Friday, September 23, 2016

University of California debt soars to $17 billion; regents consider new borrowing policy - Katy Murphy, Mercury News

The University of California’s debt has ballooned to $17.2 billion since the start of the recession, more than doubling as the system borrowed to repair buildings, fund pensions, and build medical centers and student housing. In the past decade, as states have cut support for capital projects, public universities across the U.S. have piled on debt to repair old buildings and build new ones. But some, including Gov. Jerry Brown, have expressed wariness about all the borrowing. Along with access to needed cash, UC is locking itself into more costs — and is fast approaching its limit for borrowing cheaply from the market. But with the board of regents this week considering UC’s first-ever debt policy, university leaders insist the borrowing spree is strategic, given unusually low interest rates and federal tax exemptions on university financing.

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