"When the number of students at Hawaii Pacific University started to fall at an alarming rate, the university embarked on an ambitious plan to attract more," according to The Hechinger Report. "Among other things, it spent $54 million to buy Honolulu's iconic Aloha Tower and convert it into an anchor for its downtown campus by adding dorm rooms, community spaces, a fitness center and venues for concerts and lectures."
"To pay for this and other projects, Hawaii Pacific borrowed. A lot. By 2015, the most recent year for which the figure is available, it owed $75.3 million in municipal bond liabilities, plus $10 million in mortgage and other debts, federal tax records show.
But student numbers didn’t rebound. Instead, they continued to decline, from a peak of 8,339 in 2010 to 4,081 last fall, according to government data.
Now, like many other colleges and universities, Hawaii Pacific has fewer tuition-paying students to help it pay off a large amount of red ink.
While public attention has been focused on runaway student loan amounts, colleges and universities themselves are also borrowing heavily — often in the hope of shoring up enrollments, but in many cases leaving them financially weaker, analysts say.
Colleges and universities collectively owe $240 billion, the Moody’s bond-rating service reports. That debt rose 18 percent, to $145 billion, in the last five years at public universities, Moody’s says. At privates, it went up 3 percent, to $95 billion.
Last year alone, colleges and universities borrowed a record $41.3 billion through municipal bonds, their principal source of debt funding, the financial information firm Thomson Reuters reports. That’s up from $28.7 billion a decade ago."
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Publication Date: 10/12/2017