Perspectives

The other looming educational debt crisis: institutional debt

In today’s complex higher education environment, few topics have garnered more attention than student debt, with many industry participants describing it as an imminent crisis. Indeed, it is hard to ignore the extent to which the cost burden of postsecondary education has risen for students and their families.

Yet, just as millions of American students have increased their debt load, so too have colleges and universities turned to long-term debt to fund growth and supplement their operations. While the impact of student debt has been investigated and discussed at length in the media and by policymakers alike, the ramifications of long-term institutional debt have been left largely unexplored.

American colleges and universities are entering an increasingly challenging and hyper-competitive era. As boards of trustees and administrations lead their institutions into this new era, they will be forced to grapple with new strategic questions brought on by the pressure of increased long-term debt: is this growing debt a problem? How do institutions know when they have incurred too much debt? What types of institutions may be more at risk due to their institutional borrowing?

Our three-part series aims to tackle these questions and more by examining the industry dynamics surrounding debt over the last 10 years, assessing relative debt burdens at the institutional level and evaluating the potential impact of continued long-term debt growth.

Download a PDF of the report.

View our insights on student debt.