Buying into the Bond Market

Dartmouth College is now chasing the bond market in order to increase funding. Dartmouth has issued a bond totalling a quarter of a billion dollars and received an AA1 rating from Moody’s, rather humiliating considering half of our peer institutions are given perfect scores. Our imperfect rating is a legacy of the Wright administration, whose excessive spending earned Dartmouth a downgrade.

Bond

Dartmouth chooses debt.

Columbia University, which has a lower endowment to student ratio, has a perfect score, indicating that the AA1 rating is not symptomatic of Dartmouth’s smaller size, merely inadequate management and poor decision-making at Parkhurst. While an AA1 rating still reflects confidence, the College needs to pay a higher interest rate. On a $250 million bond, the interest Dartmouth will pay will amount to $375,000, which could fund a few professors, or for President Hanlon, cover the cost of a brand new Vice-Provost of Intersectional Multicultural Diversity.

The College’s debt has been steadily rising over the past decade. Considering revenue generated from this bond will help pay off debt, we can only expect this number to increase. While we cannot know for sure how the money is being spent, President Hanlon’s housing system is most likely to blame. Excessive borrowing, four percent increase in tuition, and terminating need-blind admissions for international students raise concerns about Dartmouth’s financial management and bloated administration.

Perhaps most unfortunate is the fact that much of this money is being spent on unwanted and cosmetic initiatives such as the housing system. Geared toward public relations rather than genuine improvement, our administration is taking on more and more debt to fund Moving Dartmouth Forward and the new housing system, against the will of many alumni and students. It would be overly optimistic to expect serious cuts to be made in the College’s administration, but perhaps debt and an AA1 rating will stimulate smarter financial management and a slowing down of the bloated College bureaucracy.

 

  • fribble

    Much appreciated column. Well done.
    The College needs to strip down to what it is supposedly there for.
    It is supposed to be helping students to become independent, critical thinking adults.
    It is doing the reverse and at huge expense.
    First get rid of 1,000 administrators. Notice how much better everything is.
    Next get rid of another 1,000 administrators. Notice that it’s much better.
    That leaves 1,600 who can be dealt with in smaller increments.
    No borrowing, no money problems, better housing, food, and everything else.