Institutions face balancing act when weighing construction projects
- Colleges and universities face a $30 billion debt committed to capital maintenance and renovation, while spending more than $11 billion in new construction to help attract new students, according to a recent article in The Atlantic.
- Years of budget cuts have created a maintenance backlog on many public campuses across the country. In addition to a desire to build new state-of-the-art facilities to compete for a dwindling pool of students, schools are scrambling to address basic maintenance demands on many of the older buildings.
- The increases in building expenses, when combined with pension and health care commitments, will be a catalyst for increased tuition rates and fees. Debt associated with construction costs has risen from $6 billion to $11 billion.
Like with many improvement initiatives on campus, institutions face a tough balancing act between a need to bolster attractiveness to potential students and focus on affordability for those same students. With many states and the federal government decreasing direct aid to schools, many of the costs associated with strengthening campus infrastructure are often passed directly to the students.
As costs increase for students, salaries remain static for faculty members, and credentialing alternatives grow for cost-conscious learners, debt associated with capital financing may be a source of inquiry for families and lawmakers overseeing public campus building projects.
Additionally, as the federal government becomes more active in promoting cost-efficiency and student debt outcomes, colleges will have to find ways to privately finance needed improvements, or to balance debt servicing with alternative revenue opportunities, like building mixed-use facilities which draw income and promote community presence on campus.
- The Atlantic The paradox of buildings on campus