U. Chicago to Borrow $400 Million This Year
It looks as though finances at the University of Chicago are handled in a manner very similar to its home state of Illinois.
College Fix editor Nathan Harden reports.
U of Chicago Plans to Borrow Hudreds of Millions This Year
This week, news emerged that the University of Chicago, another of our nation’s elite and highly debt-leveraged academic institutions, is set to borrow $400 million over the coming fiscal year.
Robert Zimmer, hired as president of the University of Chicago in 2006, inherited an ambitious program to improve campus life while bolstering highly regarded academic programmes. The institution stuck to the plan even as it suffered a 21.5% loss on endowment investments in 2009. Its debt has grown in the past four years to $3.6 billion from $2.4 billion.
“We well understand that borrowing for some of these investments entails risk,” Zimmer, whose $3.36 million compensation made him the highest-paid private college president in 2011, said in a statement in August after local reporters obtained a copy of the proposed financing plan. “We cannot, however, scale back our academic and programmatic ambitions in a way that risks our future excellence as a university.”
You’ve heard of “too big to fail”–as applied to our nation’s major financial institutions. I think our nation’s big-spending universities have adopted similar motto, borrowed from the lyrics of hip-hop artist MC Hammer, whose hit song “Too legit to quit,” perfectly describes the spending habits of elite universities engaged in a never ending battle to spend themselves onto the top of the US News & World Report annual college rankings.
All to create dorms and student activity centers that resemble five-star resorts and high tech amusement parks.
These college leaders who never grow tired of spending could learn a lesson or two from the life of MC Hammer. After becoming a huge star, Hammer blew through a $33 million fortune and famously went bankrupt. Looks like the University of Chicago is well on its way to the same end.
U of Chicago Plans to Borrow Hudreds of Millions This Year (The College Fix)
