSU’s chief financial officer.
The favorable climate also has allowed Ohio State to move forward on a $396 million north campus expansion that calls for 11 new dorms, two dining halls and a 35,000-square-foot fitness center.
The dorms will allow the university to require sophomores to start living on campus by fall 2015, a longtime goal to enhance student learning.
The state estimates that Ohio’s colleges and universities face at least $5 billion in deferred maintenance.
Miami University is using much of the money it borrowed to overhaul its dorms, some of which were last renovated in 1929.
The school is “improving what we have and building only what we need,” said David T. Creamer, Miami’s vice president for finance and building.
To cuts costs, Miami has scaled back its plan for a new student union, which is being built to accommodate the 167 percent increase in its student body from when the original center was built in 1957.
Cleveland State University has built several dorms, a student union, recreation center, three parking garages and other amenities during the past decade, as it moves from a commuter campus to a more-traditional residential campus, according to spokesman Joe Mosbrook.
“We had a need to transform the university to meet the needs of the region,” Mosbrook said.
Most of the borrowed money will be paid back through fees, which a majority of students said they were willing to pay before the projects were built.
Over the past 13 years, the University of Akron spent more than $600 million to transform its campus, said Ted Curtis, the school’s vice president for capital planning and facilities.
The improvements encompassed 18 renovations, 34 new acres of green space and 22 new buildings, including a student union, recreation center, stadium and several dorms and classroom buildings.
All have helped the school raise its student body from 21,000 in the late 1990s to 30,000 now, Curtis said.
Regents don’t regulate the debt loads of state universities. That’s left up to the individual schools, Petro said.