Dive Brief:
- Turning to private investors to fund facilities projects has been a controversial topic in higher education with some distrusting the practice and others seeing it as a good solution to avoid debt.
- Brian Mitchell, director of the Edvance Foundation, writes for The Huffington Post that public and private institutions have begun to rely on private investment to meet strategic needs relating to real estate, student services, academic programs, facilities expansion and university/community relations.
- Cities with high concentrations of higher education institutions may be good pilot cities to test public-private partnerships. Boston Mayor Marty Walsh’s plan to create 50,000 new housing units, in part with help from universities building their own facilities instead of relying on off-campus housing, is one such example.
Dive Insight:
Private financing was made more common by large public institutions, and the practice has spread to smaller, private schools that are willing to take on the risk for the potential gains. New housing facilities, especially, have attracted private financing because of the steady revenue from renters, but colleges are often left on the hook in these deals if enrollment trends do not pan out.
Privatizing campus parking is another increasingly common practice in which institutions hand over management of their parking garages and leave private companies to collect the proceeds. And Ohio State is in the middle of a plan to privatize management of its energy consumption.