Ohio state universities increase indebtedness
COLUMBUS, Ohio — Outstanding debt among Ohio's 13 four-year public universities has nearly tripled over the past decade amid a building spree of classroom buildings, dormitories and recreation centers.
At The 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.
According to The Columbus Dispatch, 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 autumn 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 dorms, including some 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 cut costs, Miami has scaled back a plan for a new student union, 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, spokesman Joe Mosbrook said.
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.